ECD Automotive Design, Inc. Q4 FY2024 earnings call

• 2024 was a transformational year with 29% revenue growth to $25.2 million and 30% gross profit increase.
• Improved customer journey with engaging 3D luxury design experience, leading to orders beyond $500,000.
• Added backlog and consolidated custom Defender space via licensing agreements with Black Bridge Motors, Black Dog Traders, etc.
• Moved quality control team within production line to enhance build quality.
• Launched retail strategy with first stores in West Palm Beach (Q1 2025) and Nantucket, aiming to open 4 locations in wealthy areas.
• Introduced built-to-own vehicles for customers seeking immediate purchase of unique ECD vehicles.

In 2024, ECD Auto Design saw revenue grow roughly 29% to $25.2 million and gross profit increase 30%. For the fourth quarter of 2024, revenue was $5.3 million (up from $4.8 million in the prior year), and gross profit was $300,000 (down from $1.2 million in the prior year quarter). The overall revenue increase was due to increased unit sales, higher average selling price per vehicle, and increased sales of used vehicles. The gross profit margin in 2024 was 23.4%.

• Expect gross margins to revert to historical levels in 2025.
• Aim to reach 10 units per month to achieve cash flow positivity, currently at ~8.5 units per month.
• 12 vehicles from Q4 2024 backlog will be recognized in first half of 2025.
• Retail locations contributing 20% of leads and sales, expected to drive growth and reduce marketing costs.

• Tariffs as a moving target, but company has internal controls to mitigate margin impacts.
• Dependence on customer deposits, deferred revenue, and sales of cars for retail locations for cash flow.

Q: On the P&L, with $1.1 million nonrecurring charge in COGS and $2 million restatement cost in SG&A, does reasonable top line growth lead to income from operations in 2025?

A: The crossover point for cash flow positive is about 10 units per month; currently at ~8.5 units per month, and backlog of 12 vehicles from Q4 2024 provides cushion in first half.

Q: Split between web-based sales and retail locations?

A: Currently 80% of leads and sales from digital channels, 20% from retail stores; changing marketing strategy to reduce costly outreach activity.

Q: Mitigating tariffs?

A: Stuck to base contract prices, adjusted upgrade pricing, and classic vehicles are exempt from tariffs due to 25-year rule.