Management to Host Conference Call Today at 4:30
p.m. EDT
Polar Power, Inc. (NASDAQ: POLA), a global provider of prime,
backup and solar hybrid DC power solutions, reported its financial
results for the second quarter ended June 30, 2018.
Key Second Quarter 2018 and Subsequent
Highlights:
- Quarterly Highlights
- Net sales increased 138% to $5.8 million in Q2 2018 as compared
to the same period last year, while quarter over quarter growth in
2018 increased by 19%.
- Net income was $0.2 million in Q2 2018, or $0.02 per basic and
diluted share, as compared to net loss of $(0.3) million, or
$(0.03) per basic and diluted share, in Q2
2017.
- Increased production resulted in improved efficiency and plant
utilization resulting in gross margin increase from 31% in Q2 2017
to 36% Q2 2018.
- Backlog as of June 30, 2018 improved to $5.8 million with
military customers accounting for 32% of the total backlog. Current
backlog shows diversified growth with U.S. military and
international sales. Overseas countries include: Namibia, Sri
Lanka, Japan and Thailand.
- Received follow-on order for $1.9 million from the same Tier-1
telecom customer that earlier placed $1.8 million purchase order
disclosed in June 2018.
Financial Results for the Three Months Ended June 30,
2018 as Compared to Second Quarter 2017
Net sales totaled $5.8 million in Q2 2018, an increase of 138%,
as compared to $2.4 million in Q2 2017. The increase in net sales
was primarily a result of sales of our DC power systems to a Tier-1
telecom customer. In 2018, our growth in sales is a result of
expansion of our customer base in the U.S. telecom market.
Our backlog increased 132% to $5.8 million at June 30, 2018, as
compared to $2.5 million at March 31, 2018. This increase in
backlog was attributable to purchase orders from Tier-1 telecom
customers, our military customers and a $1.8 million order from a
new Tier-1 telecom customer.
Gross profit increased 169% to $2.0 million in Q2 2018, as
compared to $0.7 million in Q2 2017. Gross profit as a percentage
of net sales increased to 36% in Q2 2018, as compared to 31% in Q2
2017. The gross profit in Q2 2018 was attributable to
improved labor efficiencies and improved manufacturing overhead
absorption.
Operating expenses increased to $1.8 million in Q2 2018, from
$1.3 million in Q2 2017. The increase in operating expenses was
primarily due to an investment in international sales and marketing
as well as an increase in G&A expenses as a result of stock
compensation expense for stock options issued to executive officers
in Q1 2018.
Net income in Q2 2018 totaled $0.2 million, or $0.02 per basic
and diluted share, compared to a net loss of $(0.3) million, or
$(0.03) per basic and diluted share, in Q2 2017. The increase in
net income is attributable to an increase in net sales and higher
gross margins of our DC power systems.
Cash at June 30, 2018 totaled $11.7 million, as compared to
$14.2 million at December 31, 2017 with $0.6 million in long-term
debt outstanding. This decrease in cash as of the comparative
periods was the result of $0.7 million increase in inventory, $0.7
million in financing cost for purchase of plant equipment to
support higher production rate and an increase in accounts
receivable resulting from increased sales.
Management
Commentary
“During the second quarter of 2018, we continued to build on the
momentum that began during the first quarter and we have made
excellent progress in achieving our strategic initiatives,
including year-over-year revenue growth, a growing backlog and
greater customer and geographic diversification,” said Polar Power
CEO, Arthur Sams.
“We believe that increased sales combined with an increase in
backlog further validates our technology and price competitiveness
within the DC power generation market. With the addition of
our new production facility during the third quarter of 2018 we
expect to have 50% more production capacity to serve the needs of
our customers. I believe reducing lead times for our Tier-1 telecom
customers is a key to our sustainable growth in the telecom backup
power generation market,” continued Sams.
“In the first half of 2017 we only had one tier-1 telecom
customer in the U.S., in just under a year we have added two
additional Tier-1 customers delivering us higher sales and margins
in 2018. We expect that this expanded customer base will provide us
with sustainable growth while reducing material costs, improving
delivery times and profitability.
“Although we are pleased with the steady
increase in sales during the last four quarters, we continue our
investment in the international market to capture new telecom
infrastructure and after sale service opportunities, which we
believe will increase long term shareholder value. We believe
localization is a key to success in emerging markets. During the
second quarter we established a wholly owned subsidiary in Africa
to establish ourselves as a dominant solutions provider in this
high growth market,” concluded Sams.
Conference Call Details
Polar Power CEO Arthur Sams and CFO Luis Zavala will host the
conference call, followed by a question and answer period.
To access the call, please use the following information:
Date: |
Thursday, August 9,
2018 |
Time: |
4:30 p.m. ET, 1:30 p.m.
PT |
Toll-free dial-in
number: |
1-800-458-4148 |
International dial-in
number: |
1-323-794-2597 |
Conference
ID: |
4449854 |
Please call the conference telephone number 5-10 minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Integra Investor Relations at
1-415-233-7094.
The conference call will be broadcast live and available for
replay http://public.viavid.com/index.php?id=130728 and via the
investor relations section of the Company’s website at
www.polarpower.com.
A replay of the conference call will be available after 7:30
p.m. Eastern time through August 16, 2018.
Toll-free replay
number: |
1-844-512-2921 |
International replay
number: |
1-412-317-6671 |
Replay ID:
|
4449854 |
About Polar Power, Inc.Gardena,
California-based Polar Power, Inc. (NASDAQ: POLA), 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, electric vehicle charging, cogeneration, distributed
power and uninterruptable power supply. Within the
telecommunications market, Polar’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.
Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995This 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 it is
positioned for substantial revenue growth in 2018 and beyond; Polar
Power’s expectation that sales and gross margin to its customers
will increase over the course of the next several months;
Polar Power’s expectation that international, U.S. military and
federal government will become a material driver of new revenue
growth in the years to come; and Polar Power’s belief that its
strong balance sheet, conservative cash management strategy,
improved corporate governance team and product approval by its key
customers will yield both short-term and long-term success 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 DC power systems; trade tariffs on raw
materials; changes in domestic and foreign governmental regulations
and policies; and other events, factors and risks. We undertake 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 our 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 our reports filed with the Securities
and Exchange Commission.
Media and Investor Relations:Shawn
Severson Integra Investor Relations Shawn M. Severson +1
415-233-7094 shawn@integra-ir.com @Integra IR
www.integra-ir.com
Company Contact:Polar Power, Inc.249 E. Gardena
Blvd.Gardena, CA 90248Tel:
310-830-9153ir@polarpowerinc.comwww.polarpower.com
POLAR POWER INC. |
CONDENSED BALANCE SHEETS |
|
June 30, 2018 |
|
December 31, 2017 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents (including restricted cash of $1,000,423 at June
30, 2017) |
$ |
11,714,036 |
|
|
$ |
14,201,163 |
Accounts
receivable |
|
4,232,080 |
|
|
|
3,058,266 |
Inventories, net |
|
6,285,045 |
|
|
|
5,487,053 |
Prepaid
expenses |
|
535,600 |
|
|
|
236,670 |
Refundable income taxes |
|
629,316 |
|
|
|
629,316.0 |
Total
current assets |
|
23,396,077 |
|
|
|
23,612,468 |
|
|
|
|
Other assets: |
|
|
|
Property and equipment,
net |
|
1,470,700 |
|
|
|
824,076 |
Deposits |
|
114,201 |
|
|
|
87,496 |
Total assets |
|
24,980,978 |
|
|
|
24,524,040 |
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable |
$ |
410,756 |
|
|
$ |
757,753 |
Customer
deposits |
$ |
198,163 |
|
|
|
40,039 |
Accrued
liabilities and other current liabilities |
$ |
591,008 |
|
|
|
586,391 |
Current
portion of notes payable |
$ |
219,820 |
|
|
|
110,237 |
Total
current liabilities |
$ |
1,419,747 |
|
|
|
1,494,420 |
Notes payable, net of
current portion |
$ |
625,407 |
|
|
|
126,818 |
|
|
|
|
Total liabilities |
|
2,045,154 |
|
|
|
1,621,238 |
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
Shareholders’
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, 10,143,158
and 10,143,158, shares issued and outstanding, respectively |
|
1,014 |
|
|
|
1,014 |
Additional paid-in capital |
|
19,379,338 |
|
|
|
19,250,955 |
Retained
earnings |
|
3,561,002 |
|
|
|
3,650,833 |
Accumulated other comprehensive loss |
|
(5,530 |
) |
|
|
0 |
Total
shareholders’ equity |
|
22,935,824 |
|
|
|
22,902,802 |
|
|
|
|
Total
liabilities and shareholders’ equity |
$ |
24,980,978 |
|
|
$ |
24,524,040 |
POLAR POWER, INC. CONDENSED STATEMENTS
OF OPERATIONS(Unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net
Sales |
$ |
5,815,775 |
|
|
$ |
2,441,753 |
|
|
$ |
10,687,687 |
|
|
$ |
7,408,734 |
|
|
|
|
|
|
|
|
|
Cost of
Sales |
|
3,753,586 |
|
|
|
1,674,129 |
|
|
|
7,141,860 |
|
|
|
4,724,380 |
|
|
|
|
|
|
|
|
|
Gross
Profit |
|
2,062,189 |
|
|
|
767,624 |
|
|
|
3,545,827 |
|
|
|
2,684,354 |
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
Sales and
Marketing |
|
639,832 |
|
|
|
270,343 |
|
|
|
1,250,169 |
|
|
|
465,438 |
|
Research and
development |
|
336,580 |
|
|
|
391,019 |
|
|
|
800,681 |
|
|
|
467,021 |
|
General and
administrative |
|
838,704 |
|
|
|
683,629 |
|
|
|
1,566,490 |
|
|
|
1,355,054 |
|
Depreciation and
amortization |
|
8,813 |
|
|
|
7,674 |
|
|
|
17,544 |
|
|
|
15,408 |
|
Total operating
expenses |
|
1,823,929 |
|
|
|
1,352,665 |
|
|
|
3,634,884 |
|
|
|
2,302,921 |
|
|
|
|
|
|
|
|
|
Income (Loss)
from operations |
|
238,260 |
|
|
|
(585,041 |
) |
|
|
(89,057 |
) |
|
|
381,433 |
|
Other (expenses)
income |
|
|
|
|
|
|
|
Interest expenses |
|
(2,394 |
) |
|
|
(5,417 |
) |
|
|
(5,404 |
) |
|
|
(10,193 |
) |
Other income
(expenses), net |
|
(6,895 |
) |
|
|
21,612 |
|
|
|
4,630 |
|
|
|
24,074 |
|
Total other
(expenses) income, net |
|
(9,289 |
) |
|
|
16,195 |
|
|
|
(774 |
) |
|
|
13,881 |
|
|
|
|
|
|
|
|
|
Income (Loss)
before income taxes |
|
228,971 |
|
|
|
(568,846 |
) |
|
|
(89,831 |
) |
|
|
395,314 |
|
Income tax (provision)
benefit |
|
— |
|
|
|
219,717 |
|
|
|
— |
|
|
|
(151,563 |
) |
|
|
|
|
|
|
|
|
Net Income
(Loss) |
$ |
228,971 |
|
|
$ |
(349,129 |
) |
|
$ |
(89,831 |
) |
|
$ |
243,751 |
|
|
|
|
|
|
|
|
|
Net Income (Loss) per
share – basic and diluted |
$ |
0.02 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.02 |
|
Weighted average shares
outstanding, basic and diluted |
|
10,143,158 |
|
|
|
10,143,158 |
|
|
|
10,143,158 |
|
|
|
10,143,158 |
|
POLAR POWER, INC.CONDENSED
STATEMENTS OF CASH FLOW(Unaudited) |
|
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
2017 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
(89,831 |
) |
|
$ |
243,751 |
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities: |
|
|
|
|
|
|
|
Fair value of vested
stock options |
|
|
128,383 |
|
|
|
— |
|
|
Depreciation and
amortization |
|
|
154,947 |
|
|
|
120,080 |
|
|
Changes in operating
assets and liabilities |
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(1,173,814 |
) |
|
|
2,691,458 |
|
|
Inventories |
|
|
(797,992 |
) |
|
|
(897,078 |
) |
|
Prepaid
expenses |
|
|
(298,929 |
) |
|
|
(81,407 |
) |
|
Deposits |
|
|
(26,705 |
) |
|
|
— |
|
|
Refundable income taxes |
|
|
— |
|
|
|
(988,168 |
) |
|
Deferred tax assets |
|
|
— |
|
|
|
(57,378 |
) |
|
Accounts payable |
|
|
(346,997 |
) |
|
|
(550,984 |
) |
|
Income taxes payable |
|
|
— |
|
|
|
(1,227,308 |
) |
|
Customer deposits |
|
|
158,124 |
|
|
|
977 |
|
|
Accrued expenses and other current liabilities |
|
|
4,616 |
|
|
|
(227,916 |
) |
|
Net cash used in in
operating activities |
|
|
(2,288,198 |
) |
|
|
(973,973 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
Acquisition of property
and equipment |
|
|
(138,821 |
) |
|
|
(158,445 |
) |
|
Net cash used in
investing activities |
|
|
(138,821 |
) |
|
|
(158,445 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
Repayment of notes |
|
|
(54,578 |
) |
|
|
(57,895 |
) |
|
Net cash (used in)
provided by financing activities |
|
|
(54,578 |
) |
|
|
(57,895 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes |
|
|
(5,530 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Decrease in cash and
cash equivalents |
|
|
(2,487,127 |
) |
|
|
(1,190,313 |
) |
|
Cash and cash
equivalents, beginning of period |
|
|
14,201,163 |
|
|
|
16,242,158 |
|
|
Cash and cash
equivalents, end of period |
|
$ |
11,714,036 |
|
|
$ |
15,051,845 |
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Cash Flow Information: |
|
|
|
|
|
|
|
|
|
Taxes Paid |
|
$ |
— |
|
|
$ |
2,424,417 |
|
|
Interest Paid |
|
|
2,393 |
|
|
|
10,193 |
|
|
Supplemental
non-cash investing and financing activities: |
|
|
|
|
|
|
|
|
|
Assets acquired under
notes payable |
|
|
662,750 |
|
|
|
— |
|
|
A photo accompanying this announcement is available at
http://www.globenewswire.com/NewsRoom/AttachmentNg/b195daac-46c4-4939-a2a3-968a0c3ea781
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