Day: November 15, 2024

Q3 2024 total revenue of $15.2 million grew +3% Y/Y based on strong demand and output in the TrinScreen HIV business

Point-of-Care product revenue of $4.3 million grew 60% Y/Y

Reiterates guidance to achieve approximately $20 million of annualized run-rate EBITDASO¹ on annualized run-rate revenues of approximately $75 million by Q2 2025

Reiterates guidance to achieve 2024 sales revenue for TrinScreen HIV of approximately $10 million

DUBLIN, Nov. 15, 2024 (GLOBE NEWSWIRE) — Trinity Biotech plc TRIB, a commercial-stage biotechnology company focused on human diagnostics and diabetes management solutions, including wearable biosensors, today announced the Company’s results for the quarter ended September 30, 2024.

Key Highlights and Developments

Continued Revenue and Profitability Improvements

• Year-over-year revenue growth of 3% and continued disciplined execution on our profitability enhancing initiatives contributed to a decrease in the operating loss (before restructuring and impairment charges) to $2.2 million from $4.5m in Q3 2023, a 51% improvement.
• Management continues to make significant progress on the execution of the profitability focused initiatives announced in early 2024 as part of its Comprehensive Transformation Plan, many of which are now at the final stages of execution and expected to deliver near term profitability improvements:
  • Consolidate & Offshore Manufacturing:
    • We successfully completed the transfer of our second rapid HIV product manufacturing processes to our offshore manufacturing partner and we have made submissions to the relevant international regulator to permit commercial production of both rapid HIV tests with our offshore partner. We expect offshore production to begin in Q1 2025.
    • We are also beginning the transfer of some more technical aspects of production of both of our rapid HIV tests to our offshore partner. Once in place we expect this to be gross margin-accretive.
    • We have continued to make significant progress in consolidating our main haemoglobin manufacturing activities currently carried out at our Kansas City plant into two of our other sites. We remain on track to cease our main manufacturing activities at our Kansas City site by the end of 2024. 
    • We have informed staff at our autoimmune test manufacturing site in Buffalo, New York, of our intention to consolidate the site’s main manufacturing activities into our Jamestown, New York site. We expect to cease main manufacturing activities in our Buffalo site by the end of Q1 2025.
  • Centralise & Offshore Corporate Services:
    • Our new centralised corporate services site is now live across a number of functions, with additional functions expected to be added through the end of 2024.
• Based upon continued strong execution in our Comprehensive Transformation Plan, the Company reiterates its guidance of expecting to achieve approximately $20 million of annualized run-rate EBITDASO¹ based on annualised run-rate revenues of approximately $75 million by Q2 2025. This outlook is predicated solely on growth from the existing businesses including haemoglobin testing and HIV, and planned improvements to operating margins, with no contribution from the recently acquired biosensor and lab-based diagnostic businesses.

Diabetes CGM Developments

• We continue to progress the development of our next generation Continuous Glucose Monitoring (“CGM”) solution for diabetes management in line with our previously communicated plan.
• The CGM market is already estimated to be worth over $10 billion a year and projected to grow rapidly.
• Following the successful completion of our first pre-pivotal trial, we are this week starting a second, larger, pre-pivotal trial which will provide extensive data on further developments of the sensor technology which will feed into our sensor design choices.
• We are confident that the steps we are taking, with our impressive partners, with an emphasis on a great user experience, enhanced data capture & insights, and reduced cost through more reusable components, will lead to a differentiated product and a higher value proposition. 
• We continue to see strong commercial and strategic interest and are actively building and nurturing these relationships.
• Establishing strategic manufacturing & supply chain relationships with large scale premium market players to prepare for efficient & rapid scaling globally.

Business Development Update

• We recently completed two new lab-based technology acquisitions, which form an additional vertical to our long-term value creation & growth strategy:
  • EpiCapture Limited, a company developing a non-invasive test for monitoring the risk of aggressive prostate cancer. Prostate cancer is the most common non-skin cancer among men in the U.S., with about 1 in 8 men diagnosed during their lifetime, and the cost for diagnosis and treatment is estimated at over approximately $10 billion annually. This acquisition marks Trinity Biotech’s strategic expansion into the oncology diagnostics market.
  • Metabolomics Diagnostics Limited, a company that has developed an innovative test, PrePsia, to accurately predict the risk of preeclampsia in pregnant women. Preeclampsia is a frequently occurring maternal health issue, impacting up to 5% of pregnancies, which can cause serious illness or death in affected mothers and babies.

We intend to commercialise both tests in our New York State Department of Health-certified Immco diagnostic reference laboratory.

Third Quarter Results (Unaudited)

Total revenue for Q3 2024 was $15.2m compared to $14.7m in Q3 2023, an increase of 3.2% and consisted of the following:

Our Point-of-Care (‘PoC’) portfolio generated revenue of $4.3m for Q3 2024, compared to $2.7m in Q3 2023, an increase of 60.1%. Sales of our HIV screening test, TrinScreen HIV were $2.4m in the quarter (Nil in Q3 2023) as we continued to see strong demand following our initial shipments in late 2023.

Our clinical laboratory revenue was $10.8m in Q3 2024, a decrease of $1.2m or 9.6% compared to $12.0m in Q3 2023. There was a strong performance in the quarter from our clinical chemistry portfolio which grew 79.3% year-over-year. This increase in revenue was offset by a revenue decrease in our haemoglobins business, which was 17.1% lower year-over-year. This occurred due to decreased instrument sales during the period, combined with increased consumable sales in Q3 2023, which were influenced by the phasing of haemoglobin revenues from certain customers throughout 2023. The decline in instrument sales is in line with expectations as we commercially reposition our instrument offering in line with our new improved diabetes column system which is now being rolled out.

Gross profit for the quarter was $5.3m and gross margin for Q3 2024 was 35.0%. Gross margin was broadly in line with Q3 2023 when excluding stock obsolescence charges.

We continued to record improved margins in our haemoglobins division in Q3 2024 due to the financial benefits resulting from our previously announced initiatives, namely our revised in-house manufacturing process of our key diabetes HbA1c consumable. The improved margin performance in haemoglobins was offset by the negative margin impact of the higher TrinScreen HIV revenues which are currently achieving lower-than-average gross margin returns. The higher TrinScreen revenues will continue to pressure our overall gross margin percentage in the last quarter of 2024 given its lower price point when compared to our other HIV rapid test, Uni-Gold, and because of temporarily reduced efficiency as we scale up production capacity of this new product. We expect TrinScreen HIV gross margins to improve in early 2025 due to increased operational efficiency and the expected transfer of assembly to a lower cost manufacturing location.

R&D
Research and development expenses in Q3 2024 were $1.0m, a decrease of $0.2m compared to Q3 2023. We capitalized $2.1m (including capitalized borrowing costs of $0.6m as required by IAS 23) for the quarter in relation to our CGM development as we continued our development activities.

SG&A
Selling, general and administrative (SG&A) expenses were $6.5m in Q3 2024, compared to $7.7m in Q3 2023, a decrease of $1.2m over the comparative period. Key drivers of this lower SG&A expense include:

• Lower recurring salary costs of $0.7m in Q3 2024 versus the comparative period, driven by ongoing headcount optimisation activities during late 2023 and 2024.
• Our share-based payments accounting charge was $0.5m lower in Q3 2024 compared to Q3 2023, due to headcount changes.

SG&A – Restructuring costs
As previously announced, the Company has implemented a comprehensive restructuring plan across the business to include the centralization and offshoring of corporate services and consolidation and relocation of manufacturing operations. The offshoring of corporate services is progressing well and offshoring has already commenced in several areas and will continue to be rolled out through Q4 2024. Additionally, cessation of the main manufacturing activities in Kansas City remains on schedule and is expected to be completed by December 2024. A charge of $0.3m was recognized in Q3 2024 in relation to the costs associated with these restructuring activities.

Operating loss for the quarter was $2.6m, compared to an operating loss of $4.5m in Q3 2023. The lower loss this quarter was mainly attributable to higher gross margins combined with reduced overheads in Q3 2024, as a result of cost saving initiatives.

Financial expense costs in Q3 2024 were $3.1m compared to $2.4m in Q3 2023, an increase of $0.7m. The financial expense for the current and comparative period are summarized in the table below.

Loss after tax on continuing operations
Loss after tax on continuing operations for the quarter was $4.8m compared to $6.7m for the equivalent period last year.

EBITDASO
Loss before interest, tax, depreciation, amortization, share-based payments, impairment and restructuring costs (Adjusted EBITDASO) for continuing operations for Q3 2024 was $1.4m, compared to $3.5m for the comparative period. This is made up as follows:

The basic and diluted loss per ADS for Q3 2024 was $0.46 compared to $1.55 in Q3 2023.

Liquidity

The Group’s cash balance decreased to $2.8m at the end of Q3 2024 from $5.3m at the end of Q2 2024.

Cash used by operating activities for Q3 2024 was $3.6m (Q3 2023: $4.7m). During Q3 2024 the Company had investing cash outflows of $3.1m (Q3 2023: $0.9m), the largest element of this pertained to the capitalization of the development costs of our CGM device. Interest payments in the quarter were $2.2m (Q3 2023: $1.9m).

At the Market Program

On July 12, 2024, the Company entered into an At the Market Offering Agreement with Craig-Hallum Capital Group LLC, as sales agent. As of September 30, 2024, the Company had sold 3,344,208 ADSs under the ATM Program, for aggregate gross proceeds of $7.7 million and aggregate net proceeds of approximately $7.1 million, after deducting commissions and fees.

Use of Non-IFRS Financial Measures

The attached summary unaudited financial statements were prepared in accordance with International Financial Reporting Standards (IFRS). To supplement the consolidated financial statements presented in accordance with IFRS, the Company presents non-IFRS presentations of Adjusted EBITDA and Adjusted EBITDASO. The adjustments to the Company’s IFRS results are made with the intent of providing both management and investors a more complete understanding of the Company’s underlying operational results, trends, and performance. Non-IFRS financial measures mainly exclude, if and when applicable, the effect of share-based payments, depreciation, amortization, restructuring costs and impairment charges.

Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are presented to evaluate the Company’s financial and operating results on a consistent basis from period to period. The Company also believes that these measures, when viewed in combination with the Company’s financial results prepared in accordance with IFRS, provides useful information to investors to evaluate ongoing operating results and trends. Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations, however, should not be considered as an alternative to operating income or net income for the period and may not be indicative of the historic operating results of the Company; nor is it meant to be predictive of potential future results. Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are not measures of financial performance under IFRS and may not be comparable to other similarly titled measures for other companies. Reconciliation between the Company’s operating loss and Adjusted EBITDA for continuing operations and Adjusted EBITDASO for continuing operations are presented.

Forward-Looking Statements
This release includes statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”), including but not limited to statements related to Trinity Biotech’s cash position, financial resources and potential for future growth, market acceptance and penetration of new or planned product offerings, and future recurring revenues and results of operations. Trinity Biotech claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. These forward-looking statements are often characterized by the terms “may,” “believes,” “projects,” “expects,” “anticipates,” or words of similar import, and do not reflect historical facts. Specific forward-looking statements contained in this release may be affected by risks and uncertainties, including, but not limited to, our ability to capitalize on the Waveform transaction and of our recent acquisitions, our continued listing on the Nasdaq Stock Market, our ability to achieve profitable operations in the future, the impact of the spread of COVID-19 and its variants, potential excess inventory levels and inventory imbalances at the company’s distributors, losses or system failures with respect to Trinity Biotech’s facilities or manufacturing operations, the effect of exchange rate fluctuations on international operations, fluctuations in quarterly operating results, dependence on suppliers, the market acceptance of Trinity Biotech’s products and services, the continuing development of its products, required government approvals, risks associated with manufacturing and distributing its products on a commercial scale free of defects, risks related to the introduction of new instruments manufactured by third parties, risks associated with competing in the human diagnostic market, risks related to the protection of Trinity Biotech’s intellectual property or claims of infringement of intellectual property asserted by third parties and risks related to condition of the United States economy and other risks detailed under “Risk Factors” in Trinity Biotech’s annual report on Form 20-F for the fiscal year ended December 31, 2023 and Trinity Biotech’s other periodic reports filed from time to time with the United States Securities and Exchange Commission. Forward-looking statements speak only as of the date the statements were made. Trinity Biotech does not undertake and specifically disclaims any obligation to update any forward-looking statements.

About Trinity Biotech

Trinity Biotech is a commercial stage biotechnology company focused on diabetes management solutions and human diagnostics, including wearable biosensors. The Company develops, acquires, manufactures and markets diagnostic systems, including both reagents and instrumentation, for the point-of-care and clinical laboratory segments of the diagnostic market and has recently entered the wearable biosensor industry, with the acquisition of the biosensor assets of Waveform Technologies Inc. and intends to develop a range of biosensor devices and related services, starting with a continuous glucose monitoring product. Our products are used to detect infectious diseases and to quantify the level of Haemoglobin A1c and other chemistry parameters in serum, plasma and whole blood. Trinity Biotech sells direct in the United States and through a network of international distributors and strategic partners in over 75 countries worldwide. For further information, please see the Company’s website: www.trinitybiotech.com.

The above financial statements have been prepared in accordance with the principles of International Financial Reporting Standards and the Company’s accounting policies but do not constitute an interim financial report as defined in IAS 34 (Interim Financial Reporting).

______________________________
¹ Earnings before interest, tax, depreciation, amortization, share based payments from continuing operations– also excludes impairment charges and one-off items.

Year-to-Date 2024 Revenue Increases 20.8% YoY to $91.2 Million

New Production, Product and Sales Initiatives Driving Motor Vehicle Growth

GARLAND, Texas, Nov. 15, 2024 /PRNewswire/ — Massimo Group MAMO (“Massimo”), a manufacturer and distributor of powersports vehicles and pontoon boats, has reported its financial and operational results for the third quarter ended September 30, 2024.

Key Financial Q3 2024 and Subsequent Operational Highlights and Business Updates

• 9M 2024 revenue increased 20.8% to $91.2 million compared to $75.5 million in 9M 2023.
• 9M 2024 gross profit increased 21.6% to $28.9 million from $23.8 million in 9M 2023. Gross margin increased 21 basis points to 31.7% in 9M 2024 from 31.5% in 9M 2023.
• 9M 2024 net income decreased 46.9% to $3.5 million, or $0.09 per basic and diluted share, as compared to net income of $6.6 million, or $0.16 per basic and diluted share, in 9M 2023.
• Q3 2024 revenue decreased 14.4% to $25.6 million compared to $29.9 million in Q3 2023.
• Q3 2024 gross profit decreased 30.9% to $7.0 million from $10.1 million in Q3 2023. Gross margin decreased 647 basis points to 27.2% in Q3 2024 from 33.6% in Q3 2023.
• Q3 2024 net income decreased 163.2% to a loss ($2.5) million, or ($0.06) per basic and diluted share, as compared to net income of $4.0 million, or $0.10 per basic and diluted share, in Q3 2023.
• New vehicle launches included:
  • T-Boss UTV series for the winter season with cab enclosure built to deliver complete protection from the elements.
  • T-Boss 1000 UTV, the best equipped and most value-packed UTV in its class with a perfect blend of utility, performance and capability. 
  • GKD 350 All-Terrain Go Kart, combining iconic styling with powerful performance in a rugged two-seater go-kart perfect for conquering any terrain.
• Exhibited Massimo Motor vehicles at the Equip Exposition, Mid-States Fall Rendezvous 2024, and Outdoor Power Equipment Hoedown for Mid-States Distributing Company, Inc.
• Announced the adoption of a new automated vehicle assembly robot line to be installed in the third calendar quarter at its 376,000 square foot factory in Garland, Texas to support production of its ATV and UTV vehicles lines.

Management Commentary

“During the third quarter we continued to leverage new product innovation and a strong customer base to drive our strategic business expansion and growth prospects, and solidify our brand’s position in key markets,” said David Shan, Founder, Chairman & CEO. “The third quarter was marked by industry-wide challenges and pressure on Pontoon boat sales, countered by expansions in motor vehicle production, distribution and products that are supporting revenue momentum. An ongoing cadence of new vehicle launches and marketing efforts across the country are driving adoption from new distribution partners and retailers to expand our national footprint. Following the conservatism principle in accounting, we adopted a cautious approach and recorded a one-time charge of approximately $3.6 million in the third quarter due to ongoing litigation, which is currently under appeal. Should there be any favorable ruling in the future, it will result in gains reversing the charge we took in this period. Without this charge the net income for the quarter would have been positive.

“In the last several months we have launched several exciting new vehicles and vehicle series as we continue to invest in our R&D to further enhance our products, using advanced technology to offer our UTV customers a smoother and more comfortable ride. We launched a new feature-rich T-Boss 1000 UTV for those who are looking for a powerful and versatile UTV that can handle any trip, with some specific features that make it a great choice for ranchers, hunters and more. A new series of T-Boss UTVs is equipped with Cab Enclosure that is built to deliver complete protection from the elements. Made with durable tempered glass, this fully enclosed cabin shields passengers from rain, wind, and snow, providing a comfortable environment for all outdoor tasks. Finally, we introduced the new GKD 350 All-Terrain Go Kart, our new rugged two-seater go-kart perfect for conquering any terrain. Built tough with standard safety features, the GKD 350 delivers both endless fun and a utility-driven experience with a 300cc power plant, 25 inch all terrain tires and easy-to-drive automatic transmission. We are now ramping sales of these new products through our sales network nationwide.

“To support these new products and our full lineup of rugged, versatile vehicles, we showcased our vehicles to hundreds of thousands of potential customers at several flagship expos and events around the country. We engaged with several potential new dealers, discussing opportunities that could enhance our distribution network and increase market penetration. These events also serve as an excellent opportunity for us to engage with store partners and discuss potential collaborations, which we believe lays the foundation for future revenue growth.

“Several production initiatives during the quarter are positioning us to further expand output levels each month. A new expansion has added 90,000 sq. ft. to our manufacturing facility in Garland, Texas to support increased production across motor and marine product verticals. At this facility we are also launching a new automated vehicle assembly robot line that are being installed as expected. This automation is expected to improve efficiency by 50% and enhance safety for production of ATV and UTV vehicles lines.

“Looking ahead, we are committed to delivering value as we scale operations and broaden our reach in domestic and international markets. We continue to build manufacturing capacity aimed at enhancing flexibility and increasing annual production, including an automated vehicle assembly robot line and the Armlogi partnership, which are expected to allow us to meet the growing demand of our products. We believe with increased operating efficiencies we can further improve margins while continuing to grow our revenue and expand our product line with new models. We are focusing on driving sales across our existing and new diversified product portfolio. With positive feedback on our new vehicles, we are confident in the growth prospects for the first half of 2025 as the introduction of new products and distribution relationships is expected to present significant opportunities for us to build market share and deliver long-term value to our shareholders,” concluded Mr. Shan.

Third Quarter 2024 Financial Results

For the three months ended September 30, 2024, revenues decreased by $4.3 million, or 14.4%, to $25.6 million, compared to $29.9 million in the prior year period. The decrease in revenue was primarily due to a significant drop in Pontoon boat sales, and a slight decrease in sales of UTV, ATV and e-bikes.

Revenue from sales of UTVs, ATVs and e-bikes decreased by $1.9 million, or 6.9%, from $27.0 million in the third quarter of fiscal 2023, to $25.1 million in the third quarter of fiscal 2024. The decrease in revenue was partially driven by the slow industry-wide trend, and partially by the seasonal promotions we offered in the third quarter of fiscal 2024.

Revenue from sales of Pontoon Boats decreased by $2.4 million, or 82.5%, from $3.0 million in the third quarter of fiscal 2023, to $0.5 million in the third quarter of fiscal 2024. The decrease in revenue was primarily attributable to the significant industry-wide downturn due to the impact of the high interest rates and inflation as demonstrated in the high rejection rates dealers have encountered from floorplan financing providers such as Northpoint. This trend aligns with the industry-wide challenges that intensified in the third quarter of fiscal 2024. Additionally, economic uncertainty in the U.S. has led to reduced spending on luxury boats, further constraining our Pontoon Boat sales.

Gross profit decreased by $3.1 million, or 30.9%, from $10.1 million in the third quarter of fiscal 2023, to $7.0 million in the third quarter of fiscal 2024. The gross profit margin was 27.2% in the third quarter of fiscal 2024, compared with 33.6% in the same period last year. The decrease of 6.5% in the gross profit margin is consistent with (i) reduced sale prices aimed at clearing slow-moving inventory, and (ii) the decline in sales of Pontoon Boats, without a corresponding reduction in fixed overhead costs, such as rent and salaries.

The cost of revenue on UTVs, ATVs and e-bikes increased by $0.6 million, or 3.7%, from $17.5 million in the third quarter of fiscal 2023 to $18.1 million in the third quarter of fiscal 2024, and gross profit decreased by $2.5 million, or 26.5%, from $9.4 million in the third quarter of fiscal 2023 to $6.9 million in the third quarter of fiscal 2024. The gross margin decreased by 7.4%, from 35.1% in the third quarter of fiscal 2023 to 27.7% in the third quarter of fiscal 2024. The increase in the cost of revenue was largely due to higher overhead costs, mainly from research and design input and the additional rent expense as we expand our warehouse space in fiscal 2024. The slight decrease in gross margin was primarily a result of selling some inventory at lower price at our seasonal promotions in the third quarter of fiscal 2024.

The cost of revenue on Pontoon Boats decreased by $1.9 million, or 78.3%, from $2.4 million in the third quarter of fiscal 2023 to $0.5 million in the third quarter of fiscal 2024, and gross profit decreased by $0.6 million, or 98.9%, from $0.6 million in the third quarter of fiscal 2023 to $6,619 in the third quarter of fiscal 2024. The gross margin decreased by 19.1%, from 20.4% in the third quarter of fiscal 2023 to 1.3% in the third quarter of fiscal 2024. The decrease in gross margin was primarily a result of a decline in sales of Pontoon Boats, without a corresponding reduction in fixed overhead costs, such as rent, utilities, and salaries.

Selling expenses increased by $0.5 million, or 24.9%, from $2.1 million in the third quarter of fiscal 2023 to $2.6 million in the third quarter of fiscal 2024. The increase in selling expenses was mainly due to an increase in shipping and handling fees. The increase was partly offset by a decrease in warranty expense of approximately $0.4 million, due to enhanced quality control and customer service measures. The adoption of a traveling technician team has enabled timely responses to customer requests, reducing repair costs.

General and administrative expenses increased by $1.2 million, or 43.4%, from $2.7 million in the third quarter of fiscal 2023 to $3.9 million in the third quarter of fiscal 2024. The increase was mainly due to increased salaries and benefits, travel expense and rent expense.

Total operating expenses increased 37.9% to $6.6 million for the three months ended September 30, 2024, compared to $4.8 million in the prior year third quarter.

Net loss for the three months ended September 30, 2024, was ($2.5) million, or ($0.06) per basic and diluted share, as compared to net income of $4.0 million, or $0.10 per basic and diluted share, in the three months ended September 30, 2023. Without the one-time charge of approximately $3.6 million due to litigation, net income for the quarter would have been positive.

Nine Months 2024 Financial Results

Revenues increased by $15.7 million, or 20.8%, from $75.5 million for the nine months ended September 30, 2023, to $91.2 million for the nine months ended September 30, 2024. The increase in revenue was primarily due to combined effects of rising demand in the U.S. ATV and UTV market and our modified sales strategy. In 2024, we continued to expand our distribution network with various retailers to increase our products’ market penetration. We strategically focused our efforts on large retail stores in the U.S. (the “big box stores”) that offer their own financing plans, while moving away from retailers that have liberal return policies.

Revenue from sales of UTVs, ATVs and e-bikes increased by $22.2 million, or 33.8%, from $65.8 million for the nine months ended September 30, 2023 to $88.0 million for the nine months ended September 30, 2024. The increase in revenue was primarily attributed to the expansion into more big box stores. This surge is consistent with the increasing ranch/farm-work utilization of UTVs across the 1.89 million farms in the U.S. with an average size of 464 acres and the new customer’s rural lifestyle focus. The increase in sales is also due to a shift in our sales strategy, focusing mostly on in-store sales to this retail chain store customer, which generally involve larger volumes and no returns. In addition, sales to this new customer consist of high-turnover inventory products that are of high quality and have a strong customer reputation. This enhances the efficiency of our capital utilization.

Revenue from sales of Pontoon Boats decreased by $6.6 million, or 67.6%, from $9.7 million for the nine months ended September 30, 2023 to $3.1 million for the nine months ended September 30, 2024. The revenue decrease was primarily due to an industry-wide downturn driven by high interest rates and inflation, which are impacting the consumption of non-essential goods. In addition, the fact that the dealers have experienced high rejection rates at the floorplan financing providers such as Northpoint has directly affected the inventory level the dealers maintain and therefore our sales in this category. This is consistent with the industry-wide trend. The challenging economic environment and economic uncertainty in the U.S. has led to reduced spending on luxury boats directly impacting the sales of luxury boats such as our yacht.

Gross profit increased by $5.1 million, or 21.6%, from $23.8 million for the nine months ended September 30, 2023 to $28.9 million for the nine months ended September 30, 2024. Gross margin was 31.7% for the nine months ended September 30, 2024, compared with 31.5% in the same period last year. Our gross margin for the nine months ended September 30, 2024 remained constant when compared with the same period in 2023.

Cost of revenue on UTVs, ATVs and e-bikes increased by $16.1 million, or 36.9%, from $43.5 million for the nine months ended September 30, 2023, to $59.6 million for the nine months ended September 30, 2024 and gross profit increased by $6.2 million, or 27.9%, from $22.2 million for the nine months ended September 30, 2023, to $28.4 million for the nine months ended September 30, 2024. Gross margin slightly decreased by 1.5%, from 33.8% for the nine months ended September 30, 2023 to 32.3% for the nine months ended September 30, 2024. The increase in the cost of revenue was in line with the increase in sales. The slight decrease in gross profit margin was mainly due to reduced sales prices to clear out slow-moving inventory in the recent quarter.

Cost of revenue on Pontoon Boats decreased by $5.5 million, or 67.5%, from $8.2 million for the nine months ended September 30, 2023, to $2.7 million for the nine months ended September 30, 2024, and gross profit decreased by $1.1 million, or 68.5%, from $1.6 million for the nine months ended September 30, 2023, to $0.5 million for the nine months ended September 30, 2024. Gross margin decreased by 0.4%, from 16.0% for the nine months ended September 30, 2023, to 15.6% for the nine months ended September 30, 2024. Our gross margin for the nine months ended September 30, 2024 remained constant compared to the nine months ended September 30, 2023.

Selling expenses increased by $1.4 million, or 21.3%, from $6.5 million for the nine months ended September 30, 2023, to $7.9 million for the nine months ended September 30, 2024, representing 8.7% and 8.7% of total revenue in both periods. The increase was mainly due to higher shipping and handling fees, partly offset by a reduction in warranty expense of approximately $0.5 million, due to enhanced quality control and customer service.

General and administrative expenses increased by $3.1 million, or 33.8%, from $9.0 million for the nine months ended September 30, 2023, to $12.1 million for the nine months ended September 30, 2024. The increase was mainly due to higher rent expense, salaries and benefit, and insurance expense.

Total operating expenses increased 35.2% to $21.1 million for the nine months ended September 30, 2024, compared to $15.6 million in the prior year period.

Net income for the nine months ended September 30, 2024, was $3.5 million, or $0.09 per basic and diluted share, as compared to net income of $6.6 million, or $0.16 per basic and diluted share, in the nine months ended September 30, 2023.

Cash and cash equivalents totaled $1.7 million at September 30, 2024, as compared to $1.2 million at September 30, 2023.

Net cash used in operating activities was approximately $2.4 million during the nine months ended September 30, 2024, compared to net cash provided by operating activities of approximately $5.8 million during the nine months ended September 30, 2023, representing an increase in the net cash used in operating activities of $8.2 million during the nine months ended September 30, 2024 compared with the same period in 2023. This is consistent with the Company using part of the IPO proceeds as working capital to grow sales.

About Massimo Group

Massimo Group MAMO is a manufacturer and distributor of powersports vehicles and pontoon boats. Founded in 2009, Massimo Motor believes it offers some of the most value packed UTV’s, off-road, and on-road vehicles in the industry. The company’s product lines include a wide selection of farm and ranch tested utility UTVs, recreational ATVs, and Americana style mini-bikes. Massimo Marine manufacturers and sells Pontoon and Tritoon boats with a dedication to innovative design, quality craftsmanship, and great customer service. Massimo is also developing electric versions of UTVs, golf-carts and pontoon boats. The company’s 376,000 square foot factory is in the heart of the Dallas / Fort Worth area of Texas in the city of Garland. For more information, visit massimomotor.com, massimomarine.com and www.massimoelectric.com.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” including with respect to the initial public offering and the use of proceeds thereof. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “predict,” “project,” “target,” “potential,” “seek,” “will,” “would,” “could,” “should,” “continue,” “contemplate,” “plan,” and other words and terms of similar meaning. These forward-looking statements include information concerning statements regarding future cash needs, future operations, business plans and future financial results; and any other statements that are not historical facts. No assurance can be given that the proceeds of the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of Massimo, including those set forth in the “Risk Factors” section of Massimo’s Registration Statement on Form S-1 for the initial public offering filed with the SEC. Copies are available on the SEC’s website, www.sec.gov. Massimo undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

View original content to download multimedia:https://www.prnewswire.com/news-releases/massimo-group-reports-third-quarter-2024-financial-results-302306872.html

SOURCE Massimo Group