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Twin Vee PowerCats, Co. (VEEE)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 revenue declined 41% year over year to $5.276M and gross margin compressed to ~5%, reflecting weaker industry demand and an unfavorable mix shift; consolidated net loss widened to $2.335M ($0.18 loss per share) .
  • Gas-powered segment posted an adjusted net loss of $0.670M, while the electric boat development segment (Forza X1) reported a $1.168M loss; company highlighted proactive cost control and rightsizing actions .
  • No formal quantitative guidance was issued; management reiterated investments in Gen2 GFX models, a 30,000 sq ft plant expansion, and an in-house CNC tooling capability to reduce costs and improve quality .
  • Potential stock catalysts: new GFX2 model launches (400 GFX2, 280 GFX DC), inventory normalization, expanded production capacity to 100,000 sq ft by year-end, and autonomous A.I. partnership with Avikus (AquaSport) .

What Went Well and What Went Wrong

What Went Well

  • Revenue per direct labor employee increased ~40% to ~$103K, indicative of improved labor productivity despite lower volumes .
  • Product pipeline momentum: Gen2 GFX program and the tech-forward GFX2 redesign; 400 GFX2 booked 10 units and production continues, with 280 GFX DC entering production and larger offshore models planned .
  • Balance sheet capacity to invest: consolidated cash, cash equivalents, restricted cash and marketable securities of $17.381M on March 31, 2024 supports product and infrastructure initiatives .

What Went Wrong

  • Demand weakness: Q1 net sales fell 41% YoY to $5.276M; unit sales dropped to 32 from 54; gross profit fell 83% and gross margin declined to ~5% amid competitive monohull mix .
  • Profitability deterioration: Loss from operations increased and consolidated net loss rose to $2.335M, with gas-powered segment swinging to a $1.164M loss vs. prior-year profit .
  • Compliance risk: Nasdaq minimum bid price deficiency notice (May 10) introduces listing risk if not remedied within the compliance window (through Nov 6, 2024) .

Financial Results

Income Statement Summary (YoY comparison)

MetricQ1 2023Q1 2024
Net Sales ($USD)$8.877M $5.276M
Gross Profit ($USD)$1.610M $0.277M
Gross Margin (%)18.1% 5.3%
Operating Expenses ($USD)$3.979M $2.821M
Loss from Operations ($USD)$(2.370)M $(2.543)M
Net Loss ($USD)$(1.828)M $(2.335)M
Basic & Dilutive EPS ($USD)$(0.12) $(0.18)

Segment Results

Segment MetricsQ1 2023Q1 2024
Gas-Powered Boats Net Sales ($USD)$8.877M $5.276M
Gas-Powered Boats Loss from Operations ($USD)$(0.239)M $(1.227)M
Gas-Powered Boats Net Income (Loss) ($USD)$0.182M $(1.164)M
Electric Boat & Development Loss from Operations ($USD)$(2.130)M $(1.315)M
Electric Boat & Development Net Loss ($USD)$(2.005)M $(1.168)M
Franchise Net Loss ($USD)$(0.005)M $(0.003)M

Non-GAAP Adjusted Net Loss (Consolidated)

MetricQ1 2023Q1 2024
Adjusted Net Loss ($USD)$(1.466)M $(1.362)M

KPIs and Balance Sheet

KPI / Balance MetricPrior PeriodCurrent
Units Sold (Gas-Powered)54 (Q1 2023) 32 (Q1 2024)
Revenue per Direct Labor Employee ($USD)~$72K (Q1 2023) ~$103K (Q1 2024)
Net Inventory ($USD)$4.885M (Dec 31, 2023) $3.890M (Mar 31, 2024)
Cash, Cash Equivalents & Restricted Cash ($USD)$16.498M (Dec 31, 2023) $16.138M (Mar 31, 2024)
Working Capital ($USD)$22.430M (Dec 31, 2023) $18.882M (Mar 31, 2024)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2-Q4 2024None disclosed None disclosed Maintained (no formal guidance)
Gross MarginFY/Q2-Q4 2024None disclosed None disclosed Maintained (no formal guidance)
Operating ExpensesFY/Q2-Q4 2024Directional: tighten spending Directional: control costs, rightsizing Maintained qualitative stance
Capacity/Production2024 Year-end30k sq ft addition planned 30k sq ft under construction; 100k sq ft by year-end targeted Raised execution specificity
Technology Initiatives2024Autonomous A.I. partnership announced Ongoing; CNC tooling in-house Expanded execution plans

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2024)Trend
Demand & Interest RatesFLIBS sales; industry taper; rightsizing; headwinds from rising rates “Interest rates remain stubbornly high… downward pressure on demand”; proactive mitigation Persistent macro headwinds
Product RoadmapGen2 400 GFX launched; 280 GFX DC entering production GFX2 redesign; 400 GFX2 orders at 10 units; pipeline includes 44-foot Twin Vee Advancing new models
Dealer Network & InventoryConsolidated Aquasport TN to FL; inventory reduction priority Monitoring field inventory; inventory reduced >20% in Q1; re-engaging national dealers Inventory normalization
Capacity ExpansionPlanning 30k sq ft addition toward 100k total 30k sq ft addition underway; target 100k sq ft by Dec 2024 Execution phase
Manufacturing Efficiency—In-house CNC tooling to cut outsourcing cost; ERP rollout for controls Efficiency initiatives
AI/Technology—Autonomous A.I. partnership with Avikus for AquaSport; models debut planned New tech narrative
Internal Controls & CFO—Material weaknesses acknowledged with remediation plan; new CFO appointed (Apr 4/5) Strengthening finance
Regulatory/Listing—Nasdaq minimum bid price deficiency notice Elevated listing risk

Management Commentary

  • “Interest rates remain stubbornly high…higher interest rates, increased customer costs, which caused downward pressure on demand across our industry” .
  • “Despite our revenue drop from $8.8 million to $5.2 million in Q1, Twin Vee grew revenue per direct labor by 40%” .
  • “We are expanding our Fort Pierce, FL manufacturing facility to increase production capacity…adding a state-of-the-art CNC machine…bring the tooling of our brand-new boat models in house” .
  • “Our 400 GFX2 has already sold 10 units so far…we will have over 100,000 square feet…capacity production upwards of 700 units annually when we began to see the market rebound” .

Q&A Highlights

  • The company opened the call for questions, but the available transcript content reflects prepared remarks; specific Q&A exchanges were not captured in the accessible document set .

Estimates Context

  • Wall Street consensus EPS and revenue estimates from S&P Global were unavailable or not retrievable for Q1 2024 during this analysis window; as a result, we cannot present beat/miss comparisons versus consensus for EPS or revenue. Values retrieved from S&P Global were unavailable due to data access constraints.
  • Given micro-cap status and limited coverage, investors should rely on company-reported results and monitor future updates for emerging analyst coverage .

Key Takeaways for Investors

  • Mix and macro explain margin and revenue pressure: monohull mix and elevated financing costs materially reduced Q1 gross profit and margin; monitor product mix shift back toward catamarans and larger offshore models for margin recovery .
  • Execution levers are in place: ERP controls, in-house CNC, and workforce rightsizing drove labor productivity gains; continued inventory reductions could support cash flow stabilization .
  • Pipeline and capacity are potential catalysts: Gen2/GFX2 launches (400/280 lines) and factory expansion to 100k sq ft position Twin Vee for leverage in a demand rebound; watch sell-through and dealer feedback .
  • Balance sheet provides runway: $16.1M cash and $0.98M marketable securities with working capital of $18.9M as of March 31, 2024 underpin near-term investments; monitor cash burn and segment losses (Forza) .
  • Risk management: Nasdaq bid-price deficiency and internal control material weaknesses heighten execution and governance risk; remediation progress and potential corporate actions (e.g., reverse split) bear close attention .
  • Focus on margin mix: Larger offshore boats and catamarans carry higher margins; near-term thesis hinges on product mix normalization and successful rollout of GFX2 models .
  • Technology narrative: A.I.-assisted navigation partnership (Avikus) could differentiate AquaSport/Twin Vee offerings and expand addressable market; assess commercialization milestones and customer adoption through 2024–2025 .