Polar Power Reports Full Year and Fourth Quarter 2023 Financial Results

GARDENA, CA, April 01, 2024 (GLOBE NEWSWIRE) -- Polar Power, Inc. (“Polar Power” or the “Company”) (NASDAQ: POLA), a global provider of prime, backup, and solar hybrid DC power solutions, reports its financial results for the three months and full year ended December 31, 2023.

2023 Financial Highlights

  • Net sales in 2023 were $15.3 million compared to $16.1 million in 2022
  • Gross profit for 2023 was $0.7 million compared to $2.1 million in 2022
  • Operating expenses for 2023 were $6.7 million compared to $7.7 million in 2022
  • Net loss was $6.5 million in 2023, or $(0.49) per basic and diluted share, compared to a net loss of $5.6 million, or $(0.43) per basic and diluted share in 2022
  • Working capital of $11.8 million as of December 31, 2023 consisted of approximately $550,000 in cash and cash equivalents and $16.5 million in inventory; Working capital of $17.4 million as of December 31, 2022 consisted of approximately $211,000 in cash and cash equivalents and inventory of approximately $15.5 million
  • Total liquidity of $1.0 million consisting of cash and availability under the line of credit at December 31, 2023
  • Backlog at December 31, 2023 was $3.9 million

Recent Operating Highlights

  • Announced $5.1 million in new bookings in the first quarter of 2024; current backlog is $7.7 million (April 1, 2024)
  • Achieved progress in diversification objectives, with our top two customers decreasing in percentage of total sales from 89% to 68% and international sales representing over 20% of our total for the second consecutive year
  • Closed on public offering of 4,600,000 common shares for gross proceeds of $1,840,000 in December 2023

Arthur Sams, CEO of Polar Power, commented, “While volatility and push-outs in orders from some of our top customers resulted in weaker comparisons in 2023 compared to 2022, our fourth quarter revenue of $3.6 million represents sequential growth of nearly 90% over the third quarter of 2023. Having recently announced bookings of over $5 million for the first quarter of 2024, we are off to a good start in 2024 and have reason to believe that we’ll see orders continue to materialize from our tier-1 telco customers and from other international telecom providers. Our capital-efficient power generation technology platform is applicable in a wide variety of end-markets where there is a dire need for sources of reliable, fuel-efficient power, in both prime and backup applications, and we’re vigorously pursuing such opportunities.

“We are pleased with the progress made to diversify our customer base and penetrate new international markets. In 2023 we completed delivery on a significant number of units to a customer in Southeast Asia under a contract signed during 2022, and we’ve also seen repeat orders from the largest telecom provider in Puerto Rico, with deliveries there ongoing throughout 2024. On the military side, we also saw a healthy increase in sales in 2023 compared to the prior year.

“Planned investment in our sales and marketing organization to accelerate our sales growth, and a commitment to managing our operating expenses should enable both top- and bottom-line improvements throughout 2024,” concluded Sams.

About Polar Power, Inc.
Polar Power (NASDAQ: POLA), Polar Power is pioneering technological changes that radically change the production, consumption, and environmental impact of power generation and is a leading provider of DC advanced power and cooling systems, pioneering innovations across diverse industrial applications. Its product portfolio, known for innovation, durability, and efficiency, presently includes standard products for telecom, military, renewable energy, marine, automotive, residential, commercial, oil field and mining applications. Polar Power’s systems can be configured to operate on any energy source including photovoltaics, diesel, LPG (propane and butane), and renewable fuels.

Polar Power’s telecom power solutions offer significant cost savings with installation, permitting, site leases, and operation. Its military solutions provide compact, lightweight, fuel efficient, reliable power solutions for robotics, drone, communications, hybrid propulsion, and other applications. Its mobile rapid battery charging technology enables on-demand roadside charging for electric vehicles. Its combined heat and power (CHP) residential systems offer innovative vehicle charging and integrated home power systems via natural gas or propane feedstocks, optimizing performance and system costs. Polar Power’s micro / nano grid solutions provide lower cost energy in “bad-grid or no-grid” environments. Its commitment to technological advancement extends to hybrid propulsion systems for marine and specialty vehicles, ensuring efficiency, comfort, reliability, and cost savings.

For more information, please visit www.polarpower.com. or follow us on www.linkedin.com/company/polar-power-inc/.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. With the exception of historical information, the matters discussed in this press release including, without limitation, Polar Power’s belief that orders from its telecom customers will continue to materialize; Polar Power’s expectations that its planned investment in sales and marketing will accelerate sales growth, and managing operating expenses should enable both top- and bottom-line improvements throughout 2024 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 domestic and foreign economic and market conditions, including demand for its Summit Series, 27 kW DC generator product line; trade tariffs on raw materials; changes in domestic and foreign governmental regulations and policies; the impact of inflation and changing prices on raw materials; supply chain constraints causing significant delays in sourcing raw materials; labor shortages as a result of the pandemic, low unemployment rates, or other factors limiting the availability of qualified workers; and other events, factors and risks. It undertakes no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond Polar Power’s control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in Polar Power’s reports filed with the Securities and Exchange Commission.

Media and Investor Relations:
Peter Seltzberg, SVP Investor Relations and Corporate Advisory
+1 212-655-0924

Company Contact:
Polar Power, Inc.
249 E. Gardena Blvd.
Gardena, CA 90248
Tel: 310-830-9153

(in thousands, except share and per share data)

    December 31,
    December 31,
Current assets                
Cash and cash equivalents   $ 549     $ 211  
Accounts receivable     1,676       2,230  
Inventories     16,522       15,460  
Prepaid expenses     455       2,629  
Employee retention credit receivable     2,000       2,000  
Income taxes receivable     787       787  
Total current assets     21,989       23,317  
Other assets:                
Operating lease right-of-use assets, net     2,818       240  
Property and equipment, net     344       538  
Deposits     108       93  
Total assets   $ 25,259     $ 24,188  
Current liabilities                
Accounts payable   $ 1,762     $ 230  
Customer deposits     1,618       2,126  
Accrued liabilities and other current liabilities     1,151       1,231  
Line of credit     4,238       1,884  
Notes payable-related party     257        
Notes payable, current portion     64       211  
Current portion of operating lease liabilities     1,124       268  
Total current liabilities     10,214       5,950  
Notes payable, net of current portion           57  
Operating lease liabilities, net of current portion     1,856        
Total liabilities     12,070       6,007  
Stockholders’ 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, 17,579,089 shares issued and 17,561,612 shares outstanding on December 31, 2023, and 12,967,027 shares issued and 12,949,550 shares outstanding on December 31, 2022     2       1  
Additional paid-in capital     38,886       37,331  
Accumulated deficit     (25,659 )     (19,111 )
Treasury Stock, at cost (17,477 shares)     (40 )     (40 )
Total stockholders’ equity     13,189       18,181  
Total liabilities and stockholders’ equity   $ 25,259     $ 24,188  

(in thousands, except share and per share data)

    Three Months Ended   Twelve Months Ended  
December 31, December 31,
    2023     2022   2023     2022  
Net sales   $ 3,605     $ 6,366   $ 15,293     $ 16,056  
Cost of Sales (includes inventory write-downs of $450 and $nil, respectively)     5,032       5,960     14,598       13,931  
Gross profit (loss)     (1,427 )     406     695       2,125  
Operating Expenses                              
Sales and marketing     255       338     1,172       1,471  
Research and development     239       315     1,222       1,460  
General and administrative     1,051       1,078     4,291       4,727  
Total operating expenses     1,545       1,731     6,685       7,658  
Loss from operations     (2,972 )     (1,325 )   (5,990 )     (5,533 )
Other income (expenses)                              
Interest expense and finance costs     (184 )     (19 )   (559 )     (58 )
Other income (expenses), net     1           1       7  
Total other income (expenses), net     (183 )     (19 )   (558 )     (51 )
Net Loss   $ (3,155 )   $ (1,344 ) $ (6,548 )   $ (5,584 )
Net loss per share, basic and diluted   $ (0.24 )   $ (0.10 ) $ (0.49 )   $ (0.43 )
Weighted average shares outstanding, basic and diluted     13,291,575       12,878,350     13,291,575       12,878,350  

(in thousands)

    Years Ended
December 31,
    2023     2022  
Cash flows from operating activities:                
Net loss   $ (6,548 )   $ (5,584 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Depreciation and amortization     387       507  
Stock-based compensation           515  
Inventory write-down     450        
Changes in operating assets and liabilities                
Accounts receivable     554       2,013  
Inventories     (1,512 )     (6,443 )
Prepaid expenses     2,174       1,377  
Decrease in right-of-use asset     1,000       674  
Deposits     (15 )     —   
Accounts payable     1,532       (98 )
Customer deposits     (508 )     1,229  
Accrued expenses and other current liabilities     (80 )     25  
Operating lease liability     (864 )     (722 )
Net cash used in operating activities     (3,430 )     (6,507 )
Cash flows from investing activities:                
Acquisition of property and equipment     (194 )     (25 )
Net cash used in investing activities     (194 )     (25 )
Cash flows from financing activities:                
Net proceeds from sale of common stock     1,556        
Proceeds from notes payable-related party     257       —   
Repayment of notes payable     (205 )     (242 )
Proceeds from line of credit     2,354       1,884  
Net cash provided by financing activities     3,962       1,642  
Increase (decrease) in cash and cash equivalents     338       (4,890 )
Cash and cash equivalents, beginning of period     211       5,101  
Cash and cash equivalents, end of period   $ 549     $ 211  
Noncash investing and financing activities:                
Initial recognition of right-of-use asset and lease liabilities   $ 3,578        

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Source: Polar Power, Inc.