Twin Vee Powercats Co. (NASDAQ:VEEE) Q3 2023 Earnings Call Transcript November 13, 2023
Operator: Welcome to the Twin Vee PowerCats Company Third Quarter 2023 Investor Call. As a reminder, this call is being recorded and all participants are in a listen-only mode. Your speaker for today’s program are Joseph Visconti, President and CEO of Twin Vee PowerCats Company and Carrie Gunnerson, CFO of Twin Vee PowerCats 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 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 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.twinvee.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 in the Investor Relations section of our website at ir.twinvee.com for at least 90 days. Audiocast 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 formal presentation. [Operator Instructions] I will now turn the call over to your host, Joseph Visconti.
Joseph Visconti: Good morning, everyone. My name is Joseph Visconti. I’m the President and CEO of Twin Vee PowerCats. I’m joined on the call with Carrie Gunnerson, our CFO. Thank you for joining our third quarter 2023 investor call. As many of you know, Twin Vee designs, manufactures and sells a range of catamaran sport boats here from our Fort Pierce, Florida factory. For nearly 30 years, Twin Vee has been synonymous with offshore catamaran boats and considered by many to be one of the best riding boats on the water. The general economic landscape, including interest, rising interest rates continues to directly affect consumer purchasing on many recreational products, while we see entry-level buyers affected by higher interest rates.
An aerial view of boat show with recreational boats and luxury day boats on display.
We are also seeing cash buyers with slightly better demand for larger boats. The kickoff for boatshow season of Florida was two weeks ago when one of the largest and most respected boat shows named FLIBS or the international Fort Lauderdale Boat Show was held two weeks ago in Lauderdale. And Twin Vee and OneWater, our partner dealer, we had a fantastic display in the brand-new Fort Lauderdale Convention Center. We had every Twin Vee model, except our 400 being showcased in a large, well-positioned location in the show. And we had a decent amount of traffic. And after the dust settles, we feel confident that we will have sold between five and seven units at that show, including two 340 GFXs and so based on current market conditions, I would call this a strong single or double in terms of sales.
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Q&A Session
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Many brands at the show did not fare as well. There’s no doubt that we are seeing the industry taper and face continued headwinds. This is a time where leadership, smart planning and what I call rightsizing the business is now the priority. We will continue to monitor market conditions, dealing dealer inventory levels, direct and indirect costs with the goal of not burning cash from operations as we push forward. What does pushing forward look like? Well, our Twin Vee team smartly pushing forward is focusing on product development and laying the groundwork with new models across all brands. So when the market turns, and it will, we will be ready for the next upswing. It also means being operationally lean is our priority one focus. Let’s talk about some of the opportunities.
Last year, we designed and produced four 400 GFXs. This was our largest boat ever designed and produced in-house. We successfully sold the initial four boats that two of our dealers in Florida and Texas. The Gen 1 400 GFX was well received. Three of the four units successfully retailed from the dealers to the customers. And one of our 400 GFX Texas customers won a big fishing tournament as you might have seen on social media. Based on some of the feedback from our dealers, we chose to make some modifications to this now called Gen 2 400 GFX. The new version is faster. We’ve reached speeds of 75 miles an hour in a test a couple of weeks ago. The new 400 has more storage, more seating and more tech. And all around it’s a next-level fishing machine.
We have completed and shipped hull number one of this Gen 2 400 to our partner OneWater Marine, and we are currently finishing the number two boat, which we delivered to OneWater at the end of this month. As we move to larger production boat, this will help us reduce the number of total units we have to produce and also meet or exceed our revenue target. We have our — we also have our upcoming 280 GFX console. Our dual console that has officially entered production and our number one 280 should be delivered to our dealer network in January. We actually have a healthy number of orders for this new 280 DC or dual console. Now I try not to mention our competitors, but WorldCat is a competitor, and we use what’s called the SSI data, which is tracking of all boat registrations in the United States.
And according to SSI data, the number one selling WorldCat boat is their 28-foot dual console. They sell over 75 units annually of this one particular model. So we are super excited to help WorldCat fulfill some of those orders. And new products, open new markets, new products expand our reach to customers seeking various lengths and styles of our boats. Our mission to open new markets and expand our reach led us to acquire the well-known Aquasport brand. The Monaco boating market is one of the largest boat buying markets next to Pontoons and we believe that our investment in the Aquasport brand will allow our company to increase market share and grow our top line revenue in the long run. When we acquired the Aquasport brand located in White Bluff, Tennessee, the plan was to initially produce their existing legacy line of Aquasport, Monaco that were being produced in that facility.
And if you remember from previous calls or press releases, we also were producing some Aquasports in our factory here in Fort Pierce, the 22 center console and the 22 dual console. While there was some interest in the legacy models from White Bluff, Tennessee, we did not see enough demand to maintain a second, over 100,000 square foot factory four states away. We decided to consolidate all Aquasport manufacturing into our Florida facility and Sunset the Tennessee facility. We feel confident that this decision will reduce all overall cost and enhance the quality and speed of our boat production here in our Fort Pierce facility. The company remains dedicated to the Aquasport brand and we will continue designing and producing new models, including a new Aquasport 24 center console that should be in production within 30 days.
