POLA - Earnings call transcript Q4 2018

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Operator

Good day and welcome to the Polar Power's Fourth Quarter 2018 Financial Results Conference Call. Today’s conference is being recorded. At this time, I'd like to turn the conference over to Shawn Severson. Please go ahead.

Shawn Severson

Thank you and good afternoon everyone. you for taking and Polar conference thank join time full-year to call. today us Power's like all the for to XXXX I'd fourth quarter

After updates Raj Polar provide this today will Chief Zavala, will be which, quarter. who the on an Arthur providing Raj, Chief Arthur key hosts by www.polarpower.com. Officer. Wires Operations will at objectives. update Eastern key operational available Sams, A quarter's followed begin detailing and company's overview Your X:XX Executive Time the Luis and by as the are release on results. Financial Officer; well crossed financial This an today Masina, will discuss at website the Luis is events strategic Chief as Officer; press results the Power's of in

Following management's the prepared open will comments, questions. call for we

to forward-looking results you associated I'd and financial that those Before and materially that SEC filings are Sams, Power's I'd like of the call prospects, webcast to described we the like Please over company's supporting actual be risks could the number a and cause from including CEO. website uncertainties differ of made Arthur call list results those today, we remind Polar would At in regarding to future for for company's subject this to and time, on industry the call. a refer to to everyone refer more information. the risks begin, industry to may turn and statements

Arthur Sams

Power's XXXX welcome Polar conference fourth call. Shawn, and you, Thank quarter everyone to earnings

you our markets. quarter the key our for each discuss XXXX, of briefly for core will I update call, before provide I'll an today's fourth with During highlights

to of provide and like a Luis call. later details financial I'd will results during summary this give First, greater financial then, brief

gross Actual quarter increased QX reported X.X X.X million. we XXX% XX, to million million compared January million, sales fourth X.X including million for between XXXX during and revenue on of the higher same preliminary a key XXXX, XX% three-month drove correct, revenue significantly reminder, period QX in a of last to for must X total basis, as to to year’s XX.X million but XXXX QX typo, XX.X As was between last to year. XXXX a period, same a volumes quarter compared the expansion, higher that’s concessions, at be customers material XXXX margins pricing price improved overheads sequential the well below XX% On the QX modest tariffs cost million associated the at Backlog million of on with and during with from increases XXXX capacity of and significant XX.X of from million associated our US result raw the recent end strong end of a our to fixed put of X.X materials additional quarter. XX growth was two production same raw customers. telecom based QX portion trend and telecom orders this our validates tier-X last the product demand our year. mainly A XX% is

diluted share net loss During to of of per per million basic diluted of in QX $X.XX a or compared QX million X.X or QX and in we as share posted XXXX, and a X.X slight basic $X.XX net XXXX. loss

long-term of opportunities in can later tailwinds will in business. but convergence front we the in have that will growth company I review. Since been Polar. business a drive in taking year positive pushing more strategic founding our hard our optimistic I'd IPO, the There's to pivotal say been a I'm about of I update call, to a Raj forward opportunity of provide believe that the provide been the I've believe details say and front and initiatives us. tasks Now, never us. XXXX, since has XXXX for leverage to and like we've provide for that proud place our we

and seeing tier-X a their this superior DC are side, we're systems. being telecom for focus I the we network in the expect DC, is hardening, on for site on our our Specifically, the carriers diversified kW need today and tier-X power with where critical. of generators especially space revenue which and reflected larger have more capacity, -- backlog cell well, increasing corner XG we solution adding is in we is seeking And increasing believe site capacity telecom. around carriers favors the as

Internationally, service allow to as compelling are cost and experiencing and landlines the an that networks. too grid. be many and of type to another feel opportunity This markets and bypassing a engine utility the are emerging power will countries maintenance These may products We the telecom the use create these service. growth, directly applications. in will also micro to is our cells fuel much of and regions this generator. And reliable the This backup provide providers our going batteries based loads bypass backup providers pose too wireless cells a systems, small cell to the relieve technology, as for small maintenance of required ultra-capacitors. more micro are for significant wireless

create are amount this product for grid. are energy Our the off an sustainable hybrid also And vehicles fuel systems with of low an all than spearheaded systems. missions the based of with generator all combine systems. an energy, the with efficient lower ideal and OpEx military cost DC right grid Outside of have amount we CapEx systems and applications to is bad and costs take solar our This the being unmanned telecom, or zero create lower solar by DC power service generator all today. that driving solar that or the for is need right

currently we're for lightweight program can is commercial of we a power and DC As a good example Army DC manufactured our innovative new platform on how compact and US power designed system. opportunities. applications a where the we've This for leverage for a key reminder, working

emergencies resulted for demand residential natural the commercial backup for We are market, have increased frequency the during and power incumbent applications decade increased believe we applications. DC systems disasters systems over has and also distinct where residential for The our developing new past advantages technologies. of in

In to vehicles to need use grid, addition, the strain electric via that these gas set. a popularity electric trucks we of the will generator DC creating vehicles natural rise the in feel and electrical charge

developed and in line efficient sometime to During very residential Germany Engines in internationally. our the increase in We in regional our XXXX, third line. way markets. telecom in markets industrial market our we that of We of this gas emergencies maintenance, in series the hybrid believe both natural residential engines solar fuel with to Japan, and long-life This Bosch low a develop applications new into to supplier advantage and to and release will run it XXXX, a ease the quarter targeting Toyota product relationship select key propane. a while lead on product later during expanding and access for natural competitiveness propane gas is commercial sites initially natural West, and local plan and

diversify car increasing continuing roadmap. markets. manufacturing place, and key reminder exposure XXX telecom services and customers production provide technology presence and product charging. second other And military, to efficiency our our our and solutions growth. and by facilitate key by capacity and in our providing industry-leading base to Three, our more and up revenue fourth, opening including we service Two, our a to the our to With North our in will we smaller our everyone, to expand America one, customer objectives strategic increase with are and telecom network to share larger As about our of international estimate and market local commercial, technology are: markets, telcos, continue in comprehensive pursue them in to US top-tier through increase providers. plant, electric power residential, R&D wireless

he provide to I'd Now, it an can strategic like so on to hand our update operational Raj, over objectives.

Rajesh Masina

Arthur. you, Thank

me on expand four Let mentioned. objectives strategic those Arthur

expansion. The share and market increasing share first gains – one, market and international

for tier-X some quarter by as in This backlog. has and the Our continued we're traction quarter US initial evidenced in our positive continued XXXX. seeing with carriers high the first momentum forecasts our

battery the to emerging quarter, devices On renewables prime countries. a remote help DC Due to sites demonstrate we electrical successful the radio the systems fourth infrastructure, generators and telecom combination in lithium demonstration not and Lanka is in a system. like to tower of believe and with and minimum We hybrid other is of application our of sites, our this to Lanka a a DC will of use share front, few power are off a -- international require sites, Sri remote in grid Sri the emerging storage to thereby, electric percentage generator our grid milestone and, market battery power the connected in the equipment. installed this demonstrate systems in us the in to power hybrid significant -- and use provide countries DC expand during key

orders. additional select in we have result demonstrating and we in should been technology reminder, believe a As international that markets our

XXXX, in example, order based year. XX the for tier-X of December installation urban between of initial construction rural For in XX the Namibia a Thailand Furthermore, we a was QX the of we an power we national digital which part divide in that of on demonstration towers received site a to completed DC during in did for and phase telecom bridge program systems earlier and telecom Namibia.

we using available drive product lower on earlier, product a source will emerging help that mentioned a market grow new carriers top-tier as this a share help with Arthur we're widely sales. to sales believe fuel dependency will drive our As and US and and We launch we the provide solution reduce believe diesel. LPG working international cost market incremental can

provide We comply to systems their emission and it telecom permitting standards pertains when necessary. backup primary with enable and also better will believe power to this as customers the power titles

diversification. is The objective second

to perfect Namibia base and our to our and customers to of an and our comprehensive expand The exposure telecom is diversify is applications. second providing other customer product markets services products services. key in opportunity strategic our more objective a increasing example and by

-- transportation like – providing the more in their provide and part providing opportunity their a by Telecom, equipment. from government customer applications good That maintaining to profitability military the ancillary saying platform sites, with Outside surveillance the believe was along like SMET future. increase other hybrid us the this expansion we electric costs remotely systems give have that over program, program. seeing equipment, power services power military areas. vehicles reconnaissance to US the the will yield We infrastructure to leverage Arthur is sales of wide We cell powered of to solar revenue well, and same cell have about horizontal utilize their traction initiative regions propulsion our in as installing to in we're these the

very hearing tests. first systems tested the those are to sector expected now During in we And additional such such latter technology delivered be we've And, patrol, XXXX. orders completion applications under robotic receiving we during from total these a delivered XX automation results in mules mules of the field XXXX. have of conditions. commercial integrated the tests. enforcement, these during we'll being able future. We of in XXXX, platform so operational environmental as would believe far, various into good coming been be Completed this XX half half successful type We quarter, leverage upon of fourth border etc., and sometime and systems robotic is anticipate production law this the by field as well of challenging to

-- objective third capacity years. expanding what profile in to solid is expanding meet The a is our the we capacity coming demand believe is

opened expected office XX,XXX the and double just our is As ongoing throughout at when This of is This it we which continue efficiency. a located to is XXXX. second reminder, capacity is our that approximately we full from in in process expansion to production is plant, corporate an Gardena. operating manufacturing away XXXX, nearly minutes feet square expect November

opportunities. is be our technology. throughout each key roadmap. technology to and quarter focused provide leading progress fourth strategic and to A made industry objective We're two the solutions on key year. through expect technology currently initiative We fourth power is R&D The

technology. First within one, integrate -- within R&D --

the is one integrating generators solutions Arthur product. and the battery with solar LPG lithium our one discussed, ion complete and site storage is solution. it provides the second DC First And as is,

one tower a -- right shift renewable markets. back and of solar solar the We solution a grid electric a solutions systems the key of We power generator regions hybrid about in worldwide, increased based cost. tower XXXX. the ourselves is controls in to be amount provide charging saving the expansion improve our market regulations of to solar engine and the monitoring DC We grid, generation hours efficiency of of as cost need combination the And order with this this plan in and in generation hybrid is, of -- program only fossil include improves designing quarter grid project effective. to telecommunications LPG will this talk leader fuel reduce positioned advanced the technology back optimized the systems. process is our power product engine new optimized power We systems. battery technology to gas etc. international capabilities, and companies our field storage electrification systems remote also life and management solar declining the So, and not solar of combine solutions accelerated XX,XXX of to upgrading remotely right generation. has of in to a the the up that key telecom fuel monitors natural vehicle which grid sites storage storage the to the in the systems competitiveness. the developing the and next we'll power overall cost towards and combined To mix -- grid, hybrid second A services, thereby are launch for field. and but and that the rural is we next goal believe significantly, on that hybrid off reducing cost, differentiator off overall international key systems the systems first believe In enhance fuel is peak and our increase environmental companies telecom our Applications for

and integration a some solutions a of initiated summary. systems. factor our for overseas. and financial to his discussions differentiator few level will call gives a now with success large demand high will over customers believe be our also our it technology domestically the We and CFO turn power competitive in solution. have key market generic LPG suppliers advantage the this key compared I Luis? innovation Luis Overall, We to believe we us for a key and power the into seamless

Luis Zavala

sales quarterly increase the in XX% million the Gross six in was power XXX% net X.X gross three combination in was for totaled compared sales profit of an shift will DC XXXX as The the Gross domestic months compared ended as the for by XX, Net million a December of The X.X tier-X XX.X XX.X of XXXX. a sales majority million customers million the to to XXXX. was the of year of XXXX. an in compared and carrier that a in increase to for December wireless concessions sales X.X Raj. million XX, next basis, percentage XX, from our tier-X you, to year an XXXX. We an of totaled higher million sales increase December over customers. with of XXXX. telecom believe percentage orders increased our systems systems X.X backlog attributable DC in be associated million to of our sales US. increased the XX.X XXXX result primarily of to tied to months. X.X ended volume a within of attributable XXXX, profit Thank decrease the compared The to as increase XX.X% as to profit telecom facilities. backlog for at X.X in at as power year -- wireless the at our XXXX of compared costs the end for XX, million XX% increase manufacturing to carriers a net XXXX, tier-X year increase customers manufacturing to XXXX expansion last as decreased million, overhead On December to ended XX, pricing year compared in sales to in end to XXXX, as Backlog QX December as the in

raw the million share XX, share comparative result December cost X.X loss basic a was over. in which $X.XX tariffs XX, or of basic diluted to new was increase million we sorry, Of in In XXXX to XXXX. X.X an at receivable as X.X -- materials at December shipments diluted imports and XXXX. to increased that of per slight and million tier-X sorry, me the and R&D, respectively. the in a associated eight experienced negative million XXXX, aluminum, or on associated XX, of period million I'm was December Net million from in inventory per Operating increased expenses Net with negative increase of this in telecom of start increase X.X result totaled X.X X.X and million compared XX cash compared December and of XXXX end loss in of million negative as China. in with in total negative let other used terms. attributable from XXXX activities cash and investments Cash amount, a loss and and million to or million net $X.XX in XX, -- activities X.X as into net XXXX. totaled million X.X addition, marketing with X.X in I'm decrease X.X million XX.X to operating XXXX, an in X.X X.X payment XXXX, customers accounts The increase million sales

like Arthur. it I Arthur? back turn would to to Now,

Arthur Sams

Luis. thank our work everyone and on their financial Yes, of you to look speaking I'd executing continue call. with forward support results you, and today year-end as shareholders to our all their like thank first to We on strategy. time growth a for continued we for conference quarter

I to Now, call questions. to like this Operator? would open up

Operator

now Financial Stanton [Operator from [ph]. Corp Pacific Instructions] with hear We’ll David

Unidentified Analyst

I engines, included at on bulk see I you XX%. fourth they're them forward quarter on gentlemen. that your there, see And margins. going discount Hi in included, do that would a where with I got where question XXXX? assume

Rajesh Masina

in we're started we of But a that One terms mid-XXs kind get there of the things. obviously, We the factory. price few able to to because just the is factory, not gross reflect yet products of margins.

amount -- lot overhead is going that of one. significant of into added overtime costs And have also So, a there.

efficiencies we're to yet. able not So realize

of I first we would improve, the our the margins still that say but low-XXs, would say half the would would the would in of half margins second suffer So that? probably that year, year, and would we be Luis, say, maybe the is

Luis Zavala

The two as compared up we XXX and bit we being as employees employees ramping believe are a margins the year. of now, I at right equipment last end and flat will quarters, we're staff. that next quite believe, fairly I be XXX adding roughly, for of new about to the had we're of

lot in because we're of still there's quite up fast. simply So, ramping inefficiencies really, our there's of a a operation lot -- – really

we our and as staff we So XXX%, will our margin trained get start seeing this running improve. facility new and up gross

Unidentified Analyst

That you mentioned the time? market, QX? that. about Will you the that it's that mentioned up wondering topic, show was capacity even your increase sounds going On to I that go running alone I -- good. your I'm start telecom after your anything let revenues you’re for see of the PR, see January where in vital that to production ability ads number all production US just you forward glad employees. people else. we in in

Rajesh Masina

QX again, of but ramped still part factory – up. it's moving we’ve slow, one key because we're will departments starting be other, Once the to from some moved

For example, more February. than February will January, more the March is than be month of

up scaling So, on basis. we're a monthly

thereafter. it's positive but results would quarter, results overall seeing some the will of on QX give be kind So guidance of compare most to in last early QX, we'll quarter, seen and we be in for the yes, but to how too

Unidentified Analyst

Okay.

the Should up Or think less little of and quarter hold saw or fourth we're million going number have quarter? quarter. go into you second a I first expenses at you do with your X.X overtime? bit see additional that -- people flat it kind of expenses, we For can for

Arthur Sams

it. think the process. Right positions, the -- it We believe pretty I our I which moving now, we managing Right just key our maybe three will we’ve hold two completed other or think we've much is goal we forward, than flat. now, to will reduce be overtime, hiring

Unidentified Analyst

Okay, excellent, excellent.

you're front, making different on progress locations. international to hear glad the On

towers think, you Now larger get Are on there that? and built. that expect percentage? XXX there's I some more like second the contract, phase? need a to do you also Namibia will be a be And expecting to

like can think XXX. higher towers? percentage of did XX a You you Do the the first you get of remaining

Rajesh Masina

phase, yeah, XX a It's the XX did the XX is which in because might of other get first share XX, not still planning the other the allocated we there. yet. We also

recently. So Arthur, you can talk to Namibia

Arthur Sams

of large and did costs going never We going round that well believe we next tied be good in our companies have companies, awards. can outcome. capabilities. to Well, We we're unfortunately, But very competitive job. the do when that to you feel the in what's we're contract a and you our government predict really

see so. or So to comes up It month or be the we'll more. even just couple have next a delayed weeks what over may of

Unidentified Analyst

you Do from expect orders generator to get Namibia?

Arthur Sams

car many for and not generator We get it's how here's Overseas, to power have there. parts, support expect important in too market. need country important Namibia. the to you you us, if to Lithuanian orders buying have to you're from much have and And, in is where an soon going How clear but it. some service electrical like, the expect is in from order to country but point. inventory the facilities not It's infrastructure you're mechanics, local

just they Africa. buy an generator an can of South power office count power that, parts got And becomes one's They to a that support. over edge the we've having everybody we want having there's systems with So service in collector kind it DC systems. feel that on sets item. Well, in interested or collector by no that maybe,

Unidentified Analyst

Excellent.

happening -- second could was internationally, calls, of thought Australia update you in offices be a ago, a there? give conference have one speaking Now, year your in even on largest going mentioned Australia, you you what's few forward. mentioned market you Can and any maybe you

Arthur Sams

the terms application able of that reach orientation, of still in we have number and our of to one terms support to offices. that participated overseas terms product be training But We in capabilities, demonstrations. we our a have to of things turn waiting of in we're overseas way. is to in Well, provide orders for to to out the more

on of sales operate, support overseas ways to many a have before overseas, really execs there and bit the of to and we able us. overwhelming. up In have other we turn go can wonderful is been number to requests have little open doors, we the demonstrations words, market but a for bit So questions who

So for this quarter. sales, overseas we intend sometime demand starting meet next to this support and additional

Operator

Thank you.

our will from take question We now next Bridge with Kobylarz Jeff Capital. Diamond

Jeff Kobylarz

guys. Hi, gone things so Congrats on well far. how have

heard in that I about pushed XX will was think the all that sales backlog half out of I it said hear first right? as the of be million that this year. Did I

Rajesh Masina

That is right.

Jeff Kobylarz

right. All Okay.

of ramping that's bit to more quarter catch So little but obviously said at X plan. is the roughly, as quarter a will second least of a And up revenue manufacturing million you first you're be going up a quarter your slower. be

Rajesh Masina

No, But show QX because not more have the be QX no, that saying, previous QX we This saying or we be QX. is can still realized But one was the would be answering I yeah, And ways to shareholders in would caller’s obviously, was, margin QX. versus see the to those question Raj. production question results that see. go answering still yet, I our was already some efficiencies by will already basically in -- wanted Jeff. will it expect to the in the QX improvements decent.

Jeff Kobylarz

you're expect for to going can Or what year? just you have you in Do we about second this half orders depend Okay. get? comment of should revenue that does on the way any it

Rajesh Masina

on I our it's forecast based are little point getting a guidance that At the give their changing requirements be time, Yeah. premature part, to it'd think week, from odd of we because an so customers and working is every and this Basically, we're sales. at it that supply reference dynamic good basically better, point point keeping then backlog. where than a demand of away lot walking a the as would we're and backlog off are from more a

where the So, back. those to get to our orders we production increase fulfill current point focus a before we can can the supply, is go

we to months to mentioned analyst agree than we that somewhere more high one reflects is want to want too that high is management too the cut point revenue. it that we that -- where think and of a down, production as two not I bring backlog As backlog number to have and point a we

give So we first guidance want we on to get before run some rate that to one. the

Jeff Kobylarz

backlog have feel you Do will Okay. that two you months to get where is revenue? of the just point, a when

Rajesh Masina

Yeah. It’s a a something better kind that progress but probably of look we that be continuous a will maybe make, to is time it’s QX might weekly for process that yeah, end to from once perspective. us again, at have of that

Jeff Kobylarz

And All this gas. engine propane, Bosh Okay. right. of natural flash then about

You're the this going to, you product said, to quarter. the market third in release

think be of say this just Is USA markets. I the you materiality small all Western in, it’s of like very I heard at to kind about comment going unit? starting or any this

Arthur Sams

And to which Polar looking residential made the at and do and towards some we it Bosh Power, market two Power. the got be by telecom, the we've that's then releasing be Toyota, quarter. Well, that Okay. release the sooner we’ll Polar than into, it will the quarter. going third The probably markets third would be we're applications we've that is that first that releasing are we’ll it controls and is into into, got engine alternator

Jeff Kobylarz

Okay. it? comment right, product, the from all the telecom comment any industry, telecom so how about about, they excited can you Can indications you are initial about

Arthur Sams

drastically the prime There's to applications gives bit Because able terms power. in two their That's past. power them Telecom. than reduces it. prime in more One of we've excited their And in improves been and backup very maintenance, what one efficiency and power, deliver little fuel it they're prime a power. is about is

power, power than In unit XXX terms gas backup engine XX% and Kubota of that does. the been about using natural or more we've this XX% provides

and So same would does more them power the about gives some engine fuel that of efficiency. telcos the an appreciate so

that. So that's, about pretty excited

Rajesh Masina

at any of engine. we meaningful from But point this don't backlog Yeah. that time, have

there clear be and we be we’re chasing. one, to will several let's, that that product markets a So new new want on that's

So, don't that have we yet. definitive one on anything

Arthur Sams

But engine would rather Toyota that Kubota. as to And at the a engine. to we the have same time, the Toyota people to replacing opposed most be talk is going Kubota a

Jeff Kobylarz

right. All Okay, good.

industry, it? few there telecom will it going just are that initially that the buying to sales the customer are -- this sampling to or be one that's a So is be

Arthur Sams

When we to somewhere be start major to between expect X introduce And it, out will there. telcos that to XX probably hit we and domestically internationally. both

Operator

We’ll Quantum now Chatard Capital. Tim from move question our to on next with

Tim Chatard

many you you Can shipped about how in XXXX? talk units

Rajesh Masina

we’re in that no, we reflect terms because of that Yeah, in units of not total guidance there. would number ASPs ship giving kind our No. of

legal talking units mainly revenue on coming number has -- percentage the that's only the unit, about different yeah, price against guidance or per of large clients because competitive we’re The So like yeah, the from our of clients. of reasons. advised giving

Tim Chatard

can talk about how about international XXXX? much revenue from How sources you had in international, you

Luis Zavala

Sure. Yeah. that total was the in And approximately net XXXX, of $XXX,XXX. X.X% XXXX of sales X% for from totaling total year, revenue revenue million. was increased international which X.X our

So, we increase international our in a significant sales. had

Tim Chatard

sounds were roughly two correct? Namibia It Sri Lanka like sources, the and international is that

Rajesh Masina

a are big and the well. Those well, from order two then had we ones systems. with had battery Thailand decent Yeah. as we some as Thailand Australia

Tim Chatard

trying how new you it, items, list via not you prices difficult with some raw cost recapture? just with your is reflected I guess, to is recapture tariff the material that about in that anything you goods, you for pricing And XXXX? described Have I'm on just that to issue think of for can customers?

Rajesh Masina

we our tariffs, And, it's are going a our price one are labor costs, on informed we on or negating the have And yet that what's as our to same the were we, the obviously, our increasing the able is out where, happening customers. those are our we because we discounts at do of hand their in efficiency mean, of process I time, to tariffs. reducing expecting would kind back increasing about our up. bouncing like headwinds effect customers Yeah, savings had clients from volumes there the to not efficiencies. pass terms And, of but

So quarterly yeah, but informing costs tariffs. the what we on material undergoing, are are clients our our up went how basis much of about because constantly we a

Arthur Sams

sharing A additional agreed we're are it's the But, that an some still cost, some the course, expense share offset of of have little through. going increase that to cost. we to suppliers of in our

Luis Zavala

– the to and margins. sharing they on any our we’re those do costs, aluminum Yeah, steel of to customer. But, the And not we're not able cost. pass the getting erode on

those hopefully, be lifted. and the in would of aluminum So future, steel sometime near tariffs

Tim Chatard

continue there but conference call It's thought? now, consume to out from third you early of do of Difficulty] towards did What's [Technical a your the the the might be to to had working be turn the release right expect not that capital cash. in cash I case. thought recall but that quarter you year, end XXXX

Luis Zavala

operating a bit [indiscernible]. pretty ramping consider we also and technically, in terms still expenses, that to it depleted But of Well, high, when coming tier current working yes, cash a X it's fairly of quite due from assets up equivalents, terms but of capital of sales in you in our carriers the is and are the that because cash much, our whole. as

the route. needed We will looking so our a X feel are to cash stages into later to go qualify this we receivables year. large go year, that options. liquid in in this easily increase of that that a be balancing better tier should into with start we part credit receivable in We we as We situation, accounts will our different with and cash have, with our move of feel amounts we telcos, that out if later of the as we line for it the we

Operator

as investor. move question from [indiscernible] on private now We’ll a next to our

Unidentified Analyst

for gentlemen again Good great quarter. a and congratulations afternoon,

first So, I on the guess, question backlog. my is

be kind backlog increase remember as give comments strong to current said and quarterly You of prepared mentioned last in in quarter. as of what the call your continues continues is? think backlog, today the Could you estimate current exact that of did I words, to first an the us you you don't I the backlog

Rajesh Masina

for the soon those that prepared will have we numbers But something an it out this call. is share information note, XX press want be basically that releasing public. in to backlog don't we as of March We official but to

Unidentified Analyst

for there forward a danger not engine? then. will of engine kind people just to waiting about buy getting old questions the to of And while answered, of kind out orders, of or testing be most the Okay, a the in engine. wanting Is my already I been pause looking that. new are new new have engine,

Arthur Sams

-- wouldn't small. about No, inventories if I'm understand relatively I the are our Hi. not worry the Kubota sure I question.

So I worry wouldn't about really that.

good. Our are on Toyota pretty current engines inventories

Unidentified Analyst

right. All

wouldn't backlog out you engine stopping new or you worry stopping ordering, the have about the So, kind engine while but would new still continuing seamlessly? they for customers just the test orders, the of

Arthur Sams

a from it. XX to year see this a change And this customers new the would seamless as Our other. one engine to does history about engine have

do it. moved one evolved to those engine XXXX Toyota XX But with the past So then, predecessor. Toyota. engine years controls market. about engine Bosch Daihatsu. called you probably it’s adding say, new and Robert want was the by XXXX model hand, on US approximately the it, doing model has took The this company out to of Daihatsu what off And engine’s a slowly to years, this XXXX, a the we're , these then we bought over by were back built about in for

they improvements to While and compression in ratios. in engine Japan manufacture they the countries, some made sell and collaboration continue other and of terms

we we're So XXXX what an Robert with Bosch controls. selling the higher and in the is and or XXXX sold what to real an now the and engine body the difference XXXX electronic about throttle timeframe compression engine between

that we're answer out So, risk issues. your to going or some not question? coming with Did or that's problems the this a I developmental market be something onto is unknown something

Unidentified Analyst

very Yeah, that's welcomed hear to great All and right. detail.

on Now, tariffs. the

due price from prices different and understand companies, increases tariffs. other kind listening, two they're fields I As of of researching to

coming another already tariffs things them was like and things aluminum you there for mechanical of like kind them tariffs. talk kind area that small the of hit components, perceived China, But of are on just and because One everybody and shortages, electronic of components, because and from haven't steel, out by about. been about like tariffs. But prices which talked this was there's tying actually is, before increase these

prices And that you’ve those that if things in would decrease be benefit -- on be at least? could QX? So a seen

Luis Zavala

capacitors seen named We’ve you electronic costs. it. of subject components, shortages, increasing costs, to all been kinds and decreasing Yes. Not We've it.

Unidentified Analyst

And those not of are China, between falling not are decreasing yet decreasing. after, I guess, those after bit a relations off little

Luis Zavala

public, the without in the increased, the was the Let's put being that concept, announcement day or forth it put a pricing on effect. tariff even way, it of to possible this when aluminum idea,

too prices China's components they than is But yet. one down come components hoping a sourcing a will. electronic manufacturers, we things to We're electronic of where -- raw being haven't and countries, are other these quality. materials that manufactured. things of So, is other also Chinese that But lot reason expecting are supplier the one strong

a wave It's effect. effect. ripple So, a it's

Unidentified Analyst

on incredible electric in is California, for of hit in battery price that just people the And by here been they the or because the highest there's system moved [indiscernible] price power, power, in effective And we've been my question for right. later solar All in they last residential, kind for it sales increases of advance. kind day. have window surge moved

their Is would system a power you're make about you California go you grid use about resident can solar residential? natural able be the to that completely where, talk just when off completely So a in with and own talking what gas? the

Arthur Sams

something. would utility or people a bill believe applications won't jump we paying comes We sizable be most when mean, do it tell utility don't But market. the electric to It’s service. cliff like that can cut to to to a I off that the line, of everybody one their to that.

However, up, to That's believe offset going switch gas costs. those to rates the power over for demands, to electric natural one people example, with we want escape possibly that thing. peak that, and those

can believe heat are would charge heat their home is and the the waste heat natural that house. off using their engine energy they're The the car supply consider the same to the gas pool, to other the time, to heat cars people charging we at they as the their charging who car, using be that to at thing spa,

co-generation this wasn't utilities electric at my I market. and there sizable own have put mean, If a charge be my from my enough could generator there. car. we charging, service I'd charge car I electric currently to don't with and see car electric in electric my I apartment, So renting,

So as to I X current would in car be my to service. my two one able days or off opposed electrical to X charge hours

Unidentified Analyst

and selling like there the -- kind isn't grid the with an grid putting as that? power solar something turns generator as like envision a hooks up generator and or you enough expensive of controller do electrical well on is too So kind when or of solar power the that

Arthur Sams

solar say, difficult sell consume Let factory. where back that utility. say, the more way. outputs shading as the to the wants to panels, applications. And a is clouds couple on making incentive the a over that throughout me use. let's the power, let’s array of put this One the there's answer is But There's, power day, the to, the cause fluctuate factory to it to no all

you do connect So you generator is that into system. what DC the

with you're And so you're right amount is what combining doing the of solar fuel.

so that. that? So source you of from stable can clear that I a supply all electricity have you power your Was on needs

Unidentified Analyst

yes. Yes, Yes.

thorough. Thanks very been You’ve so much.

Arthur Sams

if going time, minimize off be to let's Then call both a at point they that's wall costs whatever off and there's battery the grid -- that's it's is even power their the ideal one, maintenance because application, replaced. in situation to costs because capital product, the that say, whereas, Tesla have connect the and other to back, or cell, you on the grid some expensive you're in

of is energy use and the instead energy the you line to you using do the in gas in minimize you natural storage the power. battery. battery, tank in what your supplement generator use or the that run And to solar So storage propane

process it's in dairy for an the battery pool, the swimming for heat generator the important or So water, you while spa, a less you're the what can running, if then of the you, again, make example. house, for the system. is And waste farmer, the becomes helping hot component have a use the the milk, if heating of

Operator

[indiscernible], We’ll [Operator from another Instructions] partner. hear now

Unidentified Analyst

to to, roughly, for think your would the related. second sort to I is, that have And move Once capital, or then cetera, Hi. is that you're to from million a a require enough you now? And you if capacity. would so make are that you throughput do just running, that number is you're do like what managing where production et XX capital going SG&A would do way up is, find two, is with you quarter, would you happen you believe time, -- meaningfully or what could to reach are you have that sustainable few trying having do where over questions it believe equity fully whatever to? related need to XX million, the current that facility you the of

Rajesh Masina

Okay.

I'll those this take Raj. is So, questions.

overtime million So to first, maybe and range once a in capacity, be million month. space rate to per yeah, our little that quarter, X warehousing that get is terms our full X basically targets, it goal to with run required, of XX to comes million, might million bit of some XX a

second we so, We capital working to capital What flow get rate, we’d was do Obviously, And equity there? there. sort That it's was assistance there. the coming cash third that need get to in capital to bottom go will also, line. move. question need your have some Because, not of think get capital the the be raise question. you is, don't we’ll profitable that this And your intensive, second question? at for highly to

Unidentified Analyst

And move believe to up higher? that third, meaningfully you your SG&A have would do

Rajesh Masina

not by by much, much. Yeah. Not

structure. kind that of revenue the support of level We’re already infrastructure to putting in place

increase So, of probably maybe or percentage a but couple percent will much. it points, a maybe tad not bit, a

Operator

We will final take now question Kumar from our Ashok from ThinkEquity.

Ashok Kumar

year wondering, XX of was very turnover, thereabout I what the you the it increase manufacturing sweet and be level terms turnover monitoring what million do And right you at XXXX? A type much. the the should end would or in backlog be backlog and to then you'll spot of be inventory thank be? capacity, Hi, Xx question would on believe inventory estimate do around that of in by we and you in with be

Rajesh Masina

right. Right,

Yeah. Okay.

us ideal for months worth So, of revenue. be would two numbers backlog

the be product the deliver product would within basically once eight deliver will [indiscernible] telling that So customer we the weeks. that the

get million prefer on we capacity to our perspective. and from production there, we So would X to get be we would that basically be it that the between whenever would be our XX backlog that would have million rate, anywhere X and to whenever That between the books XX million. million

Ashok Kumar

the to terms XXXX address international of have international, sales world. from committed markets In assume looking see mean, guess year? the terms I to particularly and international you looking contributions, of some And a infrastructure with of the that a high be probably does far the of contribution was this you not made you're to that resources in are I level satisfied in stand-out investment the thus throughout opportunities you're

Rajesh Masina

which way. we've terms the is products sales is half infrastructure invest been the further would We that correct. That sales believe by years past we And over any international need in and long. of a markets. and select what customization, to are in need the don’t that But we've markets, playing the those cycles one in done markets,

expect we years. the year saw in last we significantly see evidenced So, this actually or We up year, go some some to this results year. that would results following meaningful as but hope that

Ashok Kumar

to to of by assume products like with second international historically, more of average verticals year? normalize yield of one mean, carry reasonable profitability, higher then of slightly course, terms near issues a then in to mid an you some military like up margins price that some the and margins, your this type of question and would And product expect but profitability is customers in key last XXs are state you term, and working half projects lower there a T-Mobile, ramp I

Rajesh Masina

Correct. Correct.

the yeah, low-XXs, year, in be low-XX, quarters the normalize that half. half mentioned, the be us later in the as to And would target still the range. later earlier few basically in that for would half improve the Second we But, Luis expect to high-XXs, yeah, the it margins. basically of first

Luis Zavala

further Okay. no there's Looks questions. like,

Arthur Sams

Yeah.

up. Thank you it everybody. close Let's

Operator

you That you. Today's all Thank participation. for conclude your does Thank conference.

now may disconnect. You

Polar Power (POLA) 26 Mar 192018 Q4 Earnings call transcript