Twin Vee PowerCats Co (VEEE) 2021 Q2 法說會逐字稿

Welcome, everyone, to the Twin Vee PowerCats Co. second-quarter 2021 investor call. As a reminder, this call is being recorded, and all participants are in listen-only mode. Your speaker for today's program is Joseph Visconti, Chairman of the Board and CEO of Twin Vee PowerCats Co.

I would like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Twin Vee cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the company's filings with the SEC forward-looking statements on this conference call.

A replay of the conference call will be available on Twin Vee's website at www.twinvee.com for at least 90 days. (Operator Instructions) For our individual investors, please send your questions by e-mail to investor@twinvee.com, and we will respond accordingly. For now, we will open the call to institutional investors and research analysts. A question-and-answer session will follow the presentation.

And I will now turn the call over to our speaker, Joseph Visconti. Please begin.

Good morning, everybody. Thank you, everyone, for joining us on the conference call today. And this is our second-quarter financial results. As most of you are probably aware, this is Twin Vee's first earnings call as a publicly traded company. We had a very successful IPO and we're off to a great start with the second-quarter revenue of 92%. Another quarter of positive net income and infrastructure improvements underway that we believe will enable us to scale up our operations.

I will go over Twin Vee's second-quarter financials in more detail in a moment. But for those of you on the call that are less familiar with us, I'd like to provide an overview of our business. With that, let's begin. Twin Vee was founded in 1996 over 26 years ago. We design, manufacture and market recreational and commercial power catamaran boats. We're based in Fort Pierce, Florida, and we currently employ over 95 full-time people. We primarily sell Twin Vee boats to a network of 10 independent boat dealers in 14 locations across North America and the Caribbean who sell these boats to our Twin Vee end users.

Our customers use our boat for a wide range of recreational and commercial activities. What sets our Twin Vee boats apart from our competitor is our twin-hull catamaran running surface. We believe that our symmetrical catamaran hull design contributes to a superior ride quality by reducing drag, increasing fuel efficiency, and offering users a more enjoyable, stable boat ride.

We currently have 11 gas-powered models in production, including our new 34 340 GFX, and the 12th Twin Vee to enter production will be our 40-footer -- our 400 GFX. Our 40-footer's expected to begin production in late Q4 of 2021 or Q1 of 2022. This past week, we signed an agreement with a tooling company named Merit Precision to assist us in the design of a brand-new boat and the building of the molds for a 26-foot GFX. With the addition of this new 26-foot GFX model, our GFX lineup will be robust and will include [lanks] from 24, 26, 28, 34, and our 40 that we're delivering at the end of this year or early 2022.

As we ramp up the production of our GFX models, our goal is to slowly reduce production of the older classic Twin Vee models. So these classic models have served the company well. Some of these classic models have been in production for over 20 years. And what we're seeing is that customer demand is evolving and changing for a more modern Twin Vees with stylized fit and finish. While our boats are currently outfitted with gas-powered outboard engines, we continue pushing forward on the development and testing of two fully electric powered boats, our 24 and 28 electric sport models. We've added two full-time additional engineers that will continue and help with designing, development, production of all of our EV products.

With regard to the production of electric boats and supply chain, most parts are available to produce these boats. The only challenge is high-voltage, liquid-cooled lithium ion battery packs. They've been difficult to attain when we've been forecasting full production runs. The global shift towards electrification of vehicles of all kinds have placed an immense demand on most lithium-ion battery manufacturers, limiting the amount of high-powered batteries available for smaller producers like Twin Vee Electric. We have been able to reach oral agreements with two battery manufacturers where Twin Vee would have access to production runs of these high-voltage battery packs, but the availability is pushed out to Q1 or Q2 of 2022.

The addition to our electric boats, our electric power sport division has completed the design phase for our [Electra] 215-horsepower electric outboard motor. We're now entering the prototype and testing phase for this electric motor. We strongly believe that the marine industry will follow in the footsteps of the automotive electrification in terms of adoption and accelerated growth. Twin Vee's push toward marine electrification will continue on a parallel path with our push to increase production of our gas-powered boats.

As the surge of demand in recreational boating continues, our company is expanding our product lineup to appeal to a wider market. At the same time, we believe new products will help add increased top line revenue growth. In the month of May, we unfortunately had two fires. One that took a small -- one of our small buildings, destroying approximately 5,000 square feet of storage space and some production molds. They were being stored in the building at a time of the fire. Our operations and our top line production of all of our products were not affected.

We continued to build all current models, except the only boat that was hurt with a 24-foot dual console that we're redoing some of the molds now. And last year, we only built four of those units out of the 130 plus unit that we built in the previous year. We also lost a prototype electric boat in a fire. Both fires occurred in May of 2021. Insurance proceeds, receivables were recorded as other current assets for a total of $429,000.

And now I'll give more detail to our financial results for the second quarter. Revenue for the second quarter that ended June 30, 2021 was $3,298,000. This was up 92% over Q2 2020. Revenue for the six months ended June 30, 2021 was $6,505,000, up 48% over the first six months of 2020. The large increase in revenue is attributed to a strengthening economy during the first half of 2021 compared to the first half of 2020, when we were impacted significantly by COVID-19. Cost of products sold in Q2 of 2021 were $1,981,000. This is up 93% compared to the second quarter of 2020. The increase is very comparable to our increase in sales despite increase in raw material costs.

Gross profit for Q2 was $1,316,000. This was up 89% compared to the second quarter of 2020. Net income for Q2 2021 was $51,000, an increase of 316% compared to Q2 2020. Net cash generated by operating activities totaled $5,000 for the first six months of 2021 compared to a net cash expended in operating activities of $314,000 in Q2 2020. The increase is principally due to increased net income, inventory, and prepaid expenses.

Cash on hand at June 30, 2021 was approximately $407,000, and cash and cash equivalents, following our IPO as of August 20, 2021, was approximately $15.5 million.

This concludes the summary of second-quarter financial results. Before we take questions, I'd like to share what Twin Vee has planned for the remaining months of 2021 and into 2022. Despite our ambition to produce electric boats, as of today, our revenue is 100% generated from gas-powered boats. The demand for our boats continues to strengthen and our dealer inventory remains at record low numbers. Twin Vee's post-IPO focus is the addition of manufacturing capacity and factory infrastructure to meet the demand of our products. Our goal is to ramp up weekly unit production from our current 2.5 boats per week to four boats per week, starting January 1, 2022, and five boats per week, Q2 -- or Q3 of 2022.

We are adding additional molds in our lamination department. Like I mentioned, we signed an agreement with Merit Precision. The molds are the bedrock of boat building and will allow us to build multiple units of the same model at the same time where we currently build one boat at a time. We have been ordering additional equipment such as forklifts, resin guns, [shot guns], resin tanks, gantries, air compressors and tools required to support the increased level of production.

In summary, we had a strong Q2. We are very optimistic about the quarters ahead, and I'd like to offer our employees my gratitude for the dedication and hard work in helping to make Twin Vee what it is today.

I also want to thank our shareholders for their support, as well as everyone on the call today, for their time and interest in Twin Vee PowerCats.

I'd now like to open this up for questions. Like the gentleman mentioned, we'll be taking questions from institutional investors, research analysts. Individual investors, because there's so many of you on the call, we prefer to have those questions sent to investor@twinvee.com, and we will get back to you in a timely manner. We'd like to open it up for questions now. Thank you.

Mr. Visconti, we're still waiting for the questions. (Operator Instructions) Again, for our individual investors, please send your questions by e-mail to investor@twinvee.com, and we will respond accordingly. For now, we will open the call to institutional investors and research analysts.

Again, our institutional investors and research analysts, please don't miss the chance. Ask your questions.

Mr. Visconti, you still don't have any questions.

So I'm -- I know there's a couple of questions. I cannot see on a computer. I'm speaking from a phone. I don't have the computer in front of me, everybody. If you -- if the individual investor sends the questions to investor@twinvee.com, I will get those answered today.

And I think there's one question about the fires I'd like to talk about. So on the building fire, there is a brush fire in between our building. We have 7.5 acres that is along a storage facility and we're in for peers, sometimes there's individuals that walk. This was about in May. It was extremely windy. Somehow the fire marshal said that someone put out a cigarette and caused the brush fire. And in Florida during the driest of months, it jumped, and it grabbed one of our buildings. We tried to put it out and we got really lucky. It was a storage building, very unfortunate. We did get insurance proceeds. But it was really just -- we were storing things, molds that we don't use that often.

And then the boat fire was one of the original boats that we were testing. I talked about this on the roadshow. It was a 24-foot E that -- I mean I just read an article about the recall with General Motors boat that just came out about an hour ago and how LG, the largest lithium-ion battery manufacturer in the world, has challenges. And these are companies that have tens, hundreds of billions of dollars and they're still having fires.

I mean, lithium-ion is still considered unstable to some level. So there's a huge push towards battery technology and more stable batteries, quicker charge times. And so, we're keeping tabs on this. We're talking to multiple battery manufacturers. And at some point, in late Q4, early Q1, we're going to go through all types of testing, obviously, with our batteries before we put families and owners of our boat on the water with electric boat. So we're doing everything the right way.

So if there's no more questions, I appreciate everyone. Thank you very much. We're going to continue to work hard. We invite you at any time to come here for a tour. Call us, text us, email us at investor@twinvee.com. We'd love to show you around. We're growing and we're super excited about the future.

Thank you, everybody.

This concludes today's Twin Vee PowerCat's call. Thank you, everyone, for attending.