ToughBuilt Industries Announces Second Quarter 2021 Results

Rhea-AI Summary

ToughBuilt Industries reported a 132% year-over-year revenue growth to $15.9 million for Q2 2021, up from $6.8 million in Q2 2020, attributed to strong demand and repeat orders. However, gross profit rose 41% to $3.4 million, but gross profit margin decreased to 21.2% from 34.8% due to supply chain disruptions. Operating expenses surged to $10.7 million as the workforce expanded significantly. The net loss for the quarter was $7.4 million, at $0.09 per share. Cash and equivalents stood at $20.2 million.

Positive

• Revenue increased by 132% to $15.9 million.
• Strong product acceptance led to repeat orders and new customer acquisitions.
• Cash and cash equivalents totaled $20.2 million.

Negative

• Gross profit margins fell to 21.2% from 34.8%, impacting profitability.
• Operating expenses rose significantly by over 130% to $10.7 million.
• Net loss of $7.4 million, worsening from $2.5 million in the same quarter last year.

• Significant year-over-year growth of 132% to $15.9 million
• Backlog remains robust across all product lines

Lake Forest, CA, Aug. 16, 2021 (GLOBE NEWSWIRE) -- ToughBuilt Industries, Inc. ("ToughBuilt") (NASDAQ: TBLT; TBLTW), today reported financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

• Revenues for the second quarter of 2021 increased 132% to $15.9 million, compared to $6.8 million in the second quarter of 2020. The significant increase in revenue was primarily the result of wide acceptance of our products in the tool industry by new customers, combined with follow-on sales orders of metal goods and soft goods from our existing customers.
• Gross profit increased 41% to $3.4 million, compared to $2.4 million in the second quarter of 2020. Gross profit margins for the quarter were 21.2%, compared to 34.8% in the year ago period. The decline in margins for Q2 was primarily due to industry-wide supply chain disruptions, which have led to historically high shipping costs, as well as substantial increases in inventory levels during Q2.
• Operating expenses were $10.7 million, compared to $4.6 million in the second quarter of 2020. The increase in operating expense was primarily driven by higher SG&A expenses due to an expanded workforce from approximately 30 to 121 global employees and contractors, increased R&D expenses, and marketing costs.
• Net loss attributable to common stockholders was $7.4 million, or $0.09 per share, as compared to a net loss of $2.5 million, or $0.11 per share in the second quarter of 2020.
• Cash and cash equivalents was $20.2 million as of June 30, 2021.
  

“Our second quarter 2021 revenue increased significantly year-over-year and sequentially to $15.9 million, driven by strong demand from leading retailers in the US and abroad across all product lines. Additionally, we recorded record Amazon sales in the first half of 2021, which is a positive signal that our brand continues to resonate with the end user. We strengthened relationships with our U.S. and Canada-based retail partners, and, at the same time, penetrated new large retailers in European markets,” commented Michael Panosian, ToughBuilt’s Chief Executive Officer. “Shortly after the quarter end, we launched our two-in-one scraper/utility knife, bringing a never-before-seen innovation to a previously static hand tool category, and already we’re seeing accelerated order volumes online and in-stores throughout the world. Consistent with last quarter, our strategy for the remainder of 2021 is to leverage our existing retail network to launch several additional product lines, to expand into high-growth international markets and to enhance our manufacturing and distribution capabilities through hiring industry professionals.”

CONFERENCE CALL INFORMATION

Michael Panosian, Chief Executive Officer, and Martin Galstyan, Chief Financial Officer, will host a conference call to review the Company’s financial and operating results at 8:30am ET today.

To attend the conference call, please dial one of the teleconference numbers below or follow the live audio webcast here: http://public.viavid.com/index.php?id=146251. Attendees are encouraged to dial in to the conference call at least five minutes prior to the start time.

U.S. TOLL-FREE: 1-877-407-9716
INTERNATIONAL: 1-201-493-6779

To listen to a replay of the conference call, please dial one of the teleconference numbers below. The replay will also be available through the audio webcast link here: http://public.viavid.com/index.php?id=146251.

REPLAY U.S. TOLL-FREE: 1-844-512-2921
REPLAY INTERNATIONAL: 1-412-317-6671
REPLAY PIN: 13722358

ABOUT TOUGHBUILT INDUSTRIES, INC.

ToughBuilt is an advanced product design, manufacturer and distributor with emphasis on innovative products. Currently focused on tools and other accessories for the professional and do-it-yourself construction industries. We market and distribute various home improvement and construction product lines for both the do-it-yourself and professional markets under the TOUGHBUILT brand name, within the global multibillion dollar per year tool market industry. All of our products are designed by our in-house design team. Since launching product sales in 2013, we have experienced significant annual sales growth. Our current product line includes three major categories, with several additional categories in various stages of development, consisting of Soft Goods & Kneepads and Sawhorses & Work Products. Our mission is to provide products to the building and home improvement communities that are innovative, of superior quality derived in part from enlightened creativity for our end users while enhancing performance, improving well-being and building high brand loyalty. Additional information about the Company is available at: https://www.toughbuilt.com/.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) market acceptance of our existing and new products, (ii) delays in bringing products to key markets, (iii) an inability to secure regulatory approvals for the ability to sell our products in certain markets, (iv) intense competition in the industry from much larger, multinational companies, (v) product liability claims, (vi) product malfunctions, (vii) our limited manufacturing capabilities and reliance on subcontractors for assistance, (viii) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (ix) our reliance on single suppliers for certain product components, (x) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain and (xi) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction. More detailed information about the Company and the risk factors that may affect the realization of forward looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.

Investor Relations Contact:
KCSA Strategic Communications
David Hanover
toughbuilt@kcsa.com

FAQ

What were ToughBuilt Industries' revenue results for Q2 2021?

ToughBuilt Industries achieved revenues of $15.9 million for Q2 2021, a 132% increase year-over-year.

What contributed to the revenue growth of ToughBuilt Industries?

The revenue growth was primarily driven by strong demand from retailers and repeat orders from existing customers.

What was the net loss reported by ToughBuilt Industries in Q2 2021?

The net loss attributable to common stockholders was $7.4 million, or $0.09 per share, for Q2 2021.

How did gross profit margins change for ToughBuilt Industries in Q2 2021?

Gross profit margins decreased to 21.2% in Q2 2021 from 34.8% in the previous year due to supply chain disruptions.

What are ToughBuilt Industries' cash and cash equivalents at the end of Q2 2021?

ToughBuilt Industries reported cash and cash equivalents of $20.2 million as of June 30, 2021.