Conversion of $10B Forklift Battery
Market to Lithium Tech
Started by this Tiny Calif. Company
For decades, electric
material handling equipment such as forklifts has been powered by
lead-acid batteries, despite a host of performance, maintenance,
safety and environmental issues.
But now this market has been given an alternative – lithium-ion
batteries - which perform better, charge faster, use less
electricity and require little or no maintenance – all leading to a
much lower total cost of ownership.
Large – materials handling intensive businesses are starting to
take notice of this new option, with Flux Power Holdings, Inc.
(OTCQB:
FLUX), playing a leadership role in bringing this new
technology to market. Big companies are slow to make change – but
Flux has been working with several of the largest food, beverage,
grocery and logistics companies for several years.
Now that Flux has built it – the customers have started to come –
including a Fortune 500 beverage company - which intends to
standardize on lithium for its fleet of walkie pallet jack
forklifts. Many other large prospective customers are working their
way through their processes to evaluate lithium for deployment –
and the feedback has been very favorable – providing an excellent
outlook for Flux and other providers
You’ve seen the market disruption in the automotive space with the
Prius and the Tesla. However, the pace of lithium adoption
for forklifts has the potential to move much more quickly – because
they “drop” right into existing equipment – no new charging or
other infrastructure is required. Customers can replace dead
lead-acid batteries with lithium or buy new forklifts with the new
battery technology – as Flux has started to see.
We wanted to alert you to the pending lithium-revolution now, while
it’s still in its infancy. There is still much work to do – but it
does seem clear that the performance, lower cost, energy efficiency
and environmental benefits of Lithium-ion batteries provide them an
exciting opportunity to gain substantial share of the market for
industrial equipment power.
Flux Power reported its Q3 Results today –
the release is below – and hosted a conference call which will be
available for replay on their website www.fluxpwr.com.
You can also contact Flux Investor Relations at 212 924 9800 or
flux@catalyst-ir.com with any
questions or to be added to Flux’s investor list.
Flux Q3 Press Release
Flux Power Q3’18
Revenue Rose 400% to $1.67M on Large Customer Adoption of
Lithium-Ion Forklift Batteries to Replace Lead-Acid; Hosts Call
today at 11am ET
Vista, CA -- May 14, 2018 -- InvestorsHub NewsWire -- Flux Power
Holdings, Inc. (OTCQB:
FLUX), a developer of advanced lithium batteries for industrial
applications including electric forklifts and airport ground
support equipment (“GSE”), today reported results for its fiscal
2018 third quarter ended March 31, 2018 (Q3‘18). Flux will hold a
conference call this morning at 11:00 am ET to review its results
and outlook (details below).
Highlights:
- Ramping Commercial
Adoption of Flux Lithium-Ion Forklift Batteries to replace
lead-acid chemistry - Fiscal 2018 marks a turning point for Flux as
major customers have begun to purchase Flux LiFT Packs for new
equipment via leading forklift manufacturers, in addition to
replacement purchases for existing equipment.
- Q3’18 Revenue Rose
over 400% to $1.67M versus Q3’17 revenue of $0.31M and
increased 35% sequentially from Q2’18 revenue of
$1.20M.
- Flux Order
Pipeline Continues to Grow – At April 1, 2018, Flux had
orders for its Class 3 and Airport GSE product lines totaling $1.0
M, of which $360,000 has shipped as of May 14. Flux’s pipeline
currently reflects anticipated orders exceeding $2.7 M for walkie
LiFT Pack deliveries through December 2018.
- Expanding Product
Line to Larger Class 1 and Class 2 Forklift Equipment –
Flux has encountered strong interest for Class 1 and Class 2
solutions and has been piloting a LiFT Pack for Class 1
counterbalance forklifts with a Fortune 100 customer. Flux expects
an initial production order in the next few
months.
- Airport Ground
Support Equipment (GSE) Battery Shipments to a leading
global aviation services provider are planned for May 2018 with
anticipated value approaching $400,000 reflecting orders
received.
Financial Results:
Q3 ‘18 revenue rose 444% to $1,666,000 compared to Q3 ‘17 revenue
of $306,000, principally due to Flux walkie LiFT Pack shipments to
a Fortune 100 global customer that has indicated its intentions to
standardize its walkie fleet on lithium-ion batteries. Growing
customer interest and sales dialogues provide increased confidence
in Flux’s ability to continue increasing sales.
Q3 ‘18 cost of sales rose 257% to $1,816,000 compared to $508,000
in Q3 ’17, principally due to the significant increase in LiFT Pack
unit sales. Flux’s gross loss as a percentage of revenues has
decreased from -66% during Q3 ‘17 to -9% during Q3 ‘18 due to
initial steps in a comprehensive margin enhancement plan for its
walkie LiFT Pack line. The margin improvement plan includes design,
production, pricing and procurement initiatives, in addition to
expected efficiency improvements as production volume increases.
Flux believes these efforts can bring gross margin to a range of
25-30% over 12-18 months.
Selling and administrative expenses increased to $909,000 in Q3 ‘18
from $664,000 in Q3 ’17 primarily due to the addition of three
sales managers in the last year as well as an increase in
stock-based compensation and sales
commissions.
Research & development expenses increased to $483,000 in Q3
‘18, compared to $245,000 in Q3 ‘17, as Flux actively invested in
new product development targeted at the larger Class 1 and Class 2
forklift markets. Such expenses are expected to remain significant
as Flux builds out a complete forklift product line, while also
continuing to enhance features and functionality.
Flux’s Q3 ‘18 operating loss increased to $1.54M from $1.11M in Q3
‘17, principally due to higher operating expenses. Net loss in Q3
‘18 increased to $1.75M, or ($0.07) per basic share, from $1.16M,
or ($0.05) per basic share, in Q3 ‘17, reflecting the higher
operating loss and an increase in interest expense due to higher
average borrowings. Flux had 25.1M and 25.0M weighted average basic
common shares outstanding for the periods ending Q3’18 and Q3’17,
respectively.
Flux Financing:
Flux continues to fund its working capital needs through a
combination of borrowings from its largest shareholder, Esenjay
Investments, LLC (“Esenjay”) and through private placements of
common stock.
Borrowings under Flux’s $10.0M Unrestricted Line of Credit provided
by Esenjay were $7.98M as of May 14, 2018. The Unrestricted Line of
Credit is convertible, at Esenjay’s discretion, into Flux Common
Stock at $0.60 per share and matures on January 31, 2019. In
addition, on March 22, 2018, Flux secured a $5.0M Inventory Line of
Credit from Esenjay. Borrowings under the Inventory Line of Credit
(which matures March 31, 2019) were $1.76M as of May 14, 2018.
On May 11, 2018, Flux announced the completion of the private
placement of $800,000 in common stock priced at $0.70 per share, of
which $200,000 is reflected in Flux’s financial statements as of
March 31, 2018. The offering was terminated immediately
following the closing on May 11, 2018. Giving effect to the
issuance of 1.143M shares in the private placement, Flux has 26.3
million common shares outstanding as of May 14, 2018.
CEO Comments:
CEO, Ron Dutt, commented, “Following four years of product and
market development, Flux is now seeing the impact of large customer
demand for our lithium-ion forklift battery as a replacement for
lead-acid products. A broad base of enthusiasm for lithium
batteries was on very clear display at the MODEX 2018 supply chain
conference last month.
“We entered the market with our Class 3 walkie forklift solution
and through that collaborative effort we have developed an
industry-leading solution that we believe will support rapid growth
for years to come. With that expertise and experience, we have
scaled our development to produce lithium battery packs for larger
forklifts requiring greater power. We believe that we are on track
for the commercial launch of these products over the balance of
calendar 2018.
“Feedback from the forklift market reflect that Flux is recognized
as offering a premium lithium-ion solution, validated by leading
technical approvals and supported by our strong commitment to
quality and customer service. We strongly believe that the pace of
lithium-ion adoption will continue to accelerate in the
material-handling market, as customers become increasingly familiar
with the clear performance advantages over lead-acid solutions and
their substantially lower total cost of ownership. The first few
customers are always the hardest but with that now accomplished, we
are confident the pace of adoption will continue to accelerate and
that Flux is well positioned in a leadership role.”
Conference Call Details:
Date/Time:
Monday, May 14 at 11:00 a.m. ET
Dial-in
Number:
1-866-652-5200 or 1-412-317-6060
(international)
Online
Replay/Transcript:
Audio file and call transcript will be posted to the
Investor section of Flux’s website when available.
Questions:
Questions can also be submitted via email to
flux@catalyst-ir.com
About Flux Power Holdings, Inc. (www.fluxpwr.com)
Flux Power develops advanced lithium-ion batteries for 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. Current products include advanced
battery packs for motive power in the lift equipment and airport
ground support markets.
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Facebook:
FLUXPower
InvestorsHangout:
FluxPower
Twitter:
@FLUXpwr Corporate
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Relations
LinkedIn:
Flux Power
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.
Media & Investor Relations:
Catalyst IR
Chris Eddy
212-924-9800
flux@catalyst-ir.com
FLUX POWER HOLDINGS,
INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited)
|
* figures in thousands,
except per share data
|
|
Three months ended
March 31, |
|
Nine months
ended
March 31, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
Net
revenue |
$ |
1,666 |
|
$ |
306 |
|
$ |
3,020 |
|
$ |
781 |
Cost of
sales |
|
1,816 |
|
|
508 |
|
|
3,728 |
|
|
1,384 |
Gross
loss |
|
(150) |
|
|
(202) |
|
|
(708) |
|
|
(603) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling and administrative
expenses |
|
909 |
|
|
664 |
|
|
2,378 |
|
|
1,842 |
|
Research and
development |
|
483 |
|
|
245 |
|
|
1,441 |
|
|
772 |
|
Total operating
expenses |
|
1,392 |
|
|
909 |
|
|
3,819 |
|
|
2,614 |
|
Operating
loss |
|
(1,542) |
|
|
(1,111) |
|
|
(4,527) |
|
|
(3,217) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Change in fair value
of
derivative liabilities |
|
- |
|
|
1 |
|
|
- |
|
|
14 |
|
Interest
expense |
|
(211) |
|
|
(52) |
|
|
(512) |
|
|
(174) |
|
Net
loss |
$ |
(1,753) |
|
$ |
(1,162) |
|
$ |
(5,039) |
|
$ |
(3,377) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share - basic
and diluted |
$ |
(0.07) |
|
$ |
(0.05) |
|
$ |
(0.20) |
|
$ |
(0.14) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of
common shares outstanding - basic and diluted |
|
25,112 |
|
|
25,038 |
|
|
25,142 |
|
|
24,372 |