Q1 2025 Twin Vee Powercats Co Earnings Call

Welcome to the twin V power Cats coast first quarter 2025 investor call.

This call is being recorded and all participants are in listen only mode.

Speaker Change: Your speakers for todays program, our president and CEO Joseph Biscotti.

Speaker Change: And Chief financial administrative officer, Michael P. Dickerson.

Speaker Change: 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.

Live.

Speaker Change: All statements on this call other than all statements on the call other than the 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.

Speaker Change: These forward-looking statements are subject to a number of risks and uncertainties and assumptions described, including those set forth in its filing for the Securities and Exchange Commission so that some of our webcasts will be unable to submit questions.

Speaker Change: If you'd like to ask a question, you may signal by pressing star one on your telephone keypad.

I'll now turn the call over to Joseph.

and thank you for joining the call today.

Joseph Biscotti: Despite industry challenges and market volatility throughout the past year, we continue to make the discipline decisions that strengthen our foundation and reposition our company for sustainable growth.

Joseph Biscotti: Today we announced a decent quarter in terms of top lying growth and our continued effort to dial in costs of good.

2024 was a tough

Joseph Biscotti: Year for the Recreational Sactor, especially for OEMs, but 2024 gave us the opportunity to reset, refocus, and rebuild.

Joseph Biscotti: As we continue to focus on grassroots.

Joseph Biscotti: On site dealer location training proactive engagement with our customers and this is super important our field inventory, which is the inventory of unsold boats that we delivered to dealers has significantly improved which means it's decreased last year, we had approximately a hub.

Joseph Biscotti: Wondered and 80 boats in the field and 180 boats and dealer inventory that number is now reduced to under 60 boats in our entire dealer network.

Joseph Biscotti: This is a super important metric that highlights the success of our strategy through 2024, where we hold in the range and we reduce supply to dealers and we pushed hard on sales and marketing to increase the demand.

Joseph Biscotti: It was not easy.

Joseph Biscotti: Due to the downsizing, which took you know unfortunately of human and financial toll on employees and the company. It's important to note that.

Joseph Biscotti: Last year twin V built and sold over 120 boats during the same period.

Joseph Biscotti: This is super important if you take the total reduction of the field inventory from 180 boats to the current 60 and add in the 120 boats that we built and delivered last year. We now know that even in a tough market. The demand for 20 boats is approximately.

Joseph Biscotti: 220 annual units.

The reduction in field inventory numbers reflects our efficient production planning and the effective sales strategies that we put into place and can and continue to use.

Joseph Biscotti: By continually adjusting our methods and responding to market needs, we have positioned ourselves pretty good for future growth product development continues to be our core priority. This year, we introduced the all new <unk> 'twenty or 'twenty to 'twenty two 'twenty bacot.

Joseph Biscotti: As you've seen online or maybe through our social media posts as the well balanced affordable and high performance single lines and catamaran designed for the growing insurer market not offshore most of our current twin engine cats or offshore cats, it's an ideal entry point into the twin V experience and it's already generate.

Joseph Biscotti: Some strong interest.

Joseph Biscotti: Operationally, we completed our facility expansion of our 30000 feet. We're now entering a new phase for optimal efficiency.

Joseph Biscotti: As usual twin B team is pushing on many fronts and pulling all necessary levers to regain the type of volume output, we experience and developed over the past couple of years before we were hit with interest rates and inflation on.

Joseph Biscotti: On a digital front, we're excited to announce the upcoming launch of our brand New Interactive 20 website. We've been working on this for over a year. This is a major step in our customer first strategy.

Joseph Biscotti: Isn't justice website face, but this is a total transformation of customer first interaction customers will be able to do a build in price on their own 20 online with their own 20 online in real time updates to interior upholstery, gelco colors engine options and more the platform <unk>.

Joseph Biscotti: The three boat configuration. So you can spin and interact with the boat or whatever model you're looking at the platform also offers an E R or virtual reality option, where you can open a link and you'll be inside the boat you were able to walk around and kind of look at all the fine details of our products.

Joseph Biscotti: We expect we expect this site will go live in the next two to three weeks.

Joseph Biscotti: With one model at a time being rolled out one at a time. So we are focused on continually communicating with our investors customers and the broader twin the community through social media or weekly email newsletter called the C. E O update gives customers stakeholders employees and fans.

Speaker Change: Latest news on our company products and initiatives. These efforts are helping us create a stronger connection with everyone who believes in the 'twenty mission to design build and deliver the best Friday boats on the water, while we expand and grow our business now I'd like to turn it over to our CFO.

Joseph Biscotti: Dickerson.

Dickerson: Thank you Joseph.

Joseph Biscotti: Thanks for being here with us today.

Joseph Biscotti: We're pleased to report a strong start to the year marked by sequential revenue growth and a significant improvement in margins.

Joseph Biscotti: For the first quarter, we generated $3 6 million in revenue a 91.7% sequential increase over the fourth quarter of 2024, and well ahead of the 50% growth we guided previously.

Joseph Biscotti: This performance reflects the momentum building in our business as our dealer network continues to expand and consumer demand begins to show signs of recovery.

Joseph Biscotti: We shipped 24 units in the first quarter, a sequential increase of 118% compared to the fourth quarter of 24.

Joseph Biscotti: While the number of units increased the average sell price delivered fell a bit to 151000 in the first quarter compared to 171000 in the fourth quarter due to an increased mix of 22 and 24 foot boats.

Joseph Biscotti: Gross margins improved to 14, 9% up 961 basis points from the same period last year.

Joseph Biscotti: This increase was primarily driven by better manufacturing efficiency.

Joseph Biscotti: At the same time, we remain disciplined with expenses.

Joseph Biscotti: Operating expenses were down 21% year over year with reductions in SG&A, including salaries professional fees R&D expenditures.

Joseph Biscotti: Our adjusted net loss averaged 333000 per month in the first quarter, a 17% improvement over our previously guided adjusted net loss expectations of $400000.

Joseph Biscotti: We're making measurable progress towards cash flow breakeven as we scale operations responsibly and manage working capital prudently.

Joseph Biscotti: Now turning to the balance sheet.

Joseph Biscotti: At March 31, we had $5 1 million in cash and cash equivalents down from year end levels, primarily due to funding the still negative EBITDA capital investments and facility improvements new product molds and the initial development costs for our recently acquired boats for sale Dot com.

Joseph Biscotti: We also made a meaningful reclassification in our fixed asset base during the quarter by reclassifying $4 3 million of land and buildings related to the building and Marion North Carolina as held for sale.

Joseph Biscotti: This follows the consolidation affords the X one inch it wouldn't be in the fourth quarter of 2024, and our decision to exit electric boat develops.

Joseph Biscotti: We expect this assets helped to strengthen our cash position sometime within the next 12 months and therefore are classified as a current asset.

Joseph Biscotti: Importantly, our inventory turnover has improved by half a turn from approximately 4.5 to five turns year over year, reflecting better alignment between production and dealer demand.

Joseph Biscotti: This operational progress not only frees up working capital, but also supports more agile and responsive supply supply chain strategy going forward.

Joseph Biscotti: And before I close I want to address an important topic, which is tariffs and their implications for our supply chain.

Joseph Biscotti: As you know the U S has recently enacted or expanded tariffs on various categories of goods, including materials and components relevant to the marine manufacturing industry.

Joseph Biscotti: While the impact it will be to date, it's been manageable. We are actively monitoring this rapidly evolving public policy landscape.

Joseph Biscotti: It's worth noting that we continue to benefit from strong relationships with key U S suppliers for compounds components and services.

Joseph Biscotti: That wouldn't be has always led with in America first posture and supported the small and medium sized businesses in our local community.

Joseph Biscotti: While tariffs could present incremental headwinds in the quarters ahead, particularly in areas such as motors and electronics.

Joseph Biscotti: We believe our proactive supply chain strategy and commitment to cost control will enable us to navigate any near term volatility.

Joseph Biscotti: Looking ahead, we anticipate continued sequential revenue growth of your second quarter of 2025 as the market slowly recovers and our dealer base expands we remain.

Joseph Biscotti: Focused on operational efficiency margin expansion and developing high impact digital platforms to complement our core business.

Joseph Biscotti: With that I'm going to turn the call over to the operator for your questions.

Speaker Change: Thank you well now be conducting a question and answer session.

Speaker Change: If you'd like to ask a question at this time you May press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press star two if you'd like to withdraw your question from the queue.

Speaker Change: Her participant study using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Speaker Change: One moment, please where we poll for questions. Thank you.

Speaker Change: Thank you at this time I'll now turn the floor back to Mr. Joseph Biscotti.

Speaker Change: Thank you.

Speaker Change: So in closing I will leave you with this twin the entered 2025 with renewed purpose 'twenty 'twenty four is Ross, but in 2025, our dealer network is rebuilding our inventory has right sized our product line continues to expand our factory is complete.

Speaker Change: <unk> and evolving and our digital strategy is entering a new phase through it all we remain committed to operational discipline American craftsmanship and delivering real value to our customers and most importantly to our shareholders. So I want to thank you all for joining us today have a one.

Speaker Change: Wonderful day God Bless America.

Speaker Change: Thank you. This will conclude today's conference you may now disconnect. Your lines at this time and thank you for your participation have a wonderful day.