Financial Data and Key Metrics Changes - Worksport achieved net sales of $1.92 million for Q2 2024, representing a 275% increase from Q1 2024 and surpassing the entire revenue of $1.5 million for fiscal 2023 [8][9] - Gross profit margins for Q2 2024 were reported at 15.4%, an improvement of 111% compared to Q1 2024 [9][10] - The company anticipates a monthly recurring revenue of approximately $1 million by the end of Q2 2024, with expectations for continued growth throughout the year [9][11] Business Line Data and Key Metrics Changes - The Tonneau cover business is leading sales, positioned within a $3.5 billion truck bed market, with significant early traction noted [5][8] - Worksport plans to launch three new products in the second half of 2024, including the SOLIS Solar Tonneau cover and the COR modular portable energy system [5][6] Market Data and Key Metrics Changes - The portable energy market is valued at approximately $3.9 billion globally, with Worksport's COR system expected to penetrate markets beyond just the pickup truck segment [6][12] - The company is targeting the North American market, which has over seven million Tonneau covers sold annually, indicating substantial growth potential [22] Company Strategy and Development Direction - Worksport is focusing on expanding its automotive and clean-tech divisions, aiming to become a nine-figure middle market company in the short to mid-term [20][21] - The company is pursuing ISO certification for its factory, which is expected to enhance business-to-business relationships and future OEM partnerships [25][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving cash flow positivity by 2025, with a revenue forecast of $15 to $20 million for the Tonneau cover business in 2025 [11][52] - The company is strategically positioned to leverage changes in tariffs and market dynamics, particularly in the clean-tech sector [26][57] Other Important Information - Worksport received a grant valued at approximately $2.8 million from the state of New York, based on projected employee growth, redeemable starting in 2025 [17] - The company has filed a Reg A offering to raise capital, which is expected to attract new investors and expand its retail shareholder base [23][60] Q&A Session Summary Question: Can you cover your manufacturing capability in New York? - The manufacturing line can produce 1,000 Tonneau covers per day, with most components sourced from North America [14][15] Question: How much did production inefficiency cost you in the quarter? - Production inefficiencies are being addressed, and management anticipates margins to improve significantly as production scales [29][31] Question: What is the potential revenue for the Clean-tech business in 2025? - The Clean-tech market is estimated to be a ten-figure market, with hopes to capture a portion of it as the COR product launches [34] Question: Will the COR system be available for retail purchase online before Christmas? - The company is targeting hard Christmas sales, with plans for pre-sales before the holiday season [41] Question: What revenue number is needed to break even? - Management estimates that revenues between $15 million to $20 million will lead to cash flow positivity, but this is a moving target [52][53] Question: Will Worksport benefit from the IRA? - The COR product is expected to qualify for carbon credits, providing potential financial benefits [56]
Worksport .(WKSP) - 2024 Q2 - Earnings Call Transcript