Q1 2025 Worksport Ltd Earnings Call
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Stephen Rossi: You have joined the meeting as an attendee and will be muted throughout the meeting 25 earnings call I'm, Stephen Rossi Chief Executive Officer of works for limited with me is our Chief Financial Officer, and Michael Johnston today.
Stephen Rossi: They will be reviewing our Q1 performance discussing key operational milestones and share an updated outlook for 2025.
Stephen Rossi: Q1 of this year was a transformative period for work sport, we released our flagship higher margin products. The E. L. Four tunnel cover we rapidly expanded our dealer network and strengthened our gross margins, we will be reviewing the financial results for the quarterly period, ending ending March 31, 2025. These results were filed.
Stephen Rossi: Today at four P M. Eastern time in our Form 10-Q and can be downloaded from the link provided in the chat.
Stephen Rossi: At the end of todays call, we prepared our prepared remarks and presentation deck will be available for download at H T. T. P. S. Colon forward slash forward slash investors Dot work sport dotcom forward Slash hashtag reports.
Stephen Rossi: Our remarks will be accompanied by a slide presentation. After these remarks, we will open the line for questions with that let's begin.
Stephen Rossi: During this call we will make forward looking statements, including statements regarding our financial outlook for the full year 2025, our expectations regarding financial and business trends impacts from these macro economic environment and market position opportunities go to market initiatives growth strategy and business aspirations and project product.
Stephen Rossi: <unk> and the expected benefits of such initiatives. These statements are only predictions that are based on our current beliefs expectations and assumptions because forward looking statements relate to the future theyre subject to inherent uncertainties risks and changes in circumstances that are difficult to predict and and many of which are outside of our control actual results.
Stephen Rossi: Or events may differ materially therefore, you should not rely on any of these forward looking statements. These forward looking statements are subject to risk and other factors that could affect our performance and financial results.
Stephen Rossi: Which we discussed in details in our filings with the SEC, including in our annual report Form 10-K, and quarterly reports Form 10-Q, and other SEC filings. The forward looking statements made in this earnings call are only made as of today's date works for it assumes no obligation to update any forward looking statements. We may make on today's webinar.
Stephen Rossi: We'll begin by highlighting works sports achievement from Q1 2025 celebrating the milestones are propelled our impressive growth trajectory following that will dive into our financial performance emphasizing our margin growth and developments from our dealer network will then explore.
Stephen Rossi: Our operational successes showcasing the growing success of our horror folding truck bed cover line broadly made right here in the USA will also discuss our continued success betting on ourselves shifting towards higher margin work sport only branded product sales will also expand on highly anticipated outcome upcoming product launches, including our solar solar cover.
Stephen Rossi: Core portable energy storage system and innovations from tariffs energy, our subsidiary, which has generated noteworthy industry interest.
Stephen Rossi: To wrap up we'll share our vision and strategic plans for fiscal year 2025 provide fresh guidance and outline key financial goals for the rest of the year paving a clear strategic roadmap for continued expansion and profitability.
Stephen Rossi: The first quarter of 2000 and twenty-five marked a continuation of strong growth revenue for the quarter reached 2.24, million% to 337% increase compared to 512000 in Q1 of last year. While this figure is slightly lower than our Q4 'twenty 'twenty four results the decreases this.
Stephen Rossi: Increases consistent with seasonal trends as Q4 typically represents our strongest sales period.
Stephen Rossi: For example, with Black Friday, and the holidays, while Q1 tends to be slower in.
Stephen Rossi: Importantly, we remain confident in achieving substantial year over year growth by the end of this year 2025, our strategic shift towards branded high margin products highlighted by the late Q1 launch of our ale for product line has meaningfully improved gross margins instead of constructive tone for the year ahead early indications show that age.
Stephen Rossi: Oh for sales are already contributing to a significant portion of our Q2 revenues reinforcing our expectations for continued upward momentum with a very exciting road ahead as consumers adopt the newly released ale for were all working hard to achieve continued significant and exponentials growth in the months ahead.
Stephen Rossi: Mike Johnson, our CFO will now walk you through the financial details of Q1 2025.
Mike Johnson: Thanks, Steve Please bear with me everyone about a bit of a cold here. So my boys might be all over the place.
Mike Johnson: I'll be very significant financial milestone this quarter gross profit rose, notably at 396000, achieving a gross margin of nearly 18%, which is up from 7% in the same quarter of last year, and 11% from Q4 points on or even improve.
Mike Johnson: Proven pilot yangban itself of our strategic shift towards higher margin work sport branded products and better operational efficiency.
Mike Johnson: Expect margin to continue improving with the objective of reaching 25 or 30% later this year.
Mike Johnson: And believe it is only achievable with increased production that will optimize overhead absorption along with sales growth of our al Gore club.
Mike Johnson: Furthermore, our core beliefs, releasing later this year, we expect additional notable improvements to the company's growth profit and top line revenue profile.
Mike Johnson: Total operating expenses for Q1 were 4.65 million up from about $3 six 8 million and you want a 2024.
Mike Johnson: The percent increase in operating expenses reflects targeted investments that directly support our 337% surge in revenues over the same period last year.
Mike Johnson: Demonstrating the scalability of our model and return on our strategic plan.
Speaker Change: The increase in operating cost reflects a one time expenses.
Speaker Change: Ongoing strategic investments in marketing product development and significant expansion of our CLC.
Mike Johnson: More specifically sales and marketing expenses were 870000, reflecting expanded digital marketing efforts.
Mike Johnson: General and administrative expenses rose to approximately $2 nine 9 million for two point to and I know there were barely by increased staffing and facility related costs.
Mike Johnson: Professional E E decreased $426000 $944000.
Mike Johnson: Highlighting the effective cost control measures.
Mike Johnson: For Q1 of 2025 operating losses of approximately 4.46 $9 compared to $3 seven 1 million in the prior year period.
Mike Johnson: A net loss of 454 6 million, reflecting the costs associated with scaling the operation.
Mike Johnson: Strategic investments, specifically in sales and marketing expenses and non reoccurring corporate stuff.
Mike Johnson: Despite the net loss improved gross margin operational efficiency lay a foundation for achieving profitability.
Mike Johnson: We believe there is an adequate room in your.
Mike Johnson: Controlling those basketball continue accelerating expansion.
Mike Johnson: The GAAP to an expansion in gross profit is expected to decrease in future quarters.
Mike Johnson: Coronary and accompanying still targeting to achieve operational cash flow breakeven. Thank you Q4 of 2025.
Mike Johnson: Early Q1 of 2021 is to come with it.
Mike Johnson: Turning to the balance sheet cash and classic oil instead of 5.08 million slightly up from $4 $88 million a year on a 2024.
Mike Johnson: Great powers capital raising efforts subsequent to a reduction of long term debt of approximately $2 million this quarter.
Mike Johnson: Working capital improved to 749 $4 million, providing financial flexibility operational readiness for continued growth.
Mike Johnson: Current liabilities decreased slightly.
Mike Johnson: Our liquidity position and preparing us to effectively manage our upcoming product launches.
Mike Johnson: During Q1 of 'twenty 'twenty by cash used in operating activities totaled $384 million, primarily with likely are not law and increased inventory system or projected demand.
Mike Johnson: Investment activity, so $269000, primarily for property and equipment upgrades.
Mike Johnson: <unk> activities generated Autodesk was approximately $4 5 million driven by proceeds from warrant exercises offsetting operational and capital investments.
Mike Johnson: We had inventories of $5 $7 million out of the March 31st probably quantify slight increase on December 31st 2024.
Mike Johnson: Roughly 50% of our current assets.
Mike Johnson: Notably 30 quite $4 million of our inventory about raw materials. This inventory inquiries components are a L theory covers at legacy products will redeem it appropriately balance we have processes in place to monitor for any slow moving obsolete stock or just production person accordingly.
Mike Johnson: We view our quarter end inventory level of healthy support for 2025 sales target.
Mike Johnson: Meetings. This dassault further thoughts on working capital.
Mike Johnson: We also view this inventory level is sufficient combat short term carefully the impacts on our business.
Mike Johnson: While long term and pockets that are relatively new for our marriage.
Mike Johnson: Our made in America hardcovers, Novartis to even for key insights on business operation.
Speaker Change: Thank you Michael.
Mike Johnson: Beyond the financial numbers Q1 marks the foundation of what we can expect for the year ahead I'd like to highlight some of these key milestones we achieved that are setting the stage for our future.
Mike Johnson: We started shipping a L. Four tunnel covers enlisted the ale for for sale on our E. Commerce platform only in late February 2025, just a few short months ago. The a L. Four launches significant for works for it as it expands our product line.
Mike Johnson: At the high end with early feedback from customers being very positive on the quality of aesthetic and functionality of this cover model.
Mike Johnson: The product will be a big part of our story for the rest of this year. We've had tremendous early interest and expect this product to be a significant revenue driver for us in the near term.
Mike Johnson: The workspace factory is targeting four times growth in monthly production by the end of Q3 2025 as compared to Q4 last year in other words, we're targeting to produce over 200 units per day by the end of summer and have already made positive progress towards that goal in Q1, but even more so in the early.
Mike Johnson: <unk> Q2.
Mike Johnson: Our production rate of 200 units per day would represent upwards of $45 million in annual topline revenues from our E. Commerce channel all earnings strong economies of scale that will drive up gross margin towards our previously forecasted levels.
Mike Johnson: Our reseller sales now work has grown significantly as well in Q1 2025, and it continues to grow reseller network growth works for its U S network now totals 151 active dealers a 64% increase from 92 at the end of last year more export has added 35, new dealer accounts and <unk>.
Mike Johnson: <unk> following 24 additions in January and February combined.
Mike Johnson: March 'twenty twenty-five business to business sales grew nearly 70% from February underscoring strong market momentum and heightened interest of the a L. Four tonneau cover.
Mike Johnson: Works for dealer partners are independent truck accessory retailers installers main street businesses that form the backbone of the U S economy, where exports mandate is to help these local businesses thrive by providing the best service products and profit margins possible. This mandate will be the reason that with over 17000 addressable deal.
Mike Johnson: Nationwide, we expect to see significant continued growth and adoption of our products within the BTB markets, we anticipate dealers contributing to notable revenue growth this year.
Mike Johnson: More export will look to strategically expand further by partnering with distributors and purchasing groups, who value American made quality and price prioritize dealer success. These partnerships would bring many new dealers to the workspace network as well the company expects to provide additional updates in the near term again the.
Mike Johnson: The company's products are engineered to deliver healthy margins for dealers, while offering exceptional performance and value to end users, making works for a win win solution for both sides of the market.
Mike Johnson: Workspace planes to release three new products. This year, the H D. Three hard folding tonneau cover the solas solar integrated tonneau cover in the core our portable energy storage system.
Mike Johnson: The H D. Three is a heavy duty business to business oriented tonneau cover underdevelopment for release. This summer it builds on our ale three design, but with enhanced materials seals and latch mechanisms for greater durability. The key strategy with the H E. Three is to cater to commercial fleet customers for example businesses outfitting work.
Mike Johnson: <unk> fleets with a product that can withstand rigorous use while the product will be available both on our website and our wholesale customers. The intention of the AC three would be to primarily support growth amongst our wholesale business to business customers. The.
Mike Johnson: Ph D. Three is expected to begin production and sales in the coming months, adding another revenue stream for 2025 and more importantly, rounding out a full line of high quality durable tunnel covers made right here in the USA.
Mike Johnson: Now onto our solus in Q1 of this year works toward advanced solar integrated tonneau cover solus towards beta testing selecting key customers to trial early units ahead of a planned commercial launch later this year.
Mike Johnson: The solus will be assembled in the USA using American aluminum and solar panels source from India, a country. We view as tear favorable early interest has been strong, particularly among pickup truck owners, including F 150 drivers both in EV and traditional segments.
Mike Johnson: Pricing is expected to align with existing premium tunnel covers positioning our patented solar tonneau cover functionally as a competitor and its functionality as a compelling value add within our market.
Mike Johnson: Now onto the core mobile power system.
Mike Johnson: Along with Solas works for its portable core power system is nearing mass manufacturing and remains on schedule for release later this year core is a modular portable energy solution that can integrate with solas is.
Mike Johnson: Our solar tonneau cover or function as a standalone unit offering reliable power for work sites job sites and emergency scenarios designed with a broader global consumer market in mind core represents works for its first entry beyond the pickup truck segment targeting a wider wider range of users together.
Mike Johnson: Corn soulless position worst part within the fast growing multibillion dollar portable energy market space. The company believes will be a key long term profitability driver.
Mike Johnson: Now onto innovation in clean energy.
Speaker Change: Tirrivee synergy Eythor Lux heat pump breakthroughs on February 11, 2025, we announced that tear vs. Workspace subsidiary has developed a cold climate heap pump system named ether Lux with two major innovations the elimination of the defrost cycle and ultra low temperature innovation, the likes of with which does not exist in this world.
Mike Johnson: The elimination of the defrost strigl the Eythor looks he pumpkin operate without the need for traditional deep defrost cycles defrost cycles are common drawbacks and heat pumps, whether the where the system periodically stops heating to melt ice buildup, eliminating this requirement means continuous efficient heating even and freezing conditions.
Mike Johnson: The ultra low temperature operation the system can function in ambient temperatures as low as negative 57 degrees Fahrenheit or negative 49 degrees Celsius far below the operational range of commercial heat pumps. This is a groundbreaking breaking capability, marking the eighth or Lux.
Mike Johnson: Making eater Lux potentially.
Mike Johnson: Buyable in extreme Arctic environments or applications that were previously impossible for heat pumps. This is a huge global opportunity the.
Speaker Change: The <unk> Luxe heat pump featuring a revolutionary zero Frost technology continues to generate substantial global interest for multiple major global corporations, we remain committed to monetizing this transformative technology and remain open to discussions on strategic licensing and manufacturing opportunities within this 120.
Speaker Change: 3 billion dollar market.
Speaker Change: Now on to intellectual property.
Speaker Change: <unk> holds a robust and growing patent portfolio of over 170 approved registered and pending patents and trademarks on January 2025, we joined the lot network a global consortium aimed at safeguarding innovations against patent trolls. This moves house. This move helps protect our intellectual property and gives us access.
Speaker Change: Brought to our broad community of Tech companies committed to cross licensing for defensive purposes.
Speaker Change: More export believes it has it has strong.
Speaker Change: Protection pipeline against competitors on his upcoming innovations, including the solas.
Speaker Change: Tunnel covers core battery system, and ether Lux heat pump.
Mike Johnson: I'm going to pass it back to Mike with our updated fiscal year 2020 for outlook and guidance.
Mike Johnson: Thanks Nate.
Mike Johnson: Our exports hard follow Congress' lead by the a L. L. A O. Four models are proudly made back in the U S. So I think predominantly in the U S provides the strong resilience of its tariffs and geopolitical challenges.
Mike Johnson: Soft covers currently sourced from China account for a relatively insignificant portion of our revenues are domestic reductions actively under review.
Mike Johnson: Our current solar solar coupled will be assembled in the U S. Solar panels are expected to be sourced from India, a country maintained relatively stable trade relations with the U S for the.
Mike Johnson: Core portable power system or explore is working with its international battery supplier U S based partners to mitigate their exposure and evaluate onshore main bashing offices.
Mike Johnson: Are you a made in USA advantage by sourcing locally manufactured in the U S where export leaves it mitigates tariff risks Connell covered products sports Americans are deliver superior product.
Mike Johnson: The outlook for success through that manufacturing in the U S. American source material with strong American workforce, the proven strategy for growth and success within the world's largest economy.
Mike Johnson: As we look ahead, we're still very optimistic that works or trajectory in Hong Kong, but we expect to carry forward momentum in margins from Q1 of 2025.
Mike Johnson: And the exponential growth and improved financial performance.
Mike Johnson: Let me share our outlook and guidance.
Mike Johnson: We're forecasting another year of significant revenue expansion in 2025, driven by both our core title covered business and new product introduction.
Mike Johnson: Based on our current visibility with targeting all year 2025 revenue in a range of $20 million to $25 million.
Mike Johnson: I'm pleased to share some insights of what drives us.
Mike Johnson: Yeah.
Mike Johnson: Our Q1 2025 revenue of 2.24 million impacted by some expected seasonality where costs in Q2 revenue will see further margin improvement and revenue growth.
Mike Johnson: This will be driven, especially by the launch of our higher margin <unk> or which started late in Q1.
Mike Johnson: This revenue projection reflects an approximate two and a half to three times a.
Mike Johnson: The 2024 year on Brian.
Mike Johnson: With auto covered businesses is expected to carry this growth.
Mike Johnson: We expect the tonneau cover sales to improve in Q2, and notably ramp up in Q3 or allowing us to steer towards this target.
Mike Johnson: We are initially targeting $2 million to $3 million in revenue from our core solely product line by year end.
Mike Johnson: However, as geo political conditions.
Mike Johnson: Condition and global supply chain volatility, especially in particular in power electronics and Peru. They.
Mike Johnson: We remain optimistic about potentially raising this portion of our year end guidance Q3.
Mike Johnson: We believe the upper end of this range around $25 million will authorize it and cash flow breakeven and set a strong foundation regarding profitability.
Mike Johnson: While its early to provide a comprehensive revenue projection for 2026.
Mike Johnson: Target overall company profitability.
Growth on 2025, largely driven by market share when the multibillion dollar.
Mike Johnson: You asked tonneau cover market and aggressive growth of course the lease.
Mike Johnson: As mentioned cash flow positive is our next major goalposts, we're encouraged by the margin improvement seen in Q1 FY 'twenty five we expect gross margins to continue to increase in 2025, and our product mix shifts further towards higher margin items and as we benefit from economies of scale.
Mike Johnson: By phasing out our lower margin private label offerings, we anticipate gross margin will step up in sports.
Mike Johnson: Currently forecast gross margin, reaching a 25% to 30% range or higher by late.
Mike Johnson: While we continue to invest in R&D and sales to support growth, we expect a more moderate increase in operating expenses relative to revenue growth in 2025, which should drive improved EBITDA.
Mike Johnson: Our overall, our overarching financial objective for 2025 for me is really closer to cash flow breakeven.
Mike Johnson: Ultimately to achieve profitable positive by late 2025 early onset.
Mike Johnson: The revenue grew growth of margins just described we believe more export and Richard have below breakeven.
<unk> is becoming more classical day by day and team dedicated to achieving.
Mike Johnson: To manage operating expenses carefully balancing growth investment sort of efficiency. So we are pro forma sales and margins.
Mike Johnson: Funding of reaching breakeven importantly, subscriber profitability maintained sufficient cash reserves and access to capital to fund our growth initiatives. So we're not pursuing growth and strong liquidity.
Mike Johnson: With respect to capital expenditures, we expect moderate moderate capital expenditure needs in late 2025.
Mike Johnson: Most of our required production equipment. That's all coverage is already in place of a management considering additional equipment required for scaling operations.
Mike Johnson: We will also invest an additional two anchor production ramp up and possibly automation and losses to improve throughput.
Mike Johnson: Lots of stories and core might require some imbalances in production setup again, we expected managers within our operating cash flow capacity.
Mike Johnson: In summary, our 2025 outlook remains very similar to our outlook projected in Q4 of 21 four on a notable growth improving financial performance, we have set clear targets aggressively grow expand margin this year.
Mike Johnson: The animal financial model by year's end.
Mike Johnson: We will report our progress each quarter and we're confident in our direction.
Mike Johnson: <unk> EBITDA for concluding remarks.
Mike Johnson: All said and thank you Mike.
Mike Johnson: To conclude our strategic priorities for 2025 remained well defined <unk>.
Mike Johnson: Scale sales of our current products, including the ale foreign ale three an upcoming H D. Three tunnel covers successfully launch our solus solus cover and core product lines.
Mike Johnson: Drive continued innovation and strengthened intellectual property protections maintain operational excellence across manufacturing and supply chain improve.
Mike Johnson: Margins and continue ramping up revenue with a clear path towards achieving cash flow positivity, we remain focused on.
Mike Johnson: The disciplined execution across these priorities to support sustained growth and a long term value creation to our investors and analysts listening. Thank you for your time.
Mike Johnson: And for your interest in workspace, we are committed to transparent communications and delivering on our promises we look forward to updating you on our progress in the quarters ahead, as we work to create sustainable long term value.
Mike Johnson: Thanks, everyone. This concludes our prepared remarks operator, please open the line for questions.
Mike Johnson: Okay.
Speaker Change: We're now open I go ahead Glen front.
Speaker Change: Thank you, Mike we had two questions and annualize at Maxim date. Sullivan first question is have you made shale of the alpha product this quarter.
Speaker Change: So yes, thanks for that question al for its.
Speaker Change: It's flying off the shelves, we can't keep up we were actually running low on stock last week. We are we're not only selling it we're selling the heck out of it it's going extremely well and and we have a lot of our new.
Speaker Change: We have a lot of news flow relating to the product and its uptake specifically to the reseller network coming.
Steve: Thanks, Steve and the second question is what are the.
Steve: Raw materials that are within the inventory budget.
Steve: Raw materials within the inventory budget.
Steve: Our our everything that's required from packaging.
Steve: You know packaging, our product to plastic components brackets seals weather stripping everything required to manufacture the product the products majority of its inventory comprise.
Steve: Comprises of aluminum products, probably it's all domestically sourced aluminum so it's aluminum ingot from American soil extruded on by American shooters or rolled into coils here in America painted with American paint.
Steve: So I would say about 60, maybe 70% of our bill of material is consisting of aluminum products, which most of our products are all aluminum that's for the a L. Three ell for in the upcoming H D. Three the solus will be all the same but with the addition of a relatively expensive solar technology that we're importing so that the cost breakdown will be.
A little bit different than it'll be about 20% aluminum and about 60% solar is the cost for these high performance panels.
Steve: If that makes sense.
Stephen Rossi: Thanks, Steve that's all the questions they have brought unsafe.
Speaker Change: We do have two of our analysts on the call, but I don't see any questions.
Speaker Change: Well open the floor if if if anyone has any questions just bite by all means.
Speaker Change: Okay.
Speaker Change: Yeah, Hey, David It's Scott back can you hear me, yes, I can Scott.
Speaker Change: Alright, I appreciate the time guys I'm curious what do you have in place currently for distribution with with corn Solus will they be using the same dealer network that you used for the covers or how will that work.
Speaker Change: The the the core and the solus is going to be it's going to be a moving target in terms of distribution of the product.
Speaker Change: Distribution is good but the products are high technology, and we May reserve at least the initial launches for consumer direct sales exclusively at least for let's say Q3 or Q4 of this year that'll allow us to gauge feedback.
Speaker Change: <unk> also capitalize a little bit, you know and and and and recoup tooling and expenditures.
Speaker Change: And with the higher margins and then we probably will do is release that to distribution the same distribution network.
Speaker Change: Probably late late late this year or early next year on both sides, but what I will say is we've had a very sincere amount of interest from like a V.
Speaker Change: A very large businesses with fleets of thousands of pickup trucks oil and glass gas exploration exploration and obviously through our connections as disclosed in our previous press releases relating to government services of which there is.
Speaker Change: Hundreds of of of local and federal government agencies that are that that are exist in and we've had already some sales into very key ones. So I think that to answer summarized my explanation I think that you know we're going to go direct to consumer to start get it stabilized recoup some.
Speaker Change: Some of our expenditures over the R&D side of things and then release it to the existing distribution network. But in addition, we have a lot of inbound interest from large fleets and government agencies.
Speaker Change: Great. That's helpful and then my second one.
The gross margin expectations through the remainder of the year.
Speaker Change: Are the new products being launched do they have higher gross margin or is this simply a benefit of scaling. It's both so you know.
Speaker Change: The same production line, that's that's gearing to make 200 units per day.
Speaker Change: With virtually the same amount of of staff, maybe modestly higher.
Speaker Change: It was producing 40 or 50 units a day. So we're really reaching a strong amount of efficiencies of production, we're going to look to automate key elements of our production and and Upskill. Those those those roles from you know those individuals' to more like automation operators.
Speaker Change: So that we're reaching a very strong economy of scale and I have to say Scott the opportunity for efficiencies as a cost reduction or margin increase is massive it represents a strong of a.
Speaker Change: Almost all of the margin increase but we're also gearing works for to not.
Speaker Change: Come out with cheaper products to fill that that that white box or you know imported products market, but we're scaling where we're ramping up works for it to be a more premium.
Speaker Change: Brand it'll beg, a higher price point, but with financing available. These days for individuals as well as through our website I think that we could sell more expensive products at higher margins that drive strong value to the consumer and they see the value there to spend that dollar we earn that dollar through innovation. So.
Speaker Change: So it's going to be both we're going to raise our our profitability metrics, but we're also going to increase the economies of the margins through economies of scale. So it's actually both top and bottom.
Speaker Change: Great I appreciate the time guys. Thank you very much. Thank you Scott great questions.
Stephen Rossi: Hey, Stephen Hey, Poe.
Speaker Change: Yeah, Pau, France and from a GP can you just clarify on the guidance.
Stephen Rossi: You know, you're using 20% to 25 from Tony Kamin.
Stephen Rossi: And then if so.
Stephen Rossi: This potential of two to 3 million sales hopefully entered a year, maybe bleeding into next year, but I just wanted to be clear whether that's included in that 20 to 25.
Of $20 million to $25 million guidance for 2025.
Stephen Rossi: Well no we've eliminated it so what we're not doing pose we're not saying that we're not going to sell any of them. While we are saying is that we're not going to we're not going to projected so.
Stephen Rossi: So it would be like a and as stated in our remarks, we will augment or update our guidance when geopolitical matters settle so the battery supply chain and a semi.
Stephen Rossi: Semiconductor supply chain are all from generally Asia region countries and our solar panels for our Solus is also within the continent of Asia, but from India, a little bit more favorable than trade. So what we're doing is this quarter were removing the guidance of solus and core sales altogether, although we intend to sell them and we intend to do.
Stephen Rossi: We'll be a pleasant surprise in addition to the guidance that we've issued were strictly issuing guidance for traditional made in America tonneau covers why again, while not admitting we won't sell anything we just we're going to wait another quarter to see how things Pan out.
Stephen Rossi: And am I correct in and looking at the two and <unk> seen pretty much.
Stephen Rossi: Everything shifted to the heart to heart Kono covers in the shop.
Total coverage pretty much going to zero by the end of the year. Yeah. So that's that's our our our monies where our mouth is for lack of a better phrase.
Stephen Rossi: Although the soft covers come from China, we in no way are supporting our business imported business any longer and we're exploring very actively the production the manufacturing of soft covers within North America. In fact, Poe, we already have all the equipment necessary to cut and so our own saw folding goods.
Stephen Rossi: Within our factory, we just need to finalize the design of the product. So we're planning on restarting that product line.
Stephen Rossi: Following our made in America mandate.
Speaker Change: Great. Thank you. Thank you Paul.
Speaker Change: Any other questions.
Mike: Mike I think that's all the questions we have for today, we'd like to thank everyone for attending and if theres any more questions from the retail side. Please send us an email or give us a call and Ravi very opposite answer. Thank you. So much. Thank you everyone. Thank you.
Speaker Change: A very long.
Speaker Change: Goodbye.