AYRO(US:AYRO)2022-03-23 14:46Financial Data and Key Metrics Changes - The company reported record quarterly revenue of $813,000, representing a 4% increase year-over-year and a 45% increase sequentially due to record unit deliveries of the Club Car Current [13][16] - Net loss improved sequentially by 35% from the third quarter, amounting to $7.8 million compared to $12 million in the previous quarter [13][18] - Adjusted EBITDA loss was $7.1 million, showing a sequential improvement of approximately $1.1 million compared to the third quarter [17] Business Line Data and Key Metrics Changes - The primary product, the Club Car Current, saw record unit sales, contributing significantly to revenue growth [7][13] - The company is transitioning to a new supply chain strategy focused on North American sourcing to mitigate rising costs and delays associated with international shipping [8][12] Market Data and Key Metrics Changes - The low-speed electric vehicle (LSEV) market is projected to grow to $6.3 billion by 2025, positioning the company favorably within a less competitive segment [7] Company Strategy and Development Direction - The company plans to emphasize the LSEV market over high-speed EVs, with a new model, the Ayro Z, expected to launch by the end of 2022 featuring significant technology upgrades [9][10] - The strategy includes targeting government agencies for sales, aligning with sustainability goals and Buy American requirements [10][11] - The company aims to maintain a strong balance sheet while exploring potential strategic M&A opportunities in the EV market [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential revenue growth in the first and second quarters of 2022, supported by a leaner operating structure [20] - The company is focused on cost containment and expects further reductions in operating expenses while accelerating product development for the Ayro Z [14][19] Other Important Information - The company had a cash balance of $69.2 million at the end of the fourth quarter, with no debt [18] - The transition to a North American-based manufacturing strategy included one-time costs of approximately $1.78 million, which are not expected to recur [16][17] Q&A Session Summary Question: What is driving the strong sales performance? - Management noted strong collaboration with Club Car and positive responses from the dealer network, contributing to increased sales momentum [22] Question: What is the status of manufacturing and the $1.78 million inventory charge? - Manufacturing is currently at Karma, and the inventory charge primarily relates to increased freight costs from China [24][26] Question: Will R&D expenses increase with the development of the Ayro Z? - Management indicated that R&D expenses will not increase; instead, a more cost-effective approach is being implemented for the Ayro Z development [30] Question: What are the expectations for selling price and gross margin for the Ayro Z? - Management refrained from commenting on specific pricing or margin targets, emphasizing the focus on developing a competitive bill of materials [32]