Second Quarter 2022 Revenue Increased 19% to
$7.7 Million Representing 14th Consecutive Quarter of
Year-Over-Year Revenue Growth
Received $19.8 Million in New Purchase Orders
During Second Quarter with Customer Order Backlog at Record $31.4
Million
Initiated New Strategic Initiatives to Mitigate
Global Supply Chain Disruptions & Increase Profitability Across
the Portfolio
Management to Host Conference Call Today at
4:30 p.m. Eastern Time
Flux Power Holdings, Inc. (NASDAQ: FLUX), a developer of
advanced lithium-ion energy storage solutions for electrification
of industrial and commercial sectors, has reported its financial
and operational results for the fiscal second quarter ended
December 31, 2021.
Key Financial & Operational Highlights for the Second
Quarter Fiscal Year 2022
- Revenue increased 19% to $7.7 million in Q2’22 compared to
Q2’21 revenue of $6.5 million.
- Achieved 14th consecutive quarter of year-over-year revenue
growth.
- Received $19.8 million in customer purchase orders from both
existing and new customers. Utilized $14 million capital raised in
September 2021 to pre-purchase inventory to protect growing
deliveries to key customers.
- Customer order backlog increased to $31.4 million as of
December 31, 2021.
- Initiated Strategic Supply Chain & Profitability
Improvement Initiatives to accelerate the path to cash flow
breakeven, including:
- Commenced production process improvements to increase capacity,
and added an additional production line;
- Introduced new product design features expected to reduce cost,
simplify the bill of materials, and improve serviceability;
- Transitioned product lines to a new cell technology, resulting
in lower cost and improved supplier reliability;
- Implemented price increases on certain product lines to
mitigate the impact of rising input costs;
- Increased inventory to $19.6 million at December 31, 2021 to
mitigate the impact of supply chain disruptions and to support
timely deliveries.
- Cash and cash equivalents were $7.9 million at December 31,
2021. The working capital line of credit outstanding balance was
$3.5 million at December 31, 2021.
CEO Commentary
“While the second quarter of fiscal 2022 was a challenging one
for the company in light of continued global supply chain
disruptions, we experienced record customer demand as evidenced by
$19.8 million in purchase orders received from new and existing
customers,” said Ron Dutt, Chief Executive Officer of Flux Power.
“The Company also commenced strategic initiatives to mitigate the
impact of ongoing global supply chain disruptions and to increase
profitability. Our near-term goal is the timely shipment of our
record backlog of $31.4 million.
“Our strategic initiatives encompass new product designs,
production process improvements and better supply chain management.
Moreover, improvements made to our product portfolio and to our
processes should enable us to increase our production capacity,
weather the current and future supply chain disruptions and to
build a stronger company.
“Looking ahead, in addition to expanding sales of our energy
storage solutions to new and existing customers, we are providing
stationary energy storage solutions to Beam Global for their
solar-powered EV charging stations. Also, we are continuing
deployment of our SkyBMS Telematics product for remote fleet
management and monitoring. I am happy to report that customer
feedback for both of these initiatives has been positive.
“In summary, we believe Flux Power is well-positioned to
participate in the growing demand for lithium-ion energy storage
solutions among both small and large companies alike as they
appreciate and respond to the negative consequences of carbon
emissions and the benefits that lithium-ion technology and
electrification can provide as a cost effective and environmentally
friendly alternative. I look forward to sharing more on our
achievements in the upcoming investor and analyst conferences and
facility tours at our HQ in Vista, California,” stated Dutt.
Second Quarter Fiscal Year 2022 Financial Results
- Revenue for the fiscal second quarter of 2022 increased by 19%
to $7.7 million compared to $6.5 million in the fiscal second
quarter of 2021, driven by sales of energy storage solutions with
higher selling prices although lower unit volume of products
sold.
- Gross profit for the fiscal second quarter of 2022 decreased to
$1.0 million compared to a gross profit of $1.5 million in the
fiscal second quarter of 2021, primarily attributable to higher
costs for steel, electronic components, and other parts during the
quarter and partially offset by increased gross profit from higher
sales of energy storage solutions. Gross margin was 13.6% in the
fiscal second quarter of 2022 as compared to 23.0% in the fiscal
second quarter of 2021.
- Selling & Administrative expenses increased to $4.0 million
in the fiscal second quarter of 2022 from $3.1 million in the same
fiscal period of 2021, reflecting increases in outbound shipping
costs, personnel related expenses, insurance premiums, and sales
& marketing expenses.
- Research & Development expenses increased to $2.1 million
in the fiscal second quarter of 2022, compared to $1.6 million in
the fiscal second quarter of 2021, primarily due to new product
development activities.
- Net Loss for the fiscal second quarter of 2022 increased to
$5.1 million from a net loss of $3.4 million in the fiscal second
quarter of 2021, principally reflecting increased operating
expenses and decreased gross profit, partially offset by a decrease
in interest expense.
- Cash was $7.9 million at December 31, 2021, as compared to $4.7
million at June 30, 2021. Our working capital line of credit
outstanding balance was $3.5 million at December 31, 2021. Cash
requirements during the quarter were high to support pre-purchasing
of increasing sales orders.
Management Commentary
“Although customer demand was strong during the second quarter,
our profitability was negatively impacted by continued disruption
in our supply chain. We experienced higher costs to obtain key
components of our energy solutions and delays in the receipt of
such parts which led to manufacturing and shipping delays. To
address the unprecedented level of supply chain uncertainty, we
elected to build inventory levels of key component parts. This
combination of factors increased our operating expenses and reduced
gross profit.
“Cash usage in the second quarter of 2022 was also elevated due
to global supply chain disruptions leading to high levels of
inventory as well as new strategic initiatives that include new
product designs, production facility improvements and better supply
chain management. We ended the second quarter with $7.9 million in
cash, and $19.6 million in product inventory. Our goal is to
monetize our existing backlog of $31.4 million in the months ahead
and improve our working capital and cash flow needs,” concluded
Dutt.
Second Quarter Fiscal Year 2022 Results Conference
Call
Flux Power CEO Ron Dutt and CFO Chuck Scheiwe will host the
conference call, followed by a question-and-answer session. The
conference call will be accompanied by a presentation, which can be
viewed during the webcast or accessed via the investor relations
section of the Company’s website here.
To access the call, please use the following information:
Date:
Thursday, February 10, 2022
Time:
4:30 p.m. Eastern Time, 1:30 p.m.
Pacific Time
Toll-free dial-in number:
1-877-407-4018
International dial-in number:
1-201-689-8471
Conference ID:
13726247
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact MZ Group at 1-949-491-8235.
The conference call will be broadcast live and available for
replay at
https://viavid.webcasts.com/starthere.jsp?ei=1523649&tp_key=a303c51997
and via the investor relations section of the Company's
website.
A replay of the webcast will be available after 7:30 p.m.
Eastern Time through May 10, 2022.
Toll-free replay number:
1-844-512-2921
International replay number:
1-412-317-6671
Replay ID:
13726247
About Flux Power Holdings, Inc.
Flux Power (NASDAQ: FLUX) designs, manufactures, and sells
advanced lithium-ion energy storage electrification solutions for a
range of industrial and commercial sectors including material
handling, airport ground support equipment (GSE), and stationary
energy storage. Flux Power’s lithium-ion battery packs, including
the proprietary battery management system (BMS) and telemetry,
provide customers with a better performing, lower cost of
ownership, and more environmentally friendly alternative, in many
instances, to traditional lead acid and propane-based solutions.
Lithium-ion battery packs reduce CO2 emissions and help improve
sustainability and ESG metrics for fleets. For more information,
please visit www.fluxpower.com.
Forward-Looking Statements
This release contains projections and other "forward-looking
statements" relating to Flux Power’s business, that are often
identified using "believes," "expects" or similar expressions.
Forward-looking statements involve several estimates, assumptions,
risks, and other uncertainties that may cause actual results to be
materially different from those anticipated, believed, estimated,
expected, etc. Such forward-looking statements include impact of
COVID-19 on Flux Power’s business, results and financial condition;
Flux Power’s ability to obtain raw materials and other supplies for
its products at competitive prices and on a timely basis,
particularly in light of the potential impact of the COVID-19
pandemic on its suppliers and supply chain; the development and
success of new products, projected sales, deferral of shipments,
Flux Power’s ability to fulfill backlog orders or realize profit
from the contracts reflected in backlog sale; Flux Power’s ability
to fulfill backlog orders due to changes in orders reflected in
backlog sales, Flux Power’s ability to timely obtain UL Listing for
its products, Flux Power’s ability to fund its operations,
distribution partnerships and business opportunities and the
uncertainties of customer acceptance and purchase of current and
new products. Actual results could differ from those projected due
to numerous factors and uncertainties. Although Flux Power believes
that the expectations, opinions, projections, and comments
reflected in these forward-looking statements are reasonable, they
can give no assurance that such statements will prove to be
correct, and that the Flux Power’s actual results of operations,
financial condition and performance will not differ materially from
the results of operations, financial condition and performance
reflected or implied by these forward-looking statements. Undue
reliance should not be placed on the forward-looking statements and
Investors should refer to the risk factors outlined in our Form
10-K, 10-Q and other reports filed with the SEC and available at
www.sec.gov/edgar. These forward-looking statements are made as of
the date of this news release, and Flux Power assumes no obligation
to update these statements or the reasons why actual results could
differ from those projected.
Flux, Flux Power, and associated logos are trademarks of Flux
Power Holdings, Inc. All other third-party brands, products,
trademarks, or registered marks are the property of and used to
identify the products or services of their respective owners.
Follow us at:
Blog: Flux Power Blog News: Flux Power News Twitter: @FLUXpwr
LinkedIn: Flux Power
FLUX POWER HOLDINGS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
December 31, 2021
June 30, 2021
(Unaudited)
ASSETS
Current assets:
Cash
$
7,855,000
$
4,713,000
Accounts receivable
5,184,000
6,097,000
Inventories
19,583,000
10,513,000
Other current assets
868,000
417,000
Total current assets
33,490,000
21,740,000
Right of use asset
2,821,000
3,035,000
Property, plant and equipment, net
1,627,000
1,356,000
Other assets
89,000
131,000
Total assets
$
38,027,000
$
26,262,000
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
9,239,000
$
7,175,000
Accrued expenses
2,233,000
2,583,000
Line of credit
3,500,000
-
Deferred revenue
140,000
24,000
Customer deposits
-
171,000
Office lease payable, current portion
469,000
435,000
Accrued interest
3,000
2,000
Total current liabilities
15,584,000
10,390,000
Office lease payable, less current
portion
2,621,000
2,866,000
Total liabilities
18,205,000
13,256,000
Stockholders’ equity:
Preferred stock, $0.001 par value; 500,000
shares authorized; none issued and outstanding
-
-
Common stock, $0.001 par value; 30,000,000
shares authorized; 15,987,502 and 13,652,164 shares issued and
outstanding at December 31, 2021 and June 30, 2021,
respectively
16,000
14,000
Additional paid-in capital
95,217,000
79,197,000
Accumulated deficit
(75,411,000
)
(66,205,000
)
Total stockholders’ equity
19,822,000
13,006,000
Total liabilities and stockholders’
equity
$
38,027,000
$
26,262,000
FLUX POWER HOLDINGS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended December
31,
Six Months Ended December
31,
2021
2020
2021
2020
Revenues
$
7,690,000
$
6,469,000
$
13,961,000
$
10,968,000
Cost of sales
6,648,000
4,980,000
11,581,000
8,606,000
Gross profit
1,042,000
1,489,000
2,380,000
2,362,000
Operating expenses:
Selling and administrative
4,000,000
3,135,000
7,498,000
6,055,000
Research and development
2,088,000
1,594,000
4,055,000
3,101,000
Total operating expenses
6,088,000
4,729,000
11,553,000
9,156,000
Operating loss
(5,046,000
)
(3,240,000
)
(9,173,000
)
(6,794,000
)
Interest expense
(31,000
)
(124,000
)
(34,000
)
(554,000
)
Net loss
$
(5,077,000
)
$
(3,364,000
)
$
(9,207,000
)
$
(7,348,000
)
Net loss per share - basic and diluted
$
(0.32
)
$
(0.29
)
$
(0.62
)
$
(0.69
)
Weighted average number of common shares
outstanding - basic and diluted
15,987,502
11,633,793
14,895,989
10,647,181
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220210005941/en/
Media & Investor Relations: Justin Forbes 877-505-3589
info@fluxpower.com
External Investor Relations: Chris Tyson,
Executive Vice President MZ Group - MZ North America 949-491-8235
FLUX@mzgroup.us www.mzgroup.us
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