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ECD Q3 2024 Earnings Report
ECD Automotive Design, Inc. reported its financial results for the third quarter of 2024, showing increased revenue and gross profit but a higher net loss compared to the same period last year.
Key Takeaways
ECD Automotive Design, Inc. experienced a significant increase in revenue and gross profit for the three months ended September 30, 2024, primarily driven by higher vehicle sales and average selling prices. However, the company's net loss widened considerably due to increased interest expenses, changes in fair value of warrant and conversion option liabilities, and higher operating expenses associated with public company costs.
Revenue increased by 30.0% to $6,440,049 for the three months ended September 30, 2024, compared to $4,954,277 in the prior year.
Gross profit surged by 108.5% to $2,007,540, up from $962,949 in the same period last year, driven by increased vehicle sales and average selling prices.
Net loss significantly increased to $(2,569,518) for the quarter, compared to $(238,824) in the prior year, primarily due to higher interest expenses and fair value adjustments.
Operating expenses rose by 111.3% to $2,648,971, mainly due to increased advertising, marketing, and general and administrative costs associated with public company operations.
ECD
ECD
Forward Guidance
The company anticipates needing additional capital over the next twelve months to fund operations before achieving positive cash flow, and plans to continue exploring opportunities to reduce costs, improve efficiencies, and increase margins.
Positive Outlook
- The company plans to leverage the assets acquired from Bran New Muscle Car to boost Mustang production in 2024 and 2025.
- Relocation of quality and warranty services to a new facility in 2024 is expected to improve margins by adding a third production area for iconic American vehicles.
- New marketing channels, including outreach events and increased social media presence, are expected to expand customer reach.
- The company aims to increase scale, which is anticipated to result in lower component costs and improved absorption of fixed manufacturing overhead.
- The company continues to focus on cash flow and anticipates having sufficient resources to operate during 2024.
Challenges Ahead
- The company's net loss significantly increased for the three months ended September 30, 2024, compared to the prior year.
- Operating expenses, particularly general and administrative costs, increased substantially due to public company expenses and one-time re-auditing costs.
- Increased interest expense from convertible notes and floor plan payables contributed to the higher net loss.
- Changes in fair value of warrant and conversion option liabilities negatively impacted financial results.
- The company will need to source additional capital over the next twelve months to fund operations before turning cash flow positive.