Worksport ($WKSP) Announces Record High Revenues; 275% Q2 Growth

Q2 Earnings Call Available: Management Discusses Revenue Growth and Future Outlook

West Seneca, New York - August 14, 2024 - Worksport Ltd. (NASDAQ: WKSP) ("Worksport" or the "Company"), a U.S.-based manufacturer and innovator of hybrid and clean energy solutions for the light truck, overlanding, and global consumer goods sectors, at market close yesterday reported the financial results for the second quarter of its fiscal year (Q2 FY 2024) ended June 30, 2024.

Financial Results

Worksport continues its remarkable early growth story and reports an 860% revenue increase in Q2 2024 vs. Q2 2023, with 275% growth from Q1 2024, reaching a new record of $1.92 million. This surge is directly attributed to the new Buffalo factory and the launch of dealer and e-commerce marketing initiatives. Worksport believes that while revenue is still in its early stages, the growth rate in recent quarters is highly encouraging. The Company has gained strong sales traction through its rapidly expanding channels, and with the introduction of innovative, higher-margin products on the horizon, Worksport expects this momentum to continue, driving further rapid revenue growth in the upcoming quarters.

By the end of Q2, Worksport's Monthly Reoccurring Revenue (MRR) was on track to hit $1milllion per month. The Company believes the MRR will continue to grow in 2024 with the ongoing ramp up of the Al3 line and introduction of the premium Al4 product line in Q4.

"Notably, Q2 sales surpass the entire 2023 year-end revenue of $1.5 million," states Mike Johnston, Company CFO. "Gross profit margins in Q2 2024 reached 15.4%, an 111% improvement from Q1. Early 2024 production efficiency was below baseline due to efforts in enhancing production processes and product improvements. However, Worksport anticipates improved baseline efficiency in the latter half of the year, which is expected to boost future margins. Additionally, cost savings from our scaling efforts and the introduction of premium products are projected to further enhance margins into FY 2025."

The entire financial results for Q2 2024 can be accessed below.

Forward Guidance

With three new products launching later this year, Worksport has been investing heavily in growth, laying a strong foundation for continued expansion. Worksport is well positioned to leverage its equipment, facilities, and inventory investments to meet both current and anticipated sales growth through the remainder of 2024. No significant equipment investment is expected within the next 12 months. As revenues accelerate, we anticipate a reduction in net loss from operations, with a clear vision to move to positive operational cash flow within 2025.

For the tonneau cover business, at the current Q2 gross revenue rate, we are on track to meet or exceed our previously issued revenue guidance of $6-8 million by year-end 2024. Importantly, Worksport notes this guidance does not account for potential revenues from the AL4, SOLIS, and COR products in 2024, and is based solely on our AL3 and Soft Cover product segments.

For FY 2025, Worksport believes that its tonneau cover business alone [not including the clean-tech business expected to launch soon] will represent $15-20M in revenues. The Company also believes that with favorable market conditions for their next 3 tonneau cover launches, they can beat this forecast. 2025 Tonneau Cover Revenue Guidance will be updated in future quarters.

Worksport will launch the Alpha release of its highly anticipated clean-tech COR and SOLIS products this September. A successful Alpha launch will follow a market launch in the near future. This innovative business division forms the cornerstone of Worksport's future strategy to evolve into a mid-to-large market company. For future guidance on Worksport Clean-Tech, stay tuned for an initial sales outlook during the Q3 2024 earnings call.

‍CEO Statement on Worksport Stock (NASDAQ: WKSP)

Steven Rossi, Worksport CEO, stated, "In April 2024, the Company issued a press release stating that they believe the Worksport stock was undervalued. Today, given this quarters findings, the shared remarks on our path to cash flow positivity, and our update on guidance, we reaffirm that statement, confident that the revenue growth we're seeing this quarter is just the beginning of a prosperous climb ahead."

Rossi added, "Our tonneau cover business is expected to propel Worksport into a 9-figure, middle market company in the short to mid-term, while the clean-tech division opens a 10-figure-plus opportunity that we believe is achievable. Altogether, our aspirations in terms of revenues stretch beyond that of upper middle market."

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‍Worksport Q2 Earnings Call

Worksport's Q2 Earnings Call occurred at 4:30pm ET on Tuesday August 13th, 2024. The full earnings call recording, prepared remarks, and presented deck can be found in the following locations:

Worksport Q2 Earnings Call Recorded Webinar

Worksport Q2 Earnings Call Deck

Worksport Q2 Earnings Call Prepared Remarks

Investors Interested in Speaking With Management Can Contact:‍

Investor Relations, Worksport Ltd. T: 1 (888) 554-8789 x128

W1: https://invest.worksport.com/home

‍W2: www.worksport.com

‍E: investors@worksport.com

Worksport Quarterly Report, Item 1. Financial Statements

The Company has included the Financial Statements section below from the 'Full Worksport Q2 2024 10-Q' For Quarterly Period Ended: June 30, 2024. Investors are encouraged to read the full 10-Q along with the Prepared Remarks, both linked above.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Worksport Ltd. Condensed Consolidated Balance Sheets (Unaudited)

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