Twin Vee PowerCats Co Stock

Good morning, everyone. I am the CEO of Twin Vee Powercats, NASDAQ-listed company, VEEE, and I'm here with Jared Reichenberger, who is the Director of OEM Sales for Mercury Marine. We are here to announce a strategic partnership between Mercury Marine and Bahama Boats, and so I'd like to turn it over to Jared Reichenberger.

Joseph, thank you for having me. As you said, I am with Mercury Marine. We are a leading manufacturer of recreational marine propulsion. This is an exciting time for us. There's been some discussions that we've been engaging on. And we are definitely excited to roll up our sleeves and work alongside your leadership and team to help relaunch this incredible brand. We don't necessarily view this as just a regional play in the state of Florida. I think this is a great opportunity across the United States, but then also with the group when will reach there, we're going to be able to offer and help and assist with.

Bahama is a very great brand in the marketplace. They have a very loyal customer base, and that's where we see this as a great opportunity to be a part of it. We want to help take this to the next level. And I think under your leadership and the vision that you're showing, it's going to be an exciting time to see where we can take this.

More so, Mercury is about product. The vision that Joseph has laid out in regards to future products, just the true where he's going to take the brand lines perfectly with and matches our product line. Our innovation in V6, V8, V10 and B12 are great opportunities to help this brand, and we really look forward to the opportunity.

And Joseph, I'll give it back to you. Again, thank you for engaging with us and going through this process and really look forward to it.

Thank you, Jared. Appreciate all the support. Looking forward to an exciting couple of years as we roll out all of our new products.

So a brief history on Bahama Boats. Bahama was founded by the late great Scott Henley approximately 20 years ago. Bahama is a highly recognized and respected brand. And today, Twin Vee acquired -- well, not today, but Twin Vee acquired 100% of Bahama Boat Works 7 months ago. And today, Bahama is a Twin Vee company. Along with Bahama's exquisite design, it's offshore performance and it's yacht quality, fit and finish, Bahama has always been a brand for the few.

Now with Mercury Marine as a partner and Twin Vee's manufacturing capabilities, together we're going to relaunch this incredible brand with a complete model lineup from 21 feet to 41 and possibly larger as we roll forward with new Bahama models.

As you know, Twin Vee is a large-scale production boatbuilder. We have a new modified 100,000 square foot facility capable of producing up to 700 units annually depending on the model mix.

Why Mercury? Mercury is the most powerful engine brand in boating period. Mercury is backed by 0Brunswick, which is a New York Stock Exchange company, the gold standard. This partnership is an OEM alliance that instantly elevates the trust and demand for our products.

And why does this matter? Motor packages are anywhere between 20% to 35% of the total cost of a boat. I mean a lot of times, like the first question a buyer asks is what is the power on the boat. And if it's not a mercury, many buyers stop listening. And so what's important here is Mercury doesn't just power boats, Mercury brings buyers to the table and starts possibly new conversations with buyers.

Mercury is brand dominance. They've set the standard, they look the part. They have an intimidated iconic look and Mercury Motors sells boats. Do you remember that Black Max 50 years ago, and Mercury has built off that early success and they kept going. And I want to go over some investor highlights to touch on.

Today, Twin Vee, NASDAQ listed has a total market cap of under $4 million. Twin Vee has been building and designing boats for over 30 years. We've produced over 10,000 boats globally. And today, Twin Vee has two brands under one roof. This is shared cost leverage. Two brands, one factory. This lowers cost and supports scale of economy and cost efficiencies. We have all the infrastructure we need, including tooling. The processes are already in place to support a multi-brand growth without duplicating capital spend.

And Twin Vee now has the ownership of one of the most recognized names in the offshore center console sport boats. Twin Vee will be reintroducing the Bahama Boat brand with disciplined execution and modern manufacturing. And I'd like to invite everyone to our official relaunch of Bahama Boats with our new propulsion partner, Mercury Marine at the Palm Beach Boat Show on March 25. So stay tuned at twinvee.com for updates and highlights, and thank you for joining us today. Have a good day. Thank you.

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.

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. 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.

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 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.