Pioneer Power Solutions, Inc. reported significant declines in revenue and profitability for the three and six months ended June 30, 2024, compared to the same periods in 2023. Revenues for the second quarter of 2024 were $6.34 million, down 48.4% from $12.28 million in Q2 2023. For the first half of 2024, revenues totaled $14.93 million, a decrease of 31.6% from $21.84 million in the prior year. The decline was primarily driven by a substantial drop in the Electrical Infrastructure segment, where revenues fell from $9.38 million to $2.95 million for the three months ended June 30, 2024, and from $16.19 million to $8.22 million for the six-month period. In contrast, the Critical Power Solutions segment saw revenue growth, increasing from $2.91 million to $3.40 million in Q2 and from $5.65 million to $6.71 million in the first half.

Gross profit also experienced a sharp decline, with Q2 2024 gross profit at $653,000, down 83.2% from $3.88 million in Q2 2023. For the six months, gross profit decreased to $2.38 million from $6.71 million, reflecting a gross margin contraction from 30.7% to 15.9%. The company reported a net loss of $2.28 million for Q2 2024, compared to a net income of $848,000 in Q2 2023. For the first half, the net loss was $3.32 million, a stark contrast to the net income of $1.59 million in the same period last year.

Operating expenses for the second quarter decreased slightly to $2.95 million from $3.09 million in Q2 2023, while total operating expenses for the first half rose to $5.79 million from $5.25 million. The company reported an operating loss of $2.30 million for Q2 2024, compared to an operating income of $789,000 in Q2 2023, and a total operating loss of $3.41 million for the first half, down from an operating income of $1.47 million in the previous year.

As of June 30, 2024, current assets increased to $33.02 million from $27.68 million at the end of 2023, with cash on hand rising to $6.51 million. Current liabilities also increased to $21.88 million from $18.26 million. The company recognized a liability of $5 million related to a legal settlement, which was offset by a corresponding insurance receivable.

Pioneer Power Solutions has identified material weaknesses in its internal controls, particularly in revenue recognition and inventory accounting, prompting the engagement of external assistance and plans to hire additional qualified personnel to address these issues. The company anticipates that these remediation efforts will lead to significant improvements over time.