Q4 2023 Twin Vee PowerCats Co Earnings Call
Participants
Joseph Visconti; Chairman of the Board, President, Chief Executive Officer; Twin Vee Powercats Inc
Richard Jackson; Analyst; Jackson Investments
Presentation
Operator
Welcome to Twin Vee PowerCats Co year end 2023 investor call. As a reminder, this call is being recorded and all participants are in a listen-only mode. Your speaker for today's program is Joseph Visconti, President and CEO 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. Statements on this call, other than statements of historical facts, including statements regarding the company's future operation and financial position, business strategy, and plans objectives as 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, projects, potential or negative of these terms are other similar expressions.
The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends. It believes may affect its financial condition, results of operation, 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 the Company's filings with the Securities and Exchange Commission, which are available on its website, ir.twinvee.com. You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that events and circumstances reflected in forward-looking statements will be achieved or occur.
Finally, this conference call is being webcast and the webcast will be available in the Investor Relations section of the company's website at ir dot twin V.com for at least 90 days. Audiocast quality is subject to your equipment available broadband, Broadway and Internet traffic. 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 your question. Those listening via webcast will be unable to submit questions. If you would like to ask a question, you may signal by pressing star one on your telephone keypad. I will now turn the call over to Joseph Visconti.
Joseph Visconti
Good afternoon to everyone on the call today. Thank you for joining me and taking the time to participate in our 2023 year end financial results. My name is Joseph Joseph Visconti. I'm the CEO and President of Twin Vee PowerCats. Today. I would like to discuss the status of the industry as a whole, an update on our operations and performance and the progress that we have made this year as we move forward in 2024.
Let's begin by providing an overview of the current economic conditions in the recreational sports market, encompassing marine RVs and other big ticket recreational products. Our industry has been facing challenges since the high season during and after the pandemic, elevated interest rates continue to exert downward pressure on demand across our industry. While these headwinds have presented challenges for twin V, our team remains committed to pushing through with innovation, new designs and multiple new stylish products for both our iconic brands, Twin V and Aqua's sport boats as we experienced a slowing of our industry demand. We have been proactive in rightsizing our business to align with the reduction of this demand. As of today, Twin V employs approximately 85 people, and we are currently manufacturing between 10 and 14 boats per month, depending on the model mix under our flagship brands, Twin VNR for sport.
In terms of sales, we remained ahead of the curve in 2023 according to what's called SSI data statistical survey data, which tracks all boat registrations, saltwater outboard market, which is our category, experienced a decline of almost 19% in 2023 compared to 2022. Comparatively twin, we experienced an increase of 4% in sales for 2023 compared to 2022. While we experienced a slowdown in orders in early 2024. Our team has undertaken measures to foster future sales growth throughout our product offerings. While we optimize our operations and enhance cost efficiencies, turning our attention to product development, we are excited to highlight to highlight our efforts to expand our product portfolio throughout 2023 and 2024. We have introduced or are in the process of developing many new products under the twin V and Axis for brands. I would like to highlight two of our new products, the all new Atlas board to 80 super vote and the 20 to 80 dual console.
Let me start by talking about the two 80, super, both the new Aqua sport 28 foot Super Bowl with the first recreational fully autonomous production day boat. We have partnered with Abacus, a marine company specializing in autonomous navigation that was established by HD. Honda. The world's largest shipbuilder are all new to 80 super vote has been designed and tooled from the ground up for full autonomous integration and the components such as the sensors cameras, Allied are in the black brain box all built right into the boat. This is an amazing project. This was not owed a strap on add-on optional upgrade system. Our new tacos for two 80 super boat is truly a super vote, and this spectacular vessel should be ready for customer orders sometime around October 2024. Autonomous boat technology offers consumers a new level of safety and convenience, the vote will provide advanced route planning, smart autopilot navigation that identifies objects to avoid potential collisions and self docking capability. We anticipate the super vote will attract a new wave of buyers, tech enthusiasts to the market while still appealing to existing boaters.
Looking for help with navigation and docking, we've also debuted the versatile twin, the two 80 dual console Catamaran 20 has been recognized for its dual console boats in January of 2022, boat trader, one of America's largest online voting marketplaces. There are 24 foot dual console GFX. was one of the year's seven best power Catamaran's. And in March 2022, motor boat and yachting Magazine named 20s to 80. The center console, the best powerboat center console under 30 feet. Innovation, new design and next-level products drive most industries and twin V is no different. Our team of engineers, designers in boat builders are working on the next generation of our popular GFX. boat. Our next generation GFX. line will be named GFX. two, and we will be starting with the twin V. two, 60 GFX. two, which will be in production next month.
The Gen two products will include as standards and all digital switching BakBone, our new tech forward digital switching enables touchscreen controls, but also results in a cleaner layout and design of our overall electronic system. The center console of our GFX. two has been completely redesigned to resemble what some would say a spaceship. You got to see this, the new GFX. two console has improved styling, our new ergonomics and a huge single 24 inch multifunction display. We've updated color options, a pole street styling and streamlined the console framing. So there's no aluminum hitting the floor. It's all integrated into the console. Our goal with the GFX. Gen two was to make these boats stand out in the water marinas or any dealer lot. And the real excitement comes from the ability to configure your GFX. two straight from the factory with the latest innovations, navigation, fishing and water sports using our online build and price. For example, we will be offering base-level autopilot packages include cameras optional night vision. We believe the future of boating involves automating navigation, and we'd like to think and we believe that we are on the forefront of integrating these important technologies into our boats for the safety and convenience of our customers.
We will be showcasing these new boats at our dealer meeting May 20th in West Palm Beach, their representatives from 20s and Aqua's Ford dealer network throughout the country. We'll learn all about our new 2025 boats. I've had the opportunity to see trial our latest products and discuss sales strategies, marketing initiatives and production updates in support of the growth and development of our product line. And the introduction of Amkor's board is our latest brand. I'm excited to announce that we are beginning construction in the next couple of weeks on our 25,000 square foot addition here in Fort Pierce, Florida, when construction is completed in the next six to nine months our new factory will encompass nearly 100,000 square feet of linear manufacturing for both 20 and aqua sport. Additionally, we recently placed an order for the state of the art CNC machine, a five axis routers scheduled to arrive in October. This latest addition to our production Arsenal will enable Trinity to bring the tooling from our brand new boat models, all in house. This means that we'll be able to streamline our manufacturing process, save on costs associated with our outsourcing and enhance the quality of the Bolt molds as we used to build our products.
Turning to our dealer network, 20 has been working hard to supplement our dealer network with motivated partners who are just as passionate about our brands as we are we're aiming to enhance our marketplace to. For example, we recently announced that we brought on a new dealer in Dubai, the first time in Twin V's nearly 30-year history that our products will be sold in the Middle East.
Now let's look at our financial performance for 2023. While we are showing substantial losses on our financials, much of these losses are attributed to our consolidation of the fours or electric boat losses, our sister company under the symbol of FRIZA, if you remove or pull out before the losses from the twin, the financials twin. These adjusted losses, our $1.6 million in cash losses and our and our cash still remains over $8 million as of December 31, 2023.
Looking ahead, we believe that we are setting up for solid growth with new products, technology forward product expansion and an acquisition of the five axis router, again, enabling us in house to reduce expenses. As we create these new products, we will be ready with two incredible new storied, scalable brands, Twin V and aqua sport and we will continue to offer new product development and a variety of new innovative products.
In conclusion, Twin Vee remains committed to navigating the challenges posed by the current market while simultaneously setting ourselves up for success once conditions become more favorable. With our established brands, Twin Vee Aqua Sports, a pipeline of innovative products stemming from our strategic infrastructure investments, and a growing dealer network, we are positioned to capitalize on emerging opportunities and come out from under this stronger on the other side.
I want to thank our investors, our stakeholders, our employees for their continued support. And at this time, I'd like to open it up for questions.
Question and Answer Session
Operator
(Operator Instructions) Richard Jackson, Jackson Investments.
Richard Jackson
Yes, good afternoon. Tom, would you please comment on the resignation of the CFO of Twin V as well as the resignation of the CEO. that?
Joseph Visconti
Sure. So I spoke to the lead our previous call at 10 o'clock on fours. So Jim, with you did tender his resignation on, you know, Jim when I asked him to join us as we were launching for that to go public, Jim, as sold his previous company, he was the owner kind of number two guy and he went into retirement. I asked them to join us, and Jim and the team of engineers at force did an amazing job over the past couple of years. We raised over $25 million. We design build and was producing electric products. But over the past year and a half, we've all seen the EV market dramatically shift both on the automotive side. And on the marine side, you know, so small-cap microcap companies have limited capital, and my job is to make sure that we get to the other side. And we I do not run out of cash. And I we pulled in the reins and started this slowdown, some of the R & D and the fours kind of timing, the development of our products and getting into market.
And I think, you know, I don't want to put words in Jim's mouth, but I think he felt like he was just hired to kind of see this thing through and as we kind of pulled in the reins, he decided to pursue other other opportunities. So everyone left on good terms. We still speak. There's no problems, Carrie Gunderson, our CFO, who is still here and committed to be here for the next month-and-a-half and help with a smooth transition. It was a completely unrelated, but you know, Adlea timed resignation and carry also chose to pursue other opportunities on I work 24 seven, I probably, you know, very driven and motivated and competitive. And you know, and I probably hire a lot of people out again, I don't want to put words in anyone's mouth, but um, you know, it's all good. I mean, we change creates opportunity and we as we continue to have great relationships with both Jim and Gary, and we are interviewing right now for a CFO, and we feel confident that we'll be announcing a new CFO here shortly.
Richard Jackson
Okay. Well, obviously not great aspect. So you mentioned raising 25 million in cash. So you talked on the fourth call about reducing the cash burn. Presumably you're doing the same thing with Twin V. And you mentioned that the if you take the four so on cash loss out of there, it doesn't look as bad on twin V But if I'm looking at the tables correctly, you still went on the gas power boats from a loss from operations of about 2.4 million to a loss this last year of 5.4 million on gas budget. So that's not great.
Joseph Visconti
So you if you polled if you pull for that out, the loss on on the operations, cash glossy EBITDA cash loss on twin, the we'll --
Richard Jackson
Hold on, I'm not looking at EBITDA losses. What I'm looking at your table and I'm taking out the electric boat and development. I'm removing that from the equation as you have. So just the gas power boat, the loss from operations according to tables, $5.4 million versus $2.4 million.
Joseph Visconti
So I don't have the CFO on the phone right now, but I can talk to you about this offline. We have an operational loss on twin V. And after you removed depreciation, amortization and force of about $1.6 million. And if you want to call me after I get into the details on it, but that's looking at what about me. I don't know what you're looking at.
Richard Jackson
What I'm looking at the table in your cash flow is it's right there. It says table below and it says that it breaks it all out by gas power versus electric boat and development for understandable reasons, but it's right there.
Joseph Visconti
Carrie, are you on the or are you on the call? I think you might be on mute, but maybe Gary can jump in here yet.
Richard Jackson
In any case, you've talked in the past in prior years, even about reducing the cash loss need to have plenty of money and don't need to raise money and then you raised money. And here we are burning through a lot of cash in a tough environment and all that what happens, you know, investors supposed to think at this point given that you continued to raise money and dilute, you know, the stock of both companies and yet things are not looking too rosy out there. So where are we supposed to gather hope here that there won't be more dilution in the cash? The cash has declined quite a bit versus the prior year and still strong balance sheet, but it's concerning.
Joseph Visconti
So we've come out of three of the most tumultuous business years that I've I've ever been in in my 37 years of being CEO. of companies and you went from, you know, the pandemic and then you couldn't get parts. And then orders went through the roof and labor raised the $20 guy went to the $40 guy with the resin was being rationed. I mean, I can go through the history of the ups and downs challenges of managing this business and you know, we continue to create new product. We never stopped innovating. We continue to kind of I understand that we've spend some money. I don't think it's as bad as you are calculating.
Richard Jackson
But yes, it's not a question of me articulating it. I'm reading from your tables. It's right there in the financials.
Joseph Visconti
I mean, it's a question that I don't have anything and we continue to I will grew 100% two years ago. We all know what happened with these interest rates. They were 3% as high as 8% even higher. And sometimes when you're purchasing a recreational vehicle, you know, an RV or a boat, you know that the family, the plumber, the electrician that was buying $100,000 boat. That payment that was five hours a month is now 1,000 hours a month. That buyer essentially went away, you know, is then the shifting of the economics over the past three years has been dramatic on and an aggressive and both ways.
Now we are targeting larger cash buyers where our 40 foot was leading the way so our million dollars boat or 34 foot is selling on. So I understand you know, we were we were at 250 employees and a year and a half ago, we're down to like 85 people. I mean, I feel good that we've continue to like come out with new product. The losses are not as great as your I would like to talk to you about it with the CFO online. I have different numbers in front of me. And if you take out the foreign losses, the actual cash losses of Twin V are not that bad comparatively what we've experienced over the past year.
Richard Jackson
Well, again, that's not what it shows new tables, but in any case, I'll let other people ask questions, I think you're going to have a little bit of a hard time getting investors excited when you're basically saying that the the CFO has resigned, the CEO affords has resigned businesses difficult. We're burning through more cash. We have less cash. So items good luck if you can sell that at, you know, but that's a tough sell, but I'll let other people chime in as a reminder to star one on your telephone keypad.
Operator
(Operator Instructions) With no further questions in the queue, I would like to turn the conference back over to Joseph for closing remarks.
Joseph Visconti
Thank you, everyone, and I want to thank you for spending your time with us today and your confidence as shareholders, employees, stakeholders and have a great day. Thank you. If you have any other questions, please e-mail us at Glenn at Twin VGLENN. at Twin V.com, and we'll get back to you right away. Thank you so much, everybody.
Operator
Thank you. This will conclude today's conference. You may now disconnect your lines, and thank you for your participation.
