Twin Vee PowerCats, Co. Q1 FY2024 earnings call

• Dealt with slowing economy and challenging demand by rightsizing the company's economics, defensive downsizing, equalizing production output to meet demand, and monitoring field inventory.
• Twin Vee is operating leaner with higher dollar production revenue per employee. The new CFO has settled in, and ERP financial system is being rolled out across departments.
• Inventory reduced over 20% in Q1 and will continue to be tightened. Reintegrating with the national dealer network.
• Engineers refocused to redesign GFX line to new digital models. 400 GFX2 has sold 10 units so far. Team designed to produce over 15 new boat models with 6 additional in pipeline.
• 30,000 square foot addition in Fort Pierce has begun construction, with over 100,000 square feet of linear production by end of year, aiming for 700 units annual capacity when market rebounds, with Twin Vee and AquaSport boats to be designed and assembled there.

In Q1, Twin Vee experienced a decline in product demand. Revenue dropped from $8.8 million to $5.2 million. However, revenue per direct labor grew by 40%. The consolidated net loss for the 3 months ended March 31 was $2.335 million, with approximately half attributed to Forza and half to Twin Vee. Removing noncash expenses, Twin Vee's Gas-Powered boat segment had an adjusted loss of $669,500 for the quarter. As of March 31, 2024, consolidated cash, cash equivalents, restricted cash and marketable securities totaled $17,381,000, a decrease from $21,218,000 on December 31, 2023. The decrease was due to R&D for Forza X1, plant construction costs, new product development and operational cash losses. Twin Vee's Gas-Powered segment has working capital including inventory of nearly $9 million and $3 million invested in property, plant, and equipment. It has a strong balance sheet with over $7 million in cash and a small COVID-era stimulus loan of $500,000, with no bank debt.

• Focus on opportunities developed over past two quarters. Investing in new models like Gen 2 GFX boats, AquaSport 280 Superboat, larger offshore boats, and a new 44-foot Twin Vee. Readying for market rebound with strong brand recognition and customer loyalty.

• High interest rates affecting major purchases relying on financing, putting downward pressure on demand across the industry. Downward demand trend is industry-wide, not isolated to Twin Vee. Uncertainty about future events and circumstances.

Q: Are there any questions?

A: There are no questions at this time.

Q: Closing comments?

A: I want to thank our shareholders, stakeholders and employees and have a great day. Thank you, everybody.