FLUX - Earnings call transcript Q3 2024 | Flux Power Holdings, Inc.

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Operator

Greetings, and welcome to the Flux Power Holdings Third Quarter Fiscal Year 2024 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to hand the call over to Maria Rico, Marketing Manager. Maria?

Maria Rico

Thank you, Operator.

Your hosts today Ron Dutt, Chief Executive Officer; and Kevin Royal, Chief Financial Officer, will present results of operations for fiscal third quarter ended March 31, 2024. A press release detailing these results crossed the wire this afternoon at 4:01 p.m. available fluxpower.com. Investor is our section and website, company's Time in Relations the of Eastern

begin formal call we that that include Before the estimates might statements remind like predictions, made everyone be to considered on other the or and forward-looking. may presentation, webcast information I would

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

the statements, undue presentation. to of to may will publicly You our release obligating which statements attempt mind predictions. revisions or are our forward-looking to on the forward-looking reflect affect some this revise place only our discussion, of these reliance that in cautioned Please new factors of important as business we or of present light not that relating results future ourselves to opinions any to information these events. Throughout not in we today's date are keep

our XX-K time, Power I risks, Officer, the most heading Executive this particularly Factors. At You other Dutt. should over to Risk call recent under and Ron more also for complete will of factors Form Chief review the these discussion Flux a turn

Ronald Dutt

color. welcome Maria, begin, go Financial on afternoon, I'm you, headline you then and like step our Quarter themes would everyone. Thank to Third to to supporting first Results pleased good Fiscal I to today's Call. To and context and XXXX Conference call through out

uncertainty market calendar new the orders We our forklift this of shipments. delays sector this orders in of of our deliveries, year. and interest by rates impact indications have We timing timing in of see economic higher January, impact during experienced since past driven which revised and

the of aware specific don't we abatement calendar this year. of later guidance, give While of headwinds are signs we potential

reaching are for profitability. revenue simply, and priorities increase launch X our have pricing appropriate high high-demand is ensure reduce to costs, undertaking initiatives specific revenue our new all models. products We and growth, growth our been Put

reputation have over sustaining America. with our XXX Fortune we packs along the Our Flux with operating North in XX,XXX lithium-ion of customers evidence proposition, provide Power market and value in

to This our Turning revenue experience quarter. revenue $XX.X quarter versus of the reduction comes ago XXXX year. did we fiscal results, quarterly this $XX.X fiscal million in reduced million revenue year ever second following $XX.X of third the highest in in quarter of XXXX million, of

third Regarding million, quarter year $X.X adjusted of the slightly margin, of XX%, decreased loss in a fiscal compared to our the and was XXXX gross $XXX,XXX a loss with EBITDA our quarter. ago of

million with similar $XX a million backlog from ago. a $XX.X to seen Our has year reduction impact,

base, customer in Regarding pullback customers lost we intact, implementing the our value their our we Institute fleet March. To current we to not in released for to marketing Management growth, any remained have lithium-ion as interest advancing, orders lithium-ion migration fleet-wide solution is of trend have no to rate competition. Furthermore, micro still and migrating believe solutions. Despite seen known trends higher and interest lost spending no environment, to time from evidenced capital customers we're both and initiatives sales our support the and grew month manufacturing proposition expanding years revenue Power that expand showing by Flux X.X of in Supply first this this to capabilities of operations. force to awareness of impact the the past survey

the leading savings, reductions telemetry to performance and environment. solutions life cost carbon cycle dioxide increased from asset product Our improvements management provide forklifts, of our

to continued like customers. I our and secure their relationships large our we sales fleets. charging integration and of very with packs, customer also most for and migration are of highly battery to new on an integrated lithium marketing typical the to our would solution brands equipment customers' support focused that reiterate We packs, expanding provide provide to to lithium initiatives

sales several and their and needs with includes distribution our dealers with salespeople materials to customers, customers getting taking we're demand, new our and partners collaborate our actions heavy-duty targeted trajectory. acquire marketing salespeople marketing Additionally, customer our to we acquisition closer and adding resources our working of of resources initiatives. we're as support and addressing distributors. Also, to and support which new sales models in customer product end new These launches increasing include and

Importantly, are top-tier with label launching we OEM. new private quarter a program forklift another this

products we selected gross our to reductions pricing are and As increases increase value-add mentioned for earlier, reflecting customers. company-wide total our including also to cost actions and margins, services our taking

to We technology summer. of battery scheduled capital expanding launching take and this are should is our management. Separately, automation improve partnerships. our technology testing place we our are of in report which progress pleased to the working fast-charging cells, continued Prototype on of modularization

potential to with that their customers stationary our second-life of the reaching This are working would for are application. implement packs include opportunities initial of use new We those storage packs. end

our customer our improve to with We this XX of SkyBMS. long-term which implement have telemetry, all of installation one asset an call is Fortune initiative a to And we nationwide management. customers

large includes Our and accessibility support learning of for software and the tailored of an product development fleets. to features application AI machine cloud

our board to but longer our X also businesses to to both year customers. In CFO, organically building explore our products our to also impressive capital highlight around business are large March our operating gross begun on recent Royal, high-growth pack Now in Mark early new to fleets, building momentum revenue, achieve scale scaling have growing and want They margin our successfully resources top-tier our director, we revolves to sell within can to do our experience, of mentioned, revenue Kevin and strategies, strategy of of profitability are meet achieve build of mention Leposky. joined leverage building and goal scale needs technology this who already customers. pleased and and term, the building with strategy that resources I bring I'm key including our depth our our those partnerships to newly growth, develop and appointments, in and of the leverage. Currently, elected

revenue million warranty-related onetime the expense. $X.X during impact from of loss fiscal and third EBITDA of a primarily resulted adjusted earlier, mentioned I quarter As lower the

As environment, see do slides, previous growth are second the signs due higher in gradual you XXXX. of pause, of we a would our we experiencing it, a call yet rate presented interest return the half to to the in calendar rate

base costs Our lower to current of higher asset reflect performance, management tools well-known and lifetime proposition seeking fleets services. large value companies of continues the customer and

fleets Our well-known and, full suppliers product represent fleets partnerships seek ongoing require line relationship who names, current needs, who to future These provide having transactional caters best-in-class purchases. just to high-performing especially, and large onetime customers meet services. large products who household not

is rate, of lead lithium been compelling the growing acid, by proposition compared is lithium-ion While of single-digit, adoption the at value and has growth to forklift batteries the historically much rate higher a that driven to operations. The throughout especially economic transport services sector is business and provide material for not goods in and propane, matter, by but cycle. larger it unaffected downturns, the multi-shift critical handling

continue achieving our as XX% quarter leverage at X plan support part and was and competencies lower supply continued during Our equipment, targeting All over target margin have improvement as the strategic the dramatically and expect we exceeding margin XX%. we held to margin initiatives, adjacencies strategy ground to adjacent $X.X accelerate and and to to compared includes with such explore our With improvement years, gross core reach last slightly improved this third down airport referred are profitability chain long-term GSE, steady these profit we to additional volume initiatives of year gross to verticals goal continue, margin million, are improvement. purchasing, and a capabilities. Gross initiatives costs gross ago. and our higher of to goal. Gross

open order XXXX, X, May million. backlog our of As was $XX.X

with Our schedule longer new purchase deliveries their times align orders and of incoming to model new forklift backlog extended times reflects certain delivery lines major for lead OEMs for equipment. of GSE from

Chief growth current potential open look acquisition. With now customer adoption the bright, financial results. Beyond to continues Officer, Financial review Kevin? Kevin to I turn with Royal, orders, it our that, of customer and future backlog newly of our over will to the new appointed

Kevin Royal

Thank you, Ron.

based million fiscal XXXX lower interest expenses due to the achieved the fiscal loss expenses of as partially third we gross in review in including XXXX, higher primarily third average XXXX decreased as of to planned to stock-based third and during ] to support of of as $X.X the credit offset cost a decreased to costs. Adjusted in a research credit margin third severance primarily compared XX% to gross June $X.X basis loss line May million, in quarter. Gross capital as decreased outbound third and X% cost in expenses, of $XX.X XX, credit our million was the the for $X.X from of third primarily of Revenue $X.X compared available on improvement fiscal fiscal compared shipping expenses fiscal a million (sic) compared increased of costs million, to and revenue. Net activities of sales the of our quarter decreased March working the of the profit during Business X for attributable inventory sales the to Gibraltar, subordinated compensation third $X.X financial result $X.X fiscal and to per turning development in spending compared XXXX. X our recruiting of in quarter for to ended the in in available of E&O quarter million partially includes capital of expenses, fiscal million in staff-related XX, million and receivables profit million third shipments $XX at the borrowing fiscal expense. Research unit ended decreases third attributable to of with March Gibraltar and first by cash XXXX million that loss X, of of higher million. XXXX. Available million million current EBITDA depreciation XX, serve, of line to offset in XX% decreased to fiscal of quarter market million a administrative and Cleveland Capital. result to million our of to resulting XXXX, XXX in the $XX.X of million, development of [ $X.X insurance for the $X.X general by in XXXX, March XX, of under $X.X utilizing of slightly, to million for to increased of quarter XXXX, Gross The quarter XX, XXXX, to compared to months expenses, service million units fewer quarter the Capital, in and impact and to quarter as XXXX, certain line lower by million compared to quarter line. Net expense $X.X of quarter credit X% quarter increases initiatives. Selling $X.X operating and primarily Now to to by margin compared quarter XXXX, quarter, sectors expenses, $X.X due of quarter results third product loss decreased expenses on was was XXXX, professional $X Gross including to $X.X expenses higher warranty in used a balance fiscal the staff-related the profit expense in growth. Cash compared severance fiscal third base, the attributable third XXXX, the quarter $X.X $X.X stock-based as up XXXX. commissions, in third compensation, the March XXXX, expenses, ended as million profit $X.X in the fiscal the XXXX. XXXX, third fiscal our increases timing the with operating XXXX, fiscal XXXX, facility remaining months fees, and quarter $XX our lower a with under points, travel million, subject accounts expansion provides eligible credit in

reach Now been to we slowing time is looking flow by year, at this the breakeven. impacted calendar cash extending which allocation, capital have revenue frame

We our support with working requirements capital line, lender covenant for our Gibraltar, are our working to to financial current revise our trajectory.

it to our clause anticipate now As offer back on to filing, to pass which remarks. like a closing Monday, include to result, May we file needed XXXX. I'd Ron a in XX-Q going XX, concern we some to

Ronald Dutt

interest initiatives, strategies historical comments are selling To focused the We quarter our over and supply summarize confident our and lower dramatically from far, our variability. experience improvements. X recovery saw XXXX years. remain customer rate deliveries sales margin improvement strategic so third in and Thank orders and volume gross have margin however, margins improved of to and chain on higher last continue With new lumpiness we pricing, timing highly do, the initiatives you, of profitability Kevin. to trajectory. Gross additional fiscal costs support forklift

sales expanding very our another marketing current program label on customers. We're to and initiatives lithium private excited relationships strong one tier to and highly to are support continued customer to relationships and OEM add We focused approvals. secure of new OEM migration supplement

network We're and We vendors, to partnerships acquisition. are expand with distribution developing growth. customer and position to also working projects with opportunities our leveraging technology growth-oriented further with our partners drive

product with our for models markets for and working lines storage narrow-aisle customer new introduced our pack months. X-wheel Class in filling new II gaps we'll products and of multiple coming and lithium-ion battery our lines in to forklifts and be forklifts, expand are We we adding adjacent Recently, counterbalanced second-generation product segments Class I offerings. most heavy-duty to energy

a pilot telemetry, includes nationwide. the Our which Fortune company in stage is with XX implementation features, for asset management

are growth our top profitability. priorities assured, revenue and reaching Finally, be

list new diverse we would thank to to further I look in solutions the call as growing been never with all Fortunately, migration our and underlying leadership technology updates forward Operator? operator question-and-answer our large interest attending, to in customers. I for the for begin and has providing of our our term session. solutions hand shareholders strengthen with near over position now the lithium-ion lithium-ion like to greater. I you to

Operator

is first MKM. Irwin [Operator ROTH from of we Instructions] question The have Craig

Unknown Analyst

[ Andrew for on ] is Craig. This

the So kind second on the any was announced the the question have there. wondering you just the rollout scale of of maybe with on I could describe first label, I is here the OEM. private partnership, if one details the

appreciated. more Just much would be color

Ronald Dutt

to private to equal years. had X Sure. have going or The that. is label This private we've -- another bigger X be we or than and OEM for

very dealerships they strategy and pallet around is And interest we the So it walkie globally. almost installation orders. And consistent, both And almost that country. are Top very are in distribution X jacks, the provides it's program, very OEM definitely quarterly, efficient helpful, because us. really monthly, helpful, that OEM every Class for really found the found provide which III feed these

closely this. forecast We've So that of and started of excited OEMs at the we launching variations or similar product with And already It their X excited are getting size it. and work. involves very about line. magnitude both We this. They're projecting point. work this about just X Very for it.

Unknown Analyst

It's great hear. to

marketing the on of prepared in and team, here, one initiatives, and kind even different release stimulate of touched your Second mentioning to remarks with kind of the initiatives direct-to-consumer between revenue kind press working of mentioned kind Could ways you're you potential different on there can I of earlier and the what at here? think, Ron, boost call. kind you the just partnerships looking you talk through demand

Ronald Dutt

Flux strong there's to shown found I presentation, I think of website, we while bringing names, customer at triple, our a on the fully it's a year. We've have customers salesperson, a all expect the pretty household core work on brought for in configuration them who salespeople. a that and what I ] expand We're exciting. think It's the to We slide, coming very more our we good right reach supplier see found that best is exposure of sales with them, we time of in one, our lithium one. new references [ of another understand partnership. we more least a marketing having We to the help to it over interest that as now. them. are, what of aggressively possibly to another by on on as double, do, adding long-term process get best

provide player lowest we technology ], do we out we all and bid, So confidence a provide something references [ [ people techs their in long-term also, salespeople that continue that building features package have understanding evolves, this their move needs can to ] them them. our that network, on deals and how our get confidence sector country, trying product that their deliver a complete stretching get support the to can reputation as the we're packs are the and that else. quoting their future can for product to that installations And will time those it. on to around there that and relationships, and the just not to deal show have It's the of this

aggressive way we new March, helpful. in now a that very particularly investing that, had is nobody an in show just initiatives, the product. which that marketing that certainly really our a We trade reputation opportunity wants marketplace. Very strong. attract looking the Because people, got we're Atlanta the those. now sales one interest, in our with a of and There's have for to to annual investors So the and are a to be deal, reassurance same great get when with in, first trying in we

hard over now built been to work in leverage past over So this. a our expand the developing of XX of time validated We've I is think and lot we've lot exposure. a marketplace, certainly the years the

Operator

Markets. The next is Brown, question Rob Street we Capital from of Lake have

Robert Brown

On know the a How a the of Do is down is market starting kind sort the I get the the sort the half? growth that that and order to of some of sense activity back demand, with it's get you slowed time or cycle pick visibility can customer a comfortable things seasonality orders from little there? conversations? Or feel of bit. in up there to you

Ronald Dutt

seasonality install in the who like past and we've In don't the particularly companies the for beverage the new distribution to had in equipment for food summer, summer. past, some years,

what at look gross to we I past The quarter, the the if back along there current at revenue of lot impacted customers some reaction broad-based month. the with So December we experience. But we're we of activity. by We in output, across suspect. input a fall. think highest our there underlying had I you rate has that the be show, interest -- seeing it's what the end the trade is been got was, of think pretty a And sector -- was starting

to our effect that time of So the falls it affects start sector and there's we little and a competitors when lag through [indiscernible] in seeing really us. as

largest continuing. and So all on We we some our pushing, long-term with delaying forecast, they're just that They're see of these customers work there. out.

definite see forecasts the because hard orders, matching talk a who our the are sector. and batteries. hear the the We with we new of you forklifts OEMs our get about the lot Then work whole those with of that end numbers are So are backlog across timing. customers impacts our and also

up into things So more There we half "indications" know on we have on guidance, the year, latter are indications, in the times place putting but lead give equipment caution of pick and the quarter. new forklifts, say you I having batteries. because to less starting don't fourth times on towards and there are particularly lead

I this So But we be of year. the that coming factored into to that see us the of of timing. would back has understanding half say out in

Robert Brown

models Okay. Good. product the I some sort there models? were of new remind that -- some launches, again enhanced in on us at where you new are And that? were could but you product and then refresh launched where of And in kind how at of you're are coming, and know the

Ronald Dutt

Sure.

well call actually would working the a We models heavy-duty than what on I have series of our year, been having longer over lines. that, past for all

they engine to Our whether it. depending lifting they're customers chips their blocks, or with add color forklifts, potato moving different to on power needs need and

capable engineers across OEMs in this all by the and our And heavier-duty those so we're introducing on they power that UL all the have are and putting the really be then lines approved to getting Listing, through these almost forklift.

customers line than going months. And But anticipated. actually, concept that that been approved, out rolling large handle using seen are and in among configurations it very happening because longer been or coming jobs or the diesel and indoor process in using outdoors those that of forklifts just we or has be those in taken the longer, had forklifts, we've both propane better. the with was has those we past also were and heavy-duty, end to so getting outdoor, And large

higher-voltage the coming in such very for viable XX-volt. as a choice, has our we're lithium now [indiscernible], a As to be need seeing

-- for not side. XX do been hasn't material volts we demand the but we the in there airline Now the sector, been have handling

merging. However, now it's

are those XX-volt applications. developing We

The bright area. requires very meet those Also the future to the continuing in see to margins requirements. supplier that on supply are larger in trucks. we higher to capability more So side higher-voltage those

Operator

Craig-Hallum. The we next is from have Stine, Eric of question

Eric Stine

on I've jumping calls. around [indiscernible]. been

of on X maybe lift. I mean, I to double-up Or or the or I to those I the get interest I the But about, just on do So book don't back hope have of the can order more things And rate to topics, could you questions interest is go order uncertainty? interest a can talk a you Because we level dynamic. rate might lumpiness. but just it's appreciate when very that as sense conclusion start different points rates? it guess impact

Ronald Dutt

And recently, is a think rates?" I at as with my at the X%, level just Having of Eric. from think uncertainty. to the question, this of as a that work. low of long off X%, people, of and come footnote, rankles a of The economic a X%, X%, what's era, great really degree some rates, lot very national lot has the disrupting a very, really a know, forecasts a it in That's really interest going which a creates all X%, uncertainty: very opinion, we way of fallout at pandemic lot been accurate interest forces the it's even I haven't "Well, happen caused,

timing before look very perception And and there's room I input for of think don't and to of a be replaced. thinking these have the do historically, execute that that's they factories the bit ball batteries, about, these talking and get forklifts So a the for more just are you orders forklifts ] equipment what's end stuff. some particularly rates high, waiting mitigate warehouses the rates to decline. I'm forklifts, remember than rates you interest the managers that interpretate [ exactly happening. gives going a forklifts bit the to that suddenly in on to if it's requires of die forecast little but are on one to that, example, this have extremely it batteries, a that we But of lot little a the aren't little people, bit saying -- interest wiggle customers wide crystal we're interest apparently, asset that

not a there's high So risk that. in big

Now that, limited a don't forever. done. forklifts having batteries last life. have sure The The said these batteries

think of customers. from as the very And don't large input do so I our I long that term, this see get nor we

Eric Stine

All of And right. mean, think That's the of just and helpful. tripling market and I doing or organization, I sales gotten to before to once kind this potentially maybe said maybe what at percentage to then the Okay. or on the the way additions be tripled opportunities you doubling look any to expect whether quantify might doubled the you you're, or you that you've that have organization, what that. capabilities?

Ronald Dutt

I that the was believe to in have to covering in somebody good that really and salespeople train least sector. low-hanging this we by the X we We their to geographies country the new is industry need XXX, hire with and the We Fortune would and large as the going teeth. after what call can partners just fruit. people hired is of a recommended very X the this digest double our one have for cut need people. had don't industry. as I companies here mind I XXX large focus of to We've where What place relationships, on at in located the are in understanding fast any field the the

confident am also that and confident approach. very feel I in so And

ones. of is other process VP with also X potential my in Sales So

harder. I'd new for do say not those one our along we those things marketing I staffing a one back introductions office and not, or that and going more those like for the our with exposure. hard So that, a to sales Whether to to also wider to strategy on fleets. and coverage we product supplier double added much ammunition with lot it's also then determine, that these certainly is get another battery provide fleets are The battery. with one be forklift able support and for think have, of another get is timeline also some

So there's comes practical of when a -- to setup so shopping, you a one-stop becomes it application because fair to amount in point. forth particularly lithium, go the and have

we I -- pretty expand. are confident really feel think to I So going

how a your much?," through a some get Except, out gotten say. I more "Well, opportunity I've execute network, of real own and a question, think my feedback, marketing it's people "Look, to campaigns. difficult there's lot little there," if you to

Operator

Matthew The is of Galinko, Group. next question from Maxim we have

Matthew Galinko

you just shopping, weren't to fill, enough guess products on in about developed haven't any maybe Or the going that not market do something competitive of sense one-stop there out up greenfields the it's you're you just and but weren't preference I from think for mentioned have the if you end just market in, maybe that missed has you you opportunities following past, a able kind believe forward? on that opportunities, you of here?

Ronald Dutt

potential Matt, talking about? you that the first opportunities What clear. very part of didn't come through are very,

Matthew Galinko

situations And talked emphasis you've couple you where mentioned the for a think also market you where on resources into line it's just being there market of the competitive out, but kind preference after, think just that been the just stitching that put back lost the where I'm in question, curious to or go you call, time some could filling you together voids have developing play. end if you about product I one the see the of themes to really of point that whether shopping. was those and then I'm potentially one-stop

Ronald Dutt

spot-on. is sense Your

product missed there of offering. We we variation deals kind a to agonizing weren't have miss because was certain of that some were

like, counted up, forklifts -- all go there's, somebody to variations. and want you the XXX different If

didn't wanted different we to they like, They yet. go to needed, fact, one do to what types with to supplier selling And coming variations to to that be, some -- that now. But there's Now of we've lower because small we are a they orders one are and was picker wanted hadn't go a a X. customer little with point some all that in of want on out there them developed the someone. forklifts. low-order model, them believe but is volume gaps X Well, -- one some, we're of missed the

And we the business. didn't get so

of folks and of So I some do. I all think there examples And are that, understand our really that.

business So we more acquire we think to our fill can continue out as lineup. we

Matthew Galinko

it. I not-too-distant in adding future. heads follow-up a Got just to sales And guess the

we'll Just given where the macro that's it macro on contingent top additions for and Is is something -- new what when contributing and sales quickly I expectations line? are guess, how to start it environment? your starts short through that contribute come they spending see even is think in find of context spots in purchasing Or again the term, could the the current to meaningfully? relatively you

Ronald Dutt

big that of coming you the a X.X a how discussed but that down just well. network of they're thought X, I'm start fully The within to much period they that. to lot also were X- has the business recruiting And we having here contacts, ago, think months. zero. And like starting when increase the that X-month to hiring and Sure. think network because the bringing not require Well, takes sales other level, feeding And and from you think to we've or is you we aggressive, you're in was really definitely and sector can problems that when sell and about group XX ground capability And the anything. order-takers. get salesman, understands where has been in to I he There's in hired network, companies, really I a top-tier people. years start this years could not I rule X new new X factor things. extent industry. from the who to this dealing new with more in, when a a little hire case really could it hire with mentioned I skill I that a were level, along speed. the sales sector They of salespeople up bring certain person they're circuit: off in know-how, as sat people I that's thumb to it And

in much? the have a So Fiscal How and I think a is definitely you the we on get that. But door. of on think all counting I'm firing one comes just Year that you 'XX, It's that hire what crystal ball first learned cylinders, this don't for I salespeople, revenue. those exercise that bit

very a over salespeople or solution focused, that. have hot very advanced also we past love rate and market got very years, high love interest lot product, a found we've past We've we've You're and they these energy of the X because had hot demand. not And growth X determined. an months, a

So interesting to expanding really exciting. force. It's time sales the be a

Operator

we have Irwin of next The question ROTH is Partners. from Craig Capital

Craig Irwin

quarter So the I last air did really March job guess, communicating Ron, good quarter. for a pocket the you

very years. strong that results, margins, I right? the of of that's The kind they they the over of me margins, outperformed, last financial one and you've impressed you But right? gross still are areas where one So gross a the are, that fact couple really job guess had thing was what impeccable done

longer And on is products next the be might little of more in maybe getting Can efficiency? on there? any or us a you you're margin this might gross give a business there target Are update You making? bit Any to talk margins. anything issue to cut that about mix dollars that XX% term quarters helpful. over it things of to manufacturing would changed a the likely have couple you color capture opportunity little

Ronald Dutt

Sure.

we've about although are pricing. I'd but the with if on about are, beneficiaries of products. packs point a haven't that We a heard that beneficiaries of that with booking to past lot the in say one most with our you hard of volumes work costs volume comes improving the to of the those China. grown -- X/X underlying packs like, bottom in we've that significant, of [ volume, costs, the of cost of along X/X lot this of declining the had reduction had one to are over and we as battery I in seen quarter, thought lot high-single-digit packs. the that, And ] thing, of coming have you've a how may out our price a you vendors, And

nice begin through designs X/X warranty to So that the through boost. I'd certainly there bottom with that soon, on along elements, an we're to from That's the ongoing get lean, as a other the cost we're reductions more flowing inventory mature, that's going the keen we're through well. boost, of through of affect kind quality, elements gradually with to early-stage product the a way manufacturing close of say cost to goods. from that. -- But of starting

have bearing blip the are our see. a that warranty is I'd a had that competitors' a also pricing It's function on of of really we thing which that all our that. And ago, Although say months value-add the customers last has the and few on bearing those happens. things a function But this part pricing competitive in the marketplace.

our really trust say, on that and, rates. extent pretty lot a I all at our attacks have that X quality, our product I'd remember gets supplier, the leverage. I X ], more on of of pricing or [ years training product of were execute failure delivery, the pricing. high ago, our that with we innovating We responsiveness goes service our to building from us So didn't a

have the You the whole leverage just the didn't because risk-return uncertainty. principle. It's of

beyond. fuel, see something fuel storage one helps thing, XX% a that to to from we So march that help coming or eventually is

Craig Irwin

a are trucks, you Have Excellent. opportunities potential would of batteries, manufacturing considered existing retain delivering from you market? that be chunky the industrial markets, benefit margins like batteries, other I And a then your salespeople really mean, military footprint big-picture good question you. diversification? your these other lift outside medical Adjacent would your batteries engineers looking into for for and right? that and or at match also

Ronald Dutt

much very Yes, so.

think strategy think very we fuel But been infrastructure business our be that interesting, a distracted with. always DoD keen a create in I because getting has just strategy on partner. to need new it that bid have we to we put Our a mention didn't now would adjacencies or we to which where help very, into DoD, proposal to with build DoD you a get scale. on I'm add whole

So we that. on of proposals actually on different X have couple a partners

that technology we're talk and an approach using, well. has Our we fast-charging too, about, as partner that to connections that DoD, the There's we back East. have R&D one

that. we're on very yes, So keen

have XXX-volt, went automated vehicles, along. for called about shuttle a company Local project Motors -- a Local made a new Motors we And we vehicles, those. of came dozen with company and under, the We a way, done did by X-passenger fully shuttle automated

with So them. we're working

our scale, we one need to to on we So time, build It the same to hand; case, has at satisfy business exploring explore. are opportunities. the

We are exploring those.

So yes, absolutely, Craig.

Operator

turn no time. further Dutt for this to now like questions closing to the floor at comments. are There Ron back I over would

Ronald Dutt

to would than you to were forward firm, IR you, and thank Group, update Thank your unable I'd Thank of If Operator. each our you like results more look on happy out continuing we conference ongoing please of questions, past to to This growth. our concludes quarter. who MZ progress for any joining assist. today, and for our to answer be update reach financial our you. this to

Operator

and Ladies Thank today's concludes gentlemen, you conference. us. for joining that

your You lines. disconnect may now

Flux Power (FLUX) 9 May 242024 Q3 Earnings call transcript