Flux Power Holdings Reports 9% Revenue Increase in Q1 Fiscal 2024

Flux Power Holdings, Inc. reported a revenue increase of 9% for the first quarter of fiscal 2024, generating $16.1 million compared to $14.8 million in the same period last year. The growth was primarily driven by higher shipments in the Ground Support Equipment market, although there was a decline in shipments to the Material Handling sector. The company's gross profit also improved, rising to $5.2 million, or 32% of revenue, up from $4.2 million, or 29% of revenue, in the prior year. This increase in gross profit margin was attributed to higher average selling prices, despite rising warranty costs.

In terms of operational performance, Flux Power's net loss for the quarter narrowed to $1.7 million from $2.2 million a year earlier. The reduction in net loss was largely due to increased gross profit, which was partially offset by higher operating expenses and interest expenses. Selling and administrative expenses rose to $5.1 million, reflecting costs associated with stock-based compensation and professional services related to financial restatements. Research and development expenses remained stable at approximately $1.3 million.

The company’s balance sheet showed total assets of $30.6 million as of September 30, 2024, down from $32.3 million at the end of the previous fiscal year. Current liabilities were slightly reduced to $30.5 million, while total liabilities stood at $31.7 million. Flux Power's accumulated deficit increased to $101.4 million, indicating ongoing challenges in achieving profitability. The company reported cash and cash equivalents of $559,000, down from $643,000 at the end of June 2024, and highlighted the need for additional funding to support operations.

Strategically, Flux Power is focusing on expanding its product offerings and enhancing its market presence. The company has initiated a partnership aimed at improving the recycling process for end-of-life lithium-ion batteries, reflecting its commitment to environmental sustainability. Additionally, Flux Power is working on expanding its telemetry solutions to provide better asset management for customers. However, the company faces challenges, including delays in new orders due to reduced capital spending in its target markets and interest rate variability affecting customer purchasing decisions.

Looking ahead, Flux Power's management expressed concerns about its ability to continue as a going concern, citing insufficient cash resources to meet anticipated operational needs over the next twelve months. The company is actively exploring strategies to improve profitability and secure additional funding, including potential price increases for its products and cost-saving initiatives. The outlook remains cautious, with management acknowledging the risks associated with market conditions and operational execution.