TBLT - Earnings call transcript Q3 2021 | ToughBuilt Industries, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to ToughBuilt Industries Third Quarter 2021 Earnings Conference Call. [Operator Instructions]. I would now like to turn the conference over to Martin Galstyan, CFO. ahead. go Please

Martin Galstyan

thank quarterly and Financial for us joining Operating Good to you discuss our call XXXX ToughBuilt's on Results. afternoon, all Third and Quarter

am is As Galstyan, my operator Financial name the and of mentioned, I the ToughBuilt. Chief Officer Martin

today's highlights on Panosian, Michael financial quarter for conclude beyond. our from of the is Executive discussion with the President begin outlook will our Michael third the performance will our call quarter. our Chief then rest year. operational Officer Michael me and discussion Joining the XXXX and ToughBuilt. growth the and review I for financial plans for of and will with

the of SEC. Before our Act from those remarks of Any XX, as results the made those as we you materially meaning remind call other and of only the XXXX, may of with would Private Risk differ March these by no today, including statements this that to undertake a call to important Securities Litigation within result XXXX. on various the begin, Actual Reform management's filings obligation may on Factors statements forward-looking I we like and indicated this on contain of Form in our forward-looking XX-K forward-looking them. with SEC section views discussed our the filed update represent XXXX statements factors,

to non-GAAP measures call, to other may States, in review from to The GAAP, filed refer Michael? United the earnings GAAP in used those earnings financial like reasons we the press that to as I'd the release and directly issued Investors non-GAAP that with of in Form course measures the financial now of accounting are SEC, X-K measures over with comparable Form companies. be accordance prepared furnished measures the financial and X-K, its most as non-GAAP the principles are contained to presentation. known are for today by otherwise encouraged unless including different reconciliation measures an during not ToughBuilt's addition, generally non-GAAP therein. ToughBuilt's Michael. turn exhibit to financial In commonly noted may in the earlier financial call and accepted our release

Michael Panosian

and all operational you, financial the to to $XX.X third results. and million, a discuss for quarter Thank of the generated third approximately ToughBuilt, increase year-over-year you quarter joining third a for thank ToughBuilt's of revenues $XX.X in us and quarter XXXX. Martin, XXXX, quarter we record XXXX X.X% of In million compared

order a For quarter XX% excluding a the of growth quarter comparable onetime from XXXX $XX.X million, When adjusted for XXXX. the for new revenue year-over-year revenue this was significant onetime customer. revenue of period, represents a benefit, which third we recorded XXXX approximately third the

a $XX.X representing For the X September months XX% we revenue XX, reported total XXXX, year-over-year million, increase. of ended

adjusted revenue Excluding year-over-year the XX% the revenue quarter represents for which was the third onetime of revenue for of above-mentioned XXXX. third million, quarter XXXX benefit, $XX growth

notable see X-in-X the strong launched last across scraper we portfolio with quarter. knife from to continued products of our During quarter, our acceleration demand

item. this expect to fast-moving innovative another product We be

Cadima, international revenue in quarter compared our to servicing storefronts, count of million million approximately just $X.X total of XX% Group partnerships new to XX,XXX France, XXXX buying retailers the International our X,XXX footprint under XXXX. increasing increased expanded to we through quarter, as retail store stores. QX Satin groups year-over-year $X.X in Toolstation, a in and the During and new home improvement such leading group

and that confident will are additional to continue revenue. Europe generate We in platform our grow

chains. lines end X new launch and to home of international with expects America the product company the by into expansion year retail continued Additionally, the North improvement

to hiring capabilities, marketing quarter, additional we support employees engineering, consultants the efforts. and our and During our expanded operational

shipping into a levels and QX. the challenges which for several past significant up mitigate for us delays which inventory around caused strategically chain companies to the supply by enables worked ToughBuilt diligently costs have these experienced demand and has meet severe quarters, disruptions, QX the throughout globe. building year, the shipping has industry the increase Over in to

have around exposure we which manufacturing the globe, regional specific constraints. our decreases partners Additionally, from to

who in ToughBuilt gross Lastly, hired remainder been going year. confidently can to onetime will have has certain quarter, guidance we expect to which Because quarter for of had the forward. shipping the recently expected third we contracts, able favorable improve several to logistics professionals we our fourth shifted secure margins revenue provide realize the

into Martin revenue to to $XX to we translates the call such, XX% at expect financial approximately to of Martin? cover will million. year to million, back fourth details. $XX full least results in in revenue greater $XX of XXXX quarter I now our range As of growth million XX% a which range million the $XX turn

Martin Galstyan

historically Thank for to to XXXX, to for $XX.X Cost XXXX or XX, ended the of approximately you, of the $XX.X of ended the of as knife. compared same XX%. in sold to $XX.X international disruptions, of XXXX, costs million months million the as a Revenues primarily were which compared for quarter. third due industry-wide to products, increase as and $X.X demand scraper X Revenues of compared months chain accelerated cost expansion sold period XXXX mainly sales demand the the have our Michael. over X inventory year, X in XX, revenue $XX.X XX%. was September an in shipping XXXX, same goods portfolio sold XXXX of in fourth compared well XX% goods goods million September was of goods million increased to September in percentage of the XX, were a were supply sold the increase X-and-X percentage of prior Cost million representing for as high of revenues led quarter attributable in continued approximately for ended builds utility in increase as ahead a Cost period year-over-year The XXXX. months $XX.X to for X.X%. XXXX, our million approximately last period

will shipping costs favorable positively expect secured and the our shipping and we XXXX. fourth XXXX we decrease margins of quarter, that gross quarter throughout impact our in contracts the During

in the our strong the quarter third customer and holiday inventory increased we Additionally, demand. of ahead season very significantly

reclassified During of million. SG&A XXXX, goods the we custom to cost freight from of and which expense, $X.XX to sold duty quarter fees amounted

for quarter result, XXXX. gross significant gross accounting in to XX.X% was period of of compared a margin prior and a the XX.X% second had XXXX in third quarter As from impact XX% to perspective. margin year the The reclassification the

on our approximately effect approximately income to in in XXXX, decrease of increased expenses to XXXX development ended SG&A the and increases XXXX. sales. the chain attributed $XX.X X fees, freight-in no SG&A builds primarily administrative loss to by in for were reclassification year. marketing and fourth costs, of Selling, the Research the costs costs to to months related due million XXXX September were the and expect of general related Considering improvement contracts well million over XXXX. quarter was advertising and September to $X.X compared supply $XXX,XXX for increased million compared fourth last period inventory for as or Amazon.com Amazon same there XX, in However, the for shipping months million ended approximately decelerated as expenses and reclassification. XXXX, net we $X.X new fees quarter, the X in XX, partially duty the $X.X expenses custom to

continues industry. flat maintain expect approximately levels a to profit a diluted per of of for as or the quarter the a of had construction tools stockholders per the we in net new common diluted the to $XX.X XXXX, loss million third company approximately R&D costs In quarter of of third a $XXX,XXX attributable loss develop similar to net $X.XX or to share, We XXXX. compared share of

the XXX diluted average weighted As shares of September outstanding XX, XXXX, totaled company's million. common

for proceeds builds operations. of a the used capital including of $XX.X we direct from registered product for working quarter, marketing the funds registered portion million. direct launches, net purposes, for inventory offering offering During completed the and were A

I turn As raise XX, have now September back the XXXX, operating final we XXXX. of for cash will Michael cash call Based flow remarks. on position the of to company's from balance, with plans activities, Michael? was no remainder $XX.X the cash for million. his capital anticipated additional coupled current to ToughBuilt's

Michael Panosian

continues improvement the to to you, execute its on products of home cutting-edge ToughBuilt bringing Thank global market. Martin. strategy

before. XX We that the products as and be launch that well ever innovative as These of products over DIY-ers products next than gear exciting builders will comfortably technology-enabled lines have faster over several will we more of organizational expect through durable to projects to years. pipeline and and a tools an combination work professional enable of

everyday launch. bringing importance We the as focus ourselves rigorously technology to meets At the that, we of highest for to functionality we In versatility. manufacturer. improvement a most and the next-generation to the on products product only know products of with home Furthermore, products quality engineering and our ensure scaling product test ToughBuilt, are designing view value we each them generate convenience standards. each our enhanced and

As have to thousands part distribute America we products across our of stores and expanded so that, into tens of able continue entire and consumer been more millions with has retailers we as in portfolio expand their products. are of to abroad and their North To continually that to ToughBuilt our date, consumers. shelves the our refill response product our and continue shelves across add of outstanding lines to

world. into pipeline our on products Our designers, In focus retailers customers I rely pandemic. employees new through closing, through and our for to organization new and a foundation shelf ToughBuilt can growing the remaining engineers our hiring increasing strengthening the the of quality-first space dedicated across and is mission continue even our professional thank brand to going global a want that forward our of launching of into to

We road ToughBuilt Operator, a would, the wait name. please session. into you ahead, question-and-answer to to cannot go have and grow an household if exciting I

Operator

Instructions]. [Operator

Kevin from first Our is H.C. question with Wainwright. Dede

Unidentified Analyst

Spencer you is as thoughts just tonight I if as XX-Q to This backlog your on some would quarter. be for that revenue seeing talked on Congrats wanted about. get color the well on that the Kirson we Kevin.

Martin Galstyan

Galstyan. This is Martin

the to tomorrow -- We in next morning. are latest pushing and tonight file by finalize or

Unidentified Analyst

discussed could the you revenue additional Okay. backlog And terms call, that? of color also provide any in earlier on that you that on

Martin Galstyan

any that give more can't on now. We No. guidance for

Unidentified Analyst

the in efforts, And more able terms expansion sales increased in that count and or potential any plans? you like of on are of marketing to give color terms Okay. head

Michael Panosian

are feed expansion so-called are demand the demand enough focused The is we our is make is we Michael to demand. relatively for to this team sure right That's really global that massive, our The is ToughBuilt platform now. that small to and experiencing. Panosian. Spencer, what be able the is for robust

other have on marketing today, As spend, far as we and social. you as know, to be

We our tell gets and well viral It's -- products enough good world, the and story. whoever users. a just have story the create create reaches to go In as not to product. today's to it's a ways make tells end

generation. revenue spend driven therefore really creating our So is higher marketing higher towards awareness, creating

Unidentified Analyst

my provide shipping And color. good question last you're That's in you I know terms seeing of contracts. is, on what information about additional chain? the Okay. -- you supply could any securing the talked

on helpful. that any would information So be

Michael Panosian

Sure.

in bit. far, the numbers in all providers what we the and So quite seem market improving to a constantly can touch and be from with see logistics the partners, shipping being

finalizing sometime improving be lower a of as are and year, numbers much confident much, next will cost, contract therefore that greatly. be We far final we and January our between margins will June the our as

at are very been much to with are X, we achieve. savings recently. is. supplier we've the great are that added touch far We to so happy with pretty our this, people able logistics experts X in every team We've that there There and

better very news much strong going for So results next contract and year. expect I and a forward, good very

Operator

This I any turn closing to to concludes remarks. back like for over management question-and-answer conference session. the the would

Michael Panosian

Thank you, operator.

shareholders hard trying growth. very minimize we to For that spending to maximize are listening, know you want our that all are I and

create with we to point trying that for on platform growth where at more eye are a profitability. We are robust much an

the responsible massive. way But than is very today's expect. It spend. look global may are We you market more we

hand, Our and we at supply. opportunities are real. must They are

down numbers support. In from that the your I'd context, that. is to our felt line. spend Every our thank we that out. spend sets whatever you and us what understand for And a company, we like have on and are please measured, important in for bigger today business, end addition, for of really all this of main the now you within for better effect year up So very growth one we thank spending and to you be today, we will

Operator

today's concludes call. This conference

pleasant your a disconnect you participating day. lines. may You have Thank and for

Martin Galstyan	Acting CFO
Michael Panosian	Co-Founder, Chairman, President & CEO

ToughBuilt Industries (TBLT) 16 Nov 212021 Q3 Earnings call transcript