Flux Power Holdings, Inc. Q3 FY2024 earnings call

• Experienced delays in new orders since January due to revised forklift delivery timings.
• Revenue for Q3 2024 was $14.5M, down from $15.1M in Q3 2023. Gross margin was 30% in Q3 2024, down from 31% in Q3 2023. Adjusted EBITDA loss was $1.4M.
• Backlog reduced to $18.5M from $25M a year ago.
• Expanding sales force and marketing initiatives, launching a new private label program with a top-tier forklift OEM.
• Taking actions to increase gross margins via cost reductions and selected pricing increases.
• Prototype testing of fast-charging technology scheduled for summer, automation of battery cell modularization, and working on second-life use of packs and telemetry initiatives.

Revenue for the fiscal third quarter of 2024 was $14.5 million, a 4% decrease from $15.1 million in the fiscal third quarter of 2023. Gross profit decreased 7% to $4.4 million from $4.7 million in the prior year quarter. Gross margin was 30% in Q3 2024 compared to 31% in Q3 2023. Absolute revenue in Q3 2024 was $14.5 million vs $15.1 million in Q3 2023, with gross profit at $4.4 million vs $4.7 million, and gross margin at 30% vs 31%.

• Signs of potential abatement of headwinds later in the calendar year.
• Targeting gross margin improvement to continue with a long-term goal of exceeding 40%.
• Expecting a gradual return to growth rate in the second half of 2024.

• Impact of higher interest rates and economic uncertainty on new orders.
• Delays in forklift deliveries affecting order timing.

Q: On the announced private label with the OEM, describe the scale of the partnership and rollout.

A: The private label is equal to or bigger than previous ones, providing consistent monthly/quarterly orders from Top 5 OEMs globally.

Q: On order activity and market demand, visibility and growth in back half.

A: Seasonality and interest rate impact, but indications of picking up in latter half of year.

Q: On new product launches, status of heavy-duty models and 80-volt applications.

A: Heavy-duty models in process, 80-volt applications being developed.

Q: On sales organization additions, quantification of market impact.

A: Planning to double sales force, focusing on key geographies and large companies, new hires with industry connections.

Q: On gross margins, update on margin target and drivers.

A: Benefiting from vendor improvements, cost reductions, pricing leverage, and value-add to customers.

Q: On adjacent markets, diversification into military, industrial, etc.

A: Exploring DoD proposals, local motors project, and other adjacent markets.