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Flux Power announces financial results for first quarter of FY 2022

Flux Power

2685 S Melrose Drive
Vista, CA 92081
Phone: 877 505-3589
http://www.fluxpower.com

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Revenue of $6.3M, an increase of 39% YOY

Flux Power Holdings, Inc., a developer of advanced lithium-ion battery packs for commercial and industrial equipment, has reported financial results for its first quarter of the fiscal year 2022 (Q1’22).

Financial Highlights:

  • Q1’22 revenue grew 39% to $6.3M compared to Q1’21 revenue of $4.5M.
  • Q1’22 gross profit margin increased to 21.3% compared to 19.4% in Q1’21.

Strategic Highlights:

  • Achieved 13th consecutive quarter of year-over-year revenue growth.
  • Increased customer order backlog to a record $28M as of November 10, 2021.
  • Closed a registered direct offering priced at the market for net proceeds of approximately $14.1M to support growth.

Q1’22 Financial Results

Revenue: Q1’22 revenue increased by 39% to $6.3M compared to $4.5M in Q1’21, driven by sales of packs with higher selling prices and a higher unit volume of packs sold.

Gross Profit: Q1’22 gross profit improved by 53% to $1.3M compared to a gross profit of $873K in Q1’21, primarily attributable to the higher unit volume of sales to both new and existing customers, and to the improved overall cost of sales efficiencies. However, gross profit was impacted by higher costs for steel, electronic parts, and common off-the-shelf parts in Q1’22.

Selling & Administrative: Expenses increased to $3.5M in Q1’22 from $2.9M in Q1’21, reflecting increases in outbound shipping costs, personnel-related expenses, insurance premiums, and sales & marketing expenses.

Research & Development: Expenses increased to $2.0M in Q1’22, compared to $1.5M in Q1’21, primarily due to new product development activities.

Net Loss: Q1’22 net loss increased slightly to $4.1M from a net loss of $4.0M in Q1’21, principally reflecting increased operating expenses, partially offset by a decrease in interest expense and an increase in gross profit.

Balance Sheet: The balance sheet was strengthened during Q1’22 with a registered direct capital raise of $14.1M in net proceeds, which provided capital to support continued revenue growth and provide an important element to reaching cash flow breakeven. Additionally, in October 2021, the line of credit with Silicon Valley Bank was increased from $4.0M to $6.0M to provide additional resources to manage working capital needs.

The fiscal year 2022 outlook

The supply chain disruptions continue, with delivery delays at the ports of Los Angeles and Long Beach. Prices for steel and electrical components have seen dramatic increases, along with shipping costs over the past twelve months. No immediate abatement to these challenges is anticipated within the next several months. A price increase was implemented in October to offset these increases, although there will be limited benefit near term, given pricing in much of the current backlog of orders.

The current backlog of $28M reflects continued strong demand from both new and existing customers. Less than $2M of the current backlog is directly related to supply chain delays.

As the airline industry recovers from the COVID-19 pandemic, there is increasing demand for zero-emission GSE battery packs, which support the many environmental initiatives underway at airlines and airports.

Product development work continues on a new design platform for battery packs to achieve improvements with regard to manufacturing complexity, product cost, and working capital.

“We are not immune to the supply chain disruptions, but we believe we have executed plans to minimize the impact on production,” CEO Ron Dutt stated. “We have a record backlog of orders from new and existing customers which reflects the growing demand for our lithium-ion battery packs.”