ToughBuilt Industries, Inc.

For Q3 2023, revenue was $20.6 million versus $30.2 million in Q3 2022, a decline of $9.6 million or 31.8%. Gross profit was $4.9 million, down 20% year over year, while cost of goods sold was $15.7 million, or 76% of revenue, versus 74% a year earlier. SG&A was $12.5 million, down from $14.7 million and 61% of revenue versus 49% last year; R&D was $2.9 million versus $2.8 million. The company recorded a net loss of $5.9 million, compared with net profit of $8 million in the prior-year quarter. As of September 30, 2023, cash was $1.8 million, accounts receivable were $10.6 million, and inventory was $27.5 million; net cash used in operating activities for the first nine months of 2023 improved by 80% versus $6 million used in the first nine months of 2022. Management did not provide formal next-quarter or full-year revenue/EPS guidance, but said it expects further margin improvement, lower costs, selective pricing actions, and new product launches to support future net sales and move the company closer to profitability.

Michael Panosian said ToughBuilt is navigating a difficult macro backdrop by streamlining the organization, lowering overhead, and focusing on efficiencies. He emphasized the company’s 22 product lines, said major new design work is largely complete, and highlighted StackTech as a key new platform that opens additional market segments and should contribute to future sales. His tone was cautious but constructive, centered on building a stronger foundation for long-term profitability.

Martin Galstyan focused on the year-over-year revenue decline, the margin pressure from lower demand, and the company’s ongoing cost actions. He cited gross profit of $4.9 million, COGS of $15.7 million, SG&A of $12.5 million, R&D of $2.9 million, and a Q3 net loss of $5.9 million, while noting cash of $1.8 million, receivables of $10.6 million, and inventory of $27.5 million at quarter-end. He also said net cash used in operating activities improved by 80% for the first nine months of 2023 and that management expects capital resources to improve as products gain wider recognition.

There was no analyst Q&A section; the call ended after prepared remarks. Management’s main forward-looking comments were about continued cost discipline, selective price adjustments, and product expansion rather than quantitative guidance. The key uncertainty discussed was weak sector demand and its effect on gross margin and sales.