Twin Vee PowerCats Co (VEEE) 2022 Q1 法說會逐字稿

Welcome to the Twin Vee PowerCats Co. first-quarter 2022 investor call. As a reminder, this (technical difficulty) and all participants are in listen-only mode. The speakers for today's program is Joseph Visconti, Chairman of the Board and CEO of Twin Vee PowerCats Co.; and Carrie Gunnerson, CFO of Twin Vee PowerCats Co.

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 statements of historical facts, including statements regarding the company's future operations and financial position, business strategy and plans, and objectives of management's future operations are forward-looking statements.

In some cases, forward-looking statements can be identified by terminologies such as believe, may, estimate, continue, anticipate, intend, should, plan, expect, predict, potential or the negative of these terms or other similar expressions. Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends, analysis of expected financial condition, results of operations, business strategy and financial needs.

These forward-looking statements are subject to a number of risks and uncertainties and presumptions described, including those set forth in our filings with the Securities and Exchange Commission, which are available on our website at www.twinvee.com. 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 on the Investor Relations section of our website at ir.twinvee.com for at least 90 days. (Operator Instructions)

I would now like to turn the call over to Mr. Joseph Visconti. Please go ahead.

Thank you. I'm Joseph Visconti, the CEO of Twin Vee PowerCats. Thank you and good afternoon, and I thank you for taking the time to participate in our Q1 2022 financial results call. I will start off by providing several Q1 updates on our company's progress and discuss our plans moving forward. Can you hear me? Carrie Gunnerson, our CFO, will then give a financial update on the company. And that will conclude with our Q&A.

Twin Vee PowerCats manufactures and sells a variety of catamaran sport boats here in our Fort Pierce, Florida factory. We currently employ around 145 employees.

Through Q1, sustained demand for our products continues. Our backlog of orders remains around 200 boats, and the stocking inventory of our dealers remains at low levels, under 20 boats as of this week. As previously discussed, we are currently manufacturing and selling our GFX model line of Twin Vees, with the addition of our new 400 GFX and 260 GFX. Twin Vee will have a total of eight GFX models available through our dealer network.

Twin Vee's GFX models include the 240 Center Console, two 24-foot Dual Consoles, 26 -- our new 26 Center (sic - see investor presentation, "260 GFX Center Console"), two 28 Center Consoles (sic - see investor presentation, "280 GFX Center Console"), our 34 Center Console (sic - see investor presentation, "340 GFX Center Console'), and our new 40-foot Center Console. Prices of our boats ranged from $120,000 for a 24, to over $800,000 for a fully equipped 40-foot GFX.

We continue to experience ongoing but manageable supply chain issues. Material and component prices continue to rise. Shipping delays still exist. Twin Vee is dealing with the same supply chain challenges that most manufacturers are facing today.

Our purchasing and procurement team really stepped-up big time. Our team members are being pro-active, chasing down parts, opening new vendor relationships for components and materials, making sure that our assembly line continues to hum. I can report that other than a dozen boats requiring a 350-horsepower motor, we have successfully shipped all completed and finished boats.

As you can see, even with the supply chain challenges, our revenues were still up 83% for the Q. The supply of 350-horsepower motors from Suzuki that powers our 34 and our new 40- foot boats, unfortunately is not enough to fill the orders we currently have. The good news is that we do have ample supply of motors that power every other Twin Vee model. To make up for any loss of revenue with our 34-foot, we have increased production of our smaller boats. And you can see from the increase in revenues for Q1 that this strategy has been working.

A quick update on our brand-new 400 GFX, the fiberglass parts are completed. The boat is being rigged and assembled as we speak. The 400 GFX is the largest Twin Vee produced to date.

Twin Vee's hosting an annual dealer meeting, July 8 and 9 of this year. It's important that our 400 is in the water and ready to wow our dealers at this July meeting. The dealer meetings is typically where orders are placed for the new model year. So very exciting. As we increase our unit production and add new models to our lineup, the expansion of our national dealer footprint is vital.

With that, I would like to mention a recent key hire to team Twin Vee. To help lead our sales and marketing expansion, we've hired Mr. John Planty to be Twin Vee's new National Sales Director. John will be working hand-in-hand with Lolli Ball, our in-house Dealer Liaison, who has single-handedly led the charge of developing our existing dealer network from the time I became involved with this company over six years ago.

John Planty was the COO of Freeman Boatworks, one of the top and leading offshore catamaran boat builders. John comes to us with an extensive knowledge of recreational marine industry. We are super excited to bring on new dealers and began shipping our Twin Vees into new markets, such as the Great Lakes, the Ozarks, and along the Northeast Seaboard.

Now moving on to our electric vehicle manufacturing subsidiary, Forza X1. Our initiative into sustainable marine technologies includes the design development and sale of fully integrated affordable electric boats for the masses. Jim Leffew, Forza's President; and Dan Norton, Forza's Director of Engineers are doing a phenomenal job. The progress Jim and Dan, and the rest of team Forza are making is simply impressive and very exciting.

We have made some big strides at Forza X1, we see a path forward that includes a dedicated factory that is being designed to manufacture up to 1,000 units annually. And let's start with our Forza outboard motor. Our prototype motor and control system is completed and we are now in a testing phase. The motors currently hung on a test bed 22-foot Classic Twin Vee. The outboard motor and control systems are working in a functioning order.

In a parallel path, the FX1 Center Console boat has begun the tooling process. This is also extremely exciting. The tooling is the initial manufacturing process to make the molds that are required to produce and manufacture the final fiberglass parts for the FX1 model. Our goal is by Q3 of 2022, Forza should have a completed FX1 Center Console boat, fully rigged, in the water and starting final testing phase before production.

I am excited to announce that we received our first prototype battery from American Battery Solutions or ABS. As you recall, in January we announced a major five-year supply agreement with Michigan-based ABS for production-grade, 52-kilowatt high-powered lithium-ion batteries that will be used to power Forza's FX1 electric boat. This supply agreement is a huge step forward for Forza X1 to distinguish itself as a mass producer of electric boats in the evolving EV-marine market.

As lithium-ion battery supplies remain roadblock, bottle-necked across the entire EV industry, we are not familiar with any other electric boat manufacturers that have contractually secured access to production level quantities of high-powered lithium-ion batteries for their electric boats. This is a really big deal for our company.

Overall, Forza X1 has made substantial progress since the beginning of the year. We have built a tremendous team of in-house engineers; and our laser focus mission is to lead the transition of electrification in the recreational sport-boat industry.

I hope you enjoyed my presentation. Now let me turn it over to our CFO, Carrie Gunnerson, who will now give more detailed review of our financial results from Q1.

Thank you, Joseph. Beginning with the income statement, our revenue for the quarter was up 83% or approximately $2,678,000; from $3,208,000 in 2021, to $5,886,000 in 2022. Our gross profit for the quarter was up 64% or approximately $946,000; from $1,488,000 in 2021, to $2,434,000 in 2022. We continue to monitor the costs of our raw materials and our purchased components and are adjusting our sales price accordingly.

Our net loss for the quarter was approximately $1,191,000 compared to net income of $132,000 in 2021. However, in 2021, we did not have either of our subsidiaries. Forza's portion of our net loss was approximately $514,000. The net loss from our core business gas-powered boats was approximately $626,000.

Further, when we look into our adjusted net loss for the quarter, which excludes non-cash charges. Our adjusted net loss for our core business gas-powered boats was only approximately $152,000. Our net loss is a reflection of the investment the company continues to make, to increase the number of models and the production line capacity. We continue to aggressively recruit experienced production staff and are not only increasing productivity but also efficiency. Our short-term goal of one boat a day will increase our annual production to over 200 boats in 2022, which will add to our financial strength.

Turning to the balance sheet, we had cash, cash equivalents, and marketable securities of approximately $11,039,000 as of March 31, 2022. At this time, we believe our cash, cash equivalents, and cash from operations will provide sufficient cash to finance operations.

With that, I'll turn the call back over to Joseph.

Thank you, Carrie. In conclusion, I believe Twin Vee is coming off a very strong first quarter. We're continuing to see a significant backlog of orders and low-dealer inventory. We have also begun production on new boat models that will increase the variety of our product offerings. In addition, we're working on expanding our dealer footprint to allow our products to reach new customers across this country.

Based on all of this forward momentum, we remain confident in our ability to deliver value to our shareholders. And believe the remainder of 2022 and beyond will be an exciting time for Twin Vee PowerCats and our stakeholders.

I want to thank Twin Vee and Forza 1 team members. We could not thrive without the many skilled and experienced men and women that come to work every day, build our beautiful boats, and push our marine electrification forward.

And finally, I want to thank our shareholders for their support and everyone on the call today for their time and interest in Twin Vee PowerCats. I would like to open it up for questions now.

We'll now begin the question-and-answer session. (Operator Instructions)

Brian Carstens, ThinkEquity LLC

Thanks, Joseph, and congratulations on the quarter. I'm just curious how do you see yourself positioned relative to your competitors? And how do you see this space continuing to evolve? Thanks.

Thank you, Brian. It's a great question. We can see continued momentum in the catamaran multi-haul industry. I think it's really taking shape. And there's a lot more kind of onesie, twosie, catamaran boat builders that are appearing at these boat shows on national level. So that shows a lot of excitement in the multi-haul space.

And I think that when you're talking about any producer that's building over 100 units annually, there's only a couple -- there's two companies: World Cat and Twin Vee. World Cat, I believe, builds 330 units annually. Twin Vee will build over 200 units this year. And this is under the 40-foot segment.

So with our new 26 coming online this year and our 40-foot, our largest boat; I think in our current backlog and the excitement from people learning about multi-haul, and ride quality, and fuel-efficiency, and all the great attributes that multi haul-boats offer, I think that we're going to continue to grow.

(Operator Instructions) Sam Allen, Private Investor

Yes, hi. Thanks for taking my question. I just wonder if you could give me an update on the floors of IPO?

Sure. So the good news is that the SEC gave us a no-comment letter about two weeks ago. We're working with our bank, ThinkEquity, to refine our presentation. Obviously, the market's in a pretty rough condition right now, so ThinkEquity is driving this process. Obviously, the lead bank on our deal.

And what I'm being told, and I think we all know, is we need to start to see the market stabilize a little bit and then we'll begin our road show. But as far as going through the SEC and NASDAQ with our X1, that's -- we're ready to road show. So I think the good news is that with these higher gas prices, we see electrification happening all over the world in many different industries. So hopefully this market kind of like figures out what it wants to do, so we can get public.

But that's not stopping us by the way. We continue to -- Twin Vee has $11 million in the bank. We continue to push forward, we're doing the tooling on our center console, our dual console. We've designed our factory. We're receiving our orders for our batteries. I mean, so nothing has slowed.

I mean, I think the IPO from a financial perspective will add -- it's putting up the factory yields. Much of that raised capital was to build out a new factory. So Twin Vee, as you saw, it is well-capitalized and continues to fund the progress forward, for Forza.

Okay, great. Thank you very much.

You're welcome.

(Operator Instructions). I would now like to turn the conference back over to Mr. Joseph Visconti for any closing remarks.

I just want to thank everyone for their time, and I want to thank all of Twin Vee. And everyone, have a great day. Thank you.

The conference has now concluded and thank you for attending today's presentation. You may now disconnect.