Twin Vee Powercats Q1 2025 Earnings Call Transcript

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May 8, 2025

There are 3 speakers on the call.

Operator

Welcome to the Twin V Power Cats Co. First Quarter twenty twenty five Investor Call. As a reminder, this call is being recorded, and all participants are in listen only mode. Your speakers for today's program are President and CEO, Joseph Fiscounti and Chief Financial Administrative Officer, Michael P. Dickerson.

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 all statements on this 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. 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. 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 needs. 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.twinv.com.

Operator

You should not rely upon forward looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward looking statements will be achieved or occur. Finally, this conference call is being webcast. The webcast will be available at ir.twinv.com for at least ninety days. Audiocast quality is subject to your equipment, available bandwidth, and Internet traffic.

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 that 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 one on your telephone keypad.

Operator

I'll now turn the call over to Joseph Visconti.

Speaker 1

Thank you. Good afternoon, and thank you for joining the call today. As we head into the second half of twenty twenty five, I'd like to take a few minutes and reflect on the positive momentum at Twinbee PowerCats and the operational progress we've made through Q1. Despite industry challenges and market volatility throughout the past year, we continue to make this disciplined decision to strengthen our foundation and reposition our company for sustainable growth. Today, we announced a decent quarter in terms of top line growth and our continued effort to dial in cost of goods, which as we know has been a whack a mole from COVID supply chain challenges to labor, now potential tariff increases.

Speaker 1

But we are laser focused on the bottom line. 2024 was a tough year for the recreational sector, especially for OEMs. But 2024 gave us the opportunity to reset, refocus, and rebuild. And that's exactly what we've done. Our dealer network is being actively built.

Speaker 1

We added six new dealer locations as you might have seen from the recent press releases. We continue to focus on grassroots 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've delivered to dealers has significantly improved, which means it's decreased. Last year, we had approximately 180 boats in the field and 180 boats in dealer inventory.

Speaker 1

That number is now reduced to under 60 boats in our entire dealer network. This is a super important metric that highlights the success of our strategy through 2024 where we've pulled in the range and we reduced supply to dealers and we pushed hard on sales and marketing to increase the demand. This was not easy due to the downsizing which took unfortunately a human and financial toll on employees and the company. It's important to note that last year, Twinbee built and sold over 120 boats during the same period. So, this is super important.

Speaker 1

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 Twinbee boats is approximately two twenty annual units. The reduction in field inventory numbers reflects our efficient production planning and the effective sales strategies that we put into place and continue to use. 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 22 foot twin D Bay Cat.

Speaker 1

As you've seen online or maybe through our social media posts, this is a well balanced, affordable and high performance single engine catamaran design for the growing inshore market, not offshore. Most of our current twin engine cats are offshore cats. It's an ideal entry point into the Twinbee experience and it's already generating some strong interest. Operationally, we completed our facility expansion or 30,000 feet. We're now entering a new phase for optimal efficiency.

Speaker 1

As usual, Twinbee team is pushing on many fronts and pulling all necessary levers to regain the type of volume output we experienced and developed over the past couple of years before we were hit with interest rates and inflation. On a digital front, we're excited to announce the upcoming launch of our brand new interactive Twinbee website. We've been working on this for over a year. This is a major step in our customer first strategy. This isn't just a website facelift.

Speaker 1

This is a total transformation of customer first interaction. Customers will be able to do a build and price on their own Twinbee online, with their own Twinbee online and real time updates to interior upholstery, gelco colors, engine options and more. The platform includes a three d boat configurator so you can spin and interact with the boat or whatever model you're looking at. The platform also offers an AR or virtual reality option where you can open a link and you'll be inside the boat. You're able to walk around and kind of look at all the fine details of our products.

Speaker 1

We expect this site will go live in the next two to three weeks 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 Twinbee community through social media. Our weekly email newsletter called the CEO Update gives customers, stakeholders, employees and fans the latest news on our company products and initiatives. These efforts are helping us create a stronger connection with everyone who believes in the Twinbee mission to design, build and deliver the best riding boats on the water while we expand and grow our business. Now I'd like to turn it over to our CFO, Mike Dickerson.

Speaker 2

Thank you, Joseph. Thanks for being here with us today. We're pleased to report a strong start to the year marked by sequential revenue growth and a significant improvement in margins. For the first quarter, we generated $3,600,000 in revenue, a 91.7% sequential increase over the fourth quarter of twenty twenty four and well ahead of the 50% growth we guided previously. 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.

Speaker 2

We shipped 24 units in the first quarter, a sequential increase of 118% compared to the fourth quarter of twenty twenty four. While the number of units increased, the average sale price delivered fell a bit to $151,000 in the first quarter compared to 171,000 in the fourth quarter due to an increased mix of twenty two and twenty four foot boats. Gross margins improved to 14.9%, up nine sixty one basis points from the same period last year. This increase was primarily driven by better manufacturing efficiency. At the same time, we remain disciplined with expenses.

Speaker 2

Operating expenses were down 21% year over year with reductions in SG and A, including salaries, professional fees, R and D expenditures. Our adjusted net loss averaged $333,000 per month in the first quarter, a 17% improvement over our previously guided adjusted net loss expectations of $400,000 We're making measurable progress towards cash flow breakeven as we scale operations responsibly and manage working capital prudently. Now turning to the balance sheet. At March 31, we had $5,100,000 in cash and cash equivalents, down from year end levels primarily due to funding the still negative EBITDA. Capital investments in facility improvements, new product molds and the initial development costs for our recently acquired Boats4Sale.com.

Speaker 2

We also made a meaningful reclassification in our fixed asset base during the quarter by reclassifying $4,300,000 of land and buildings related to the building in Marion, North Carolina as held for sale. This follows the consolidation of Forza X1 into Twinbee in the fourth quarter of twenty twenty four and our decision to exit electric boat development. We expect this asset sale to strengthen our cash position sometime within the next twelve months and therefore have classified it as a current asset. 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. This operational progress not only frees up working capital, but also supports a more agile and responsive supply chain strategy going forward.

Speaker 2

And before I close, I want to address an important topic, which is tariffs and their implications for our supply chain. As you know, The US has recently enacted or expanded tariffs on various categories of goods, including materials and components relevant to the marine manufacturing industry. While the impact of Twinbee to date has been manageable, we are actively monitoring this rapidly evolving policy landscape. It's worth noting that we continue to benefit from strong relationships with key US suppliers for compounds, components, and services. In fact, Twinbee has always led with an America First posture and supported the small and medium sized businesses in our local community.

Speaker 2

While tariffs could present incremental headwinds in the quarters ahead, particularly in areas such as motors and electronics, we believe our proactive supply chain strategy and commitment to cost control will enable us to navigate any near term volatility. Looking ahead, we anticipate continued sequential revenue growth in the second quarter of twenty twenty five as the market slowly recovers and our dealer base expands. We remain focused on operational efficiency, margin expansion and developing high impact digital platforms to complement our core business. With that, I'm going to turn the call over to the operator for your questions.

Operator

Thank you. We'll now be conducting a question and answer a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants that are 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

Thank you. Thank you. At this time, I'll now turn the floor back to mister Joseph Fisconti.

Speaker 1

Thank you. So in closing, I will leave you with this. Twin v entered 2025 with renewed purpose. 2024 was rough. But in 2025, our dealer network is rebuilding.

Speaker 1

Our inventory has rightsized. Our product line continues to expand. Our factory is completed 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, for joining us today.

Speaker 1

Have a wonderful day. God bless America.

Operator

Thank you. This will conclude today's conference. You may now disconnect your lines at this time. Thank you for your participation. Have a wonderful day.

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Earnings Conference Call
Twin Vee Powercats Q1 2025
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