Polar Power, Inc. (“Polar Power”) (NASDAQ: POLA), a global provider
of prime, backup and solar hybrid DC power solutions, today
reported its financial results for the quarter ended March 31,
2022.
Key Q1 2022 Results and Highlights:
Financial Results for the Three Months Ended March 31,
2022
- Net sales for Q1 2022 increased to
$3.7 million, a 13% increase, compared to $3.3 million during the
same period last year.
- We had a gross profit of $905
thousand at the end of Q1 2022, as compared to a gross loss of $58
thousand during the same period last year.
- Operating expenses increased to
$2.0 million in Q1 2022, as compared to $1.8 million in the same
period last year.
- Net loss for Q1 2022 totaled $1.1
million, or $(0.10) per basic and dilutive share, compared to a net
loss of $1.9 million, or $(0.15) per basic and dilutive share in Q1
2021.
- Cash and cash equivalents at March
31, 2022 were $4.1 million, as compared to $5.1 million at December
31, 2021. We had $10.5 million in inventory at March 31, 2022, as
compared to $9.0 million at December 31, 2021. Working capital was
$20.7 million at March 31, 2022, as compared to $21.7 million at
December 31, 2021.
- Backlog as of the end of Q1 2022
was $9.0 million. Backlog as of April 16, 2022 is $13.0 million, of
which 66% is from orders of our DC power generators from
telecommunications customers in the U.S., 31% from
telecommunications customers in international markets, 1% from
customers in marine market, and 2% from customers in other
markets.
Management Commentary
We continue to see growth in demand for our DC
power systems. Our net sales increased 13% in Q1 2022 as compared
to Q1 2021 despite labor and supply chain issues hampering sales
and shipments.
The increased geopolitical factors are
generating increasing interest in DC power systems for robotics and
drones. In addition, the commercial / residential markets are
driven to seek greater energy independence through increased
efficiency and renewable energy.
Our domestic increase in sales is driven by our
telecommunications customers purchasing our DC Generators to
support their 5G infrastructure. We also see an increase in demand
to export DC power systems for programs bringing broadband to rural
communities.
For the three-month period ending March 31,
2022, our gross profit increased to $905 thousand, which is an
improvement of 1,660%, as compared to a gross loss of $58 thousand
in the same period in 2021. Our gross margins improved to 24.4% for
the quarter ended March 31, 2022, as compared to (1.8)% for the
same period in 2021. We believe we will continue to see
improvements in our gross margins as our quarterly shipments
continue to increase and we gain from labor efficiencies in
manufacturing. We believe our manufacturing facilities are
under-utilized as a result of significant investments in
manufacturing equipment and facilities in the years right before
the start of the pandemic.in the U.S.
Polar Power management is focused on managing
the disruptions with our supply chain shortages, extended lead
times, increasing prices, and labor shortages which is slowing down
new product developments and marketing. We are also experiencing
challenges sourcing qualified workers to add to our production and
engineering teams.
Overseas sales to telecommunications customers
are showing growth after long marketing investments. In April 2022,
we received a PO from a telecommunications customer in the South
Pacific Islands in the amount of $4.0 million for our DC generators
for grid backup and off-grid applications to supply rural areas
with broadband services. This order is part of a growing program to
develop the telecommunications infrastructure in this region. We
plan to begin deliveries mid-year 2022 and fulfil the order by the
end of this year.
We also continue to work on diversifying our
customer base and are selling into non-telecommunication markets
and applications at an increasing rate. In March 2022, we received
EPA certification on our 4Y Toyota engine project aimed at
expanding the power range to 35 kW on natural gas and LPG. Polar
Power’s EPA certification of 1KS and 4Y Toyota engines brings to
the market (non-diesel) engines with very low maintenance and high
fuel efficiency. In addition to meeting the telecommunications need
for larger and more compact generators our larger models have high
interest from micro-grids, peak power shaving, and EV charging.
Our solar hybrid power systems, which integrate
solar energy storage with natural gas/LPG (propane) powered
generators, are ideal for off-grid (i.e., areas where wireless
towers are not connected to an electrical grid) and bad-grid (i.e.,
areas where wireless towers are connected to an electrical grid
that loses power more than eight hours) applications.
Mr. Sams concluded, “We meet the challenges of
supply chain shortages through our production and engineering
capability of adaptation and sourcing internationally. Labor
shortage is managed by delaying some of our product development
programs and many of our employees putting in the extra effort. Our
overall efforts have resulted in an increase in sales and
profits.
I believe we are on the right side of technology
and manufacturing. The world electrical grids will not meet the
increasing need for power demand because of increasing needs in
air-conditioning, data services (server rooms), increasing
populations, and most importantly the huge shift in energy used for
transportation. Moving from diesel and gasoline to EV charging is
an unprecedented amount of energy shift from one source to another.
If cities like Los Angeles and New York have had brown / black outs
in the summer due to air-conditioning loads for over a half
century, how will they handle millions of EVs coming to charge on
the grid. This will increase the need for power generation using
wind, solar, and clean burning fuels distributed through micro /
nano grids. For energy security, homes and business will have to
rely on multiple sources of energy including Solar, natural
gas/LPG, and the grid. It will take many decades before the grid
can grow in capacity where natural gas is no longer needed. The
supply chain shortages demonstrated how important domestic
manufacturing is. Polar Power was able to overcome many supply
issues due to its vertical manufacturing capability.
We believe Covid-19 will be a challenging factor
for many years to come and labor along with supply chains are
gradually learning to deal with it. The factories that were closed
for long periods of time are filling their backlogs thereby
reducing delivery times on new orders.Polar Power’s products are
aimed at addressing present and future needs for energy while
reducing environmental impact and pollution.”
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 (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 expectation that sales from its U.S.
Tier-1 telecommunications customers will continue to grow as a
result of 5G network expansions; Polar Power’s expectation that it
will see increasing sales of DC power systems for programs bringing
broadband to rural communities; Polar Power’s expectation that its
gross margins will improve as quarterly shipments increase or it
improves labor efficiencies; Polar Power’s expectation that its
diversification strategy will lead to increasing sales into
non-telecommunications markets, including micro-grids, peak power
shaving, and EV charging; Polar Power’s belief that increased
geopolitical factors will lead to increasing sales of its DC power
systems; Polar Power’s belief that the domestic telecom market is a
compelling growth market for Polar Power; Polar Power’s belief that
its new products, including propane and natural gas generators
powered by Toyota engines, gives it industry leading technology;
and Polar Power’s belief that it will successfully manage supply
chain and labor shortages to avoid disruptions to its business
operations 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:Integra Investor
RelationsShawn M. Severson+1
415-233-7094info@integra-ir.com@Integra IRwww.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(in
thousands, except share and per share data)
|
|
March 31,2022 |
|
|
December 31,2021 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,186 |
|
|
$ |
5,101 |
|
Accounts receivable |
|
|
3,616 |
|
|
|
4,243 |
|
Inventories |
|
|
10,485 |
|
|
|
9,017 |
|
Prepaid expenses |
|
|
3,264 |
|
|
|
4,006 |
|
Employee retention credit receivable |
|
|
2,000 |
|
|
|
2,000 |
|
Income taxes receivable |
|
|
787 |
|
|
|
787 |
|
Total current assets |
|
|
24,338 |
|
|
|
25,154 |
|
|
|
|
|
|
|
|
|
|
Other assets: |
|
|
|
|
|
|
|
|
Operating lease right-of-use
assets, net |
|
|
748 |
|
|
|
914 |
|
Property and equipment,
net |
|
|
893 |
|
|
|
1,019 |
|
Deposits |
|
|
93 |
|
|
|
93 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
26,072 |
|
|
$ |
27,180 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
544 |
|
|
$ |
328 |
|
Customer deposits |
|
|
923 |
|
|
|
897 |
|
Accrued liabilities and other current liabilities |
|
|
1,211 |
|
|
|
1,206 |
|
Current portion of operating lease liabilities |
|
|
691 |
|
|
|
721 |
|
Current portion of notes payable |
|
|
245 |
|
|
|
242 |
|
Total current liabilities |
|
|
3,614 |
|
|
|
3,394 |
|
|
|
|
|
|
|
|
|
|
Notes payable, net of current
portion |
|
|
205 |
|
|
|
268 |
|
Operating lease liabilities,
net of current portion |
|
|
123 |
|
|
|
268 |
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
3,942 |
|
|
|
3,930 |
|
|
|
|
|
|
|
|
|
|
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,
12,805,680 shares issued and 12,788,203 shares outstanding on March
31, 2022, and December 31, 2021. |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
36,816 |
|
|
|
36,816 |
|
Accumulated deficit |
|
|
(14,647 |
) |
|
|
(13,527 |
) |
Treasury Stock, at cost (17,477 shares) |
|
|
(40 |
) |
|
|
(40 |
) |
Total stockholders’
equity |
|
|
22,130 |
|
|
|
23,250 |
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders’ equity |
|
$ |
26,072 |
|
|
$ |
27,180 |
|
POLAR POWER,
INC.UNAUDITED CONDENSED
STATEMENTS OF
OPERATIONS(in
thousands, except share and per share data)
|
|
Three Months EndedMarch 31, |
|
|
|
2022 |
|
|
2021 |
|
Net
Sales |
|
$ |
3,709 |
|
|
$ |
3,290 |
|
Cost of
Sales |
|
|
2,804 |
|
|
|
3,348 |
|
Gross profit
(loss) |
|
|
905 |
|
|
|
(58 |
) |
|
|
|
|
|
|
|
|
|
Operating
Expenses |
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
405 |
|
|
|
368 |
|
Research and development |
|
|
476 |
|
|
|
490 |
|
General and
administrative |
|
|
1,131 |
|
|
|
982 |
|
Total operating
expenses |
|
|
2,012 |
|
|
|
1,840 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(1,107 |
) |
|
|
(1,898 |
) |
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
Interest expense and finance costs |
|
|
(13 |
) |
|
|
(16 |
) |
Other income (expense), net |
|
|
— |
|
|
|
11 |
|
Total other
income (expenses), net |
|
|
(13 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,120 |
) |
|
$ |
(1,903 |
) |
|
|
|
|
|
|
|
|
|
Net loss per share – basic and
diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.15 |
) |
Weighted average shares
outstanding, basic and diluted |
|
|
12,788,203 |
|
|
|
12,513,625 |
|
POLAR POWER,
INC.UNAUDITED CONDENSED STATEMENTS OF CASH
FLOW(in
thousands)
|
|
Three Months EndedMarch 31, |
|
|
|
2022 |
|
|
2021 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(1,120 |
) |
|
$ |
(1,903 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
135 |
|
|
|
151 |
|
Amortization of operating
lease right-of-use asset |
|
|
166 |
|
|
|
160 |
|
Changes in operating assets
and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
626 |
|
|
|
(1,521 |
) |
Inventories |
|
|
(1,468 |
) |
|
|
540 |
|
Prepaid expenses |
|
|
742 |
|
|
|
(416 |
) |
Accounts payable |
|
|
216 |
|
|
|
113 |
|
Customer deposits |
|
|
26 |
|
|
|
(333 |
) |
Accrued expenses and other current liabilities |
|
|
5 |
|
|
|
(10 |
) |
Decrease in lease liability |
|
|
(175 |
) |
|
|
(162 |
) |
Net cash used in operating
activities |
|
|
(847 |
) |
|
|
(3,381 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of property and
equipment |
|
|
(8 |
) |
|
|
— |
|
Net cash used in investing
activities |
|
|
(8 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of common
stock, net of offering cost |
|
|
— |
|
|
|
12,466 |
|
Proceeds from exercise of
warrants |
|
|
— |
|
|
|
707 |
|
Repayment of notes
payable |
|
|
(60 |
) |
|
|
(80 |
) |
Net cash provided by (used in)
financing activities |
|
|
(60 |
) |
|
|
13,093 |
|
|
|
|
|
|
|
|
|
|
Increase (decrease) in cash
and cash equivalents |
|
|
(915 |
) |
|
|
9,712 |
|
Cash and cash equivalents,
beginning of period |
|
|
5,101 |
|
|
|
1,646 |
|
Cash and cash
equivalents, end of period |
|
$ |
4,186 |
|
|
$ |
11,358 |
|
Polar Power (NASDAQ:POLA)
Historical Stock Chart
From Mar 2024 to Apr 2024
Polar Power (NASDAQ:POLA)
Historical Stock Chart
From Apr 2023 to Apr 2024