This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
Twin Vee PowerCats Co.
8/24/2021
This conference is now being recorded. Welcome everyone to the Twin V PowerCats Co. second quarter 2021 investor call. As a reminder, this call is being recorded and all participants are in listen-only mode. Your speaker for today's program is Joseph Visconti. chairman of the board and CEO of Twin V PowerCats Co. I would like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of sale harbor provisions under the Private Securities Litigation Reform Act of 1995. Twin V cautions that these forward-looking statements are subject to risks and uncertainties that may cause their actual results to differ materially from those indicated, including risks described in the company's filings with the SEC forward-looking statements on this conference call. A replay of the conference call will be available on Twin V's website at www.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, please use the telephone dial-in option provided in your confirmation and reminder emails. If you have dialed in, operator assistance is available by pressing zero pound. You can send questions at any time by using the Q&A box to the left of the presentation screen. That's the one with the question mark. Just type your message at the bottom of the pop-up box and press enter to send it. For our individual investors, please send your questions by email to investor at twinv.com and we will respond accordingly. For now, we will open the call to institutional investors and research analysts. A question and answer session will follow the presentation. And I will now turn the call over to our speaker, Joseph Visconti. Please begin.
Good morning, everybody. Thank you, everyone, for joining us on the conference call today. And this is our second quarter financial results. As most of you are probably aware, this is Twin V's first earnings call as a publicly traded company. We had a very successful IPO, and we're off to a great start with a second quarter revenue of 92%, another quarter of positive net income, and infrastructure improvements underway that we believe will enable us to scale up our operations. I will go over TwinVie's second quarter financials in more detail in a moment, but for those of you on the call that are less familiar with us, I'd like to provide an overview of our business. With that, let's begin. TwinVie was founded in 1996, over 26 years ago. We design, manufacture, and market recreational and commercial power catamaran boats. We're based in Fort Pierce, Florida, and we currently employ over 95 full-time people. We primarily sell Twin V boats to a network of 10 independent boat dealers in 14 locations across North America and the Caribbean who sell these boats to our Twin V end users. Our customers use our boats for a wide range of recreational and commercial activities. What sets our 20 boats apart from our competitor is our twin hull catamaran running surface. We believe that our symmetrical catamaran hull design contributes to a superior ride quality by reducing drag, increasing fuel efficiency, and offering users a more enjoyable, stable boat ride. We currently have 11 gas-powered models in production, including our new 34-340 GFX, And the 12th twin V to enter production will be our 40-footer, our 400GFX. Our 40-footer is expected to begin production in late Q4 of 2021 or Q1 of 2022. This past week, we signed an agreement with a tooling company named Merit Precision to assist us in the design of a brand-new boat and the building of the molds for a 26-foot GFX. With the addition of this new 26-foot GFX model, our GFX lineup will be robust and will include lengths from 24, 26, 28, 34, and our 40 that we're delivering at the end of this year or early 2022. As we ramp up the production of our GFX models, our goal is to slowly reduce production of the older classic Twin V models. So these classic models have served the company well. Some of these classic models have been in production for over 20 years. And what we're seeing is that customer demand is evolving and changing for more modern twin Vs with stylized fit and finish. While our boats are currently outfitted with gas-powered outboard engines, we continue pushing forward on the development and testing of two fully electric-powered boats, our 24 and 28 electric sport models. We've added two full-time additional engineers that will continue in the help of designing, development, production of all of our EV products. With regard to the production of electric boats and supply chain, most parts are available to produce these boats. The only challenge is high-voltage, liquid-cooled lithium-ion battery packs. They've been difficult to attain when we've been forecasting full production runs. The global shift towards electrification of vehicles of all kinds have placed an immense demand on most lithium-ion battery manufacturers, limiting the amount of high-powered batteries available for smaller producers like Twin V Electric. We have been able to reach oral agreements with two battery manufacturers where Twin V would have access to production runs of these high-voltage battery packs, but the availability is pushed out to Q1 or Q2 of 2022. The addition to our electric boats, our electric power sport division has completed the design phase for our Electra 215 horsepower electric outboard motor. We are now entering the prototype and testing phase for this electric motor. We strongly believe that the marine industry will follow in the footsteps of the automotive Electrification in terms of adoption and accelerated growth, Twin V's push toward marine electrification will continue on a parallel path with our push to increase production of our gas-powered boats. As the surge of demand in recreational boating continues, our company is expanding our product lineup to appeal to a wider market. At the same time, we believe new products will help add increased top-line revenue growth. In the month of May, we unfortunately had two fires, one that took one of our small buildings, destroying approximately 5,000 square feet of storage space and some production molds that were being stored in the building at the time of the fire. Our operations and our top line production of all of our products were not affected. We continued to build all current models except The only boat that was hurt was a 24-foot dual console that we're redoing some of the molds now. And last year, we only built four of those units out of the 130-plus units that we built in the previous year. We also lost a prototype electric boat in a fire. Both fires occurred in May of 2021. Insurance proceeds Receivables were recorded as other current assets for a total of $429,000. And now I'll give more detail to our financial results for the second quarter. Revenue for the second quarter that ended June 30th, 2021 was $3,298,000. This was up 92% over Q2 2020. Revenue for the six months ended June 30, 2021 was $6,505,000, up 48% over the first six months of 2020. The large increase in revenue is attributed to a strengthening economy during the first half of 2021 compared to the first half of 2020 when we were impacted significantly by COVID-19. Cost of products sold in Q2 of 2021 were $1,981,000. This is up 93% compared to the second quarter of 2020. The increase is very comparable to our increase in sales despite increase in raw material costs. Gross profits for Q2 was $1,316,000. This was up 89% compared to the second quarter of 2020. Net income for Q2 2021 was $51,000, an increase of 316% compared to Q2 2020. Net cash generated by operating activities totaled $5,000 for the first six months of 2021 compared to a net cash expended in operating activities of $314,000 in Q2 2020. The increase is principally due to increased net income, inventory, and prepaid expenses. Cash on hand at June 30th, 2021 was approximately $407,000 in cash and cash equivalents. Following our IPO as of August 20th, 2021 was approximately $15,500,000. This concludes the summary of second quarter financial results. Before we take questions, I'd like to share what TwinVie has planned for the remaining months of 2021 and into 2022. Despite our ambition to produce electric boats, as of today, our revenue is 100% generated from gas-powered boats. The demand for our boats continues to strengthen, and our dealer inventory remains at record low numbers. Twin V's post-IPO focus is the addition of manufacturing capacity and factory infrastructure to meet the demand of our products. Our goal is to ramp up weekly unit production from our current 2.5 boats per week to four boats per week starting January 1, 2022, and five boats per week Q2 or Q3 of 2022. We are adding additional molds in our lamination department, Like I mentioned, we signed an agreement with Merit Precision. The molds are the bedrock of boat building and will allow us to build multiple units of the same model at the same time where we currently build one boat at a time. We have been ordering additional equipment such as forklift, resin guns, chop guns, resin tanks, gantries, air compressors, and tools required to support the increased level of production. In summary, We had a strong Q2. We are very optimistic about the quarters ahead, and I'd like to offer our employees my gratitude for the dedication and hard work in helping to make Twin V what it is today. I also want to thank our shareholders for their support, as well as everyone on the call today for their time and interest in Twin V power caps. I'd now like to open this up for questions. Like the gentleman mentioned, we'll be taking questions from institutional investors, research analysts, individual investors, because there's so many of you on the call. We prefer to have those questions sent to investor at twinv.com, and we will get back to you in a timely manner. We'd like to open it up for questions now. Thank you.
Mr. Visconti, we're still waiting for the questions. But again, you can send questions at any time by using the Q&A box to the left of the presentation screen. That's the one with the question mark. Again, you can use the chat box, which is the question mark. If you click on that, you can type your message at the bottom of the pop-up box and then just press enter to send it. Again, for our individual investors, please send your questions by email to investor at TwinVee.com, and we will respond accordingly. For now, we will open the call to institutional investors and research analysts. Again, our institutional investors and research analysts, please don't miss the chance to ask your questions. Mr. Visconti, we still don't have any questions.
So, please, I know there's a couple questions. I cannot see on a computer. I'm speaking from a phone. I don't have the computer in front of me, everybody. If you, if the individual investor sends the questions to investor at twinv.com, I will get those answered today. And I think there's one question about the fires I'd like to talk about. So on the building fire, there was a brush fire in between our building. We have seven and a half acres that is along a storage facility. And we're in Fort Pierce. Sometimes there's individuals that walk. This was about in May. It was extremely windy. Somehow The fire marshal said that someone put out a cigarette and caused a brush fire. And in Florida, during the driest of months, it jumped and it grabbed one of our buildings. We tried to put it out, and we got really lucky. It was a storage building. Very unfortunate. We did get insurance proceeds. But it was really just we were storing, you know, things, molds that we don't use that often. And then the boat fire was one of the original boats that we were testing. I talked about this on the road show. It was a 24-foot E that, I mean, I just read an article about the recall with General Motors Volt that just came out about an hour ago. and how LG, the largest lithium ion battery manufacturer in the world, has challenges. And these are companies that have tens, hundreds of billions of dollars, and they're still having fires. I mean, lithium ion is still considered unstable to some level. So there's a huge push towards battery technology and more stable batteries, quicker charge times. And so we're keeping tabs on this. We're talking to multiple battery manufacturers. And at some point in late Q4, early Q1, we're going to go through all types of testing, obviously, with our batteries before we put families and owners of our boats on the water with electric boats. So we're doing everything the right way. So if there's no more questions, I appreciate everyone. Thank you very much. We're going to continue to work hard. We invite you at any time to come here for a tour. Call us, text us, email us at investor, investor at TwinVee.com. We'd love to show you around. We're growing, and we're super excited about the future. Thank you, everybody.
This concludes today's TwinVee PowerCats call. Thank you, everyone, for attending. The moderator has ended the conference. Goodbye. Thank you for calling.