Worksport .(US:WKSP)2025-05-15 21:30Financial Data and Key Metrics Changes - Revenue for Q1 2025 reached $2,240,000, a 337% increase compared to $512,000 in Q1 2024, although slightly lower than Q4 2024 due to seasonal trends [6][8] - Gross profit rose to $396,000, achieving a gross margin of nearly 18%, up from 7% in the same quarter last year and 11% from Q4 2024 [8][9] - Operating loss for Q1 was approximately $4,460,000, compared to $3,710,000 in the prior year period, reflecting costs associated with scaling operations and strategic investments [11][12] - Cash and cash equivalents stood at $5,080,000, slightly up from $4,880,000 at the end of 2024, with working capital improving to $7,940,000 [12][13] Business Line Data and Key Metrics Changes - The AL4 product line was launched in late Q1 2025, contributing significantly to revenue growth and improving gross margins [6][16] - The company is targeting to produce over 200 units per day by the end of Q3 2025, which could represent upwards of $45,000,000 in annual top-line revenues [18] - The reseller network grew to 151 active dealers, a 64% increase from 92 at the end of the previous year, with business-to-business sales growing nearly 70% from February [19][20] Market Data and Key Metrics Changes - The company anticipates significant growth in the B2B market, with over 17,000 addressable dealers nationwide [20] - The upcoming product launches, including the HD3 hard folding tunnel cover and the Solis solar integrated tunnel cover, are expected to drive additional revenue growth [21][23] Company Strategy and Development Direction - The strategic focus for 2025 includes scaling sales of current products, launching new product lines, and maintaining operational excellence [38] - The company aims to achieve cash flow breakeven by Q4 2025 or early Q1 2026, with a target gross margin of 25% to 30% later this year [11][34] - Worksport plans to phase out lower-margin private label offerings to improve overall gross margins [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving substantial year-over-year growth by the end of 2025, despite the net loss reported [6][11] - The company remains optimistic about revenue growth driven by the core tonneau cover business and new product introductions, targeting full-year revenues in the range of $20 to $25 million [31][32] - Management highlighted the importance of maintaining sufficient cash reserves and access to capital to fund growth initiatives while pursuing profitability [35][36] Other Important Information - The company has developed a robust patent portfolio of over 70 approved, registered, and pending patents and trademarks [27] - Worksport's subsidiary, TerraVise Energy, has developed a groundbreaking cold climate heat pump system, which is generating substantial global interest [25][26] Q&A Session Summary Question: Have you made sales of the AL4 product this quarter? - Yes, the AL4 is selling very well, and the company is running low on stock [42][43] Question: What are the raw materials that are within the inventory budget? - The majority of the inventory comprises aluminum products, with about 60-70% of the bill of materials consisting of domestically sourced aluminum [44][45] Question: What do you have in place currently for distribution with Core and Solis? - Initially, the distribution will focus on direct consumer sales to gauge feedback before expanding to the existing dealer network [49][50] Question: Are the new products being launched expected to have higher gross margins? - Yes, the new products will benefit from both economies of scale and higher gross margins due to their premium positioning [52][53] Question: Can you clarify on the guidance for 2025? - The guidance for 2025 is focused on traditional tonneau covers, with Solis and Core sales not included in the current projections [59][60]