Welcome to the Twin Vee Powercats Co. Third Quarter 2022 Investor Call. [Operator Instructions] Your speaker for today's program is Joseph Visconti, CEO and President of Twin Vee Powercats Co.; and Carrie Gunnerson, CFO of Twin Vee Powercats Co.

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 beliefs may estimate, continue, anticipate, intend, should, plan, expect, 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 is -- that 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 billing 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 reflect 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 are experiencing unsatisfactory audio quality, please use the telephone dial-in option. A question-and-answer session will follow the presentation. Please note that only those that have dialed in via telephone may ask a question.

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Hello?.

Joseph, I can hear you. I'm not sure what happened to our operator..

I'm not sure either.

Operator?.

I will now turn the conference over to Joseph Visconti. Please go ahead, sir..

Thank you. Thank you, and good afternoon. Thank you for taking the time to participate in our Q3 2022 financial results for Twin Vee Powercats. My name is Joseph Visconti, I'm the CEO and President of Twin Vee.

I'll start off by providing third quarter update on sales trends, revenue, product development, facility development and the general health of our company. Carrie Gunnerson, our CFO, will then update you on the company's financial health and then we will conclude with Q&A.

Twin Vee Powercats designed manufacturers and sells catamaran sport boats that are shipped to shipped from our factory here in Fort Pierce, Florida. Our current gas-powered model lineup ranges and length from 24 feet to our new 40-foot GFX. We employ over 170 employees.

We are currently manufacturing 6 GFX models, and we are adding 3 additional models in the coming weeks under the name of STX. This is a sport tournament both we've come up with. The STX models will include a 24, 26 and 28-footer.

From the day I bought Twin Vee in 2015, we set out to build a company where talented people who provided the opportunity to thrive and succeed with the focus of building an international business that designs, manufactures, and sells iconic products in multiple markets. From the beginning, we have done just that.

Year-over-year, we have consistently designed new boat models from conceptual design to beautiful Twin Vee boats being shipped to our dealers throughout the United States and several island nations. The only time we've taken our foot off the gas was a 3-month period when COVID arrived.

After a brief pullback, our team hit the accelerator forward, bringing almost a dozen new models from conception to marketing, including a brand-new 40-foot quad-engine power count. We have a lot of new developments to share new products in the pipeline, expansion plans to go over.

But first, I'd like to take a moment and discuss the question that is on everybody's mind.

And that question is, how is rising interest rates, consumer confidence, and the general uneasiness in the market affecting Twin Vee's day-to-day business? Well, over the past 5 months, we've seen dealer field inventory go from extremely unnatural low numbers of boats on dealer lots. Sometimes, there is not a single boat available at certain dealers.

And over the past 5 months, we've seen dealer inventories are climbing. Some of the dealer levels are back to pre-COVID numbers, and we have other dealers that don't sit and wait for the phone to ring but take a proactive sales strategy, and these dealers are doing great.

We have several -- as dealers that continue to sell every boat they take possession of. Several weeks back, we were seeing some field inventory levels starting to reach high numbers, and the industry talk was FLIBS, which is the Fort Lauderdale International Boat Show.

It's one of the largest boat shows in the world would be the kickoff for a renewed period of demand. Tom City yachts, our dealer that represented 4 Twin Vee models at FLIBS in Lauderdale, for 5 days did very well. We saw a wave of fresh demand.

We had 4 deals closed at the show, and there's another 8 deals that are pending, and these numbers are very good for a 5-day period over a boat show. Obviously, today is a big day. I think today's election could have a positive impact on consumer confidence, especially in Florida, we are seeing what appears to be a healthy economy.

Housing is still relatively strong. The labor market remains strong. It appears that jobs are available for the people that want to work and the supply chain is getting better with a few items still remaining a challenge, which tells me that the overall demand of products remains greater than the supply.

The bottom line is at Twin Vee, we are building boats. We're working to increase our production. We're expanding our distribution, and we're implementing a several growth -- a several-pronged growth plans as we move forward.

Our game plan is growth, growth by adding new models to our lineup, growth by increasing our distribution, and opening new markets. New models accelerate growth and market opportunity. Some of the new models include the 3 STX 4 tournament models I mentioned previously.

And more specifically, we have 4 new completely unique special models that we've been designing that will be launching under a brand-new name called LFG Marine Group. LFG Marine will be a Twin Vee unit.

The initial LFG models are geared towards the freshwater market, which Twin Vee boats typically are saltwater boats but the LFG boats can also be used and enjoyed in the saltwater environment. The goal is that LFG will help open new markets and increase our exposure.

The LFG Marine Group brand will have its own website, its own marketing, but the boats will be designed, manufactured and shipped from our Twin Vee factory in Fort Pierce We intend to open new dealers and freshwater markets like Michigan, Ozark, the Thousand Islands, in New York and the thousands of lakes throughout the country.

Our initial LFG models will include a 25-foot multi-haul center console, a 25-foot dual console, a 25-foot deck boat, and a new 22-foot single-engine mono haul. All these models our past design stage and the tooling is being completed as we speak.

Actually, the first 25-foot LFG dual console is actually in our rigging department in Fort Pierce right now and should be in the water in the next 2 to 3 weeks. We feel confident that revenues from the LFG boat sales will begin in Q1 of 2023. Let me spotlight some additional points.

As part of this increased growth, we've hired Zach Crane as our new Director of National Sales. Zach has extensive experience and dealer development management. He developed and managed over $100 million in boat sales for Malibu Boats Group. Zach is located in New Jersey and will open new Twin Vee territories in the Northeast.

Additionally, Zach will work with our current dealer base to increase sales and manage our brand quality control. Our current cash position, Twin Vee is $14.5 million of cash and cash equivalents.

This cash allows the company the ability to sustain itself through any possible rough markets, but also to acquire assets that might come available in the near future. Twin Vee has also begun infusing our boats. Infusion significantly changes the boat manufacturing process.

This modern efficient lamination build process creates a stronger, lighter structure. Infusion is just one part of the continued improvement processes that we are striving at the company to get to the next level of boat building. We also recently added Mercury and Yamaha Motors as an OEM. This is a big deal. We've had Suzuki for almost 30 years.

We've signed up Yamaha and Mercury and Twin Vee and LFG boats will have the opportunity to hang all 3 of these brands, Zuki, Yamaha, Mercury, which will allow our brands to succeed in markets where motor brands have strong brand recognition and sometimes those motor brands control that market share because of that.

We also are moving to become a lean manufacturing organization, which focuses on the minimizing waste and manufacturing systems while maximizing productivity. We've hired Steve Gunderson, an experienced and trained lean manager to help train our employees and transition the factory to lean manufacturing.

Welcome aboard, Steve, and this is a big deal for us. We continue to move forward on the design and construction of our 30-foot extension at the Twin Vee factory. The extension structure will connect the back building in the front building, giving us approximately 100,000 square feet of a linear manufacturing space.

This will allow us to ramp from the current 220 units annually to production of approximately 600 units annually. We're about to launch a brand-new Twin Vee website in the coming weeks. This new site will enhance the customer experience and increase our online visibility.

We are in the process of installing an ERO software program from SAP that will manage all build-to-material, control inventory, connect all departments, tie in all financial reporting for each department and segments throughout our organization.

For example, as both ordered from our dealers, the order will trigger a pick list of materials and relieve that inventory, adding to the efficiency of our financial reporting. Forza X1 continues to make substantial progress towards its mission of building electric boats for mass production. Our team continues its amazing work.

On October 28 of this year, about 1.5 weeks ago, the FX1 boat, our dual console and all major components were tested successfully for several hours in the [ India and Lagoon ] in Fort Pierce, Florida. This was the first true water test that included all major components. The performance of the boat exceeded our expectations.

Forza X1 will continue to build prototype engines and prototype boats for the next 6 to 9 months; and Jim Leffew our Forza CEO and President held an investor call for Forza yesterday. And for you - for those of you that missed it, you can find a copy of this call on Forza's website, forzax1.com, and you'll be able to listen to Jim's investor call.

I hope you enjoyed my presentation. I'd now like to turn over to our CFO, Carrie Gunnerson, who will give a more detailed review of our financial results, and then we'll open it up for Q&A. Thank you..

Thank you, Joseph. I will begin with the income statement. Our net revenue for the quarter was up 114% to $8.52 million. Our revenue year-to-date was up 119% to $23,218,000. We are very pleased with our consistent growth over the 9 months. Our gross profit for the quarter was up 107% to 3,334,000.

We continue to monitor the cost of our raw materials, the purchase components, along with our dealer inventory and are adjusting our sales prices and discount structures accordingly. As Joseph mentioned, increasing our dealer network is a high priority for us, especially outside of the Florida territory.

Our operating expenses for the quarter increased 117% to $4,191,000. When we look at our operating expenses as a percent of sales for the quarter, they were 48% compared to 47% in 2021. However, if we look at just the gas-powered segment, our operating expenses as a percent of sales for the quarter were 36% compared to 45% in 2021.

We are very pleased with this improvement of 9%. Our net loss for the quarter was approximately $887,000 compared to $383,000 in 2021. However, in 2021, our subsidiaries [ FRZA ] and Forza had very limited activity. Forza, our electric boat segment, their portion of our net loss was approximately $1,043,000.

The net income from our core business, gas-powered boats was approximately $160,000. Further, when we look at our adjusted net income for the quarter, which excludes noncash charges, our adjusted net income for our core business, the gas-powered boat was approximately $577,000.

Our consolidated net loss is a reflection of the investment that the company continues to make in the electric boat division Forza X1. As we turn to the balance sheet, our consolidated cash, cash equivalents, and marketable securities were approximately $23 million as of September 30th, 2022.

If we break that down by segment, Twin Vee was $9 million and Forza was $14 million. Our cash position in the quarter did increase significantly due to Forza's IPO.

When we look at our current cash and marketable securities at Twin Vee, the Gas Power division, it did increase significantly from September 30th due to our shelf offering and our current cash is cash, cash equivalents and marketable securities is at $14.5 million.

We believe that we have sufficient cash in the books and from operations to provide for our ongoing operations. With that, I'll turn the call back over to Joseph. Thank you..

Thank you, Carrie. In conclusion, I believe Twin Vee's third quarter was extremely strong. We've debuted new boat models, we added dealer locations, and we continue to have a backlog of orders. We are excited for the opportunity ahead. We continue to grow our market share, expand operating margins with the goal of adding meaningful shareholder value.

I'd like to thank our employees for their continued teamwork and execution. I want to thank our shareholders for their support and everyone on the call today for their time and interest in Twin Vee Powercats. And with that, I'd like to turn it back to the operator and begin Q&A..

Operator:.

I just want to thank everybody, and we look forward to the next Q call, and everybody, have a great day. Thank you..

[Operator Instructions] Thank you. And that does conclude today's teleconference. We do appreciate your participation. You may now disconnect..