Twin Vee Powercats Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 14, 2023

There are 5 speakers on the call.

Operator

Welcome to the TwinD Power Cats Company Second Quarter 2023 Investor Call. As a reminder, this call is being recorded and all Your speaker for today's program is Joseph Visconti, President and CEO of TwinV Power CATs Company. 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, 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 are similar expressions.

Operator

The company has based these forward looking statements largely on our 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 and assumptions described, including those set forth in our filings with the Securities and Exchange Commission, which are available on our website at www.twinv.com. You should not rely upon forward looking statements as predictions of future events. We cannot assure you that these events or circumstances reflected in the forward looking statements will be achieved or occur. Finally, this conference is being webcast.

Operator

Webcast will be available in the Investor Relations section of our website at ir. Twinv.com for at least 90 days. Audio cast quality is subject to your equipment, available bandwidth and Internet traffic. If you experience unsatisfactory audio quality, operator, please use the telephone dial in option. A question and answer session will follow the formal presentation.

Operator

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 and must call in instead. I'll now turn the call over to Joseph Esconti.

Speaker 1

Hello, everyone. My name is Joseph Esconti. I'm the President and CEO of Twinbee Power CATs. Today's call is being recorded. I'm joined on the call with Kerry Gunderson, TwinBee's CFO and Jim LeFeu, the President and CEO of Forza X1, our electric today's call is being recorded.

Speaker 1

Jim is on the call due to his leadership role specifically for the opening and ramping of our Aquaspor plant in Tennessee. Good morning and thank you for joining our Q2 2023 investor call. Twinbee designs, manufactures offers a range of catamaran sport boats from our factory located in Fort Pierce, Florida. For nearly 30 years, for the Twinbee brand has been synonymous with offshore catamaran boats and is considered by many to be one of the best riding boats on the water. We are pleased to report an 18% increase in top line revenue to $17,000,000 for the 6 months ended June 30, 2022 and compared to $14,400,000

Speaker 2

fiscal 2020,

Speaker 1

if you break out our main production for our facility in Fort Pierce, Florida, where we manufacture 100 percent of all Twin D boats and our 2 new models of our AquaSport, our 20 2 footer, we had a net loss of $234,000 for the 6 months in 2023. This $234,000 loss is compared to a net loss of a net loss of $554,000 for the same period in 2022. Twinbee net of Forza Axone had cash and cash equivalents, restricted cash and marketable securities of approximately $12,434 as of June 30, 2023. The reportable larger loss of the $2,500,000 for the the quarter ended June 30, 2023 is a direct reflection of Twinbee's majority ownership in Forza X1, the electric to consolidate the financial statements. So if you take the $2,300,000 loss on Forza, plus the $234,000 loss On TwinV, that's where you get the bigger loss, the reportable loss of the $2,500,000 for the 6 months.

Speaker 1

So, the general economic landscape, including rising interest rates, continues to have a direct effect on consumer purchasing, special promotions and recreational vehicles. While we have seen entry level buyers affected by higher interest rates, We are also seeing cash buyers and boat clubs maintaining a healthy demand for our boats. Due to the changing environment and consumer demand, we continue to expand our product offerings, including our new 400 GFX and our upcoming 280 GFX dual console, new products open new markets and expand our reach to consumers seeking various lengths and styles of our boats. Our acquisition of the iconic monohull brand Aquasport is off to a good start. While requiring cash outlays and start up expenses, the acquisition of Akosport has allowed us to partner with over 10 new dealers a strong quarter in over 30 locations.

Speaker 1

We feel confident that our AquaSport monohull boat brand will continue our ability to scale our overall business and grow our brands, while appealing to a broader market. The monohull market is extremely competitive. As we know, highly competitive markets put downward pressure on gross margins, Which we saw in the Q2. The monohull boating market is one of the largest boat buying markets besides pontoons And we believe that entering the monohull market with a superior brand like Aquasport will allow Twinbee, the company, to increase market share and grow our top line revenue. As we continue to watch market conditions, dealer inventory levels economic indicators that might affect our business.

Speaker 1

We are being vigilant with managing inventory levels, labor and production costs and of course not to burn our cash. To the point of managing the balance between dealer inventory levels and production of our TwinBee boats, We have strategically chosen to slow TwinBee's production, the boats down to 2.5 units of TwinBee's per week. While we have increased the production of our new Aquasport 22 Footer in the Fort Pierce facility to 4 to 5 units per week, due to the brisk upbeat demand for our new 22 foot center console and dual console. And this production is taking place again in our Fort Pierce facility. Our revenues in Fort Pierce are made up of 70% of Twin D boats and 30% of our 22 foot Aquasport.

Speaker 1

So this is this revenue is only with this 122 foot Aquasport model, which is why we're excited about ramping up our Tennessee facility with 7 additional Aquasport legacy models. So some of the highlights for our 6 months ended 2023 and some other takeaways is our net loss from operations. Again, our core business was only $234,000 for the 6 months ended June 30, 2023 participants and Twinbee's Metaphorza had cash and cash equivalents of $11,437,000 as of June 30, 2023. Some additional items that we've discussed in the previous quarter call. We received site plan approval for our expansion, extension of our building here, 30,000 Square Feet in Fort Pierce.

Speaker 1

A full year of strength facility here in Fort Pierce, which at that point will be a true linear, ability to have true linear production with two lines. We've transitioned our lamination department 100 percent to the infusion process for hulls and decks. Infusion, as we discussed, is us a state of the art lamination process that increases quality of our boat builds while refining the cost and controls. We have finalized OEM agreements with 3 leading outboard motor companies. TwinBee can now offer Suzuki, Mercury and Yamaha Motors as we continue expanding our dealer footprint and target regions of the country where these motors companies have regional brand strength.

Speaker 1

Our largest dealer, One Water Marine, who currently represents 7 of our dealers, mostly in Florida, has placed a 100 boat order, locations outside of the One Water locations. We've opened 10 new AquaSport dealers. These dealers have 30 locations. And again, this is in addition to our Twin D dealers. AquaSport forecasted orders are approximately 150 units over the next 12 months.

Speaker 1

Our current Twinbee forecasted orders is over 120 orders for the next 12 months. This includes 6 400 GFXs and we will begin to see revenue from our Aquascor Tennessee plant in Q3. While markets are a bit choppy, our continued business objective is not to burn cash, remain prudent with our balance

Operator

questions. Our first question comes from the line of Joshua Horowitz with Palm Ventures. Please proceed with your question.

Speaker 3

Participants Hi, Joseph. Good morning.

Speaker 1

Good morning.

Speaker 2

Great job on everything you said with scaling back for Keep an eye on the inventory and stuff. My question is, I guess, could you use a little bit more color on how the reopening and ramping of the AquaSport for the quarter is coming.

Speaker 1

Thank you. So Jim LaFeo, our President and CEO of Forza, is spending a couple of days a week, over in Tennessee. I'd like to bring Jim on to talk specifically about, the opening and ramping of that facility.

Speaker 2

For questions.

Speaker 4

Yes. Thanks, Joseph, and thanks for the question, Josh. A quick update on our Aquasport facility. As many of you know, we have taken over the operations of the former Edtide Holdings in White Bluff, Tennessee. It's a 150,000 Square Foot facility including the molds and the trademarks for the Aquaspor brand.

Speaker 4

To date, we have hired approximately 35 people since June 1. In June, we started the cleanup and rehabilitation of the factory and began actual production in July. We expect to be able to ship probably up to 8 boats by the end of August from the White Bluff facility. We will settle into 2 boats per week for the remainder of the year, September through December, and then we will look to ramp up faster at the turn of the year in January. One of the biggest initiatives we have will be to develop a full line of boats, including bay boats, offshore center and dual consoles and possibly even flats boats.

Speaker 4

We have a really aggressive new product a plan that will be implemented over the next 5 years. But so far so good with the start up. We're excited about it. Hope that answers your question.

Speaker 2

Yes, very good. Thank you so much.

Speaker 1

Josh, I'd like to add, We set out we did the Aquaspor deal and then we had our dealer meeting in West Palm And we it was just absolutely amazing kind of the positive feedback we got. I mean, we've signed these dealers. I mean, this In the face of a pretty tough market and I mean we're feeling it a little bit on the Twinbee side, but Aquasport, There's a lot of dealers out there that are looking for new opportunity. There's other larger boat brands that got caught up delivering very expensive premium boats and nobody was really kind of catering the value based buyer anymore. And The opportunity with Aquaspor, it was a ready made production facility.

Speaker 1

The previous owners did a fairly decent job with tooling. We talked about it in previous calls, there were 7 legacy models ready to go. I mean nothing is easy, Jim Lefue's background at Maverick Boat Group, he was the, the head of all of production for that facility for over 25 years building 1700 boats a year. So Jim is assembling a team of some of the old Aqua Board employees have come back, leaders, managers, workers. So it's just a really great opportunity for us to Build a monohull brand and also as a public company continue to have kind of

Operator

Thank you. Our next question comes from the line of Raj Moshwari with Charleston Capital. Please proceed with your question.

Speaker 3

Hello. Good morning, Joseph. Good morning, Jin. Thank you for taking my question. I just wondered as you look out to 2024, What does 2024 is there any way to gauge what 2024 looks like?

Speaker 3

Is it starting are things starting to bottom out on a macro point of view? And maybe some guidance as to the combined AquaSport and Twin B Companies.

Speaker 1

Thank you. I could tell you that we currently are Hitting numbers out of our Fort Pierce facility, that's with our twin our legacy. Can you hear me okay?

Speaker 3

Participants

Speaker 1

are in our Fort Pierce facility, With our legacy Twin V boats plus our 2 additional AquaSport model, the 22 center console and dual console, for the quarter. We are hitting last year's revenue numbers, which are about $35,000,000 on an annual run rate. And so as we kind of bring on Aquasport, with Jim's numbers like 2 boats a week, I think that kind of adds So $35,000,000 plus of this additional AquaSport revenue, I think Which is good, it's higher than it was last year. And that's in face of some pretty tough headwinds, higher interest rates, some of the buyers like the us is being recorded and all for us is being recorded and all for us is being recorded and all for us is the electrician that were buying a $100,000 boat and the payment was $500 that same payment is $11,000 now and that buyer, we're seeing him move to the boat clubs or coming up with an alternative summer

Speaker 4

Yes. And if I can add a little bit to that, for Raj, I think one of the questions for us is how do we view the macro and do we see any signs of bottoming. This is mostly anecdotal information, But we are getting feedback from some of our dealers that there's increased traffic on the showroom floors and people are starting to buy again. I think They've gotten used to some of the higher rates and some people that don't need to finance are still buying. We are also hearing from our dealers And looking at the SSI data, one of the best performing segments in marine right now is the saltwater fishing boat segment.

Speaker 4

So some of the other segments of the market are down much more, but it seems like we're in a pocket of strength in saltwater fishing. So That's a good thing for us. Obviously, there's no way of knowing for sure, but some of the preliminary signs, I don't want to call them green shoots, Look like they're getting a little bit better.

Speaker 2

So

Speaker 3

Have you started to plan for the 2024 calendar year budget yet or is it still too early?

Speaker 1

Participants Well, we've got our forecast. I went through so we have a forecast number of 150 AquaSport for the quarter has been forecasted from our new AquaSport dealer network. So we've got 150 boats there And we've got a baseline of 120 Twin V Boats, 100 of those are from 1 Water And we need to finish collecting our forecasted numbers from our other Twin D dealers. As you know, the marine industry celebrates the model year change in July. So it's all happening right now When we're working with our dealers, we're getting our forecasted numbers and planning 2024.

Speaker 1

So I mean, the numbers look good right now. I mean, I don't want to pinpoint an exact revenue I think it's important that we get the Aquaspore Tennessee plant online, in addition to what's happening in Fort Pierce, I think we've got a bright future.

Speaker 3

Excellent. Thank you, Joseph.

Operator

Participants. Thank you.

Speaker 2

Participants are now ready to begin.

Operator

Mr. Visconti, I'm seeing no other questions in queue. I'll turn the floor back to you for any final comments.

Speaker 1

I want to thank everyone for participating today and we appreciate our stakeholders and shareholders and the confidence and support you've given us. So thank you and everybody have a great day. Thank you.

Operator

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
Twin Vee Powercats Q2 2023
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