On January 30, 2025, Flux Power Holdings Inc (FLUX, Financial) released its 8-K filing detailing the financial results for the fiscal year ending June 30, 2024. Flux Power Holdings Inc, a company specializing in lithium-ion energy storage solutions for industrial and commercial sectors, reported a challenging year with a decline in revenue but improvements in gross margins.
Performance Overview
Flux Power Holdings Inc reported a revenue of $60.8 million for fiscal year 2024, a decrease of 9% compared to $66.5 million in fiscal year 2023. This figure fell short of the annual estimated revenue of $61.89 million. The decline was primarily attributed to delays in shipments and reduced sales in the material handling and airport ground support equipment sectors.
Despite the revenue shortfall, the company achieved a gross profit of $17.2 million, up from $15.9 million in the previous year, with gross margins improving from 24% to 28%. This improvement was driven by strategic cost control measures and a shift towards higher-margin products.
Financial Achievements and Challenges
Flux Power Holdings Inc's adjusted EBITDA loss improved to $4.0 million from a loss of $4.7 million in fiscal year 2023, reflecting better operational efficiencies. However, the company faced challenges with a net loss of $8.3 million, compared to a net loss of $7.7 million in the previous year, due to increased sales and marketing expenses and higher interest costs.
The company also completed a restatement of previously filed financial statements, identifying $5.2 million in cumulative adjustments related to inventory and warranty obligations. This restatement did not impact cash flow or the company's credit line with Gibraltar Capital.
Quarterly Performance and Market Conditions
For the fourth quarter of fiscal year 2024, Flux Power Holdings Inc reported a revenue of $13.4 million, an 18% decrease from $16.4 million in the same quarter of the previous year. This figure fell short of the quarterly estimated revenue of $14.29 million. The decline was primarily due to reduced sales with OEM partners and delayed shipments. However, gross profit remained stable at $3.6 million, with gross margins increasing to 27% from 22% in the prior year.
The company faced market challenges, including higher interest rates and geopolitical uncertainties, which led to deferred orders. These conditions are expected to impact future revenue growth positively as delayed orders are fulfilled.
CEO Commentary and Strategic Outlook
“Over the past six months, we focused on strengthening our internal processes, restating certain previously-filed financials, and completing the FY 2024 audit,” said Flux Power CEO Ron Dutt. “Our overall business and long-term outlook remain strong as we move into FY 2025. We anticipate improving revenue throughout fiscal year 2025 and beyond due to greater clarity regarding interest rates and government policies, along with furthering our product and selling initiatives.”
Financial Position and Future Prospects
As of June 30, 2024, Flux Power Holdings Inc reported cash reserves of $0.6 million, down from $2.4 million a year earlier. The company has a credit facility with Gibraltar Business Capital, providing a remaining available balance of $6.3 million, subject to borrowing base limitations.
Looking ahead, Flux Power Holdings Inc plans to expand its product lines and enhance its sales and marketing efforts to capture new customer segments. The company is also focusing on sustainability initiatives, including a new partnership for recycling lithium-ion batteries.
Flux Power Holdings Inc's strategic initiatives and improved gross margins position it for potential growth and profitability in the coming fiscal year, despite the challenges faced in fiscal year 2024. Investors and stakeholders will be keenly watching the company's progress as it navigates market conditions and executes its growth strategies.
Explore the complete 8-K earnings release (here) from Flux Power Holdings Inc for further details.
