Massimo Group Reports First Quarter 2024 Financial Results
Massimo Group (NASDAQ: MAMO) reported significant financial growth for Q1 2024, with revenue up 60% YoY to $30.2 million and net income soaring 480% YoY to $3.2 million. Gross profit increased by 86%, reaching $10.5 million with a gross margin of 34.7%. The company secured new retail agreements and expanded production capacity to over 3,000 vehicles per month. However, revenue from pontoon boats decreased by 38.2% due to a shift in sales strategy. Total operating expenses rose by 31.1% to $6.5 million. Massimo also completed a $5.85 million IPO in April 2024.
- Q1 2024 revenue increased 60% YoY to $30.2 million.
- Net income rose 480% YoY to $3.2 million.
- Gross profit grew by 86%, reaching $10.5 million.
- Gross margin improved to 34.7% from 29.8%.
- Entered new agreements with global retailers for in-store sales.
- Increased production capacity to over 3,000 vehicles per month.
- Completed a $5.85 million IPO in April 2024.
- Revenue from pontoon boats decreased by 38.2%.
- Total operating expenses increased by 31.1% to $6.5 million.
- Selling and marketing expenses rose by 13.3% to $2.2 million.
- General and administrative expenses increased by 37.2% to $4.1 million.
- Cash and cash equivalents decreased from $0.8 million to $0.2 million.
Insights
Massimo Group's first quarter results show significant gains, particularly in revenue and net income. Revenue increased by
However, long-term sustainability remains a key consideration. The increase in operating expenses and a decrease in cash reserves (
Massimo Group's performance reflects strong adaptation to market demands and strategic expansion. The company’s agreements with major retailers for in-store sales of UTVs, ATVs and mini vehicles indicate a solidified presence in the outdoor recreational vehicle market. This sector has seen increasing popularity, particularly with heightened outdoor activities. The decision to focus on in-store sales, which typically involve larger volumes, suggests a deliberate pivot towards maximizing sales efficiency and reducing returns. This aligns well with industry trends favoring consumer convenience and immediate availability.
Another important aspect is the expansion of production capacity, allowing Massimo to meet growing demand effectively. This operational scalability is a positive marker for future growth. However, the dip in pontoon boat sales due to challenges in dealer financing amid high-interest rates might indicate vulnerability to macroeconomic conditions. Investors should consider the potential volatility in specific product segments while assessing overall market penetration and growth strategies.
The introduction of new models such as the Massimo MSA 600 and MSA 1000 ATVs and the new 1000 UTV highlights the company's innovation in product development. The 1000 UTV’s 83hp EFI engine not only offers efficiency but also positions the vehicle competitively in the market for both work and recreational purposes. This dual functionality is likely to appeal to a broader consumer base, enhancing market reach.
Innovations in vehicle technology can significantly impact consumer choices, especially in the utility and recreational vehicle markets. Massimo’s ability to deliver advanced, high-powered engines in its products demonstrates a commitment to meeting evolving customer needs. However, continuous innovation will be necessary to maintain a competitive edge and this requires ongoing investment in R&D, which could impact financials if not managed prudently.
Q1 2024 Revenue Increases
Q1 2024 Net Income Increases
New In-Store Agreements with Leading Global Retailers for Motor Vehicles
Increased Massimo Motor Production Capacity to 3,000+ Vehicles a Month
Key Financial Q1 2024 and Subsequent Operational Highlights and Business Updates
($ millions) | Q1 Comparison | ||||
| Q1 2023 | $ Change YoY | % Change YoY | ||
Revenue | 60 % | ||||
Gross Profit | 86 % | ||||
Gross Margin | 34.7 % | 29.8 % | -- | 500 bps | |
Net Income | 480 % | ||||
- Closed
$5.85 million - Revenue increased
60% to$30.2 million $18.8 million - Gross profit increased
86% to$10.5 million $5.6 million 34.7% in Q1 2024 from29.8% in Q1 2023. - Net income increased
480% to$3.2 million $0.08 $0.5 million $0.01 - Entered into an ongoing national agreement with a global omnichannel retailer for its youth series Mini Tractor and Mini 125 Go Karts to be sold in stores.
- Entered into an ongoing agreement with Fleet Farm, a retailer serving active, outdoor, suburban and farm communities in the Midwest
U.S. , for its UTV, ATV, and youth series product lines to be sold in stores. - Increased production capacity to 3,000+ vehicles each month, a significant jump from previous output levels
- Added two new models to its 2024 ATV lineup, the Massimo MSA 600 and MSA 1000 ATVs, providing customers with new options for work or on the trail.
- Unveiled new 2024 1000 UTV, with a powerful 83hp EFI engine that allows for an efficient workday while leaving plenty of room for thrills on the weekends.
- Showcased a range of vehicles at the 2024 Tractor Supply Company Annual Sales Meeting, annual Thiesen's Home and Farm Show, and 40th Annual Equip Expo.
Management Commentary
"The first quarter of 2024 was highlighted by our successful IPO and Nasdaq listing, along with substantial top and bottom line growth on strong sales and margin improvement for our diversified and comprehensive product portfolio," said David Shan, Founder, Chairman & CEO. "Our production crew is able to produce 3,000+ vehicles each month, a significant jump from previous output levels. This surge in manufacturing is expected to allow Massimo to meet growing demand while paving the way for exciting new developments.
"Two new recent partnership agreements highlighted our in-store distribution channel expansion efforts with major retailers. We signed an ongoing national agreement with a global omnichannel retailer for the youth series Mini Tractor and Mini 125 Go Kart to be sold in stores. The retailer's online marketplace currently features over 100 Massimo products, and with the expanded partnership, the two products will now be eligible to be stocked at over 1,300 stores in 13 states beginning in May. The addition of this first national in-store opportunity with this global retailer represents a significant milestone for our company, and we are well positioned to accelerate robust sales growth with the retailer. We believe with successful sales we can continue to add vehicles to the in-store program.
"We also entered into an ongoing agreement with Fleet Farm for six UTV, ATV, and youth series products to be sold in stores and featured on the retailer's online marketplace.
"Our focus on distribution channel expansion has resulted in over 2,800 retail locations promoting our brand in 48 states where our products are distributed and will continue to drive sales across our full motor product line of Massimo vehicles.
"Looking ahead, with increased participation in outdoor activities and higher utilization of utility vehicles in ranch and farm-work, demand for UTVs and ATVs in the
First Quarter 2024 Financial Results
For the three months ended March 31, 2024, revenues increased by
Revenue from sales of UTVs, ATVs and electric bikes increased by
Revenue from sales of pontoon boats decreased by
Gross profit increased by
Cost of revenue on UTVs, ATVs and electric bikes increased by
Cost of revenue on pontoon boats decreased by
Selling and marketing expenses increased by
General and administrative expenses increased by
Total operating expenses increased
Net income for the three months ended March 31, 2024, was
Cash and cash equivalents totaled
Net cash used by operating activities was
About Massimo Group
Massimo Group (NASDAQ: 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 286,000 square foot factory is in the heart of the
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 annual report on Form 10-K for the for the fiscal year ended December 31, 2023 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.
Company
Dr. Yunhao Chen
Chief Financial Officer
Massimo Group
ir@massimomotor.com
Investor Relations
Chris Tyson
Executive Vice President
MZ North America
Direct: 949-491-8235
MAMO@mzgroup.us
MASSIMO GROUP AND SUBSIDIARIES | |||||||
March 31, 2023 (unaudited) | December 31, 2023 (audited) | ||||||
As of | |||||||
March 31, 2024 (unaudited) | December 31, 2023 (audited) | ||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and cash equivalents | $ | 207,137 | $ | 765,814 | |||
Accounts receivable, net | 14,203,770 | 9,566,445 | |||||
Inventories, net | 27,182,635 | 25,800,912 | |||||
Advance to suppliers | 1,406,100 | 1,589,328 | |||||
Other current assets | 679,319 | 637,509 | |||||
Total current assets | 43,678,961 | 38,360,008 | |||||
NON-CURRENT ASSETS | |||||||
Property and equipment at cost, net | 384,551 | 399,981 | |||||
Right of use operating lease assets, net | 1,197,431 | 1,478,221 | |||||
Right of use financing lease assets, net | 103,169 | 113,549 | |||||
Deferred offering assets | 1,563,547 | 1,457,119 | |||||
Deferred tax assets | 346,948 | 134,601 | |||||
Total non-current assets | 3,595,646 | 3,583,471 | |||||
TOTAL ASSETS | $ | 47,274,607 | $ | 41,943,479 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Short-term loans | $ | - | $ | 303,583 | |||
Accounts payable | 14,772,382 | 12,678,077 | |||||
Other payable, accrued expenses and other current liabilities | 90,463 | 98,097 | |||||
Accrued return liabilities | 138,229 | 283,276 | |||||
Accrued warranty liabilities | 640,525 | 619,113 | |||||
Contract liabilities | 1,052,342 | 1,835,411 | |||||
Current portion of obligations under operating leases | 681,872 | 847,368 | |||||
Current portion of obligations under financing leases | 42,083 | 41,647 | |||||
Income tax payable | 3,221,201 | 2,121,083 | |||||
Total current liabilities | 20,639,097 | 18,827,655 | |||||
NON-CURRENT LIABILITIES | |||||||
Obligations under operating leases, non-current | 515,559 | 630,853 | |||||
Obligations under financing leases, non-current | 66,338 | 77,024 | |||||
Loan from a shareholder | 7,909,525 | 7,920,141 | |||||
Total non-current liabilities | 8,491,422 | 8,628,018 | |||||
TOTAL LIABILITIES | $ | 29,130,519 | $ | 27,455,673 | |||
Commitments and Contingencies | |||||||
EQUITY | |||||||
Common shares, | 40,000 | 40,000 | |||||
Preferred shares, | - | - | |||||
Subscription receivable | (357,159) | (832,159) | |||||
Additional paid-in-capital | 1,994,000 | 1,994,000 | |||||
Retained earnings | 16,467,247 | 13,285,965 | |||||
Total equity | 18,144,088 | 14,487,806 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 47,274,607 | $ | 41,943,479 | |||
MASSIMO GROUP AND SUBSIDIARIES | |||||||
2024 | 2023 | ||||||
For the Three Months Ended March 31, | |||||||
2024 | 2023 | ||||||
Revenues | $ | 30,151,677 | $ | 18,840,415 | |||
Cost of revenues | 19,700,290 | 13,223,421 | |||||
Gross Profit | 10,451,387 | 5,616,994 | |||||
Operating expenses: | |||||||
Selling and marketing expenses | 2,210,484 | 1,950,285 | |||||
General and administrative expenses | 4,106,905 | 2,984,262 | |||||
Research and development expenses | 162,250 | - | |||||
Total operating expenses | 6,479,639 | 4,934,547 | |||||
Income from operations | 3,971,748 | 682,447 | |||||
Other income (expense): | |||||||
Other income, net | 247,569 | 44,895 | |||||
Interest expense | (137,694) | (155,098) | |||||
Total other income (expense), net | 109,875 | (110,203) | |||||
Income before income taxes | 4,081,623 | 572,244 | |||||
Provision for income taxes | 900,341 | 24,079 | |||||
Net income and comprehensive income | $ | 3,181,282 | $ | 548,165 | |||
Earnings per share – basic and diluted | $ | 0.08 | $ | 0.01 | |||
Weighted average number of shares of common stock outstanding – | 40,000,000 | 40,000,000 | |||||
MASSIMO GROUP AND SUBSIDIARIES | |||||||
2024 | 2023 | ||||||
Three Months Ended March 31, | |||||||
2024 | 2023 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 3,181,282 | $ | 548,165 | |||
Adjustments to reconcile net income to net cash provided by | |||||||
Depreciation | 36,511 | 35,300 | |||||
Non-cash operating lease expense | 280,790 | 184,316 | |||||
Accretion of finance lease liabilities | 1,331 | 1,784 | |||||
Amortization of finance lease right-of-use assets | 10,380 | 9,343 | |||||
Gain on disposal of fixed asset | (44,655) | - | |||||
Provision for expected credit loss, net | 234,298 | 104,631 | |||||
Deferred tax assets | (212,347) | - | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (4,871,623) | 93,993 | |||||
Inventories | (1,381,723) | (672,300) | |||||
Advance to suppliers | 183,228 | 1,423,742 | |||||
Other current asset | (41,810) | (302,580) | |||||
Accounts payables | 2,094,305 | (525,990) | |||||
Other payable, accrued expense and other current liabilities | (7,634) | (33,401) | |||||
Tax payable | 1,100,118 | 24,079 | |||||
Accrued warranty liabilities | 21,412 | (37,558) | |||||
Accrued return liabilities | (145,047) | (292,483) | |||||
Contract liabilities | (783,069) | 403,760 | |||||
Due to shareholder | (10,616) | (20,273) | |||||
Lease liabilities – operating lease | (280,790) | (184,316) | |||||
Net cash (used in) provided by operating activities | (635,659) | 760,212 | |||||
Cash flows from investing activities: | |||||||
Proceed from sales of property and equipment | 128,001 | - | |||||
Acquisition of property and equipment | (104,427) | - | |||||
Net cash provided by investing activities | 23,574 | - | |||||
Cash flows from financing activities: | |||||||
Proceeds from bank loan | - | 300,000 | |||||
Repayment of bank loan | - | (900,000) | |||||
Repayment of other loans | (303,583) | - | |||||
Repayment of finance lease liabilities | (11,581) | (10,536) | |||||
Repayment to related party | - | (10,000) | |||||
Deferred offering costs | (106,428) | (75,000) | |||||
Proceeds from subscription deposits | 475,000 | - | |||||
Net cash provided by (used in) financing activities | 53,408 | (695,536) | |||||
Net (decrease) increase in cash and cash equivalents | (558,677) | 64,676 | |||||
Cash and cash equivalents, beginning of the period | 765,814 | 947,971 | |||||
Cash and cash equivalents, end of the period | $ | 207,137 | $ | 1,012,647 | |||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW | |||||||
Cash paid for interest | $ | 137,694 | $ | 155,098 | |||
Cash paid for income taxes | $ | 12,570 | $ | - | |||
NON-CASH ACTIVITIES | |||||||
Right of use assets obtained in exchange for operating lease | $ | - | $ | - | |||
Right of use assets obtained in exchange for finance lease | $ | - | $ | 37,430 | |||
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SOURCE Massimo Group
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