Flux Power Holdings, Inc., a developer of advanced lithium-ion industrial batteries for commercial and industrial equipment, has reported financial results for its first quarter of the fiscal year 2021 (Q1’21).
Financial Highlights:
- Q1’21 revenue grew 135% to $4.5M compared to Q1’20 revenue of $1.9M
- Q1’21 gross margin increased to 19.4% compared to 6.1% in Q1’20
Strategic Highlights:
- While our first quarter is typically a seasonal low quarter for many of our customers, our underlying momentum and pacing compared to our revenue levels for Q1’20 is encouraging, especially in view of the COVID environment.
- Uplisted to Nasdaq and completed a public offering of $12.4M in August.
- Completed a private placement offering for $3.2M.
- Continued expansion of relationships with forklift OEMs and new customers.
- Continued expansion with Beam Global for stationary power.
- Repaid short-term debt by $2.6M during Q1’21.
- Subsequent to Q1’21:
- Filed a shelf registration of $50M to support capital raise for business growth over the next three years.
- Converted $2.2M of short-term debt to equity to strengthen the balance sheet and capital structure.
- Secured a working capital revolving line of credit with Silicon Valley Bank.
“Our revenue during Q1’21 reflects added customers and momentum despite the COVID pandemic,” Flux Power CEO Ron Dutt commented. “We believe continued improvement in our gross margin moves us closer to our goal of becoming cash flow breakeven.”
Q1’21 Financial Results
Revenue: Q1’21 revenue increased by 135% to $4.5M compared to $1.9M in Q1’20, driven by sales of larger LiFT Packs and stationary power applications.
Gross Profit: Q1’21 gross profit improved to $873,000 compared to a gross profit of $117,000 in Q1’20 principally reflecting higher sales volumes and gross margin improvement program.
Selling & Administrative: Expenses increased to $2.9M in Q1’21 from $2.3M in Q1’20, principally reflecting increased staffing to support expanded sales and marketing, sourcing and procurement, demonstration units for marketing, and expanded customer service footprint.
Research & Development: Expenses increased to $1.5M in Q1’21, compared to $1.3M in Q1’20 reflecting our continued rollout of new product models, third party expense for UL Listing certification, and further development of our telemetry products.
Net Loss: Q1’21 net loss increased to $4.0M from a loss of $3.8M in Q1’20, principally reflecting higher operating costs and interest expense.
The fiscal Year 2021 Outlook
The first quarter of the fiscal year is a seasonally lower revenue quarter, reflecting customers not purchasing or installing new equipment over the historically slower summer months of July and August. However, Flux Power continued its underlying business momentum with triple-digit year-over-year growth.
The current growth trajectory is anticipated to continue based on an expanded line-up of product offerings, continued demand for lithium-ion solutions, and potential new customer opportunities. Flux Power also expects to further enhance gross margins across its product lines by implementing a series of clearly defined initiatives to advance technology, design, production, and purchasing efficiencies, as well as benefiting from growing economies of scale.
CEO Ron Dutt added, “While the timing of sales continues to be a challenge to predict each quarter, we are confident in a positive outlook for the fiscal year 2021 based on customer dialogues across all product lines.”
As a point of reference, according to the October 2020 report from the Material Handling Equipment Distributors Association (MHEDA), the outlook for new U.S. equipment orders is down 9.6% for the calendar year 2020 and up by 10.0% for the calendar year 2021.
