Q1 2024 Expion360 Inc Earnings Call
Yeah.
Operator: Greetings and welcome to the Expion360 First Quarter 2024 Financial Results Conference Call. At this time, all participants are in listen-only mode.
X fuel: Greetings and welcome to the X fuel to 61st quarter 'twenty 'twenty full financial results conference call.
Operator: A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded and will be available in the Investor Relations section of the company's website at investors.xpion360.com. Before we begin the formal presentation, I would like to remind everyone that certain statements made on this call and through the webcast are forward-looking statements within the meaning of federal securities laws and are subject to considerable risks and uncertainty. Such forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.
Speaker Change: At this time, all participants are in listen only mode.
Speaker Change: A question and answer session will follow the formal presentation.
Investor Relations: A reminder, this conference is being recorded and will be available in the Investor Relations section of the company's website at investors don't extra on 360, <unk> Dot com.
Before we begin the formal presentation I would like to remind everyone that certain statements made on this call and through the webcast. All forward looking statements within the meaning of federal security laws and are subject to considerable risks and uncertainties.
Investor Relations: These forward looking statements are intended to qualify for the safe Harbor from liability established by the private Securities Litigation Reform Act of 1995.
Operator: All statements made on this call today, other than statements of historical fact, are forward-looking statements and include statements regarding the company's beliefs, plans, and expectations about the company's operations, future development plans, growth prospects, product pipeline, and development, anticipated timing of commercial availability of its products, beliefs about marketing size and opportunity, including customer base and market conditions. While these forward-looking statements represent management's current judgment and expectations, they are subject to risk and uncertainties that could cause actual results to differ materially.
Company Representative: All statements made on this call today other than statements of historical fact are forward looking statements and include statements regarding the company's beliefs plans and expectations about the company's operations.
Company Representative: Development plans gross prospects product pipeline on development.
Company Representative: The anticipated timing of commercial availability of its products.
Company Representative: Beliefs about marketing size and opportunity, including customer base and market conditions.
Company Representative: While these forward looking statements represent managements current judgment on expectations. They are subject to risks and uncertainties that could cause actual results to differ materially.
The company: The company has explained some of these risks and uncertainties in its SEC filings, including the risk factors section of its annual report on Form 10-K, and quarterly reports on Form 10-Q.
Operator: The company has explained some of these risks and uncertainties in its SEC filings, including the risk factor section of its annual reports on Form 10-K and quarterly reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Except as required by law or the NASDAQ listing standards, the company expressly disclaims any intent or obligation to update any forward-looking statements.
Speaker Change: You are cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of the date of this presentation.
Speaker Change: Except as required by law or the NASDAQ listing standards. The company expressly disclaims any intent or obligation to update any forward looking statements.
Operator: Your hosts today, Brian Schaffner, Chief Executive Officer, and Greg Adelot, Chief Financial Officer, will present results of operations for the first quarter ended March 31, 2024. A press release detailing these results crossed the wire this afternoon at 4.05 p.m. Eastern Time and is available in the Investor Relations section of the company's website at investors.expion360.com. At this time, I will turn the call over to Exeon360's Chief Executive Officer, Brian Schaffner. Please go ahead, sir.
Speaker Change: Your host today, Brian Hoffman, Chief Executive Officer, and Greg Aydelott, Chief Financial Officer will present, the results of operations for the first quarter ended March 31, 'twenty 'twenty four.
Brian Hoffman: A press release detailing these results crossed the wire. This afternoon at 405 P. M. Eastern time and is available in the Investor Relations section of the company's website at investors thought XP on 360, <unk> Dot com.
At this time I will turn the call over to X gene three sixties, Chief financial Chief Executive Officer, Brian Schaff now. Please go ahead Sir.
Brian Schaffner: Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's first quarter 2024 Financial Results Conference Call. For those of you who might be new to our story,
Operator: Thank you operator, and then get all afternoon everyone.
Brian Schaff: I'm pleased to welcome you to today's first quarter 2024 financial results Conference call.
Brian Schaff: For those of you who might be new to our story.
Brian Schaffner: I'd like to start by giving a brief overview of who we are and what we do. Xpeon360 focuses on the design, assembly, and sales of lithium-ion phosphate or LiPo4 batteries and supporting accessories for RV, marine applications, and, as recently announced, our expansion into light electric vehicle and home energy storage markets, with plans to expand into industrial applications in the future. We design, assemble, and distribute high-powered lithium battery solutions using groundbreaking concepts, with creative sales and marketing prowess. We believe that our product offerings include some of the most dense and minimal footprint batteries in the RV and marine industries.
Brian Schaff: I'd like to start by giving a brief overview of who we are and what we do.
Speaker Change: X gene $3 60 focuses on the design assembly and sales lithium iron phosphate or life post for batteries and supporting accessories for RV Marine applications, and as recently announced our expansion into light electric vehicle and home energy storage markets.
Speaker Change: With plans to expand into industrial applications in the future.
We: We design assemble and distribute high powered lithium battery solutions using groundbreaking concepts with creative sales and marketing approaches.
We: We believe that our product offerings include some of the most dense and minimal footprint batteries in the RV and marine industries.
Brian Schaffner: We are developing the E360 Home Energy Storage System, which we expect to bring positive change to the industry and barriers to price, flexibility, and integration. We are deploying multiple intellectual property strategies with cutting-edge research and innovative products to sustain and scale the business. We currently have customers consisting of dealers and wholesalers.
E 360: We are developing the E 360 home energy storage system, which.
Speaker Change: Which we expect to bring positive change to the industry and barrier price flexibility and integration.
Speaker Change: We are deploying multiple intellectual property strategies with cutting edge research and innovative products to sustain and scale the business.
Speaker Change: We currently have customers consisting of dealers wholesalers.
Brian Schaffner: Private Label Customers and Original Equipment Manufacturers, or OEM, who are driving revenue and brand awareness and complement our wholesale channel and direct-to-consumer sales. We have a management team and board experience across engineering, technology, and finance. And we believe the confluence of these factors positions us to execute our long-term growth strategies. I'm proud of the progress that we've made in the first quarter and remain excited about our future processes.
Oems: Private label customers and original equipment manufacturers or Oems.
Speaker Change: Who are dragging revenue and brand awareness nationally.
Speaker Change: And complement our wholesale channel and direct to consumer sales.
Speaker Change: We have a management team and board experienced across engineering technology and finance.
Speaker Change: And we believe the confluence of these factors positions us to execute our long term growth strategies.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: I am proud of the progress we've made in the first quarter Andrew.
Speaker Change: And remain excited about our future prospects.
Brian Schaffner: Our E360 product line, which is manufactured for the RV and marine industries, has shown to be the preferred conversion solution for lead acid batteries through its sales growth. We currently have more than 300 customers across the United States, consisting of dealers, wholesalers, private label customers, and OEMs. We then sell our products to end consumers. In addition, we also sell products directly to those who are interested. We have sales relationships with major RV retailers, including Camping World, a leading national RV retailer, as well as Meijer Distributing, Inc., a leading national marketer and distributor of automotive...
Speaker Change: Are you 60 product line, which is manufactured for RV and Marine industries is shown to be the preferred conversion solution.
Speaker Change: Awesome batteries.
Speaker Change: Sales growth, we currently have more than 300 customers across the United States.
Andrew Smith: Dealers wholesalers private label customers and Oems, who.
Speaker Change: We then sell our products to end consumers.
Speaker Change: We also sell products directly to consumers.
Speaker Change: Yeah.
Speaker Change: We have sales relationships with major RV retailers, including camping world and national leading national RV retailer as well as my or distributing Inc. A leading national marketer and distributor of automotive and RV specialty projects.
Brian Schaffner: Specialty Project. We believe we have a strong reputation in the lithium battery space, which we plan to continue leveraging to broaden our distribution channels as we expand into adjacent verticals such as LEDs and home energy storage. To highlight some of our accomplishments and milestones in the first quarter.
We: We believe we have a strong reputation in the lithium ion lithium battery space.
We: Which we plan to continue leveraging to broaden our distribution channels as we expand into adjacent verticals, such as Leds and home energy storage.
Speaker Change: To highlight some of our accomplishments and milestones in the first quarter.
Brian Schaffner: In January 2024, we launched our next generation Group 27 and GC2 series lithium iron phosphate batteries, designed for use in a variety of applications. They now offer higher amp hour options and the latest advancements in power technology features, including Xeon360's proprietary vertical heat conduction, internal heating, Bluetooth, and CAN bus communication. In March of 2024, we announced that our EX1 SmartTalk Bluetooth batteries had achieved UL1973 compliance The UL1973 compliance ensures that Xeon360's EX SmartTalk Bluetooth batteries meet safety standards required by our customers for energy storage systems.
Speaker Change: In January.
Speaker Change: 2024, we launched our next generation group 27 at G. C. Two series lithium iron phosphate batteries designed for use in a variety of applications and now offer a higher end of our options and the latest advancements in power technology features.
Speaker Change: Including actually on 360 is proprietary vertical heat conduction internal heating.
Speaker Change: Bluetooth in sandbox communication.
Speaker Change: In March of 2024, we announced that our E X one smartcard coke batteries at a cheap U L 1973 two points.
Speaker Change: The U L 1973 compliance insurers that actually on 360, <unk> E X Smart talk Bluetooth batteries meet safety standards required by our customers for energy storage systems.
Brian Schaffner: This certification not only underscores our unwavering commitment to safety but also our dedication to innovation and excellence in a growing industry. In April 2024, we announced substantial pre-orders for our next generation Group 27 GC2 series batteries, which now include our proprietary vertical heat conduction technology driven by customer demand. The new versions also include higher amp-hour 4.0 and 4.5 amp-hour cell technology, Bluetooth, and CAN bus communication. Xeon shipments for these orders have begun in May.
Speaker Change: This certification not only underscores our unwavering commitment to safety, but also our dedication to innovation and excellence in a growing industry.
Speaker Change: Okay.
Speaker Change: In April 2024, we announced substantial preorders for a next generation group 27 G. C. Two series batteries now include our proprietary vertical heat conduction technology.
Customer: Driven by customer demand.
Speaker Change: The new versions also include higher empower 4.0, and $4 five amp hour cell technology, Bluetooth and can best communication.
unknown: <unk> shipments for these orders have begun in may.
Brian Schaffner: This month, May 2024, we launched the Edge Battery, now available for pre-order, which utilizes a modular design for off-grid power solutions. It is available in 12.8 volt and 51.2 volt configurations featuring a slim profile that maximizes available space without compromising performance. With dimensions of just 4.2 inches in height, 17.5 inches in width, and 21.9 inches in length, the Edge offers flexibility for installation in a variety of applications, from mounting on the walls of vans to fitting it to tight spaces in RVs.
Speaker Change: This month in May 2024, we launched the edge battery nowadays both for preorder.
Speaker Change: Which utilizes a modular design for off grid power solutions.
Company spokesperson: It is available in 12.8 bulk and $51 two volt configurations, featuring a slim profile that maximizes available space without compromising performance.
Company Representative: With dimensions of just 4.2 inches in height 17.
Company Representative: 17.5 inches in width, and 21.9 inches in length. The edge offers flexibility for installation in a variety of applications for.
Company Representative: For mounting on the walls of Danske.
Arby's: Get spaces in arby's, the edges Slim design maximizes available space without compromising performance.
Brian Schaffner: The Edge's slim design maximizes available space without compromising performance. The Edge incorporates vertical heat conduction, smart talk, Bluetooth, and CAN bus communication. We plan to begin shipping the Edge in the third quarter of this year. Lastly, on April 30th, we released specifications for our home energy storage solutions, DC-coupled home energy battery, expandable in 5 kilowatt increments up to 80 kilowatts, in most jurisdictions and for our AC coupled one all-in-one home energy battery featuring 10 kilowatt battery paired with built-in 5 kilowatt inverter and expandable in 10 kilowatt increments up to a total of 40 kilowatts.
Arby's: The edge incorporates vertical heat conduction smartcard, Bluetooth and can bus communication.
Speaker Change: We plan to begin shipping the edge in the third quarter of this year.
Arby's: Okay.
Speaker Change: Lastly on April 30th we released specifications for our home energy storage solutions D C coupled home energy battery.
Speaker Change: Expandable and five kilowatt increments up to 80 kilowatts in most jurisdictions and for our AC coupled one all in one home energy battery featuring 10 kilowatt battery paired with.
Speaker Change: I built 10, five kilowatt and Burger and expandable and 10 kilowatt it increments up to a total of 40 kilowatts.
Speaker Change: Okay.
Speaker Change: Okay.
Brian Schaffner: We have strategically positioned our battery portfolio across both established market segments and future premium market segments, each of which I will quickly touch on. The recreational vehicle and overland segment continues to grow, driven by interest in outdoor activities and the demand for vehicles that depend on batteries to power systems. Our lithium batteries support these systems and appliances while replacing noisy generators for off-grid power, and they are charged by the engine or by solar.
Speaker Change: We have strategically positioned our battery portfolio.
Speaker Change: Both established market segments, and future premium market segments, each of which I will quickly touch on.
Speaker Change: The.
Speaker Change: <unk> vehicle in overland segment continues to grow driven by interest in outdoor activities and the demand for vehicles that depend on batteries to power systems.
Speaker Change: Our lithium battery support these systems.
Speaker Change: In the appliance and appliances, while replacing noisy generators for off grid power.
Speaker Change: And are charged by the engine whereby solar.
Brian Schaffner: As previously mentioned, we recently launched the Edge battery. This custom form factor includes many applied-for patents and other IP that we have been developing in the past couple of years, and we plan to begin shipping that product in Q3 this year. The Edge incorporates vertical heat conduction, SmartTalk Bluetooth, and CAN bus communication, and we are currently wrapping up UL testing.
Company Representative: As previously mentioned, we recently launched the edge battery.
Speaker Change: Custom form factor includes many applied for patents and other IP that we have been developing in the past couple of years.
Speaker Change: Plan to begin shipping that product in Q3. This year the edge incorporates vertical heat conduction smartcard, Bluetooth and can best communication and we are currently wrapping up testing.
Brian Schaffner: Our solutions are also employed in the boating and marine segment to support trolling motors and operating cabin electronics. The third established market we serve is light electric vehicle, or LED, such as golf carts, which are also undergoing a transition to lithium from lead acid. These LEDs require sufficient power generation and reliability, which Xeon batteries deliver.
Speaker Change: Our solutions are also employ in the boating and marine segment to support trolling Motors and operating cabin electronics.
Speaker Change: The third establish market. We serve is light electric vehicle M D. Such as golf carts, which are also undergoing a transition from lithium to lithium from lead acid. These leds requires sufficient power generation and reliability to which XP on batteries delivered.
Speaker Change: Okay.
Brian Schaffner: Our newest market segment, which we recently announced, is our plans to enter the home energy storage market, including new home and commercial solar power storage solutions. I will expand on that opportunity when we get to the home energy section. And finally, we see industrial applications as a future growth vertical for XPO. Driven by demand for additional capacities for electric forklifts and industrial materials, we are building a robust IP moat across all five of these market segments, for which we have 11 patents pending.
Speaker Change: Our newest market segment and the recently announced is our plans to enter the home energy storage market.
Speaker Change: Including new home and commercial solar power storage solutions I will expand on that opportunity when we get to the home energy section.
Speaker Change: And finally, we see industrial applications as a future growth vertical for the next deal.
Speaker Change: Driven by demand for additional capacities for electric forklifts and industrial material.
Speaker Change: We are building a robust IP moat across all five of these market segments in which we have 11 patents pending.
Speaker Change: [laughter].
Speaker Change: Yeah.
Brian Schaffner: Now for a shift to some more detail about our market expansion with E360 Home Energy and the December 2023 introduction of our two LiPo4 battery solutions to support home energy storage, as I just mentioned. The recently released specifications, which you can see on our website, We are targeting home and small commercial solar users and installers who are interested in the high-performance modular system with straightforward installation. We are mobilizing quickly for the launch and plan on accepting pre-orders for the new home energy systems beginning in the second quarter of 2024, with shipments to begin in the second half of 2024.
Speaker Change: Now for a shift to some more detail about our market expansion with <unk> hundred 60 home energy.
Speaker Change: With the December 2023 introduction of our two lifestyle for battery solutions to support home energy storage for which I just mentioned.
Speaker Change: The recently released specifications, which you can see on our website.
Speaker Change: We are targeting home and small commercial solar users.
Speaker Change: Installers, who are interested in the high performance modular system more straightforward installation.
Speaker Change: We are mobilizing quickly with the launch and plan on accepting preorders for the new home energy systems commencing in the second quarter of 2024 with shipments to begin in the second half of 2024.
Speaker Change: Okay.
Brian Schaffner: We believe the HomeMG market provides complementary economics to our business model with an opportunity to generate recurring revenue streams while enabling margin expansion. Our solutions provide scalability and versatility across market channels. Some of these channels include solar installers, electrical contractors, retailers, and wholesalers, big box stores, and franchise hardware retailers, residential and commercial builders, along with energy service providers. We believe the launch into the home energy segment will support the company's strategic objective.
Speaker Change: We believe the home energy market provides complimentary economics to our business model with an opportunity to generate recurring revenue streams, while enabling margin expansion.
Speaker Change: Our solutions provide scalability and versatility across market channels.
Speaker Change: These channels include solar installers, electrical contractors retailers and wholesalers big box stores and franchise hardware retailers residential and commercial builders along the energy service providers.
Speaker Change: We believe the launch into the home energy segment will support the company's strategic objectives.
Brian Schaffner: A view of our home energy systems and specifications and pricing can be found on our website. Future home energy announcements will include the identification of strategic implementation and installation partners. I will now turn the call over to Chief Financial Officer Greg Adelot to discuss our first quarter 2024 financial results. Thanks.
Speaker Change: Our view of our home energy systems, and specifications and pricing can be found on our website.
Company Representative: Future home energy announcements will include identification of strategic implementation and installation partners.
Speaker Change: I will now turn the call over to Chief Financial Officer, Greg Eat a lot to.
Greg Adelot: For the first quarter of 2024, revenue totaled $1 million, decreasing 35.5% from $1.5 million in the prior year period. The decrease was primarily attributable to the lingering effects of the downturn in the RV market, combined with some customers limiting orders in anticipation of the availability of our new products with enhanced Gross profit for the first quarter of 2024 totaled $200,000, or 22.9% of revenue, as compared to $400,000, or 29.4% of revenue, in the prior year period.
Speaker Change: To discuss our first quarter 2024 financial results.
Greg Adelot: The decrease in gross profit as a percentage of revenue was primarily attributable to decreases in sales, which drove higher fixed overhead costs per unit. Selling general and administrative expenses increased to $2.2 million compared to $2.1 million in the prior year period. The increase was primarily due to salaries and benefits, which included non-cash, stock-based compensation, and sales and marketing increases, offset by significant reductions in legal and professional fees. Net loss for the first quarter of 2024 totaled $2.2 million or $0.31 per share, and a net loss of $2 million or $0.29 per share in the prior year period. The increase in net loss was primarily a result of lower net sales for the period and non-cash stock-based compensation expense. I will now turn the call back to Brian for his closing statement.
Speaker Change: Thanks, Brian.
Speaker Change: For the first quarter of 'twenty 'twenty, four revenue totaled $1 million decrease or 35, 5% from $1 $5 million in the prior year period.
Speaker Change: The decrease was primarily attributable to the lingering effects of the downturn in the RV market.
Brian: Bind with some customers eliminate the orders in anticipation of the availability of our new products with enhanced features.
Brian: Gross profit for the first quarter of 'twenty 'twenty four totaled $200000.
Speaker Change: Or 22, 9% of revenue as compared to $400000 or 29, 4% of revenue in the prior year period.
Speaker Change: The decrease in gross profit as a percentage of revenue was primarily attributed to decreases in sales.
Speaker Change: Which drove higher fixed overhead cost per unit.
Speaker Change: Selling general and administrative expenses increased to $2 2 million compared to $2 $1 million in the prior year period.
Speaker Change: The increase was primarily due to salaries and benefits, which included non cash stock based compensation and sales and marketing increases offset by significant reductions in legal and professional fees.
Speaker Change: Net loss for the first quarter of 'twenty 'twenty, four totaled $2 2 million or 31 cents per share.
Speaker Change: Net loss of $2 million or 29 cents per share in the prior.
Speaker Change: Prior year period.
Speaker Change: The increase in net loss was primarily a result of lower net sales for the period and noncash stock based compensation expense.
Brian: I will now turn the call back to Brian for his closing summary.
Brian Schaffner: Thank you so much, Greg. In closing, we are confident and enthusiastic about our growth trajectory for 2024. That comes from our experience in the fourth quarter of 2023 and our current 2024 activity to date. Thus far in 2020, the RV industry reports that RV shipments in the first quarter have increased 9.3% and that the full year 2024 shipments are expected to be up 18.8% or 365,500 units. According to the RV Industry Association's March 2024 survey of manufacturers and the Spring 2024 issue of RV Roadside.
Brian: Thank you so much Greg.
Brian: Yeah.
Brian: In closing we.
Brian: We are confident and enthusiastic about our growth trajectory for 2024.
Brian: That comes from our experience in the fourth quarter of 2023, and our current 2020 for activity to date.
Speaker Change: Thus far in 2000 2020 in 2020 for the RV industry reports that RV shipments in the first quarter have increased nine 3% and that the full year 2024 shipments are expected to be up 18, 8% or 365500 units.
Speaker Change: Adding to the RV industry associations March 2024 survey the manufacturers and the spring 2024 issue of RV roadsides.
Brian Schaffner: We also announced the planned launch of and have just released the specifications for our E360 home energy system, which we expect to disrupt the industry with its barrier price, flexibility, and integration. These two LiPo4 battery storage solutions will enable residential and small business customers to create their own stable micro-energy grid and lessen the impact of increasing power fluctuations and energy. Xpeion360 continues to work towards additional OEM market penetration while thoughtfully balancing our customer requirements of confidentiality during negotiations and our duty to provide timely information to our investors.
Speaker Change: We also announced the planned launch of <unk>.
Speaker Change: And have just released the specifications for our E 360 home energy system, which.
Speaker Change: Which we expect to disrupt the industry with its barrier price flexibility and integration.
Speaker Change: These two lifestyle for battery storage solutions will enable residential and small business customers to create their own stable micro energy grid and lessen the impact of increasing power fluctuations and outages.
E 360: <unk> 360 continues to work towards additional OEM market penetration.
E 360: Rebalancing, our customer requirements of confidentiality during negotiations and our duty to provide timely information to our investors.
Brian Schaffner: We continue to add features, improve energy density, and develop unique OEM-centric form factors. Notably, we announced substantial pre-orders for our next generation Group 27 and GC2 series batteries with our proprietary vertical heat conduction technology, which began shipping this month. The launch of the Edge battery, featuring a slim profile that maximizes available space and incorporates vertical heat conduction, SmartTalk, Bluetooth, and CAN bus communication, and we recently released specifications for our home energy storage solution.
Rebalancing: We continue to add features improved energy density and develop unique OEM centric form factors.
Notably: Notably we announced substantial preorders for next generation group 27, and <unk> series batteries with our proprietary vertical heat conduction technology, which began shipping this month.
Not specified: The launch of the edge battery, featuring a slim profile that maximizes available space and incorporates vertical heat conduction smartcards to.
Speaker Change: And can bus communication.
Speaker Change: And we recently released.
Speaker Change: Specifications for our home energy storage solutions.
Brian Schaffner: Before we get to the Q&A portion of this call, we have an exciting announcement to make. We recently signed a contract to become a vendor for tractor supply, which will greatly impact and expand our retail footprint. Tractor Supply has 2,232 locations in the continental United States, and in June, we expect customers across 48 contiguous states will have the opportunity to purchase Xbeon360 products through this retailer's website. I thank you all for attending, and now I would like to hand the call over to the operator to ask a few questions. Operator?
Speaker Change: Before we get to the Q&A portion of this call we have an exciting announcement to make.
Speaker Change: We recently signed a contract to become a vendor for tractor supply.
Speaker Change: That will greatly impact and expand our retail footprint.
Speaker Change: Tractor supply has 202232 locations in the continental United States and in June we expect customers across 48 contiguous states will have the opportunity to purchase purchase extra on 360 products through this retailer's website.
Operator: Thank you all for attending and now I would like to hand, the call over to the operator to take a few questions operator.
Operator: Thank you Sir.
Operator: You so. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star and then 1 now. A confirmation tone will indicate your line is in the question queue. You may press star and then 2 if you would like to remove your question from the queue. Again, if you would like to ask a question, please press star and then 1 now. The first question that we have comes from Brian Latnia from Zacks Small Capital Research. Please go ahead.
Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star and then one now.
Operator: Confirmation tone will indicate your line is in the question queue.
Operator: You May press Star and then two if you would like to move your question from the queue.
Operator: Again, if you would like to ask a question. Please press star and then one now.
Brian <unk>: Last question Duffy half comes from Brian <unk> from Zacks small capital movie such please go ahead.
Brian Latnia: Good afternoon, gentlemen. That's exciting news about tractor supply.
Brian <unk>: Hey, good afternoon, gentlemen, that's our exciting news about tractor supply if I can just follow up.
Brian Latnia: If I can just follow up a quick question there. You mentioned that you'll be on their website. Do you think there's a possibility to expand that to their retail locations as well?
Brian <unk>: Quick question there you.
Brian <unk>: You mentioned that you'll be on their website do you think there's the possibility to expand that to their retail locations as well.
Brian Schaffner: Well, I mean, we would hope that that opportunity exists. But, you know, tractor supply seems to have a unique niche where they can have smaller locations than what you would normally have for square footage in some of the big boys, the Home Depots and the Lowe's of the world. But their customers know that they can go in, and if it's not necessarily stocked there, they can get the product relatively quickly at that location using the web services. So we're very excited about starting there, and if they decide to move down that road with us, we would, of course, tell you first.
Brian <unk>: Well I mean, we would hope that that opportunity exists, but tractor supply seems to have a unique niche where they can have.
Brian <unk>: Smaller.
Speaker Change: Locations and where what you would normally have for square footage in some of the big Big Boys, the home depots and the lows of the world, but their customers know that they can go in and if it's not necessarily stock there. They can get the product relatively quickly at that location.
Speaker Change: The web services. So we're very excited about starting there and if they decided to move down that road with US We would of course tell you first.
Brian <unk>: Okay great.
Brian Latnia: Any early feedback on the home energy system since you released the data sheets? You know, just looking at it, it looks like the system compares really favorably to the current market leaders like Tesla and LG. So, I'm just wondering if you've heard back from people in the industry and if there will be opportunities to sort of let people see the product in person at any upcoming industry events?
Brian <unk>: Early feedback on that.
Brian <unk>: Home energy system. Since you released the data sheets I'm just looking at it.
Brian <unk>: It looks like the system compares really favorably to the current.
Brian <unk>: Market leaders like that for an L. G.
Speaker Change: So I'm wondering if you've heard anything back from people in the industry and if there will be opportunities to sort of.
Speaker Change: Let people see the product in person.
Speaker Change: <unk> upcoming industry events.
Brian Schaffner: Well, we've had good traffic related to calls that have come in about the new products. As I noted before, in previous press releases, these units have to be sold and installed through Amazon. Certified Dealers, and we're currently working with some of those dealers to do test pilots in preparation for customer installations. So we're just moving down the path that is needed to put this in the hands of our customers, but we have to follow the steps.
Speaker Change: Well we've had.
Speaker Change #101: Good traffic related to calls that have come in about.
Speaker Change #101: The new products as I noted before.
Speaker Change #100: In previous press releases. These these units have to be sold and installed through.
Speaker Change #105: <unk> certified dealers and we're currently working with those sort of some of those dealers to do test pilots in preparation for customer installations. So we're just we're just moving down the <unk>.
Speaker Change #104: The path that is needed to put this in the hands of our customer, but we have to follow the steps.
Speaker Change #100: Okay.
Brian Latnia: And just one sort of housekeeping issue, Greg. The gross margin, is there anything going on there with the mix? It's pretty much principally just the battery, you know. There's nothing going on in terms of pricing pressures or anything like that that would be holding down the margin right now, right?
Speaker Change #102: And not just one.
Greg: Sort of housekeeping issue, Greg the gross margin is there anything going on there.
Greg: Pretty much principally just the battery.
Greg: You know, there's nothing going on in terms of pricing pressures or anything like that that would be holding down the margin right now right.
Greg Adelot: No, it's mainly just with the batteries; the, you know, our pricing. We've done really well with our vendors, holding prices and not seeing too many increases thus far.
Greg: No it's mainly.
Greg: Just the batteries.
Greg: And our pricing.
Greg: It doesn't really well with our vendors.
Speaker Change #106: Holding holding prices and not.
Speaker Change #107: Thank you you may increases thus far.
Brian Latnia: Okay, good. And when I retire in a few years and I'm building out a van, that new Edge battery is going to come in handy.
Speaker Change #109: Okay got it and when I when I retire in a few years in building out a van that.
Speaker Change #108: That new edge batteries is going to come in handy.
Speaker Change #108: Okay.
Brian Schaffner: So, thanks. Okay, thank you, Brian. Thank you.
Brian: Okay. Thank you Brian.
Operator: Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then 1 now. We'll pause for a moment to see if we have any further questions on the conference call. At this stage, there are no further questions on the conference call. I will now turn the call over to Larry Hull for webcast questions. Please go ahead, sir.
Speaker Change #108: Thank you ladies and gentlemen, just a reminder, if you would like to ask a question. Please press star and then one now.
Speaker Change #108: We'll pause a moment does he have any further questions on the conference call.
Speaker Change #108: At this stage there are no further questions on the conference call I will now turn the call over to Larry hung up for webcast questions. Please go ahead Sir.
Larry Hull: Our first question is, can you speak to the Biden administration's tariffs against China that were announced today?
Larry Hung: Our first question asks can you speak to the Biden administrations tariffs against China that were announced today.
Brian Schaffner: Yeah, that was an interesting read. You know, we don't really quite know the scope yet because it's a new executive order, but our initial reading shows that none of our batteries are included in the tariff lists for 2024-2025. The only lithium-ion batteries that we could identify were ones used in electric vehicles, so that's a different chemistry than what we would typically use, and we don't provide batteries for EVs.
Larry Hung: Yeah that was.
Larry Hung: And that was an interesting read.
Larry Hung: We don't really quite know the scope yet because it's a new executive order, but our initial read shows that none of our batteries are included in the tariff lists for 2020 for 2025.
Speaker Change #113: Lithium ion batteries that we could identify were ones used in electric vehicles. So that's different.
Speaker Change #112: A different chemistry.
Speaker Change #110: Chemistry than what we would typically use and we don't provide batteries for evs.
Brian Schaffner: If the tariffs for some reason did affect us, the majority of the businesses in our space would be subject to that as well, so at least we'd be on an even competitive field. And we have been working to reduce our costs and lessen the impact of what our customers have to pay for our products. So we're constantly doing that. So that will be determined by the tariffs and whether there are any more.
Speaker Change #115: If the tariffs for some reason did affect us the majority of the businesses in our space would be subject to that as well. So at least we would be on and even competitive field.
Speaker Change #114: And we have been working to reduce our cost and lessen the impact of what our customers have to pay for our products. So we're constantly doing that.
Speaker Change #114: And so to be to be determined on the tariffs and whether there's any more.
Brian Schaffner: Our second question asks, can you expand upon the announcement at the end of the call related to tractor supply?
Speaker Change #114: Our second question asks can you expand upon the announcement at the end of the call related to tractor supply.
Brian Schaffner: Absolutely. We actually finished executing the contract with them this morning. We weren't sure if we were going to be able to announce it or not, so I was very excited. But they have more than 2,200 locations, and it fits perfectly with our product offerings. We're going to be offering our 27 and 24 series products along with the Aura Cap and Solar Power Bundles, and they have a large customer base, and we're just very excited about the opportunity to provide them with our products. And since obviously that happened today, we will follow that up with a formal press release.
Speaker Change #114: Absolutely.
Speaker Change #116: We actually finished executing the contract with them. This morning, we weren't sure. If we were going to be able to announce it or not I was very excited but you know they have more than 2200 locations and it fits perfectly with our product offerings.
Speaker Change #117: We're gonna be offering our 27% and 24 series products, along with the order of cap and solar powered bundles.
Speaker Change #119: They are a large customer base and we're just very excited about the opportunity to provide them with our products and since obviously that happened today, we will follow that up with a formal press release.
Speaker Change #117: Okay.
Brian Schaffner: Our next question asks, have you begun shipping products to fulfill pre-orders for Group 27 and GC2 batteries?
Speaker Change #114: Our next question to ask have you begun shipping products to fulfill preorders for group 27, and GC to batteries.
Speaker Change #114: Sure.
Brian Schaffner: We have started to ship the pre-orders for Group 27, and our GC2 batteries are in, and we are going to be fulfilling those pre-orders as well. So yes, we have begun, and we're in the process of filling those orders.
Speaker Change #123: We have started to ship the preorders for the group 27, and our GCG batteries are in and we're gonna be fulfilling those preorders as well so yes.
Speaker Change #118: We have begun and we are in the process of filling those orders.
Speaker Change #118: Okay.
Brian Schaffner: Our next question asks, can you talk more about the new Edge battery with respect to customer orders and feedback?
Speaker Change #118: Our next question asks can you talk more about the new edge battery with respect to customer orders and feedback.
Speaker Change #118: Sure.
Brian Schaffner: Sure, as we work with our customers, they're appreciative and excited about options and that this new form factor gives them more flexibility during their RV design process, flexibility that they haven't necessarily seen in the past with other form factors. So that is what is driving the interest in the Edge battery.
Speaker Change #120: As we work with our customers.
Speaker Change #122: They are appreciative and excited about options.
Customer: And that said this new form factor gives them more flexibility during their RV design process.
Speaker Change #127: Flexibility that they haven't necessarily seen in the past.
Speaker Change #121: With that with other form factors. So that is that is what is driving the interest in edge battery.
Speaker Change #121: Okay.
Brian Schaffner: Our next question asks, "Any update on new OEM partners or customers?"
Speaker Change #121: Our next question asked any update on new OEM partners and customers.
Brian Schaffner: We have many potential OEM partners and retail partners engaged. It's very exciting to see the reactions to our new form factors and options, and we expect to begin announcing orders and highlighting new relationships as they're finalized.
Speaker Change #124: We have many potential OEM partners and retail partners engaged.
Speaker Change #124: It's very exciting to see the reactions to our new form factors and options.
Speaker Change #125: And we expect to begin announcing orders and highlighting.
Speaker Change #130: New relationships as they are finalized.
Speaker Change #125: Yeah.
Brian Schaffner: And our last webcast question asked: Is there any color you would like to add regarding where you are currently at with your home energy storage solution? Yeah, probably.
Speaker Change #125: And our last webcast question asked.
Speaker Change #134: Is there any color you would like to add regarding where you are currently at with your home energy storage solutions.
Brian Schaffner: Yeah, probably the only one is the.., constant question that comes up is, you know, Can I self-install that in the... And I don't want to speak to people that do off-grid work, but if you're working with the power grid... Um, That's a very dangerous game and these units must be sold and installed through certified dealers, and we're currently working, with some of those dealers to do test pilots in preparation for customer installation.
Speaker Change #133: Yes, probably the only one is the.
Speaker Change #126: Constant question that comes up is.
Speaker Change #126: Ken can I self install that in my home.
Speaker Change #128: And I don't want to speak to that.
Speaker Change #128: People that do off grid.
Speaker Change #128: But if you're working with the power grid.
Speaker Change #128:
Speaker Change #136: That's a that's a very dangerous game in these units must be sold and installed two certified dealers.
Speaker Change #128: And we're currently working.
Speaker Change #137: With some of those dealers to do test pilots in preparation for the for customer installations.
Seth: Thank you Seth.
Larry Hull: Thank you, sir. Ladies and gentlemen, that concludes our webinar. (inaudible)
Seth: Ladies and gentlemen that concludes our with all of them.
Mr. <unk>: Question and answer session I would now like to turn the call back over to Mr. <unk> for his closing remarks. Please go ahead.
Seth: Okay.
Mr. <unk>: Thank you so much.
Brian Schaffner: And thank you for attending today's call. It means a lot to me. We're excited about where we're headed and looking forward to engaging with our investors throughout 2024. If for some reason we were unable to answer any of your questions, please reach out to our IR firm, MZ Group. They'd be happy to assist. I will do my best to make myself available. And this concludes our call.
Speaker Change #132: And thank you for attending today's call.
Mr. <unk>: It means a lot to me.
Mr. <unk>: We're excited about where we're headed and looking forward to engaging with our investors throughout 2024.
Speaker Change #135: If for some reason we are unable to answer any of your questions.
Brian Schaffner: Please reach out to our IR firm MZ group they'd be happy to assist I do my best to make myself available and this concludes our call.
Operator: Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.
Speaker Change: Thank you, Sir ladies and gentlemen that then concludes today's conference. Thank you for joining US you may now disconnect your lines.
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Speaker Change #135: Okay.
Operator: Yeah.
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Speaker Change #135: Okay.
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Speaker Change #135: Hum.
Brian Schaffner: [music].
Operator: Okay.
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