Flux Power Holdings, Inc. (NASDAQ: FLUX), a developer of
advanced lithium-ion energy storage solutions for electrification
of commercial and industrial equipment, today issued a letter to
shareholders from Ron Dutt, CEO of Flux Power.
Dear Fellow Shareholders,
On behalf of the entire team at Flux Power, we hope you had a
wonderful Holiday Season and wish you a Happy New Year!
Throughout the calendar year 2023, Flux Power continued revenue
and margin expansion while diligently following our roadmap to
achieve consistent profitability and an improved capital structure.
The year was highlighted by new purchase orders from installed and
new customers, ending 2023 with over 20,000 high performance
battery packs in the field for lift trucks and other industrial
equipment including airport ground support equipment (GSE), and
stationary energy storage for EV charging. For our products, during
the year we obtained UL Solutions List Status for our
next-generation G2 series battery platform and began developing
Artificial Intelligence (AI) features for the SkyBMS® Telematics
Platform. Operationally we opened a new Atlanta facility to
supplement customer support services and continued our strategic
supply chain and profitability improvement initiatives.
2023 Initiatives Accomplished:
- Added 8 new customers in 2023, reflecting customers
desire to fulfill long-term fleet needs of replacing lead acid
battery packs with lithium-ion.
- Expansion of Gross Margins Leading to Profitability in
FY2024
- Commenced development of Artificial Intelligence (AI)
features for SkyBMS® Telematics Platform to drive more informed
decision-making around asset management and maximize operational
efficiency.
- Completed UL Solutions compliance testing to obtain
third-party, safety and durability certification for high demand
new heavy-duty models to be launched for 2024, reflecting our
product line expansion.
- Launched initiative with technology partner to
incorporate fast charging capability into our lithium-ion battery
cells.
- Reached prototype stage for automation of battery cells
into modules to support current high customer demand, while
achieving purchasing simplification and reducing inventory.
- Expanded testing and product validation capabilities
with on-site vibration table, to reduce time required from testing
to certification.
- Opened a new Atlanta facility to supplement customer
support services in response to growth in nationwide sales of
lithium-ion battery packs, enabling faster response times to Flux
Power’s nationwide customer base.
- Strategic Supply Chain & Profitability Improvement
Initiatives continued to accelerate the path to cash flow
breakeven.
- Secured a new $15 million credit facility, with expansion
capability to $20 million, from Gibraltar Business Capital
(“GBC”) to fund working capital and to repay its existing credit
facility with Silicon Valley Bank (“SVB”).
- Secured a new $2.0 million subordinated line of credit
with Cleveland Capital providing additional credit support with an
extended duration to August 15, 2025.
- Terminated an at-the-market (“ATM”) offering
program.
- Customer order backlog of $31.1M as of November 2,
2023.
Throughout the year, our increase in revenue mirrored the global
trend of major corporations actively seeking ways to curtail
emissions and address the challenges posed by climate change,
particularly through the adoption of electric fleets. The
escalating convergence of sustainability programs, financial
efficiencies, and governmental regulations is compelling businesses
to explore innovative solutions that not only cut carbon emissions
but also align with their environmental, social, and governance
objectives. In addition, our customers typically migrate to our
lithium-ion packs to achieve higher performance and cost
reductions, without government incentives.
To meet the demanding needs of our customers with cutting-edge
solutions, we continued to innovate our products and capabilities
and expand our reach into new applications. We began work to
develop Artificial Intelligence features and capabilities into our
SkyBMS Telematics platform, which delivers insight into equipment
fleet’s usage so customers can make more informed decisions to
maximize operational efficiency. Our telemetry system with AI
assistance can help anticipate and resolve issues before they
happen, addressing the number one driver in fleet management -
minimizing downtime of the equipment. We completed UL Solutions
compliance testing to obtain third-party, science-backed
certification for our next-generation clean energy battery
technology. We also began a staged launching of our updated product
platform that includes the rollout of “heavy duty” models for more
demanding performance, which is expected to provide added revenue
opportunities.
Throughout the year we built on our growing list of new and
diverse Fortune 500 customers and partners. We added on average two
new major customers each quarter while maintaining orders from
existing customers. Expanding revenues from these relationships
helped drive new customers to our technology. We anticipate our new
heavy-duty models and OEM private label program commencing early in
calendar year 2024 will effectively meet the robust market demand.
We expect our installed base of customers will continue to adopt
our existing and new lithium-ion packs for their fleet needs. Our
significant backlog of open orders supports our strategy, along
with a pipeline of high probability orders of over $100 million
ahead of us in 2024.
In 2023 we took significant actions to strengthen our capital
structure while managing our business growth and margin expansion
with careful priorities as part of our strategy to enhance
shareholder value. We migrated from our Silicon Valley Bank
facility to a new $15 million credit facility with Gibraltar
Business Capital, which provides lower interest rates, a two-year
term, and the potential to expand the facility to $20 million to
accommodate higher working capital needs as our business grows.
This facility, along with our improvement in operating cash
performance, supports our current business growth. An additional
$2.0 million subordinated line of credit with Cleveland Capital
provides greater working capital optionality beyond our projected
needs and continued confidence in our growth strategy from a
long-term investor in Flux Power. As we look to the future, we
believe it is good corporate practice to have replaced our previous
shelf registration as this allows the Company maximum flexibility
with respect to our capital management.
Looking ahead, we believe 2024 will be another year of progress
and opportunity for Flux Power as we continue our growth trajectory
with a focus on the advancement of our technology, capacity,
customer and partnership relationships, and expanding into new
markets. Taken together, we believe our strategy is leading us
toward near-term profitability and positioning us to be the leading
provider to large Fortune 500 material handling fleets. We thank
all our shareholders for your ongoing support as we work diligently
to build on the short and long-term value of our company. We wish
you all the best for a happy, healthy and prosperous new year!
Best Regards,
Ron Dutt CEO, Flux Power
About Flux Power Holdings, Inc.
Flux Power (NASDAQ: FLUX) designs, manufactures, and sells
advanced lithium-ion energy storage solutions for electrification
of 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240103786804/en/
Media & Investor Relations: 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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