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| Statement |
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| I would like to reiterate that ToughBuilt has tremendous market opportunities ahead and the infrastructure we have built to capitalize on those opportunities is sound |
| We believe our 22 product lines provide a strong foundation for growth |
| We are pleased to report that our commitment to innovation and market responsiveness has resulted in impactful product expansion, building a stronger foundation from which we believe can achieve sustained growth and long-term profitability |
| We anticipate our entrance into the stacking tool storage and toolbox market will drive us closer to our profitability target and we expect to see a strong contribution to future net sales |
| We anticipate that these efforts will enable us to create new revenue streams by increasing our global reach, launching additional new product categories and moving us closer to profitability |
| In closing, I want to thank our shareholders and our team for helping grow ToughBuilt into a high quality brand that has a bright future |
| We seek to further improve our gross margins and we continue to work to decrease costs |
| This and a reduced net loss helped drive an 80% improvement in net cash used in operating activities for the first nine months of 2023, compared to net cash used of $6 million for the first nine months of 2022 |
| Management anticipates that our capital resources will improve as our products gain even wider market recognition and acceptance |
| We aim to enforce our position as a leader in the industry by meeting demand and evolving customer needs |
| We are focused on improving gross profit margins in the quarters ahead |
| For the third quarter of 2023, the company reported revenue of $20.6 million, a 9% increase compared to the prior quarter |
| Even as we introduce additional new products, we believe that a significant portion of our major new design work has been completed and we will begin to reap the rewards of what we have built so far in years to come |
| We have and will continue to seek examine further operating expense leverage in the coming quarters |
| The StackTech line is not only the world’s first auto locking stacking tool storage solution, but with the launch, we were able to break into new market sectors |
| Moving forward, we plan to expand our product portfolio prudently, selectively adjust prices and focus on efficiency throughout the organization |
| As a result, we continue to work diligently to decrease overhead |
| The year-over-year increase was primarily due to the development of new innovative tools for the construction industry |
| Martin Galstyan Good afternoon |
| Cost of goods sold as a percentage of revenues in the third quarter of 2023 was 76%, up from 74% in the same period prior year |
| During the last quarter, we continued to streamline the organization and focus on driving efficiencies on our planned path towards profitability by focusing on innovation and sustaining and scaling customer partnerships |
| Statement |
|---|
| The decrease in gross profit margin in 2023 third quarter was primarily driven by a decrease in demand in the overall sector |
| Revenues decreased in the third quarter of 2023 over the same period in 2022 by approximately $9.6 million or 31.8%, primarily due to a decrease in demand for the tool sector |
| Our gross profit for Q3 decreased by 20% to $4.9 million compared to the third quarter of 2022 |
| We are very aware of the challenging macroeconomic background that has been affecting our industry |
| Although the gross margin decreased this Q3, however, on first nine months comparison basis, it only declined 0.32% |
| For the third quarter, SG&A expenses were $12.5 million, a 33% decrease compared to the prior quarter and a decrease of 30% compared to the same quarter last year |
| We implemented cost cutting strategies in preparation for an anticipated decrease in demand |
| For the third quarter of 2023, we recorded a net loss of $5.9 million, as compared to a net profit of $8 million for the three months ended September 30, 2022 |
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