Flux Power’s Q2 Net Loss Narrows to $1.7 Million on Increased Sales
The company’s financial performance was driven by lower operating expenses
Flux-Power, a U.S.-based lithium-ion energy storage solutions provider, posted a net loss of $1.7 million during the second quarter (Q2) of the financial year (FY) 2023 compared to $5.1 million year-over-year, driven by increased sales volumes and higher selling prices to existing and new customers.
For the October-December period, the company’s revenue rose by 123% YoY to $17.2 million.
The earnings before interest, taxes, depreciation and amortization (EBITDA) loss stood at $0.9 million during the quarter, compared with a $1.5 million EBITDA loss YoY.
Due to the new orders outpacing shipments, the customer backlog increased to $30.4 million as of December 31, 2022, from $26.9 million in the last quarter. The new orders accounted for $20.7 million during the quarter, reflecting continued lithium adoption.
The revenue and profits were also driven by decreased operating expenses and partially offset by increased interest expenses. The company has also designed cost actions to lower material and assembly costs and simplify inventory requirements.
The company’s investment in research and development saw a considerable drop to $1.2 million from $2.1 million. Lower staff and costs for new product developments primarily drove the decrease.
The battery storage solutions provider’s net loss during the first half (1H) of FY23 narrowed to $2.39 million from $9.21 million YoY.
The company recorded a revenue of $35 million in 1H FY23, a growth of 39.9% YoY.
The EBITDA loss for 1H FY23 decreased to $2.4 million from the EBITDA loss of $8.5 million recorded during the same period last year.
Lower operating costs with major deductions in the R&D expenses also drove the rise in revenue and gross profits during the period. The R&D expenses were reduced to $2.39 million, a 170% decrease compared to the same period last year.
Flux Power CEO Ron Dutt said, “Existing customers continue to drive our revenue growth, with greater than 95% of revenue during the second quarter attributed to customers with whom we have had long-term relationships. Although global supply chain disruptions have improved, we increased our inventory of raw materials and component parts to $19.5 million as of December 31, 2022, to mitigate supply chain disruptions and support timely deliveries. To address disruptions and reduce excess inventory, we have improved lean manufacturing processes and supply chain management.”
In January this year, the company announced an amended agreement to its revolving line of credit with Silicon Valley Bank to increase the available capacity of the facility from $8 million to $14 million to support the company’s higher working capital requirements related to increased customer demand.
According to the U.S. Energy Information Administration, power developers and project owners in the U.S. would add utility-scale battery storage capacity of up to 30 GW over the next three years.
Also, a recent report by the BNEF found that after declining steadily since 2010, the average prices for lithium-ion battery packs across all sectors have risen to $151/kWh in 2022, a 7% rise from the year before.