Exhibit 99.1

 

 

 

Polar Power Reports 2016 Financial Results

 

2016 Net Sales up 233% to Record $22.8 Million, Driving 2016 Net Income to Record $4.4 Million

 

GARDENA, CA – March 6, 2017 – Polar Power, Inc. (NASDAQ: POLA), a global provider of prime and backup DC power solutions, reported financial results for the twelve months ended December 31, 2016.

 

Key 2016 Financial & Operational Highlights:

 

·Completed initial public offering on December 7, 2016 with $17 million in net proceeds

 

·Net sales increased 233% to $22.8 million, as compared to $6.8 million in 2015

 

·Gross margin increased to 45%, as compared to 33% in 2015

 

·Operating income increased 2,315% to $7.3 million , as compared to $0.3 million in 2015

 

·Net income increased to $4.4 million, or $0.58 per basic and diluted share, as compared to a net loss of $0.03 million, or ($0.01) per basic and diluted share, in 2015

 

Financial Results for the Twelve Months Ended December 31, 2016 Compared to 2015

 

Net sales totaled $22.8 million, an increase of 233%, as compared to $6.8 million in 2015, with order backlog of $3.1 million at December 31, 2016. The increase in sales was a result of the company’s expansion of sales of DC power systems into other regions within the U.S. telecommunications sector.

 

Gross margin,as a percentage of net sales, improved to 45%, as compared to 33% in 2015. This improvement in gross marginwas attributable to lower material costs and improved overhead absorption resulting from increased sales.

 

Operating expenses increased to $2.7 million from $1.9 million in 2015, representing 12% of net sales as compared to 29% of net sales in 2015. The increase in operating expenses was primarily due to the addition of sales and administrative personnel and an increase in consulting and accounting fees related to the public offering.

 

Operating income was up 2,315% to $7.4 million, as compared to $0.3 million in 2015. This improvement is largely attributable to higher sales and gross margins.

 

Net income increased to $4.4 million, or $0.58 per basic and diluted share, compared to a net loss of $0.03 million, or ($0.01) per basic and diluted share, in 2015.

 

Cash at December 31, 2016 totaled $16.2 million, as compared to $0.3 million at December 31, 2015. The increase in cash is primarily due to the successful completion of a $19.3 million initial public offering in December of 2016, resulting in net cash proceeds of $17 million.

 

 

 

 

 

 

Management Commentary

 

“We believe our strong sales growth in 2016 reflects the acceleration of telecom infrastructure investment nationwide,” said Polar Power CEO, Arthur Sams. “Newer telecom sites are often outdoor sites requiring higher power generation while occupying less space. Our DC power systems, with a small footprint and weight, is meeting growing industry needs for higher efficiency and lower emissions power generating equipment.”

 

“Today’s reported financial results reflect a strong close to a productive high growth year for Polar Power. Our net sales for the year grew by over 233% while our gross margin increased from 33% to 45% as compared to 2015. These results reaffirm our strategy of investing in plant and equipment during 2015 to ramp up production capacity while expanding sales infrastructure. In addition, during 2016 we successfully completed our initial public offering to provide us with the necessary working capital to continue our expansion globally,” continued Sams.

 

“Already in 2017, the global outlook for the telecommunications industry that we serve remains optimistic led by strong expansion in cellular tower infrastructure in Asia and Africa. The domestic market continues its growth through increased investments in telecom infrastructure by top tier telecom providers. We expect the market for DC generators, along with solar hybrid power generation equipment, will remain strong during 2017, supported by the growth of telecommunications infrastructure in rural and remote areas in developing nations. The work to expand our sales infrastructure has already begun, with us adding new sales personnel in both domestic and international markets, while we continue our investment in plant and equipment to further increase production capacity and reduce manufacturing costs.”

 

“We look forward to sharing more on our developing story at the upcoming 29th Annual ROTH Conference on March 14, 2017 in Dana Point, California,” concluded Sams.

 

About Polar Power, Inc.

Gardena, California-based Polar Power, Inc. (NASDAQ: POLA), designs, manufactures and sells direct current, or DC, power systems, lithium battery powered hybrid solar systems for applications in the telecommunications market and, in other markets, including military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply. Within the telecommunications market, Polar’s systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical power needs that cannot be without power in the event of utility grid failure. For more information, please visit www.polarpower.com.

 

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, the matters discussed in this press release including, without limitation, the ability of Polar Power to meet industry needs with higher energy efficiency and lower emissions power generating equipment; Polar Power’s expectation that the market for DC generators, along with solar hybrid power generation equipment, will remain strong during 2017, and the ability of Polar Power to add key telecom personnel throughout 2017 are forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Polar Power could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, adverse economic and market conditions, including demand for DC power systems; raw material and manufacturing costs; changes in governmental regulations and policies; and other events, factors and risks previously and from time to time disclosed in Polar Power’s filings with the Securities and Exchange Commission including, specifically, those factors set forth in the “Risk Factors” section contained in Polar Power’s Form S-1 filed with the Securities and Exchange Commission on November 30, 2016.

 

 

 

 

 

 

Media and Investor Relations:

 

Chris Tyson

Managing Director

MZ North America

Direct: 949-491-8235

ir@polarpowerinc.com

www.mzgroup.us

 

Company Contact:

Polar Power, Inc.

249 E. Gardena Blvd.

Gardena, CA 90248

Tel: 310-830-9153

ir@polarpowerinc.com

www.polarpower.com

 

 

 

 

 

 

POLAR POWER INC.

Balance Sheets

 

   December 31,
2016
   December 31,
2015
 
ASSETS          
Current assets          
Cash and cash equivalents   $ 16,242, 158   $263,418 
Accounts receivable   4,403,946    1,496,654 
Inventories, net   4,839,591    2,093,099 
Prepaid expenses   178,569    93,125 
Total current assets   25,664,264    3,946,296 
           
Other assets:          
Property and equipment, net   737,586    542,892 
Deposits   66,796    88,944 
Deferred tax assets   160,637    205,000 
           
Total assets  $26,629,283   $4,783,132 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities          
Accounts payable  $659,355   $182,884 
Customer deposits   71,954    229,602 
Income taxes payable   1,227,308    295,778 
Accrued liabilities and other current liabilities   669,889    268,636 
Current portion of notes payable   111,368    327,693 
Line of credit       965,150 
Payable for acquired technology       131,215 
Total current liabilities   2,739,874    2,400,958 
Notes payable, net of current portion   237,431    127,840 
           
Total liabilities   2,977,305    2,528,798 
           
Commitments and Contingencies          
           
Shareholders’ Equity          
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding        
Common stock, $0.0001 par value, 50,000,000 shares authorized, 10,143,158 and, 7,365,614, shares issued and outstanding, respectively   1,014    736 
Additional paid-in capital   19,242,715    2,248,159 
Retained earnings   4,408,249    5,439 
Total shareholders’ equity   23,651,978    2,254,334 
           
Total liabilities and shareholders’ equity  $26,629,283   $4,783,132 

 

 

 

 

 

 

POLAR POWER INC.

STATEMENTS OF OPERATIONS

 

   Years Ended
December 31,
 
   2016   2015 
         
Net sales  $22,801,494   $6,846,759 
Cost of sales   12,619,837    4,558,725 
Gross profit   10,181,657    2,288,034 
Operating Expenses          
General and administrative   2,112,336    1,454,563 
Research and development   213,931    116,297 
Sales and Marketing   424,579    392,306 
Depreciation and amortization   26,888    18,342 
Total operating expenses   2,777,734    1,981,508 
Income from operations   7,403,923    306,526 
Other expenses          
Interest expense   (112,550)   (50,971)
Other expenses   (27,516)   (15,325)
Total other expenses   (140,066)   (66,296)
Income before income taxes   7,263,857    240,230 
Income tax provision   (2,861,047)   (273,569)
Net Income (loss)  $4,402,810   $(33,339)
           
Net Income (loss) per share – basic and diluted  $0.58   $(0.01)
Weighted average shares outstanding, basic and diluted   7,564,629    6,832,329 

 

 

 

 

 

 

POLAR POWER INC.

Statements of Cash Flows

 

   Years Ended
December 31,
 
   2016   2015 
         
Cash flows from operating activities:          
Net Income (loss)  $4,402,810   $(33,339)
Adjustments to reconcile net income (loss) to net cash used in operating activities:          
Common shares issued for services   37,500     
Additional costs of shares issues to related party       581,895 
Depreciation and amortization   207,857    143,573 
Changes in operating assets and liabilities          
Accounts receivable   (2,907,292)   (868,416)
Inventories   (2,746,492)   (1,192,827)
Prepaid expenses   (85,444)   15,177 
Deposits   22,148    13,755 
Deferred tax assets   44,363    (15,000)
Accounts payable   476,471    104,823 
Income taxes payable   931,530    257,373 
Customer deposits   (157,648)   173,244 
Accrued expenses and other current liabilities   401,253    199,015 
Net cash provided by (used in) operating activities   627,056    (620,727)
           
Cash flows from investing activities:          
Acquisition of property and equipment   (165,088)   (223,423)
Payable for acquired technology   (131,215)   (180,000)
Net cash used in investing activities   (296,303)   (403,423)
           
Cash flows from financing activities:          
Advances (repayment) of credit line net   (965,150)   965,150 
Repayment of notes   (344,197)   (731,074)
Proceeds from issuance of common stock   16,957,334    500,000 
Net cash provided by financing activities   15,647,987    734,076 
           
Increase (decrease) in cash and cash equivalents   15,978,740    (290,074)
Cash and cash equivalents, beginning of period   263,418    553,492 
Cash and cash equivalents, end of period  $16,242,158   $263,418 
           
Supplemental Cash Flow Information:          
Interest paid  $112,550   $50,971 
Taxes Paid   1,885,337    31,197 
Supplemental non-cash investing and financing activities:          
Assets acquired under notes payable  $237,463   $28,046 
Transfer of customer deposit to notes payable       183,989