Vista, CA – Flux Power Holdings, Inc. (OTCQB: FLUX), a developer of advanced lithium-ion batteries for commercial and industrial equipment including electric forklifts and airport ground support equipment (“GSE”), today reported results for its fiscal year 2020 second quarter ended December 31, 2019 (Q2 ‘20).
Q2 ’20 revenue increased 33% to $3.6M reflecting the continuation of strong growth from the rollout of a full product line of packs for forklifts, along with increased unit volume and a higher percentage of larger packs.
Q2 ’20 gross margins improved to 9.0% driven by the Company’s gross margin initiative.
Increased sales efforts generated a record order backlog of approximately $10M at the end of Q2 ’20, driven by orders across the full line of forklifts and airport GSE.
Sales from 3-Wheel Class 1 Forklifts, as Flux Power is now shipping its “L-Series” Class 1 packs designed for 3-Wheel forklifts, a growing sector in new, highly-efficient warehouses.
“We are pleased to see recent revenue growth from our full product line of forklifts and airport GSE,” commented Flux Power CEO Ron Dutt, “Our relationships with Fortune 500 customers and forklift OEMs continue to expand, and we are nearing completion of UL Listings on our full product lineup for forklifts. Our strategic priority for the next twelve months is to complement such strong revenue growth with significant improvement in our gross profit margins. We are well on our way to achieving this goal.”
FY 2020 and Beyond
Flux Power anticipates FY’20 revenue to continue to increase rapidly reflecting: (i) rollout and growth of full product line of LiFT Packs; (ii) increasing demand for its private label products; and (iii) the strength of its current order backlog.
The gross profit margin improvement program is beginning to see traction as Flux Power implements a series of clearly defined activities to advance technology, design, production and purchasing efficiencies.
Q2 FY 2020 Operating Results:
Q2’20 revenue increased 33% to $3.6M compared to $2.7M in Q2’19. As the customer base increases, Flux Power anticipates seeing a smoother, more stable, growth trajectory based on increasing customers and orders.
Q2’20 gross profit improved to $326,000 compared to $255,000 in Q2’19, principally reflecting higher sales volumes and benefits from higher revenue and early impact of the Company’s gross margin improvement program.
Selling and administrative expenses increased to $2.2M in Q2’20 from $1.6M in Q2’19, principally reflecting increased staffing to support expanded operations and growth. Research & development expenses increased to $1.0M in Q2’20, compared to $882,000 in Q2’19 as Flux Power progressed development of higher capacity battery packs for larger equipment. Flux Power’s Q2’20 net loss increased to $3.3M from a loss of $2.9M in Q2’19, principally reflecting higher operating costs, partially offset by the improvement in gross profit and decreased interest expense.
At December 31, 2020, borrowings under Flux Power’s $12.0M Short Term Line of Credit provided by Esenjay Investments LLC, owned by the Company’s largest shareholder and other lenders, were $10.7M, due June 30, 2020, and a second short-term borrowing, due March 31, 2020 was $1.1M.
Additionally, the Company entered into a Factoring Agreement with BayView Funding dated August 13, 2019 with a current maximum principal amount of $3.0M and an initial term of 12 months, which can be extended. Flux Power also implemented a working capital line sponsored by one of its leading OEMs for receivables with that OEM.