Worksport (NASDAQ:WKSP) reported record third-quarter sales of approximately $7.2 million, up 44% from a year earlier, as demand for its NEXUS truck bed cover helped narrow losses and reduce inventory.
CEO Steven Rossi said the quarter was the company’s second consecutive period of record sales. Revenue increased 38% from the second quarter, while operating expenses were relatively flat and inventory declined by roughly $2.5 million.
The company used approximately $400,000 in operating cash during the quarter, down from $3.4 million in the preceding three months. Rossi cautioned that the improvement benefited from favorable working capital timing and should not be viewed as a quarterly run rate.
Worksport is targeting sustained positive operating cash flow but did not provide a new timeline for reaching it. Rossi said progress would depend on sales, margins, recurring cash needs and working capital discipline.
Sales Growth and a Narrower Loss
Third-quarter sales rose from approximately $5 million a year earlier and $5.2 million in the second quarter, CFO Jennifer Kartychak said. For the first nine months of 2026, sales reached approximately $15.8 million, up 39% year over year and close to the $16.1 million reported for all of 2025.
Direct-to-consumer sales increased approximately 48% from the second quarter, while business-to-business sales grew about 26%. B2B represented 41% of quarterly net sales, down from 45% in the prior quarter, although it accounted for about half of September sales, Kartychak said.
Quarterly gross profit rose approximately 40% year over year to $2.2 million. Gross margin was 30.3%, compared with 31.3% a year earlier and 31.5% in the second quarter. Kartychak attributed the sequential decline partly to higher material and landed costs, including tariffs, and a greater contribution from B2B sales, which generally carry lower gross margins than direct sales.
Operating expenses fell 12% year over year to $5.6 million. Net loss narrowed to $3.6 million, or $0.26 per share, from $4.9 million, or $0.75 per share, a year earlier. Kartychak noted that the per-share improvement also reflected a higher weighted average share count.
Inventory Conversion and Liquidity
Inventory fell to $9.6 million at the end of September from approximately $12.1 million at the end of June. Kartychak said the company is moving toward a just-in-time fulfillment model, aligning purchasing and production more closely with consumer sales and distributor reorders.
Third-quarter sales orders totaled approximately $7.9 million, exceeding invoiced sales. Estimated backlog rose to approximately $740,000 at Sept. 30 from approximately $117,000 at the end of June.
Despite the lower third-quarter cash use, Worksport used $12 million in operating cash during the first nine months, compared with $11.2 million a year earlier. Kartychak said the next task is to narrow the underlying cash flow gap through higher gross profit and cost efficiencies.
Rossi said an August warrant inducement raised approximately $2.3 million and was the main reason cash ended the quarter at $2.5 million. He also said the company’s credit facility had been renewed through July 2028 and that Worksport would use its credit facility and capital markets as needed.
Products and Heat Pump Plans
NEXUS sales reached approximately $4.8 million in the third quarter, up 150% from the preceding quarter and representing roughly two-thirds of company revenue, Rossi said. The premium cover is built on the same platform as Worksport’s AL4 cover.
Sales of the SOLIS solar tonneau cover more than quadrupled from the second quarter to approximately $96,000, Rossi said. He added that SOLIS and the company’s COR portable energy storage product can be used independently or together.
Worksport also signed a non-binding term sheet for a business selling a patented, American-made truck bed accessory. Rossi said a potential acquisition remains subject to due diligence, definitive agreements and closing conditions.
At subsidiary Terravis Energy, Rossi said certification of the AetherLux heat pump remained targeted for the fourth quarter of 2026, with first production expected before year-end, subject to certification, testing and readiness. Initial pilot installations in the contiguous United States are targeted for the first quarter of 2027.
Nasdaq Compliance
During the question-and-answer session, the operator said Worksport has until February 2027 to regain compliance with Nasdaq’s $1 minimum bid price requirement. Rossi said an additional extension may be available subject to rules and conditions, and expressed optimism that the company could address the deficiency.
About Worksport (NASDAQ:WKSP)
Worksport Ltd. (NASDAQ: WKSP) develops and manufactures tonneau covers and related products for pickup trucks. Its covers are designed to protect cargo, improve vehicle utility, and provide an alternative to conventional truck-bed coverings. The company serves the automotive aftermarket and targets owners of pickup trucks across North America. Worksport’s product portfolio includes hard and soft folding tonneau covers, including its COR line of hard-shell covers. The company is also developing SOLIS, a solar-integrated tonneau cover designed to generate electricity from sunlight, and COR battery-related products intended to store and supply portable power.
