Earnings call transcript Q4 2020

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Operator

Good afternoon and welcome to the Flux Power Earnings Call. This is Justin Forbes, Director of Marketing and Investor Relations for Flux Power. I wanted to let you know that we just issued a press release with our financials. And joining me on the call today will be Ron Dutt, our CEO and Chuck Scheiwe, our CFO who will present the fiscal year 2020 ending June 30 financial results.

Now before that, I want to read our Safe Harbor statements.

include forward-looking. or may might information discussion considered be our predictions, other estimates that So

forward-looking represent risks the materially. holds, could While statements actual they the on cause are future what exempted to to results and that our uncertainties differ current judgement

are this undue on release presentation. are in that statements to Please these information as of not place opinions any events. revision statements or or forward-looking of we to results publicly reflect keep the our only not revise obligating the cautioned forward-looking You these reliance future which date or light ourselves of mind to in new

Throughout today’s may present that affect important discussion, our predictions. factors to some relating to business will we our attempt

XX-Q other discussion these tables or A and You the most review can particularly should risks, copy also release viewed our website@flexpower.com/investors. of more Form of factors of for “Risk and recent financial be the and Flux Relations under heading XX-K press Factors”. Power Investor from our complete downloaded Form

you. it with to Ron Dutt Thank I'll over that, turn And

Ron Dutt

long on thanks what afternoon XX; Today, provide to and going ending headlines the we're year on for our what working Good I’m color for our June introduction. is fiscal Justin, term and strategy. XXXX, and

revenue $XX.X year. Our increased XX% fiscal from year XXXX to $X.X last

quarters, was which ago. year ended million, June quarter than fourth compared full with in four with of XXXX. higher record $X.X results our Including fiscal a as XX Our include quarters, year comparable quarters XXX% revenue year XXXX,

network, distribution pack recent of X-Wheel product line. Aisle top a OEMs, their of relationships velocity and forklift product an Narrow of Primary multi including centers. a in high This tier of Class forklift, X include rollout rollout sales shift popular SXX the includes customers, account Walkie we for call used this launch drivers increased full new key a momentum expansion a national with and

a the three-year gratifying. was largest world's of Winning one Airlines opportunity with

renamed relationships see vehicles. a a Beam EVSI, ago for new Solar, to for in partnership another provide Global, as packs backup long with now solar We symbol to this Envision stations not announced also fast We agreement company such opportunity NASDAQ charging as putting mobile purchase Power Fortune forklift growing Clark with XX sector. master in more XXXX. Material significant and a during a place developments global for industrial Securing supply Handling year represents fiscal Flux OEMs, with

future These our our and brand for lithium relationships handling customers position reputation leading important of material adoption well and of with growth. strengthen us our to and and foundation, is goal our the sectors. adjacent Proving

very capability requires fleets impact adoption that vision large transformational and are productivity the business. track lead Our to to seeking to cost the their lower

competitors. strategy Our than does this. building lithium drives service our I or and also by better that good software technology technology confidence. and is, but Flux towards This What as having our scale, mean

about sales So our business word] [a momentum [ph] and cycle is quarterly our results. strong;

And for due reflecting for seasonality over new can The been holidays. first matter, July first coming summer September revenue XXth low some up quarter quarter this August. seasonally historically that slow of quarter, has a equipment our in which customers our for year historically not to ending quarter, months installing case fiscal and December the us, the purchasing week, experience also is the or to

compare assess rather periods the current comparable our consecutive year we investors than to encourage progress, with quarters prior to Hence results. from results quarters of quarterly

waves I of $XXX of annually. going into we capable for million believe adoption. moved Flux fast Flux on that mentioned, also in allow a what's lithium year the supporting to just turned behind of to us revenue facility which past this has we the And be to If headlines participate growing

program the year. offering to anticipate have to a adding and private assembly high visits source in add lines coming another names three label of months currently customers, you volume have know. pack we also include coming our which OEM. operation product from and five have few We line three been plans global household our facility a more launching in credibility have Our to that We another in the with top large place,

SkyBMS a which telemetry introduced product, conditions, new And and any competitors. data platform, accessible extreme management. from excuse pack on any diagnosis. the our differentiator truck recently health, to existing The a shift software, true cloud and enabling or operating also is our in by firmware We enable communications platform, including firmware, cloud of techs our brain paradigm our with operating controls, from connecting to provides the SkyBMS, information state this pack BMS to optimize operates is the extensive and providing downloading forklift me, operation, our fleet BMS and provides The a which managing of platform. of host customized for doing

from seen excited for Our the SkyBMS with footprint expand operations, have scale tell they implementing not ongoing the two margin are are largest the improve their initiatives customers before. designs us we well, evolved very that seeking in lower Internally, so and value our of vendors. have about added impact and market to costs building specific both we gross an reflecting to been they by

We system with give prioritize in along scale, implementing process our and Other been steps XXXX to ISO quality have goals. requirements. particularly ERP our this support full an growth this attention our do but at profitability history, yet year building to point foundation we

the a Together kilowatt showing given include per reports upto operation. the customers with in customers, half for energy cost comparison grid, our order lead our acid environmental and case data EPA enhancement reductions existing savings productivity hour acid, from which discontinuing studies and the using demonstrate experiencing, savings to the we're from are energy spillage to that build to collecting lead

our that resources, members, and total of have five. company appointed and Exchange, which all oversight And an and staff to bringing as Stock expected and our have business continue this in expand was to Director in appropriate Independent ensure of Board will April John We the growth. public and Cosentino to total year, Board experience, of point, for our brings industry we wealth a independent three of York a New to experience

COVID. presentation Power sources have the as a food material flow Hard without And pandemic. the Now of during essential open give we throughout pandemic. and a for power designated word supporting as Flux about of goods other handling business manufacturer remained equipment, COVID. a was to the an

to We chain. have minimal experienced only our disruptions supply

mass enhanced screening, that implemented employee protect distancing visitors symptoms, have multiple We social are checks sanitation, and limiting along safety and and including to measures our with employees with to cleaning those facility, questionnaires, roles daily necessary. and temperature

under quarantine two XX employees XX, Two policies. COVID-XX others internal those along for test In employees we two our and -- with quarter fourth with ending positive had June implemented quarter, steps immediately were our or other tested directed guidelines. any since guidelines, including for employees have recommended exposure XX. state other by as possible self-quarantined California of COVID CDC, the of None positive and employees safety

potential our however, risk represent and the our impacted recognize will and with very that only following operations manufacturing operate were We minimize period to able minimally create and strategies we to continues our that We are do were a report COVID-XX this pleased implement during due diligent in to efficiently assembly to to to staff. and were business. largely continue disruptions business because to our the guidelines, we

Finally, I the near would strategy future. like to our for address

a to for to we're $XX.X now mid-August, on and qualified is remind market. we traction that completed raise capital customers, the accelerate million products, capital in with that I'm getting listeners with and NASDAQ with growth of goal pleased listing Our infrastructure.

what Our trade is for market demand shares to capital the doing enhanced events These NASDAQ under symbol objectives, growth as in the growing Flux now iron business us Flux. on visibility mentioned to on our strengthen with F-L-U-X, ability and energy our I earlier. lithium provided support participate

impact market our stock May, on and to achievements will our liquidity, sheet capital hand our Scheiwe, and will to CFO and mention of expense. capital I these the our now balance gross to margin and balance color provide it Chuck since operating structure he provide to improvements also over the sheet

So with it turn Chuck. to that,

Chuck Scheiwe

Yes, thank you, Ron.

closed raise meaningful These a related have Ron mentioned, August $XX.X have and positioned and listed us on of the As on we capital growth. million. for XX source milestone are NASDAQ

and to cost our allowed capital, banks sheet and effective has for balance line, with lenders. and ways a cash needs strength getting us capital other Our working real working explore financing flow

equity The away, which right expanded base, in trading institutional raising activity shares our and increased pretty investor In great. underwriters addition financing exercise significantly. their the much our full August to was over-allotment our also capital, in option

of improve goals been our our One to has stock liquidity.

listing, With path. now the additional appear in we to the shares that NASDAQ on be

held all closed and $X.X Now to friendly on raise during on a and just the balance the And million significant shareholders. $X.X stock of that's term And were million, the able debt debt we million. totaling discussed, placement raising short sheet. private of $X.X amount convert common fourth quarter a really we uplift leaving of for equity by

loan $X.X to Also, of full no applied won't and the loan be apply for a reason we of see received intend PPP and for such coming that We in forgiveness months for forgiven. the million. amounts

Now talking on really that. gross margin, been focused about

XXXX year to gross quarter compared year fourth fiscal XXXX to X.X% and gross increased QX compared fiscal with the of margin to X.X% our prior increased year Our a XX% XX% margin during year-over-year.

January from higher making packs. generation XXXX to gross some lower cost with We initiative actions second we’re design prices program actions and of in specific volume, reductions purchasing progress. include margin of did in sourcing So a and selecting from the

operating the to now And expenses.

our including next UL continued certification about. Our BMS. And generation of increase SkyBMS that in of testing R&D expense, our Ron our telemetry expense launch rollout development the was talking reflects that product

increase and new the efforts in customer base customer to plan to in support objectives, ahead. expand our the expense and growth year The and our sales our we efforts to growth our reflects discussed, marketing Ron acquisitions

and We expand customers during to brought base. on year XXXX new working fiscal this three are

expenses to growths. G&A our outstanding seen business support increases Lastly, just

to Ron. turn I Now, back will it

Ron Dutt

Thanks, go-forward Chuck. strategy. on comment our our I'd To session, up like wrap to

of shelf have growth. stock -- time given all market. have happening leading our these that of and that consider to strategic accelerating to including meet and M&A. actions mentioned can foundation We developments currency market demand say the vision we our is level now that lithium stock to ability the I off traction, a enable of Now firm consider building capture it's ways more now the our to the we've

that. At time, high And number for open and agree our questions. on remarks. enough learned customers a like employees. lessons believe of will placing our to a that we prepared having priority that continue this are with Catherine, we know concludes after at same many the years I investors and thing,

Operator

your first from Keith Instructions] [ph]. now Gill, have Sure sir. you And so question ask is do Mr. you [Operator your line may question, your Gill open.

Unidentified Analyst

Yes, and current a quarter. cash recent burn your position, what's And your great including offering? on the rate quarterly congratulations

Ron Dutt

fees million, really chunk good after the fortunately, cash. us gave a bankers Yes, $XX.X paying even of

is a approved are capital battery orders we to collect. materials cells, to because we’ve working implement; buy for going and between that help, steel, and about big still we gap line give that's when a have further these the We so had we all when there us to have terms with

So going really, the help working really is cash. facility with to keep going us that capital

and the So, part what your was of question again? other

Unidentified Analyst

cash The quarterly current quarterly burn, position burn? your and

Ron Dutt

the Yes, of our been it just in our - $XXX,XXX. fixed and quarterly about the, cost, terms $XXX,XXX, is quarterly of burn running has

So development have launching that, line. costs, keen then listing. course, which top parties, paying capital third on the had And of of of we we're number and a ones working why we've working capital one UL this on is -- the needs, then as bigger of is such

Unidentified Analyst

you. Thank

Operator

Dutt oh is a Mr. And Instructions] [Operator question here. pop – up there that seems

from [ph]. Mr. Rick question ask Sir, your Senior next Your please question.

open. is now line Your

Unidentified Analyst

-- in so you towards packs? you shift have a shift COVID business? business Are more retailers customer more your seeing those placing seeing more as retailers, see in base orders you with for online a Are are online

Ron Dutt

Rick.

all and all, just know, seen thanks really and we've Amazon pretty of buy don't for online. everything question. you, And, I the the asking you know First my I wife about everything of I much but impact think

with is say say good certainly it's Particularly retail Amazon, big that global beverage, really customers, I the retailers, beverage information serving se, customers would providers, online you definitely So the I there know the can't are with, one. I then with more of have that But also we provide impact us. any on mentioned, they're our would per not that and directly. the but for other

progressed has unabated. That

telling not usually The buy don't front example, anything know, it already other and stores, your to at they door. your I'm you stuff Nordstrom, for have delivered anybody

people is a we distribution increase support DC and going department that's are stores the to product. as going this massive a buying what in centers traffic seeing to to in opposed to growth So warehouses centers and

Now that has get to still department product to the store.

a fortunately, with where complex is. That But But little related and moving in your up, the robust we've impact little it's increase you a out of it's to Rick So outweighed the to to brought COVID it going sort country. across from exactly, on commerce certainly noticed these finger put the increment on all trends. by COVID.

to answer our Does So, I is Rick? that advantage. feel that your question,

Operator

already disconnected, He sir.

Ron Dutt

Oh, questions if it Would guess appreciate any I'll so appreciate anybody I it. did. more has,

Operator

Yes, sir.

you have You follow-up [ph]. Hill] Keith your may your question ask Sir, question. from [Mr.

Unidentified Analyst

color Thank some you. CLARK expectations you. Could with on supply Material partnership? Handling your Thank partnership that with your you recent and

Ron Dutt

Yes. it's let we release. CLARK. and of relationships OEMs, making the big And are already is, me our they, forklift the they Sure, And specifics the buyers those. a forklift, out in our I'll of relationships then and market. big selling with press companies see the that's because global target no, have good question. to -- in that We put part context with it context, go But the put to

or lot, So, a years we've those develop happen which four three instantly. done to past relationships, don't the over particularly

another They're the OEM So the actually XXth largest world. example. is CLARK in

actually So interested and people we're we reached products some them, very they I with lithium Five. our packs. close Because putting lithium. they wanted with developed because decided come the in in -- vehicle, been out for that they saw us, our a out new the demand on to packs their Class And three-wheeled developing pretty that to relationships we've Top

the they surveyed, us. or you other know, a we so dozen competitors so And selected and half have

to we're won win them. contest, So, it beauty always with gratified we and a

lithium. tell what they to So And to me look provide means. us that let their you

with relationships their distributors. have dealers and they So,

when get sold customers. units the pack end their our promote those through will to they so distributors And

and So sales that's distribution. marketing a big in our advantage

serious. packs we at just And outlook happened really, Atlanta, release that their MODEX them. So we at were in said, pack week which COVID-XX signed press - equipment. our they a so the our in really agreement -- got the right also supply the with really, signed exhibited they trumpeting And before

our to So that's part to around strategy their a country. that's our leverage of -- relationships part fleets key the of large

Top to expand to we focus So number OEMs pretty look Global But as We we beyond that. OEMs. XX the well on continue -- talk that. there's a of much

So a to that help? rich that. I opportunity continue Does expand there's think to

Unidentified Analyst

that partnership. outstanding on Yes, congratulations and

Ron Dutt

Any you. Thank questions? other

Operator

question Yes, from please sir. more We still have Sir, Alan question. ask [Indiscernible]. one your

is now line open. Your

Unidentified Analyst

Good afternoon. I apologize late. joined And I because

sell how you battery vertical, airline. global Can a you So or follow major talk anything how does was if you. compare from a this asked, you Thank else a forklift lithium-ion a about think pack that is to there? little it -- order I what have up. a the mentioned about? in to When do pricing And you the terms of opportunity

Ron Dutt

you And trucks lot. question. global a we And I distributes We been terms be started of to particularly us a huge Top focus for take great or know have us conveyors of batteries But I airlines But out and and Yes. lifts me came focus. on to We're and using full in in and joining, carts, on a the company our yet, in going, like lithium. and using late. anything the the that conveyor cargo we to anybody equipment, their not the key And -- for things doesn't else Five one the the know, a airlines to forklifts. one Alan. all that you, scissor this. said, trucks it's airline name support of distributors ground focus baggage you're to are context -- that and opportunity a migrate good call. Thanks, you've how a give and sure The can tell like this. us thanks

We for it. not at -- even looking we were honestly weren't

know, engineering we it, essentially said, without studied can trucks utilize you and that we after the I so looked major large same So, packs I, Class modification, Class those we go with our forklifts. at in

operation, we goes, which try it. is maintenance, what Flux. for that's spots a and all develop agreement guys, then three-year, goes, source how a order. is And how do very see to their on little our you going So figuring XX, pilot it that, buy that service, they did like They to they it, color know, sweet distributor an it, have of to pilot how that, what's their them to one our just they And got their from impact that. the affect to how they we for -- work it reliability, their got it's large they out

produce the the we Now in But with us back of take line, COVID, on on course, pending, on to call all our and see the that, that's of because of large that have all were kind we very can those pack gratified suspended, assembly airlines. packs. getting

actually that steel, large be actually telemetry to those line potential so create we to our large, anticipation, systems, in technology utilizes forklifts. that. it for management the just But of Now our assembly such have battery has going our separate order, it one we're a that on

So to of see adopted important me they we we those really can to take these and be can applications. strategically, kinds packs that

Unidentified Analyst

possible it Thank something else ask could you. I Is or?

Ron Dutt

free. Feel Sure.

Unidentified Analyst

in just Okay. a press commentary and I you said there One, was $X.X have you on where Thank you you. the Well, was debt in I had if million two equity, then pipeline to And second, curious was $XXX,XXX backlog. that was converted separate July stand of private release raise. any on equity -- things. your

July, as curious just if you what could was possible? if today I of the us the share So tell end of count or was

Ron Dutt

talking piece Chuck XX.X minute, I'm in think so. Chuck uplisting, the before do raise, here. decided we pipe to on you equity or are Yes, to got first, there. the I to the And, around going place. as -- backlog, call said, the months. had that we before I you I and sure. we of just fine. the to of Chuck, slow it's No, don't August That's on which shares a our highlights in do Last million one July but a questions in pipe conversion But one couple all will want was just give and happened

not the was higher year backlog it's in ordering put explain that to a and context, our bit just high let in was me and that a cycle. as as ago. it it spring. is But So significantly than quite And the sales understand

certainly, to sales In it's kind large as number been going in, what's their is a these scheduling that future. But in even cycle many that key note say the it's with to barometer installation. for backlog near and us. not our I've works of to are of happen businesses a a fleets equipment And of ordering very

these most With packs, the to brand new got they And schedule large fleets, to over new of is they packs year. it, stage our revenue got trucks. into new going our trucks, it

the to what some large our so the established lead with once before happen, the Now orders, the of current and lead kind on for the those also usually orders, play the revenues rescheduling and large with lag if existing put and pull dies, so goes. acid trucks, out, But there's just acid it there's he lithium. packs ours trucks, plug are fit the we there's extent order any get orders these

don't So long getting actually we the on hand. orders our time have lead a in

time OEMs our What companies on get along their Fortune and XXX fleet we with to they're dialogue where us. do converting the the the is

not we you been of only have underlying, me, to us I as work have in hands? the many we what we a how be works. industries. they're next you're And I've businesses orders way. Because wish hero So that's month could included. and Do don't good on And conversation. is most those believe of giving But did. looks it did whole the these in it indications have as I like. last that what year this ours real in

for have relationship So counts. that what all expect next with year the dialogue really and to is what you

backlog, as I September But into precipitously it's Well, anticipating we really rules. we disclose through that current FD grow have going and under can't here move do because well million to of we're in October. $XX but

lot So, and focus for coming of put a commitments projections, cycle which and year. in those recognizing that we sales the effort

the on just the X.X, bounce Chuck, that, overall we how fits that and pipe? want to XXX,XXX mentioned that you with know So, with about

Chuck Scheiwe

Yes. XXX, Overall then closed and was three pipe, first And another then XXX,XXX. we closing, the we X.X And million. as we different XXX, one did had X.X million. like another

up And So just to uploads being it’s in X,XXX,XXX stopped pipe. at do total a we that [ph] ended point, the thing.

we're looking shares, XX.X outstanding current at right of terms million now. In

Ron Dutt

than I reflected line one was XX.X. that was shares I the we equity debt well. And got more thought that term converting July with have of as and to then from in July happened XXX,XXX our which in short convertible Sorry, insiders our that

you Alan, So us give question? Alan, is -- another that can

Unidentified Analyst

one I another would love ask if you to mind. don't

Ron Dutt

Yes, think go I on ahead. creeping up And this. time's this, our

fast. So we're get probably

Unidentified Analyst

they over Day I of attempted understand make so. you everything. by Tesla's I to So half or their battery goal the of And probably how And just lowering costs cutting points know of of they a have and in was to on around and than some you. curious pack like Battery batteries three did listen of terms years sailed batteries costs of I last I think But week. But about understanding different types time? your opportunities

Ron Dutt

our great, battery packs, up as Yes, the the go Because those of the are cost, pack, smaller great cost bigger of packs, about the material for will cells, to which for you costs, much part third half. as great, a and can overall if it it's of question.

batteries. We connect two like really those was formatted. in use A cylindrical the these you we to suppliers, big, And modules a cell power and get package want. whatever it, suppliers, to Tesla level in packaging just use the could doesn't the the you cells. format It's matter. all as case, and It module either using the Alan, look double that referring We large have cells cylindrical

because cost our months, of six more get volume. the both we've and suppliers from But of past over to reductions achieved principally expect

packs. from to car have the the or just matters is you're kilowatt in case, has the our I massive So little in the are cell, of their whether we're cost But per per to Tesla kilo, buy other per to touts packs this our and something. because Tesla's kilowatt or me quote $XXX reports, battery to entire kilowatt for so put or cost for Tesla, down probably about like the wrong, the and they $XXX note, out ranged I thing at, pack if think, hour don't knowledgeable looking case. it hour, volumes $XXX per

So I reduce better the you got improvements, do think chemistry some particular seem sectors for to the with increase that volume, working world half on in of productivity, use. work costs, technology might to related

and I out Well So of electrodes anything just think really real down. And is going continuing the Alan, go like on up. the issue than especially volume. are technology on Tesla you cost all the talking forecasts X% real, through to of cost lithium we pure pack last the those the on see to of procrastinate, of drive cost is is the all else? and our But kilowatt on one the lithium. giving just path price increasing hour a the word people course, lithium of see those battery, less down that, per about people

Unidentified Analyst

Thank so I much. you No. appreciate it. Fascinating.

Ron Dutt

forward talking you future. Yes. the Thanks, in I look to And Alan. to

Ron Dutt

this has So essentials business again, available had doing. to Chuck build a would at And in And getting mention talk glad Be large for lot for a at place right being you industries, the and a to Thanks time. questions. on listening a for the place. in have I number we're I a number believe with Thank and that we're of of in good of and at are right a are what call. years, to day. an people you. to end. always the lot the come we that After attending and to we just other I of our session

Chuck Scheiwe

you. thank Yes,

Operator

gentlemen, concludes call. today's joining. this and conference you for all Ladies Thank

please You now Speakers, fourth [ph] a disconnect. may remain for online conference.

Flux Power (FLUX) 28 Sep 202020 Q4 Earnings call transcript