Flux Power FY 2019 Revenue Grew 126% to $9.3M;
Rollout of Full Product Line for Forklifts Now
Underway;
Growth Trajectory Continues on Track
Vista, CA – September 12, 2019 -- Flux Power Holdings,
Inc. (OTCQB: FLUX), a developer of advanced lithium industrial
batteries for commercial and industrial equipment, today reported
results for its fourth quarter (Q4’19) and fiscal year ended
June 30, 2019 (FY‘19).
Flux is a leading developer of lithium-ion batteries having higher
performance, extended life, and lower cost of ownership compared
with lead acid solutions. Products include advanced battery packs
for forklifts, airport ground support equipment, and other
commercial and industrial applications.
Highlights:
●
Q4 FY’19 Revenue vs Q4 FY ’18 Rose
172% from $1.1M to $3.0M, supported by walkie pallet jack
LiFT Pack sales which grew 70% to $1.4M, in addition to $1.6M from
rollout of larger packs (for Class 1, Class 2 and Class 3 end
riders).
●
FY’19 Revenue vs FY’18 Rose 126%
from $4.1M to $9.3M, as walkie LiFT Pack sales grew 30% to
$4.7M and new, larger forklift batteries contributed over
$4.6M.
●
Commenced Sales via Private Label OEM
Relationship with a leading forklift manufacturer in
Q4’19. Flux currently supplies lithium-ion batteries for this
OEM’s walkie pallet jack product line. Additional product
development projects are being pursued with other manufacturers of
commercial and industrial equipment.
●
Achieved Positive Gross Profit Margin,
with gross margins of 6% in FY 2019 and 7% in
Q4’19 compared to
negative gross margins in the comparable periods of FY 2018,
reflecting the benefit of growing economies of scale and initial
design and sourcing improvements. Specific plans continue to
achieve a targeted 30% gross margin from further design, sourcing,
and volume growth.
●
Capacity Expansion Achieved,
with relocation to a new facility in
Vista, CA with over 60,000 square feet of availability, a
three-fold increase over the prior facility. This facility should
support up to $100 million in revenue per year.
Flux CEO Ron Dutt, commented, “Flux has invested the past six
years to build out a foundation of production, product, and
customer service to serve Fortune 500 customers in a multi-billion
dollar, potential market. We are pleased to see the benefit of our
efforts reflected in our strong fiscal 2019 sales growth and the
achievement of solid, positive gross margin improvements over the
prior year. We expect this pace to continue in fiscal 2020 and
beyond as we are expanding penetration of current large customer
fleets and adding new customers by leveraging current
successes.”
FY 2020 and Beyond
Based on its expanded base of product offerings, current pipeline
of large customer procurement discussions, and projected new
customer activity, Flux anticipates the current growth trajectory
to continue, with potential upside attributable to accelerating
demand for lithium solutions. Flux also expects to further enhance
gross margins across its product lines as the Company implements a
series of clearly defined initiatives to advance technology,
design, production and purchasing efficiencies, as well as
benefiting from growing economies of scale.
Flux
anticipates FY’20 revenue to continue to increase rapidly
reflecting: (i) a growing preference for high performing,
cost-efficient, and reliable lithium battery solutions over legacy
lead-based solutions; (ii) the strength of its current order
backlog and potential purchasing plans of existing customers; and
(iii) impact of current launching of full product
line.
Q4 FY 2019 Operating Results
Q4’19
revenue increased 172% to $3.0M compared to $1.1M in Q4’18,
driven by a 70% increase in Walkie LiFT Pack sales, to $1.4M, which
benefitted from Flux’s private label OEM relationship, and
from sales of larger LiFT Packs that debuted in FY
2019.
Q4’19
gross profit improved to $220,000 compared to a gross loss of
$87,000 in Q4’18, principally reflecting higher sales volumes
and benefits from the Company’s gross margin improvement
program.
Selling
and administrative expenses increased to $2.2M in Q4’19 from
$1.1M in Q4’18, principally reflecting increased staffing to
support expanded operations and growth. Research & development
expenses increased to $1.2M in Q4’19, compared to $515,000 in
Q4’18 as Flux progressed development of higher capacity
battery packs for larger equipment. Flux’s Q4’19 net
loss increased to $3.3M from a loss of $1.9M in Q4’18,
principally reflecting higher operating costs and interest expense
which more than offset the improvement in gross
profit.
FY 2019 Operating Results
Flux’s
FY’19 revenues rose 126% to $9.3M compared to $4.1M in
FY’18, reflecting the initial rollout of of LiFT Packs for
larger forklifts and electric trucks, rapid sales of packs for
walkie pallet jacks, a four-fold sales increase in GSE packs to
$1.5 million and rising interest overall in lithium storage
solutions. During FY’19 Flux invested in general engineering
and design, launched battery packs for the End Rider and Class 1
and 2 forklift markets and expanded its sales blueprint by
increasing the number of regional sales managers.
FY’19
gross profit improved to $549,000 vs. a loss of $795,000 in
FY’18, reflecting higher sales and improved gross margins
reflecting the benefit of sourcing initiatives, lower prices from
higher volume purchasing, and expected growing economies of
scale.
Selling
and administrative expenses increased to $7.7M in FY’19 from
$3.5M in FY’18, principally due to additional cash and
stock-based compensation expense related to new hires in sales,
marketing, engineering and manufacturing and assembly, along with
increased marketing expense to support new products, and legal fees
related to fund raising. Research & development expenses
increased to $4.1M in FY’19 from $2.0M in FY’18,
reflecting development costs supporting the full product line as
well as LiFT Pack design improvements.
Flux’s
net loss increased to $12.4M (a loss of $2.84 per share) in
FY’19 from a net loss of $7.0M (a loss of $2.74 per share) in
FY’18 mainly due to higher operating expenses and increased
interest expense. Per share results are based on 4.4M and 2.5M
weighted average basic shares outstanding at the end of FY’19
and FY’18, respectively. As a
result of the 1 for 10 share reverse stock split effective July 11,
2019, Flux’s issued and outstanding common shares have been
reduced to approximately 5.1M and its total authorized shares have
also been proportionally reduced.
Flux
entered into an amended and restated credit facility agreement in
March 2019 with Esenjay Investments, LLC, owned by the
Company’s largest shareholder, Cleveland Capital, and other
lenders to extend the facility’s maturity date from March 31,
2019 to December 31, 2019 and to increase the maximum principal
amount available from $5.0M to $7.0M. Total borrowings outstanding
under this credit facility were $6.4M at June 30, 2019. More
recently, on July 3, 2019 Flux entered into a short-term note with
Cleveland Capital in the amount of $1M the maturity of which has
been extended to December 1, 2019.
Additionally,
Flux entered into a Factoring Agreement with BayView Funding dated
August 23, 2019 with a current maximum principal amount of $3.0M
and an initial term of 12 months, which can be
extended.
CEO,
Ron Dutt, added, “While the timing of quarterly sales
continues to be difficult to predict, we are ever confident in the
outlook for fiscal 2020 based on customer dialogues across all
product lines.”
About Flux Power Holdings, Inc. (www.fluxpower.com)
Flux
Power develops advanced lithium-ion batteries for commercial and
industrial uses, including its first-ever UL 2271 Listed
lithium-ion “LiFT Pack” forklift batteries. Flux
solutions utilize its proprietary battery management system and
in-house engineering and product design. Flux batteries deliver
improved performance, extended cycle life and lower total cost of
ownership than legacy lead-acid solutions. Flux sells primarily to
lift equipment OEM’s, their dealers and battery distributors.
Products include advanced battery packs for motive power in the
lift equipment and airport ground service markets, and other
commercial and industrial applications.
This release contains projections and other "forward-looking
statements" relating to Flux’s business, that are often
identified by the use of "believes," "expects" or similar
expressions. Forward-looking statements involve a number of
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 the development and success of
new products, projected sales, the Company’s ability to
timely obtain UL Listing for its products, the Company’s
ability to fund its operations, distribution partnerships and
business opportunities and the uncertainties of customer acceptance
of current and new products. Actual results could differ from those
projected due to numerous factors and uncertainties. Although Flux
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’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 the Company
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:
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Facebook:
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FLUXPower
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Twitter:
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@FLUXpwr Corporate
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@FluxPowerIR Investor Relations
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LinkedIn:
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Flux
Power
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Media & Investor Relations:
David
Collins and Chris Eddy
Catalyst
IR
212-924-9800
flux@catalyst-ir.com
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FLUX POWER HOLDINGS, INC.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(figures in
thousands, except per share data)
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Three months ended June 30,
(Unaudited)
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Twelve months ended June 30,
(Audited)
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2019
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2018
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2019
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2018
|
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Net
revenue
|
$3,020
|
$1,098
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$9,317
|
$4,118
|
|
Cost
of sales
|
2,800
|
1,185
|
8,768
|
4,913
|
|
Gross
profit (loss)
|
220
|
-87
|
549
|
-795
|
|
|
|
|
|
|
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Operating
expenses:
|
|
|
|
|
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Selling
and administrative expenses
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2,194
|
1,084
|
7,712
|
3,462
|
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Research
and development
|
1,196
|
515
|
4,088
|
1,956
|
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Total
operating expenses
|
3,390
|
1,599
|
11,800
|
5,418
|
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Operating
(loss)
|
(3,170)
|
(1,686)
|
(11,251)
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(6,213)
|
|
|
|
|
|
|
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Other
income (expense):
|
|
|
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Other
Income
|
84
|
|
84
|
|
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Interest
expense
|
(189)
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(240)
|
(1,247)
|
(752)
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Net
loss
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$(3,275)
|
$(1,926)
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$(12,414)
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$(6,965)
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|
|
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Net
loss per share - basic and diluted
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$(0.64)
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$(0.73)
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$(2.84)
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$(2.74)
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|
|
|
|
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Weighted
average number of basic common shares outstanding
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5,100
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2,622
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4,364
|
2,539
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