Battery Storage Firm Flux Power’s Q3 Net Loss Narrows on Higher Sales Volume
Quarterly revenue rose by 14% to $15.1 million; cost of revenue fell 8% to $10.4 million
The net loss of lithium-ion storage solutions provider Flux Power Holdings narrowed to $1.4 million in the third quarter (Q3) of the financial year (FY) 2022-23 compared to the loss of $3.7 million year-over-year (YoY).
The company said that the loss reduction reflects higher sales and lower costs associated with revenue. However, these were partially offset by increased operating expenses related to the development of new products.
The revenue increased by 14% YoY to $15.1 million for January-March.
Flux’s cost of revenue declined by $0.9 million YoY to $10.4 million in Q3. The company lowered its cost of research and development by $500,000 in the quarter, which further aided a higher gross margin.
“Gross margin was 31% in the fiscal third quarter of 2023 as compared to 15% in the fiscal third quarter of 2022, reflecting a higher volume of units sold with greater gross margin and lower cost of sales as a result of the gross margin improvement initiatives,” the company said.
Flux’s adjusted Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) loss decreased to $0.7 million from $3.7 million in Q3 2022.
During the January-March quarter, the company diversified its supply base by improving production critical material supply.
The company also expanded its customer base with two new large fleets of customers and long-term prospects for continued lithium adoption by replacing lead acid battery packs with lithium-ion.
Flux Power’s CEO Ron Dutt commented, “We recently announced a renewal of the credit facility with Silicon Valley Bank, now a division of First Citizens Bank (“SVB Facility”), of $14.0 million to support higher working capital requirements related to increased customer demand.”
“Although global supply chain disruptions have lessened, we increased our inventory to $21 million as of March 31, 2023, to accommodate the lengthening of forklift original equipment manufacturers’ delivery timelines being experienced in the material handling sector. To address disruptions and reduce excess inventory, we have improved lean manufacturing processes and supply chain management.”
Nine Months (9M) 2023
Higher shipments and sales fuelled Flux’s revenue for the 9M of FY 2023 by 85% YoY to $50 million.
The company’s net loss for 9M 2023 narrowed by 60% YoY to $5.2 million.
Flux’s adjusted EBITDA loss totaled $3.1 million for the period, down by 74% YoY.
Flux-Power posted a net loss of $1.7 million during the second quarter of 2023 compared to $5.1 million YoY, driven by increased sales volumes and higher selling prices to existing and new customers.