Release Date: November 14, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Twin Vee PowerCats Co (NASDAQ:VEEE) has managed to increase the average sales price by 17% due to a focus on bigger, higher-priced boats.
• The company has reduced consolidated operating expenses by 16% compared to the third quarter of 2023.
• Twin Vee PowerCats Co (NASDAQ:VEEE) ended the third quarter with $11.4 million in cash and cash equivalents, indicating a strong liquidity position.
• The company is actively managing production and refining its supply chain to adapt to changing market conditions.
• Twin Vee PowerCats Co (NASDAQ:VEEE) is preparing for a market rebound with a solid product pipeline, including new designs and models.

Negative Points

• Net sales for the third quarter of 2024 were $2.9 million, a significant reduction of 64% from the same period in 2023.
• The company sold only 20 boats in the third quarter compared to 66 in the same period last year.
• Twin Vee PowerCats Co (NASDAQ:VEEE) experienced a slightly negative gross margin due to cost-cutting efforts not keeping pace with declining sales.
• The company is facing a challenging retail environment with economic headwinds and inflationary pressures affecting demand.
• Operational cash burn was approximately $547,000 per month, which the company acknowledges as unacceptable and is working to reduce.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with VEEE.

Q: Can you provide more details on the financial performance for Q3 2024? A: Michael Dickerson, CFO, reported that net sales were $2.9 million for Q3 2024, a 64% decrease from the same quarter in 2023. The company sold 20 boats compared to 66 in the previous year, with a 17% increase in average sales price due to a focus on larger, higher-priced boats. Despite cost-cutting efforts, the company experienced a slightly negative gross margin due to the rapid decline in sales.

Q: What measures are being taken to address the cash burn and financial challenges? A: Michael Dickerson, CFO, stated that the company is focused on reducing cash burn by driving sales efforts, eliminating discretionary spending, reducing headcount, and scrutinizing every line item for potential savings. They aim to achieve a consolidated adjusted net loss of $400,000 per month or better by the end of Q1 2025.

Q: How is the company handling the current inventory and production challenges? A: Joseph Visconti, CEO, explained that the company is managing production to align with demand, reducing overhead, and consolidating production into a single facility. They are also working with dealers to manage high inventory levels and have delayed shipments as needed.

Q: What is the outlook for the recreational vehicle and boating industry? A: Joseph Visconti, CEO, expressed optimism for the next 4 to 6 months, expecting a positive shift in the retail environment. He believes that political and economic changes, particularly under President-elect Donald Trump, will benefit the industry through deregulation, tax incentives, and economic stimulation.

Q: What strategic initiatives are in place for future growth? A: Joseph Visconti, CEO, highlighted the development of a new line of bay boats, set to launch in Q1 2025, and the focus on expanding the customer base. The company is preparing for a market rebound with a solid product pipeline and operational agility to capture renewed customer interest.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.