ECD Automotive Design(ECDA) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for 2024 was $25.2 million, a 29$19.5 million in 2023, driven by increased unit sales and higher average selling prices [30] - Gross profit for 2024 increased by 30% to $5.9 million compared to$4.5 million in the previous year, with a gross profit margin of 23.4% [30][32] - The net loss for 2024 was $10.8 million, or$0.32 per diluted share, compared to a loss of $1.2 million, or$0.05 per diluted share, in 2023 [32] Business Line Data and Key Metrics Changes - The company reported a fourth-quarter revenue of $5.3 million, up from$4.8 million in the prior year, attributed to increased sales volume and average sales price [24][25] - The average selling price per vehicle increased by $25,000, contributing to higher revenue [30] Market Data and Key Metrics Changes - The company has begun to establish retail locations, with the first store opening in West Palm Beach, Florida, and a second in Nantucket, which are expected to enhance customer engagement and sales [19][20] - Retail sales currently contribute about 20$500,000 [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by tariffs but emphasized their strategy to mitigate impacts without raising base contract prices for clients [50][51] - The company expects to reach a cash flow positive position by increasing production to about 10 units per month, aided by a backlog of orders [39][40] Other Important Information - The company underwent a re-audit of financial statements due to the shutdown of its prior auditor, which has impacted its reporting timeline [7] - A non-cash write-down of $1.1 million in labor overhead allocation affected gross profit for the fourth quarter [26] Q&A Session Summary Question: Regarding non-recurring charges and growth potential - Analyst inquired about the impact of non-recurring charges on future income from operations, suggesting that reasonable growth could lead to positive results in 2025 [38] Question: Vehicle backlog and its impact - Analyst noted that the 12 vehicles pushed from Q4 to Q1 would provide a cushion for the first half of the year [42] Question: Split between web-based sales and retail locations - Management discussed the shift in sales strategy, noting that retail locations currently contribute 20% of leads and sales, allowing for reduced traditional marketing spending [44][48] Question: Mitigation of tariff impacts - Management explained their strategy to avoid increasing base contract prices while adjusting upgrade pricing to offset tariff impacts [50][51]