GARDENA, CA, Nov. 14, 2023 (GLOBE NEWSWIRE) -- Polar Power, Inc. (“Polar Power” or the “Company”) (NASDAQ: POLA), a global provider of prime, backup and solar hybrid DC power solutions, today reported its financial results for the three and nine months ended September 30, 2023.
Financial Highlights:
Operating and Corporate Highlights:
Arthur Sams, CEO of Polar Power, commented, “We continued to make progress on strategic growth objectives including diversification of our customer base and markets. This strategy has resulted in 21% growth this year reducing our losses due to improved overhead absorption. During the third quarter of 2023 we experienced lower than anticipated revenues due to rescheduling of $2.8 million in deliveries by our largest Tier-1 telecom customer.
Due to a steady improvement in our supply chain lead times combined and improvements in employee turnover has improved our gross profits during the first nine months. Introduction of lower emission products and increased demand from 5G expansion for higher power products provides us a positive sales outlook for the next year. We believe as the telecom market transitions towards 5G our product mix will shift towards 27 kW which has 50% higher average sales price than our current product offerings which may result in additional $20 million in sales for us within the next two to three years.
In anticipation of the industry shift towards lower emission natural gas and LPG products we established a supply chain relationship with engine manufacturer Toyota, which we believe produces the industry’s most reliable and fuel-efficient engine for industrial applications. To ensure on time delivery we purchased over $9.0 million in natural gas and Propane (LPG) engines after completion of required approvals and certifications. Fixing software and hardware bugs within the engine controls along with delayed acceptance tests and approvals from our Tier-1 customers has temporarily reduced our working capital. During the third quarter, we began shipment of our natural gas and LPG products which are currently used in 25% of our backlog.”
“During the past two years we have been codeveloping products with OEM’s in the defense field who are engaged in developing products like electronic warfare, robotics and drones. In addition, we have provided initial products to customers producing robotics, hybrid vehicles and marine vessels. We have a large pipeline of product configurations that our customers are testing and marketing to their end users. We believe the military conflict in Europe, Middle East, and South Pacific is driving demand for small DC diesel generators to power remote facilities and equipment in these markets.” he added.
Third Quarter and Nine-Month 2023 Financial Details:
Net sales for Q3 2023 were $1.9 million, representing a 12% year-over-year increase from $1.7 million in Q3 2022. Net sales for the nine months ended September 30, 2023 were $11.7 million, representing a 21% increase, compared to $9.7 million in the same nine month period last year. For the third quarter of 2023, sales to telecommunications customers represented 96% of total net sales, which includes 65% of the sales to our largest Tier-1 customer. During Q3 2022, sales to telecommunications customers represented 90% of total net sales, with sales to the Company’s largest Tier-1 telecommunications customer representing 87% of total net sales. During the nine months ended September 30, 2023, sales to telecommunications customers represented 96% of total net sales, with sales to the Company’s largest telecommunications customer representing 52% of total net sales.
Gross loss during Q3 2023 reduced by 56%, to $(108,000), compared to a loss of $(247,000) in the same period in 2022.
Gross profit during the nine months ended September 30, 2023, increased 23% to $2.1 million, compared to $1.7 million for the same period in 2022. The improvements in gross profit resulted primarily from improved overhead absorption resulting from 21% higher sales and improvement in labor efficiency.
Operating expenses decreased 26% to $1.5 million during Q3 2023, as compared to $2.1 million during Q3 2022. Operating expenses for the nine months ended September 30, 2023 decreased 13% to $5.1 million, as compared to $5.9 million for the same period in 2022. The decrease was primarily due to fixed cost reductions and overhead reductions.
Net loss for Q3 2023 totaled $1.8 million, or $(0.14) per basic and diluted share, compared to a net loss of $2.3, or $(0.19) per basic and diluted share in Q3 2022. Net loss for the nine months ended September 30, 2023 totaled $3.3 million, or $(0.26) per basic and diluted share, compared to a net loss of $4.2 million, or $(0.33) per basic and diluted share during the same period in 2022.
The number of customers that purchased Polar DC generators during Q3 2023 increased to seventeen, as compared to six in Q3 2022. The number of customers that purchased Polar DC generators during the nine months ended September 30, 2023 increased to thirty-one, as compared to fourteen for the same period in 2022. International sales represented 24% of total net sales for the nine-month ended September 30, 2023, compared to 2% for the same period in 2022. This increase in customer count is a result of ongoing demonstrations of Polar DC power systems internationally.
About Polar Power, Inc.
Gardena, California-based Polar Power, Inc. (NASDAQ: POLA), is a technology company that designs, manufactures and sells direct current, or DC, power systems, lithium battery powered hybrid solar systems for applications in the telecommunications market and, in other markets, including military, EV charging, cogeneration, distributed power and uninterruptable power supply. Within the telecommunications market, Polar Power’s systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical power needs that cannot be without power in the event of utility grid failure. For more information, please visit www.polarpower.com. or follow us on www.linkedin.com/company/polar-power-inc/.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. With the exception of historical information, the matters discussed in this press release including, without limitation, Polar Power’s belief that the telecom market will continue to transition towards 5G; Polar Power’s belief that the telecom market will shift to higher powered units such as the 27 kW DC generator and result in an increase in sales by $20 million within the next two to three years; and Polar Power’s belief that Toyota prime power engines will provide strong opportunities for growth and diversification are forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Polar Power could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, adverse domestic and foreign economic and market conditions, including demand for its Summit Series, 27 kW DC generator product line; trade tariffs on raw materials; changes in domestic and foreign governmental regulations and policies; the impact of inflation and changing prices on raw materials; supply chain constraints causing significant delays in sourcing raw materials; labor shortages as a result of the pandemic, low unemployment rates, or other factors limiting the availability of qualified workers; and other events, factors and risks. It undertakes no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond Polar Power’s control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in Polar Power’s reports filed with the Securities and Exchange Commission.
Media and Investor Relations:
CoreIR
Peter Seltzberg, SVP Investor Relations and Corporate Advisory
+1 212-655-0924
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www.CoreIR.com
Company Contact:
Polar Power, Inc.
249 E. Gardena Blvd.
Gardena, CA 90248
Tel: 310-830-9153
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www.polarpower.com
POLAR POWER, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share and per share data)
| September 30, 2023 | December 31, 2022 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 296 | $ | 211 | ||||
| Accounts receivable | 1,582 | 2,230 | ||||||
| Inventories, net | 19,155 | 15,460 | ||||||
| Prepaid expenses | 942 | 2,629 | ||||||
| Employee retention credit receivable | 2,000 | 2,000 | ||||||
| Income taxes receivable | 787 | 787 | ||||||
| Total current assets | 24,762 | 23,317 | ||||||
| Other assets: | ||||||||
| Operating lease right-of-use assets, net | 3,103 | 240 | ||||||
| Property and equipment, net | 423 | 538 | ||||||
| Deposits | 108 | 93 | ||||||
| Total assets | $ | 28,396 | $ | 24,188 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 1,988 | $ | 230 | ||||
| Customer deposits | 1,720 | 2,126 | ||||||
| Accrued liabilities and other current liabilities | 1,178 | 1,231 | ||||||
| Operating lease liabilities, current portion | 1,045 | 268 | ||||||
| Notes payable-related party, current portion | 233 | — | ||||||
| Notes payable, current portion | 88 | 211 | ||||||
| Line of credit | 5,194 | 1,884 | ||||||
| Total current liabilities | 11,446 | 5,950 | ||||||
| Notes payable, net of current portion | — | 57 | ||||||
| Operating lease liabilities, net of current portion | 2,162 | — | ||||||
| Total liabilities | 13,608 | 6,007 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding | — | — | ||||||
| Common stock, $0.0001 par value, 50,000,000 shares authorized, 12,967,027 shares issued and 12,949,550 shares outstanding on September 30, 2023, and 12,967,027 shares issued and 12,949,550 shares outstanding on December 31, 2022 | 1 | 1 | ||||||
| Additional paid-in capital | 37,331 | 37,331 | ||||||
| Accumulated deficit | (22,504 | ) | (19,111 | ) | ||||
| Treasury Stock, at cost (17,477 shares) | (40 | ) | (40 | ) | ||||
| Total stockholders’ equity | 14,788 | 18,181 | ||||||
| Total liabilities and stockholders’ equity | $ | 28,396 | $ | 24,188 | ||||
POLAR POWER, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Sales | $ | 1,911 | $ | 1,707 | $ | 11,688 | $ | 9,690 | ||||||||
| Cost of Sales | 2,019 | 1,954 | 9,566 | 7,971 | ||||||||||||
| Gross profit (loss) | (108 | ) | (247 | ) | 2,122 | 1,719 | ||||||||||
| Operating Expenses | ||||||||||||||||
| Sales and marketing | 274 | 328 | 917 | 1,134 | ||||||||||||
| Research and development | 299 | 319 | 983 | 1,145 | ||||||||||||
| General and administrative | 992 | 1,482 | 3,240 | 3,648 | ||||||||||||
| Total operating expenses | 1,565 | 2,129 | 5,140 | 5,927 | ||||||||||||
| Loss from operations | (1,673 | ) | (2,376 | ) | (3,018 | ) | (4,208 | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
| Interest expense and finance costs | (171 | ) | (12 | ) | (375 | ) | (39 | ) | ||||||||
| Other income (expense), net | — | 7 | — | 7 | ||||||||||||
| Total other income (expenses), net | (171 | ) | (5 | ) | (375 | ) | (32 | ) | ||||||||
| Net loss | $ | (1,844 | ) | $ | (2,381 | ) | $ | (3,393 | ) | $ | (4,240 | ) | ||||
| Net loss per share – basic and diluted | $ | (0.14 | ) | $ | (0.19 | ) | $ | (0.26 | ) | $ | (0.33 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 12,949,550 | 12,848,466 | 12,949,550 | 12,967,027 | ||||||||||||
POLAR POWER, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOW
(in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (3,393 | ) | $ | (4,240 | ) | |||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 309 | 387 | |||||||||
| Stock-based compensation to officers, employees and consultants | — | 515 | |||||||||
| Changes in operating assets and liabilities | |||||||||||
| Accounts receivable | 648 | 3,027 | |||||||||
| Inventories | (3,695 | ) | (6,608 | ) | |||||||
| Prepaid expenses | 1,687 | (322 | ) | ||||||||
| Deposits | (15 | ) | — | ||||||||
| Operating lease right-of-use asset | (2,863 | ) | 503 | ||||||||
| Accounts payable | 1,758 | 97 | |||||||||
| Customer deposits | (406 | ) | 2,672 | ||||||||
| Accrued expenses and other current liabilities | (53 | ) | (27 | ) | |||||||
| Operating lease liability | 2,939 | (536 | ) | ||||||||
| Net cash used in operating activities | (3,084 | ) | (4,532 | ) | |||||||
| Cash flows from investing activities: | |||||||||||
| Acquisition of property and equipment | (194 | ) | (25 | ) | |||||||
| Net cash used in investing activities | (194 | ) | (25 | ) | |||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from advances from credit facility | 3,310 | — | |||||||||
| Proceeds from notes payable, related party | 233 | — | |||||||||
| Repayment of notes payable | (180 | ) | (181 | ) | |||||||
| Net cash provided by (used in) financing activities | 3,363 | (181 | ) | ||||||||
| Increase (decrease) in cash and cash equivalents | 85 | (4,738 | ) | ||||||||
| Cash and cash equivalents, beginning of period | 211 | 5,101 | |||||||||
| Cash and cash equivalents, end of period | $ | 296 | $ | 363 | |||||||
| Last Trade: | US$3.38 |
| Daily Change: | 0.39 13.04 |
| Daily Volume: | 62,255 |
| Market Cap: | US$59.350M |
November 14, 2024 October 29, 2024 October 09, 2024 August 14, 2024 | |
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