Revenue Performance - Total revenue decreased by $3.8 million, or 3.3%, from $115.0 million in fiscal 2023 to $111.2 million in fiscal 2024[244]. - Revenue from UTVs, ATVs, and e-bikes increased by $4.1 million, or 4.0%, from $103.3 million in fiscal 2023 to $107.5 million in fiscal 2024, representing 96.6% of total revenue in 2024[247]. - Revenue from sales of Pontoon Boats decreased by $7.9 million, or 68.0%, from $11.7 million in fiscal 2023 to $3.8 million in fiscal 2024, representing 3.4% of total revenue in 2024[248]. Profitability - Gross profit decreased by $1.6 million, or 4.4%, from $35.9 million in fiscal 2023 to $34.3 million in fiscal 2024, with a gross margin of 30.9% in 2024[249]. - Income from operations decreased by $6.1 million, or 47.3%, from $12.92 million in fiscal 2023 to $6.81 million in fiscal 2024[242]. - Net income decreased by $7.26 million, or 69.7%, from $10.42 million in fiscal 2023 to $3.15 million in fiscal 2024[242]. Operating Expenses - Operating expenses increased by $4.5 million, or 19.8%, from $22.99 million in fiscal 2023 to $27.53 million in fiscal 2024[242]. - General and administrative expenses increased by $3.4 million, or 25.6%, from $13.2 million in fiscal 2023 to $16.6 million in fiscal 2024, representing 14.9% of total revenue[254]. Cash Flow and Financing - Net cash provided by operating activities was approximately $6.7 million in fiscal 2024, a decrease of $4.2 million compared to fiscal 2023[265]. - Net cash provided by financing activities was approximately $3.0 million in fiscal 2024, compared to net cash used of approximately $11.0 million in fiscal 2023, primarily due to net proceeds from IPO[266]. - As of December 31, 2024, the company had cash and cash equivalents of approximately $10.2 million and positive working capital of $19.2 million[270]. Legal and Other Liabilities - The company recorded a one-time loss of approximately $3.6 million on legal judgment related to a lawsuit, bringing total accrual related to this lawsuit to approximately $6.0 million[259]. - The company recorded an additional accrual of $3,645,092 related to a lawsuit, bringing the total accrual to approximately $5,988,961 as of December 31, 2024[287]. - Warranty liabilities decreased from $619,113 in 2023 to $503,553 in 2024, with warranty expenses of $1,274,037 in 2024 compared to $1,924,203 in 2023[282]. Inventory and Provisions - Inventory provision increased slightly from $439,900 in 2023 to $469,900 in 2024, with impairment provision of $30,000 in 2024 compared to $439,900 in 2023[285]. - The allowance for credit loss was recorded at $0.5 million for 2024, down from $0.6 million in 2023[284]. - Sales return liabilities were recorded at $261,588 for 2024, down from $283,276 in 2023, with sales returns of $1,061,694 and $3,355,112 for the respective years[281]. Business Strategy and Risks - The company expanded its distribution network through large retail stores in the U.S., focusing on in-store sales to enhance market penetration[244]. - The company is facing risks from intense competition, economic changes in China, and fluctuations in raw material costs, which could adversely affect its financial condition[240][241]. - The company has initiated research and development expenses amounting to $343,493 in fiscal 2024, reflecting a focus on innovation[242]. Capital Expenditures - Capital expenditures for Fiscal 2024 amounted to approximately $387,876, a substantial increase from $134,662 in 2023, reflecting business growth[276]. - The company's lease commitments total $11,549,277, with $2,904,205 due within one year[277]. Other Income - Other income increased by $1.0 million, or 688.6%, from $0.1 million in fiscal 2023 to $1.1 million in fiscal 2024, primarily due to write-offs and additional insurance claims[261]. Debt and Loans - As of December 31, 2024, the total loan balance was $0, compared to $303,583 in 2023, indicating a significant reduction in outstanding loans[272][275]. - There were no off-balance sheet arrangements that could materially affect the financial condition or results of operations for the years ended December 31, 2024 and 2023[278].
Massimo Group(MAMO) - 2024 Q4 - Annual Report