(VEEE)
Operator: Welcome to the Twin Vee Powercats Co.’s First Quarter 2025 Investor Call. As a reminder, this call is being recorded. All participants are in listen-only mode. Your speakers for today’s program are President and CEO, Joseph Visconti, and Chief Financial Administrative Officer, Michael Dickerson. Before I turn the call over to Joseph Visconti, 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 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, predict, potential, or the negative of these terms or other similar expressions. The company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, and financial needs. These forward-looking statements are subject to a number of risks and uncertainties, assumptions described including those set forth in its filings with the Securities and Exchange Commission, which are available on the company’s investor relations website at ir.twinv.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 at ir.twinv.com for at least ninety days. Audio cast quality is subject to your equipment, available bandwidth, 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 a question. Those listening via webcast will be unable to submit questions. If you’d like to ask a question, you may signal by pressing star one on your telephone keypad.
I’ll now turn the call over to Joseph Visconti.
Joseph Visconti: Thank you. Good afternoon, and thank you for joining the call today. As we head into the second half of 2025, I’d like to take a few minutes and reflect on the positive momentum at Twin Vee Powercats Co. and the operational progress we’ve made through Q1. Despite industry challenges and market volatility throughout the past year, we continue to make disciplined decisions that strengthen our foundation and reposition our company for sustainable growth. Today, we announced a decent quarter in terms of top-line growth and our continued effort to dial in the cost of goods, which, as we know, has been a whack-a-mole from COVID supply chain challenges to labor, now potential tariff increases. But we are focused, laser-focused, on the bottom line.
2024 was a tough year for the recreational sector, especially for OEMs. But 2024 gave us the opportunity to reset, refocus, and rebuild. And that’s exactly what we’ve done. Our dealer network is being actively built. We added six new dealer locations, as you might have seen from the recent press releases. We continue to focus on grassroots on-site dealer location training, proactive engagement with our customers, and this is super important. Our field inventory, which is the inventory of unsold boats that we deliver to dealers, has significantly improved, which means it’s decreased. Last year, we had 80 boats in the field and 80 boats in dealer inventory; that number is now reduced to under 60 boats in our entire dealer network. This is a super important metric that highlights the success of our strategy through 2024, where we’ve pulled in the range and we reduced supply to dealers, and we pushed hard on sales and marketing to increase the demand.
This was not easy, due to the downsizing, which took, you know, unfortunately, a human and financial toll on employees and the company. It’s important to note that last year, Twin Vee built and sold over 20 boats during the same period. So this is super important. If you take the total reduction of the field inventory from 80 boats to the current 60, and add in the 20 boats that we built and delivered last year, we now know that even in a tough market, the demand for 220 annual units. The reduction in field inventory numbers reflects our efficient production planning and the effective sales strategies that we put into place and continue to use. By continually adjusting our methods and responding to market needs, we have positioned ourselves pretty good for future growth.
Product development continues to be our core priority. This year, we introduced the all-new 2022 22-foot Twindie Bay Cat. As you’ve seen online or maybe through our social media posts, this is a well-balanced, affordable, and high-performance single-engine catamaran design for the growing inshore market, not offshore. Most of our current twin-engine cats are offshore cats. It’s an ideal entry point into the Twin Vee experience, and it’s already generating some strong interest. Operationally, we completed our facility expansion, our 30,000 feet. We’re now entering a new phase for optimal efficiency. As usual, the Twin Vee team is pushing on many fronts and pulling all necessary levers to regain the type of volume output we experienced and developed over the past couple of years before we were hit with interest rates and inflation.
On a digital front, we’re excited to announce the upcoming launch of our brand new interactive Twin Vee website. We’ve been working on this for over a year. This is a major step in our customer-first strategy. This isn’t just a website face, but this is a total transformation of customer-first interaction. Customers will be able to do a build and price on their own Twin Vee online with their own Twin Vee online, a real-time update to interior upholstery gelcoat colors, engine options, and more. The platform includes a three-boat configurator so you can spin and interact, you know, with the boat or whatever model you’re looking at. The platform also offers an AR or virtual reality option. Where you can open a link, and you’ll be inside the boat.
You’re able to walk around and kinda look at all the fine details of our products. We expect this site will go live in the next two to three weeks. With one model at a time being rolled out one at a time. So we are focused on continually communicating with our investors, customers, and the broader Twin Vee community through social media, our weekly new email newsletter called the CEO Update gives customers, stakeholders, employees, and fans the latest news on our company products and initiatives. These efforts are helping us create a stronger connection with everyone who believes in the Twin Vee mission to design, build, and deliver the best riding boats on the water while we expand and grow our business. Now I’d like to turn it over to our CFO, Michael Dickerson.
Michael Dickerson: Thank you, Joseph. Thanks for being here with us today. We’re pleased to report a strong start to the year, marked by sequential revenue growth and a significant improvement in margins. For the first quarter, we generated $3.6 million in revenue, a 91.7% sequential increase over February 2024 and well ahead of the 50% growth we guided previously. This performance reflects the momentum building in our business as our dealer network continues to expand and consumer demand begins to show signs of recovery. We shipped 24 units in the first quarter, a sequential increase of 118% compared to the fourth quarter of 2024. While the number of units increased, the average sale price delivered fell a bit to $151,000 in the first quarter, from $171,000 in the fourth quarter due to an increased mix of 22 and 24-foot boats.
Gross margins improved to 14.9%, up 961 basis points from the same period last year. This increase was primarily driven by better manufacturing efficiency. At the same time, we remain disciplined with expenses. Operating expenses were down 21% year over year, with reductions in SG&A, including salaries, professional fees, and R&D expenditures. Our adjusted net loss averaged $333,000 per month in the first quarter, a 17% improvement over our previously guided adjusted net loss expectations of $400,000. We’re making measurable progress towards cash flow breakeven as we scale operations responsibly and manage working capital prudently. Now turning to the balance sheet. At March 31, we had $5.1 million in cash and cash equivalents, down from year-end levels primarily due to funding the still negative EBITDA.
Capital investments in facility improvements, new product molds, and the initial development costs for our recently acquired BoatsForSale.com. We also made a meaningful reclassification in our asset base during the quarter by reclassifying $4.3 million of land and buildings related to the building in Marion, North Carolina as held for sale. This follows the consolidation of Forza X1 into Twin Vee in February and our decision to exit electric boat development. We expect this asset sale to strengthen our cash position sometime within the next twelve months and, therefore, have classified it as a current asset. Importantly, our inventory turnover has improved by half a turn from approximately 4.5 to 5 turns year over year, reflecting better alignment between production and dealer demand.
This operational progress not only frees up working capital but also supports a more agile and responsive supply chain strategy going forward. And before I close, I want to address an important topic, which is tariffs and their implications for our supply chain. As you know, the US has recently enacted or expanded tariffs on various categories of goods, including materials and components relevant to the marine manufacturing industry. While the impact on Twin Vee to date has been manageable, we are actively monitoring this rapidly evolving policy landscape. It’s worth noting that we continue to benefit from strong relationships with key US suppliers for compounds, components, and services. In fact, Twin Vee has always led with an America-first posture and supported the small and medium-sized businesses in our local community.
While tariffs could present incremental headwinds in the quarters ahead, particularly in areas such as motors and electronics, we believe our proactive supply chain strategy and commitment to cost control will enable us to navigate any near-term volatility. Looking ahead, we anticipate continued sequential revenue growth in the second quarter of 2025 as the market slowly recovers and our dealer base expands. We remain focused on operational efficiency, margin expansion, and developing high-impact digital platforms to complement our core business. With that, I’m going to turn the call over to the operator for your questions.
Operator: Thank you. Now be conducting a question and answer session. If you would like to ask a question at this time, you may press 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press 2 if you’d like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Thank you. Thank you. At this time, I’ll now turn the floor back to Joseph Visconti.
Joseph Visconti: Thank you. So in closing, I will leave you with this. Twin Vee entered 2025 with renewed purpose. 2024 was rough. But in 2025, our dealer network is rebuilding. Our inventory has rightsized. Our product line continues to expand. Our factory is completed and evolving. And our digital strategy is entering a new phase. Through it all, we remain committed to operational discipline, American craftsmanship, and delivering real value to our customers and, most importantly, to our shareholders. So I want to thank you for joining us today. Have a wonderful day. God bless America.
Operator: Thank you. This will conclude today’s conference. You may now disconnect your lines at this time. Thank you for your participation. Have a wonderful day.