Q1 2024 Twin Vee Powercats Co Earnings Call

Operator: Welcome to the Twin Vee Powercast Company first quarter 2024 investor call. As a reminder, this call is being recorded, and all participants are on a listen-only basis. Your speaker for today's program is Joseph Visconti, President and CEO of Twin Vee PowerCats.

Welcome to the twin V power Cats company first quarter, 'twenty 'twenty four investor call.

As a reminder, this call's being recorded and all participants are in a listen only mode.

Your speaker for today's program is Joseph Biscotti, President and CEO of twin Bee power Cats company.

Operator: Before I turn the call over to Joseph, please remember that certain statements made during this investor call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements on this call, other than statements of historical facts, including statements regarding the company's future operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements can be identified by terminologies such as believes, may, estimates, continue, anticipates, intends, should, plan, expects, predict, potential, or the negative of these terms or other similar expressions.

Joseph Visconti: Before I turn the call over to Joseph Please remember that certain statements made during this investor call. Our forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, all statements on this call other than statements of historical facts, including statements regarding the company's future operations.

Operator: The company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial condition. These forward-looking statements are subject to a number of risks and uncertainties and assumptions, including those set forth in its filings with the Securities and Exchange Commission, which are available on the company's investor relations website at ir.gov. T W I N V E E dot com. You should not rely upon forward-looking statements as predictions of future events.

Operator: We cannot assure that the events and circumstances reflected in the forward-looking statements will be achieved or occur; find this conference call as being webcast. The webcast will be available at IRTWINVE.com for at least 90 days. Audio cast quality is subject to your equipment, available bandwidth, and internet traffic.

Joseph Visconti: And financial position business strategy, and plans and objectives of management for future operations are forward looking statements.

Joseph Visconti: In some cases forward looking statements can be identified by terminal terminology such as believes May estimates continue anticipates intends should plan expect predict potential or the negative of these terms or other similar expressions.

Joseph Visconti: Company has based these forward looking statements largely on its current expectations.

Joseph Visconti: And projections about future events and financial trends that it believes may affect its financial condition results of operation business strategy and financial needs.

Joseph Visconti: These forward looking statements are subject to a number of risks and uncertainties and assumptions described including those set forth in its filings with the Securities and Exchange Commission, which are available on the company's Investor Relations website at IR Dot.

Joseph Visconti: T W. I N V E Dot com.

Should not rely upon forward looking statements as predictions of future events, we cannot assure that the events and circumstances reflected in the forward looking statements will be achieved or a car.

Speaker Change: Finally, this conference call is being webcast. The webcast will be available at I R. T. W. I N V E Dot com for at least 90 days.

Speaker Change: Audiocast quality are subject to your equipment available bandwidth and internet traffic. If you experienced unsatisfactory audio quality. Please use the telephone dialing up.

Operator: If you experience unsatisfactory audio quality, please use the telephone dial-in option. A question-and-answer session will follow the presentation. Please note that only those who have dialed in via telephone may ask a question. Those listening via webcast will be unable to submit questions. If you'd like to ask a question, you may signal by pressing star 1 on your telephone keypad. I will now turn the call over to Joseph Vis

Speaker Change: A question and answer session will follow the presentation. Please note that only those who have dialed in via telephone may ask a question.

Speaker Change: Those listening via webcast, we will be unable to submit questions.

Joseph Visconti: If you'd like to ask a question you may signal by pressing star one on your telephone keypad I will now turn the call over to Joseph Biscotti.

Joseph Visconti: Thank you, Rob. Good afternoon to everybody on the call today and thank you for joining, taking the time to participate in Twin Vee's first quarter 2024 financial results. My name is Joseph Visconti.

Speaker Change: <unk>.

Joseph Visconti: Thank you Rob good afternoon to everybody on the call today and thank you for joining taking the time to participate in twin These first quarter 2024 financial results.

Joseph Visconti: My name is Joseph Escalante, I'm, the CEO and President of Twin V power Cats co and joining me today is also our new CFO, Mike Dickerson welcome Mike Q.

Joseph Visconti: I am the CEO and president of Twin Vee Power Cats Co., and joining me today is also our new CFO, Mike Dickerson. Welcome, Mike. Q1 was an important quarter in terms of dealing with the slowing economy, challenging demand for recreational products, and shifting our business by right-sizing the company's finances, while simultaneously laying the groundwork for the many exciting developments Twin Vee is aiming to accomplish in 2024 for the rest of the year.

Speaker Change: Q1 was an important quarter in terms of dealing with the slowing economy challenging demand for recreational products and shifting our business by right sizing the company's economics.

Speaker Change: Simultaneously laying the groundwork for the many exciting developments twin biggest aiming to accomplish in 2024 for the rest of the year intra.

Joseph Visconti: Interest rates remain stubbornly high and elevated, and for industries like ours where major purchases often rely on financing, higher interest rates increase customer costs, which causes downward pressure on demand across our industry. Lower demand is not isolated to our company but a trend across this entire industry. While these headwinds have presented challenges for Twin Vee since mid-2022, we've taken some proactive measures to mitigate these economic challenges and the impact of the slowing demand for our product.

Speaker Change: Interest rates remain stubbornly high and elevated <unk>.

Speaker Change: And for industries, like ours, where major purchases often rely on financing higher interest rates increased customer costs, which caused downward pressure on demand across our industry lower demand is not isolated to our company, but a trend across this entire industry wide.

Speaker Change: While these headwinds have presented challenges for twin V. Since mid 2022, we've taken some proactive measures to mitigate these economic challenges and the impact of the slowing demand for our products Q1 was not easy, but we face the quarter had on not only with defensive downsize.

Joseph Visconti: Q1 was not easy, but we faced the quarter head-on, not only with defensive downsizing and equalizing production output to meet or equalize the demand for products from our dealers and customers, but we also closely monitored field inventory not to exceed an outsized liability or exposure. As these challenges continue, we cannot predict with 100% certainty what the future holds.

Speaker Change: <unk> and equalizing production output to meet or equalizing the demand for products from our dealers and customers, but also we closely monitored field inventory not to exceed an outsize liability or exposure.

Speaker Change: These challenges continue we cannot predict with 100% certainty what the future holds while we work through these challenges our focus is on the many opportunities we have developed over the past two quarters.

Joseph Visconti: While we work through these challenges, our focus is on the many opportunities we have developed over the past two quarters. Twin Vee is now operating leaner. It's important to note that our dollar production revenue per employee is higher. Our new CFO, Mike Dickerson, has settled into his role, and we are already seeing some positive financial controls and accountability take shape.

Speaker Change: Twin V is now operating leaner.

Speaker Change: It's important to note that our dollar production revenue per employee is higher our new CFO, Mike Dickerson has settled into his role and we are already seeing some positive financial controls and accountability takes shape R. E. N E. R. ERP financial system continues to be rolled out and.

Joseph Visconti: Our ERP financial system continues to be rolled out and developed in departments from production, procurement, work order, finance, warranty, and inventory management. And now we are utilizing our financial platform to reduce inventory, which has been reduced over 20% for the quarter. And we will continue to tighten controls and try to get inventory even lower moving forward. We are now integrating back with our national dealer network that built this company over a 30-year period.

Speaker Change: Developments in departments from production procurement work order finance warranty inventory management.

Speaker Change: And now we are utilizing our financial platform to reduce inventory, which has been reduced over 20% for the quarter and we will continue to tightened controls.

Speaker Change: And try to get inventory, even lower moving forward.

Mike Dickerson: We are now and we are now integrating back with our national dealer network that built this company over a 30 year period.

Joseph Visconti: We have refocused our amazing team of engineers to redesign, reimagine, and retool our popular GFX line of PowerCats into our brand new, tech-forward, all-digital GFX PowerCats. I recommend that you go to our website, TwinVee.com, and really learn about these brand new models that we're bringing to the market. These newly designed GFX2 models will make their debut at our dealer meeting this coming Monday in front of our national dealer network.

Mike Dickerson: We have refocused our amazing team of engineers to redesign and re imagine their retool our popular G. F X line of power caps through our brand new tack forward all digital G. F X power cats I recommend that you go to our website <unk> dot com and really learn about these brand.

Mike Dickerson: New models that we're bringing to the market. These newly designed GFX two models will make their debut at our dealer meeting this coming Monday in front of our national dealer network.

Joseph Visconti: Our 400 GFX2 has already sold 10 units. So far, we are now building number 11, when last year we were only projecting six units for this 40-foot power cap. Our team is now designed to produce over 15 new boat models with six additional new models in the pipeline. Our 30,000-square-foot addition here in Fort Pierce has begun construction, and by the end of this year, we will have over 100,000 square feet of linear production for our two iconic brands that represent over 90 years of industry brand recognition.

Speaker Change: Our 400 G. F X two has already sold 10 units.

Speaker Change: So far we are now building number 11, when last year, we were only projecting six units for this 40 foot power cat.

Speaker Change: Our team is now designed and produced over 15, New boat models with six additional new models in the pipeline.

Speaker Change: Our 30000 square foot addition, here in Fort Pierce has begun construction and by December of the end of this year, we will have over 100000 square feet of linear production for our two iconic brands that represent over 90 years of industry brand recognition.

Joseph Visconti: The 100,000 square feet should bring our capacity production upwards; Twin Vee and AquaSport boats will all be designed and assembled right here in our new 100,000 square foot plant in Fort Pierce, Florida. Financial performance. Let's look at the financial performance for Q1. As I mentioned earlier, Twin Vee experienced a decline in demand for its products during the quarter. Despite our revenue drop from $8.8 million to $5.2 million in Q1, Twin Vee grew revenue per direct labor by 40%.

The 100000 square feet should bring our capacity production upwards of 700 units annually.

Speaker Change: When we began to see the market rebound.

Speaker Change: N V and Aqua sport boats will all be designed and assembled right here in our new 100000 square foot plant in Fort Pierce, Florida.

Joseph Visconti: That means that per employee in production now has more of a 40% increase in dollar revenue. Our consolidated net loss for the three months ended March 31st was $2.335 million, which approximately half was attributed to Forza and half, which was $1,164,000 for Twin Vee.

Speaker Change: Financial performance, let's look at the financial performance for Q1, as I mentioned earlier <unk> experienced a decline in demand for its products for the quarter.

Joseph Visconti: If you remove the non-cash expenses.., from the Twin Vee loss of $1,164,000, Twin Vee's gas-powered boat segment adjusted loss for the quarter was $669,500. On March 31st, 2024, Twin Vee's consolidated holdings of cash, cash equivalents, restricted cash, and marketable securities totaled $17,381,000, a decrease from $21,218,000 that was on December 31st, 2023, in costs allocated for new product development such as the 400GFX, Twin Vee's 280GFX2, AquaSport's 24 center console, and AquaSport's brand new 280 superboat, in addition to operational cash losses from reduced revenue in the first quarter of 2024.

Speaker Change: Despite our revenue dropped from $8 8 million to $5 2 million in Q1, 'twenty grew revenue per direct labor by 40% that means that per employee and production now has more of a 40% increase in.

Speaker Change: And dollar revenue our consolidated net loss for three months ended March 31 was 2.335 million, which approximately half was attributed to four as and half which was 1.164 million for twin V. If you removed.

Speaker Change: The non cash expenses from.

Speaker Change: From the twin the loss of 1 million 164 twin these gas powered boat segment adjusted loss for the quarter was $669500.

Speaker Change: On March 31, 2024, twenties consolidated holdings of cash cash equivalents restricted cash and marketable securities totaled 17.381 million a decrease from 21.218 million. It was on December 31 2023.

Speaker Change: The decrease in cash reserves was primarily due to four is that ex ones R&D for us is plant construction.

Speaker Change: And costs are allocated for new product development, such as the 400 G effects twin these to a D. G F X to Aqua sports twenty-four center console and Aqua Sports brand new to 80 Super boat.

Speaker Change: In addition to operational cash losses from reduced revenue in the first quarter of 2024.

Joseph Visconti: Twin Vee's gas-powered segment has working capital, including inventory, of nearly $9 million. Additionally, we have $3 million invested in property and equipment. Twin Vee has a strong balance sheet with over $7 million in cash and only a small COVID area stimulus loan of $500,000. We currently have no bank debts.

Speaker Change: <unk> gas powered segment has working capital, including inventory of nearly $9 million. Additionally, we have $3 million invested in property plant and equipment.

Speaker Change: <unk> has a strong balance sheet with over $7 million in cash and only a small COVID-19 areas stimulus alone of $500000. We currently have no bank debt.

Joseph Visconti: During the first quarter, we took further steps to right-size the labor force while also tightly controlling operating costs. Despite the current economic challenges, Twin Vee is investing in exciting new models like our Gen 2 GFX boats and our brand-new Aquasport 280 Superboat, and our larger offshore boats. We're beginning a brand-new 44-foot Twin Vee. These boats have much higher margins. Additionally, we are committed to reducing cash burn while making smart investments in our infrastructure.

Speaker Change: During the first quarter.

Speaker Change: We took further steps to right size the labor force, while also tightly controlling operating costs. Despite the current economic challenges 'twenty is investing in exciting new models like our Gen. Two G. F X boats are brand new Acrospore to EDI Super boat, our larger offshore boats, we're beginning a brand new <unk>.

Speaker Change: 44 foot twin Bee. These boats have much higher margins and additionally, we are committed to reducing cash burn, while making smart investments to our infrastructure when.

Joseph Visconti: When we do start seeing the next market upswing, we will be ready. Twin Vee Powercats and Aquasports have over 90 years of brand recognition and customer loyalty. These two incredible, storied, scalable brands offer a variety of new and innovative products to a growing and more diverse dealer network. We are excited about the future, and I want to thank our investors, stakeholders, and employees for their continued support. Now, I'd like to open it up to questions. Thank you.

Speaker Change: When we do start seeing the next market upswing, we will be ready.

Speaker Change: Twin V power Cats, and Aqua sports has over 90 years of brand recognition and customer loyalty.

Speaker Change: These two incredible storied scalable brands offer a variety of new and innovative products to a growing and more diverse dealer network. We are excited about the future.

And I want to thank our investors and stakeholders employees for their continued support and now I'd like to open it up for questions.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Operator: One moment, please, while we poll for questions. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. There are no questions at this time. I'd like to turn the call back over to Joseph Visconti for closing comments.

Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad, one moment, while we poll for questions.

Speaker Change: There are no questions at this time I'd like to turn the call back over to Joseph to Scotty for closing comments.

Joseph Visconti: I want to thank our shareholders, stakeholders, and employees and have a great day. Thank you, everybody.

Joseph: I want to thank our shareholders stakeholders and employees and have a great day. Thank you everybody.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Joseph: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.