Twin Vee Powercats Co. (NASDAQ:VEEE) Q3 2025 Earnings Call Transcript

Twin Vee Powercats Co. (NASDAQ:VEEE) Q3 2025 Earnings Call Transcript November 6, 2025

Operator: Welcome to the Twin Vee Powercats Company Third Quarter 2025 Investor Call. As a reminder, this call is being recorded. [Operator Instructions] Your speakers for today’s program are President and CEO, Joseph Visconti and Chief Financial Officer, Scott Searles. 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 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 and 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.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 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. [Operator Instructions] I will now turn the call over to Joseph Visconti.

Joseph Visconti: Good afternoon, everyone, and thank you for joining Twin Vee Powercats Quarterly Investor Call. Today we’ll outline how we’re navigating current conditions with a clear focus on sales, dealer expansion and customer engagement. As we know, high interest rates, inflation and cautionary consumer spending have slowed new boat sales across the sector. Pressure on new unit demand and higher-than-normal inventory levels across the industry are still a challenge. As a builder of premium Twin Vee and Bahama boats, these headwinds create a complex environment for manufacturers and dealers alike. At Twin Vee, we’re addressing these challenges head on by controlling what we can, our costs, our inventory, our relationships with dealers and customers.

Our primary focus is driving sales and rebuilding our backlog. We’re channeling all resources into sales, marketing and strengthening customer demand. In Q2 and Q3, we added 10 new dealer locations, expanding our reach into regions like the Southeastern Seaboard, the Gulf Coast and a brand-new stocking dealer in Australia. We’re working closely with all dealers offering hands-on support through personalized customer consultation, demo events and any guidance required to shorten the sales cycle for customers. Operationally, we’ve made strategic moves to improve efficiencies. Our Fort Pierce headquarter expansion is complete. This gives us the capacity to produce new models, expand our production and integrate additional brands. We have also completed the installation of our 46-foot 5-axis CNC router, which allows us to handle precision in-house tooling.

Q&A Session

This reduces our reliance on external vendors, cuts lead times and lower costs on product development. These upgrades are now operational, enabling us to respond to demand without significant further capital investment. On the product front, we’re seeing steady progress with our 22-foot BayCat, which continues to resonate with customers for its versatility and value. Production remains efficient with manufacturing output is aligned with dealer orders to avoid overstocking. You can explore this BayCat in other Twin Vee models on twinvee.com using our new 3D configurator, which lets customers build and price their boats and also customize options like upholstery, colors and engines in real time. We also completed integrating the recently acquired Bahama Boat Works known for its premium offshore fishing vessels.

We’ve completed the relocation of all Bahama molds and the tooling into our expanded — our recently expanded Fort Pierce facility. We are carefully pacing the Bahama rollout to match market demand, ensuring we don’t overextend inventory while building excitement for these amazing products. As a public company, our priorities are clear. We’re going to drive revenues through sales, marketing, rebuild our backlog and maintain financial disciplines. We’re positioning Twin Vee to capitalize as conditions improve. We will continue to expand our dealer network and drive efficient operations. We’ve taken additional steps to ensure success in this challenging market. One significant decision was the sale of our North Carolina property. This move has further reduced overhead, particularly the insurance and carrying expenses associated with the facility.

And more importantly, the proceeds from the sale will bolster our balance sheet. Looking ahead, our strategy is straightforward: stay lean, focus on sales and deepen customer and dealer relationships. We are confident that our disciplined approach positions us to outperform competitors. The sale of the North Carolina property has strengthened our financial foundation. Our expanded product portfolio enhances manufacturing capabilities and our growing digital presence are all aligned to drive revenue and rebuild our backlog. We remain committed to delivering value to our shareholders by focusing on what we do best, building high-quality boats, supporting dealers and engaging directly with customers. The marine industry may be navigating rough waters, but Twin Vee, we are focused on emerging stronger than ever.

In closing, our operation, upgrades and strategic acquisitions position us to compete effectively while protecting our financial health. I want to thank you for your support, and I will now hand it over to our interim CFO, Scott Searles.

Scott Searles: Thanks, Joseph. Good afternoon, everyone. My name is Scott Searles, I’m the Interim CFO for Twin Vee. This is my first earnings call with Twin Vee, and I want to begin by thanking all the shareholders, employees and dealer partnerships for their warm welcome and for your continued support. It’s been great getting to know the business, and I’m excited to be part of Twin Vee’s story moving forward. As Joseph mentioned earlier, the boating industry continues to face a challenging environment. High interest rates, inflation and cautious consumer spending has slowed new boat sales across the sector. Inventory levels across the industry remain elevated, creating a complex environment, both for manufacturers and dealers.

At Twin Vee, we’re tackling these headwinds head on by focusing on what we can control, our costs, our inventory and our dealer relationships. Our approach is simple, stay lean, stay disciplined and keep supporting our dealers to rebuild momentum. For the third quarter, net sales were $3.43 million, up 18% year-over-year from $2.9 million last year. Gross results showed a small gross loss of about $45,000, a meaningful improvement over last year’s $146,000 loss reflected better production efficiency and cost control. Selling and general and administration expenses were down roughly 16% from the prior year. Our net loss for the quarter was $2.76 million, an improvement from last year’s $3 million loss and consistent with our expectations given the industry backdrop.

For the first 9 months of 2025, we generated $11.8 million in sales with a gross margin of 9.6%, up significantly from 2.7% a year ago. These results demonstrate the early benefits of our operational discipline and focus on aligning production with dealer demand. Turning to the balance sheet. We ended the quarter with $2.7 million in cash and equivalents and continue to maintain very low leverage. Our only long-term debt remains the SBA economic injury disaster loan, which carries a fixed 3.75% rate and is fully current. After the quarter end, we completed the sale of our North Carolina property for $4.25 million. That included $500,000 in cash at closing and a $3.75 million secured promissory note earning 5% interest payable in [ installments ] between ’26 and ’27.

This transaction immediately reduces overhead and strengthens our balance sheet. We are managing working capital carefully, producing to order rather than to stock to preserve liquidity and to protect dealer profitability. Operationally, our Fort Pierce expansion is now complete, and our 5-axis CNC router is fully operational. This capability allows us to handle precision tooling in-house, reducing outside vendor costs and shortening development times. It’s a good example of what we’re doing more with what we have, not spending more to grow but investing smarter. And I wanted to thank all of the operations and finance teams for their hard work in achieving this balance. Looking ahead to the fourth quarter, our priorities are clear: protecting liquidity, support dealers, sell-through and remain ready for the growth when demand improves.

We’re entering Q4 from a position of stability with a leaner cost base, stronger dealer coverage and healthier balance sheet. Our focus is on rebuilding the backlog and strengthening our relationships with our dealers and customers. The sale of the North Carolina property gives us flexibility to invest in marketing and dealer support without taking on debt. We’ll continue to expand our presence in high-potential coastal regions and ensure our dealers have the training and tools and support to succeed. Before we open the call to questions, I want to thank you all for — and the shareholders and employees and our partners. Your confidence truly motivates our team every day. We’re focused on what Twin Vee does best, building high-quality boats, supporting our dealers and engaging directly with customers.

The marine industry may face rough waters, but we are steering through them with focus and discipline. Our mission is clear: to whether the storm, emerge stronger and create a lasting value for our shareholders. Thank you for your continued support. With that, I’ll turn it over to the operator for questions.

Operator: [Operator Instructions] There are no questions at this time. And this concludes today’s conference. You may disconnect your lines at this time, and we thank you for your participation.