Worksport ($WKSP) Announces Record High Revenues; 275% Q2 Growth
Q2 Earnings Call Available: Management Discusses Revenue Growth and Future Outlook
West Seneca, New York, August 14th, 2024 — Worksport Ltd. (NASDAQ: WKSP) (“Worksport” or the “Company”), a U.S.-based manufacturer and innovator of hybrid and clean energy solutions for the light truck, overlanding, and global consumer goods sectors, at market close yesterday reported the financial results for the second quarter of its fiscal year (Q2 FY 2024) ended June 30, 2024.
Financial Results
Worksport continues its remarkable early growth story and reports an 860% revenue increase in Q2 2024 vs. Q2 2023, with 275% growth from Q1 2024, reaching a new record of $1.92 million. This surge is directly attributed to the new Buffalo factory and the launch of dealer and e-commerce marketing initiatives. Worksport believes that while revenue is still in its early stages, the growth rate in recent quarters is highly encouraging. The Company has gained strong sales traction through its rapidly expanding channels, and with the introduction of innovative, higher-margin products on the horizon, Worksport expects this momentum to continue, driving further rapid revenue growth in the upcoming quarters.
By the end of Q2, Worksport’s Monthly Reoccurring Revenue (MRR) was on track to hit $1milllion per month. The Company believes the MRR will continue to grow in 2024 with the ongoing ramp up of the Al3 line and introduction of the premium Al4 product line in Q4.
“Notably, Q2 sales surpass the entire 2023 year-end revenue of $1.5 million, states Mike Johnston, Company CFO. “Gross profit margins in Q2 2024 reached 15.4%, an 111% improvement from Q1. Early 2024 production efficiency was below baseline due to efforts in enhancing production processes and product improvements. However, Worksport anticipates improved baseline efficiency in the latter half of the year, which is expected to boost future margins. Additionally, cost savings from our scaling efforts and the introduction of premium products are projected to further enhance margins into FY 2025”
The entire financial results for Q2 2024 can be accessed below.
Forward Guidance
With three new products launching later this year, Worksport has been investing heavily in growth, laying a strong foundation for continued expansion. Worksport is well positioned to leverage its equipment, facilities, and inventory investments to meet both current and anticipated sales growth through the remainder of 2024. No significant equipment investment is expected within the next 12 months. As revenues accelerate, we anticipate a reduction in net loss from operations, with a clear vision to move to positive operational cash flow within 2025.
For the tonneau cover business, at the current Q2 gross revenue rate, we are on track to meet or exceed our previously issued revenue guidance of $6-8 million by year-end 2024. Importantly, Worksport notes this guidance does not account for potential revenues from the AL4, SOLIS, and COR products in 2024, and is based solely on our AL3 and Soft Cover product segments.
For FY 2025, Worksport believes that its tonneau cover business alone [not including the clean-tech business expected to launch soon] will represent $15-20M in revenues. The Company also believes that with favorable market conditions for their next 3 tonneau cover launches, they can beat this forecast. 2025 Tonneau Cover Revenue Guidance will be updated in future quarters.
Worksport will launch the Alpha release of its highly anticipated clean-tech COR and SOLIS products this September. A successful Alpha launch will follow a market launch in the near future. This innovative business division forms the cornerstone of Worksport’s future strategy to evolve into a mid-to-large market company. For future guidance on Worksport Clean-Tech, stay tuned for an initial sales outlook during the Q3 2024 earnings call.
CEO Statement on Worksport Stock [NASDAQ: WKSP]
Steven Rossi, Worksport CEO Stated “In April 2024, the Company issued a press release stating that they believe the Worksport stock was undervalued. Today, given this quarters findings, the shared remarks on our path to cash flow positivity, and our update on guidance, we reaffirm that statement, confident that the revenue growth we're seeing this quarter is just the beginning of a prosperous climb ahead”
Rossi added, “Our tonneau cover business is expected to propel Worksport into a 9-figure, middle market company in the short to mid-term, while the clean-tech division opens a 10-figure-plus opportunity that we believe is achievable. Altogether, our aspirations in terms of revenues stretch beyond that of upper middle market.”
Worksport Q2 Earnings Call
Worksport’s Q2 Earnings Call occurred at 4:30pm ET on Tuesday August 13th, 2024. The full earnings call recording, prepared remarks, and presented deck can be found in the following locations:
Investors Interested in Speaking With Management Can Contact:
Investor Relations, Worksport Ltd.
T: 1 (888) 554-8789 x128
W1: https://invest.worksport.com/home
Worksport Quarterly Report, Item 1. Financial Statements
The Company has included the Financial Statements section below from the ‘Full Worksport Q2 2024 10-Q' For Quarterly Period Ended: June 30, 2024. Investors are encouraged to read the Full 10-Q along with the Prepared Remarks, both linked above.
PART I. FINANCIAL INFORMATION
Item 1. FinancialStatements
Worksport Ltd.
Condensed ConsolidatedBalance Sheets
(Unaudited)
June 30, 2024 (Unaudited)
December 31, 2023
Assets
Current Assets
Cash and cash equivalents
$
3,426,089
$
3,365,778
Accounts receivable, net
623,386
463,122
Other receivable
140,863
165,865
Inventory (note 4)
6,386,744
3,631,492
Related party loan (note 8)
14,303
-
Prepaid expenses and deposits (note 5)
151,815
1,497,249
Total Current Assets
10,743,200
9,123,506
Investments (note 10)
90,731
90,731
Property and Equipment, net (note 6)
14,308,776
14,483,436
Right-Of-Use Asset, net (note 11)
705,155
917,354
Intangible Assets, net
1,337,636
1,338,889
Total Assets
$
27,185,498
$
25,953,916
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable and accrued liabilities
$
1,750,166
$
1,451,181
Payroll taxes payable
260,585
85,010
Related party loan (note 8)
-
2,192
Current portion – Long term debt (note 12)
-
5,300,000
Current lease liability (note 11)
243,203
328,229
Total Current Liabilities
2,253,954
7,166,612
Long Term – Lease Liability (note 11)
485,451
608,761
Long Term Debt (note 12)
5,300,000
-
Total Liabilities
8,039,405
7,775,373
Shareholders’ Equity
Series A & B Preferred Stock, $0.0001 par value, 100,100 shares authorized, 100 Series A and 0 Series B issued and outstanding, respectively (note 7)
-
-
Common stock, $0.0001 par value, 299,000,000 shares authorized, 28,520,704 and 20,320,503 shares issued and outstanding, respectively (note 7)
2,852
2,032
Additional paid-in capital
69,230,341
64,685,693
Share subscriptions receivable
(1,577
)
(1,577
)
Share subscriptions payable
5,964,290
1,814,152
Accumulated deficit
(56,041,233
)
(48,313,177
)
Cumulative translation adjustment
(8,580
)
(8,580
)
Total Shareholders’ Equity
19,146,093
18,178,543
Total Liabilities and Shareholders’ Equity
$
27,185,498
$
25,953,916
The accompanying notes form an integral part of these condensedconsolidated financial statements. Please click here for the full notes.
Worksport Ltd.
CondensedConsolidated Statements of Operations and Comprehensive Loss
For the Threeand Six Months Ended June 30, 2024 and 2023
(Unaudited)
Three Months ended June 30,
Six Months ended
June 30,
2024
2023
2024
2023
Net Sales
$
1,921,539
$
199,851
$
2,434,176
$
231,776
Cost of Goods Sold
1,624,910
153,288
2,100,091
173,045
Gross Profit
296,629
46,563
334,085
58,731
Operating Expenses
General and administrative
2,946,386
1,744,801
5,620,704
3,874,413
Sales and marketing
478,792
548,712
545,569
1,093,063
Professional fees
766,563
1,491,453
1,710,341
(Gain) loss on foreign exchange
15,636
316
7,685
(142
)
Total operating expenses
4,207,377
3,785,282
7,884,299
7,327,398
Loss from operations
(3,910,748
)
(3,738,719
)
(7,550,214
)
(7,268,667
)
Other Income (Expense)
Interest expense
(134,164
)
(187,893
)
(257,762
)
(352,992
)
Interest income
-
78,778
3,054
198,606
Rental income (note 17)
31,513
50,379
76,866
94,835
Gain on settlement of debt
-
-
-
7,493
Total other income (expense)
(102,651
)
(58,736
)
(177,842
)
(52,058
)
Net Loss
$
(4,013,399
)
$
(3,797,455
)
$
(7,728,056
)
$
(7,320,725
)
Loss per Share (basic and diluted)
$
(0.15
)
$
(0.22
)
$
(0.33
)
$
(0.43
)
Weighted Average Number of Shares (basic and diluted)
25,958,628
17,165,533
23,573,349
17,162,471
The accompanying notes form an integral part of these condensedconsolidated financial statements. Please click here for the full notes.
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Read the rest of the 10-Q: ‘Full Worksport Q2 2024 10-Q'
Key 2024 Press-Releases:
- August 1: Worksport Announces Impressive SOLIS Solar Cover Test Results
- July 30: Worksport to Drive Growth With new Live Sales Platform
- July 11: Worksport Expands Dealer Network
- June 20: Worksport Announces Record Breaking May Sales
- June 13: Worksport Awarded ‘Innovator of the Year’
- May 16: Worksport Reports 1,506% Q1 Revenue Surge
- May 8: Worksport Awarded $2.8MM Grant
- April 25: Worksport Signals Undervalued Status, Eyes Major 2024 Growth
- March 18: $2.8MM Direct Offering Priced At-The-Market.
- March 6: Worksport to Launch Innovative SOLIS & COR Products This Summer
Read all Worksport press releases: [Link to All Press Releases].
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