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CST: 18/07/2019 23:44:10   

Polar Power Reports Fourth Quarter and Full Year 2018 Financial Results

114 Days ago

Management to Host Conference Call Today at 4:30 p.m. EDT

GARDENA, Calif., March 26, 2019 (GLOBE NEWSWIRE) -- Polar Power, Inc. (NASDAQ: POLA), a global provider of prime, backup and solar hybrid DC power solutions, today reported its financial results for the fourth quarter and full year ended December 31, 2018.

Key 2018 and Subsequent Highlights:

Financial Results for the Three and Twelve Months Ended December 31, 2018

  • Net sales in 2018 totaled $24 million, an increase of 67%, as compared to $14.4 million in 2017. Net sales totaled $8.3 million in Q4 2018, an increase of 108%, as compared to $4.0 million in Q4 2017. The increase in net sales was primarily a result of an increase in sales of DC power systems to Tier-1 wireless carrier customers, coupled with an increase in international and government sales during 2018.
     
  • Backlog totaled $16.0 million at December 31, 2018.
     
  • Gross profit increased by $2.7 million to $7.4 million as compared to $4.7 million in 2017; however, gross profit as a percentage of sales decreased to 30.9% in 2018, as compared to 33.0% in 2017. The decrease in gross profit as percentage of net sales was due to a combination of pricing concessions tied significantly to higher volume from our Tier-1 telecom customers and an increase in manufacturing overhead costs associated with the expansion of our manufacturing facilities. In addition, the company experienced higher raw material costs associated with new tariffs on aluminum and other imports from China. 
     
  • Operating expenses increased to $8.5 million in 2018 from $5.6 million in 2017, an increase of $2.9 million. Of this amount, $0.6 million and $1.2 million was attributable to increased investments in R&D and sales and marketing activities, respectively. The increase in operating expenses in both periods was primarily due to investments in several major R&D projects.
     
  • Net loss in 2018 totaled $0.8 million, or ($0.08) per basic and diluted share, compared to a net loss of $0.8 million, or ($0.07) per basic and diluted share, in 2017. The decline in EPS is attributable to a combination of lower gross profit rate and an increase in operating expenses associated with investment in R&D and sales.
     
  • Cash at December 31, 2018 totaled $5.6 million, as compared to $14.2 million at December 31, 2017. The substantial reduction in cash balances are associated with a $7.8 million cash used by operating activities, of which $2.9 million was associated with an increase in inventory, and a $4.7 million increase in accounts receivable associated with increased shipments to Tier-1 carriers with net 90-day payment terms.  

Management Commentary
                                                                     
“During 2018 we experienced significant growth resulting from an increase in shipments to Tier-1 telecom customers, which validated our technology and price competitiveness in the DC backup power generation market in the U.S.,” said Polar Power CEO, Arthur Sams. “We also made progress in reducing our customer concentration through sales to Tier-1 telecom providers. These improvements were offset to some degree by volume discounts from those customers.”

Mr. Sams continued, “International growth remains a key strategic initiative for the company and towards the second half of 2018 we made solid gains with increased sales to customers in Namibia, Sri Lanka, Australia and Thailand. We would like to note that our telecom customers in the emerging markets are well established regional telecom providers and we are optimistic that we will increase our market share as they gain more experience and familiarity with our products and technologies.”

“During 2018 we made significant progress on our renewable energy systems technology roadmap. Many of the emerging markets lack reliable electric grid infrastructure and a large portion of the telecom towers are located in off-grid or bad grid areas. During 2018, we demonstrated the DC hybrid systems in Sri Lanka, where our system is used as primary power,  fully integrated with lithium battery storage and solar modules.”

“During 2018, our diversification efforts beyond telecom markets came to fruition as we delivered light weight, compact liquid-cooled DC power system for use in the U.S. Army’s Robotic Mule Project.  We believe automated robotic vehicles have numerous applications beyond military and we plan to develop new technologies for commercial applications of these vehicles.”

“We also recently launched our new LPG and natural gas DC power systems designed for residential and mobile electric vehicle charging stations. We believe this is an exciting new opportunity for us and it’s the first product in a series designed for residential applications. We also believe that using a DC generator that is operating on natural gas, with or without a solar PV array, will be instrumental in helping electric utilities meet the increased power demand associated with electric car charging. Many homes and commercial businesses are without sufficient power to charge an EV or fleet of EVs and the cost to increase electrical service can be cost prohibitive. In addition, the utilities energy cost during peak demand may become too high making natural gas a cost competitive alternative to the electric grid,” concluded Mr. Sams. 

Conference Call Details

Polar Power CEO Arthur Sams, COO Rajesh Masina and CFO Luis Zavala will host the conference call, followed by a question and answer period.

To access the call, please use the following information:

Date:           Tuesday, March 26, 2019
Time:            4:30 p.m. ET, 1:30 p.m. PT
Toll-free dial-in number:           1-888-394-8218
International dial-in number:           1-323-794-2588
Conference ID:           8959903

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Integra Investor Relations at 1-415-233-7094.

The conference call will be broadcast live and available for replay http://public.viavid.com/index.php?id=133608 and via the investor relations section of the Company’s website at www.polarpower.com.

A replay of the conference call will be available after 7:30 p.m. Eastern Time through Tuesday, April 2, 2019.

Toll-free replay number:            1-844-512-2921
International replay number:           1-412-317-6671
Replay ID:           8959903

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 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 it  will increase its market share in international markets; Polar Power’s belief that automated robotic vehicles have numerous applications beyond military and its plans to deliver new technologies for commercial applications of those vehicles; and Polar Power’s belief that using a DC generator operating on natural gas, with or without a solar PV array, will be instrumental in helping electric utilities meet the increased power demand associated with electric car charging 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 DC power systems; trade tariffs on raw materials; changes in domestic and foreign governmental regulations and policies; and other events, factors and risks. We undertake 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 our 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 our reports filed with the Securities and Exchange Commission.

Media and Investor Relations:
Integra Investor Relations
Shawn M. Severson
+1 415-233-7094
info@integra-ir.com
@Integra IR
www.integra-ir.com

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,
2018
    December 31,
2017
 
ASSETS                
Current assets                
Cash and cash equivalents (including restricted cash of $1,002,683 and $1,001,180 at December 31, 2018 and December 31, 2017, respectively)   $ 5,640,078     $ 14,201,163  
Accounts receivable     7,726,919       3,058,266  
Inventories, net     8,471,769       5,487,053  
Prepaid expenses     468,666       236,670  
Refundable income taxes     715,916       629,316  
Total current assets     23,023,348       23,612,468  
                 
Other assets:                
Property and equipment, net     2,122,757       824,076  
Deposits     94,001       87,496  
                 
Total assets   $ 25,240,106     $ 24,524,040  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable   $ 1,066,415     $ 757,753  
Customer deposits     79,184       40,039  
Accrued liabilities and other current liabilities     504,559       586,391  
Current portion of notes payable     283,388       110,237  
Total current liabilities     1,933,546       1,494,420  
Notes payable, net of current portion     924,539       126,818  
                 
Total liabilities     2,858,085       1,621,238  
                 
Commitments and Contingencies                
                 
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, 10,143,158 and, 10,143,158, shares issued and outstanding, respectively     1,014       1,014  
Additional paid-in capital     19,578,426       19,250,955  
Retained earnings     2,802,581       3,650,833  
Total stockholders’ equity     22,382,021       22,902,802  
                 
Total liabilities and stockholders’ equity   $ 25,240,106     $ 24,524,040  


POLAR POWER, INC.
STATEMENTS OF OPERATIONS

  Three Months Ended   Years Ended
  December 31,   December 31,
    2018       2017       2018       2017  
               
Net sales $ 8,297,509     $ 3,979,965     $ 24,046,354     $   14,418,726  
               
Cost of sales   5,941,867       2,732,094       16,614,574         9,657,558  
               
Gross profit   2,355,642       1,247,871       7,431,780         4,761,168  
               
Operating Expenses              
Sales and Marketing   611,305       487,224       2,579,457         1,348,455  
Research and development   535,829       387,210       1,907,810         1,334,637  
General and administrative   1,417,506       868,177       4,043,301         2,880,036  
Total operating expenses   2,564,640       1,742,611       8,530,568         5,563,128  
               
Loss from operations   (208,998 )     (494,740 )     (1,098,788 )       (801,960 )
               
Other income (expenses)              
Interest expenses   (11,989 )     (3,166 )     (20,170 )       (17,822 )
Interest income   10,213       18,966       55,706         54,791  
Other income (expenses)   0       795               7,575  
Total other income (expense)   (1,776 )     16,595       35,536         44,544  
               
Loss before income taxes   (210,774 )     (478,145 )     (1,063,252 )       (757,416 )
Income tax benefit (provision)   215,000       (113,118 )     215,000        
               
Net Loss $   4,226     $   (591,263 )   $    (848,252 )   $  (757,416 )
               
Net loss per share – basic and diluted $   0.00     $    (0.06 )   $    (0.08 )   $  (0.07 )
Weighted average shares outstanding, basic and diluted   10,143,158       10,143,158       10,143,158       10,143,158  


POLAR POWER, INC.
STATEMENTS OF CASH FLOWS

    Years Ended
December 31,
 
    2018       2017    
             
Cash flows from operating activities:                
Net loss   $ (848,252 )     $ (757,416 )  
Adjustments to reconcile net loss to net cash used in operating activities:                
Fair value of vested stock options     327,471         8,240    
Depreciation and amortization     385,583         255,631    
Changes in operating assets and liabilities                
Accounts receivable     (4,668,653 )       1,345,680    
Inventories     (2,984,716 )       (647,462 )  
Prepaid expenses     (231,996 )       (58,101 )  
Deposits     (6,505 )       (20,700 )  
Refundable income taxes     (86,600 )       (629,316 )  
Deferred tax assets             160,637    
Accounts payable     308,662         98,398    
Income taxes payable             (1,227,308 )  
Customer deposits     39,145         (31,915 )  
Accrued expenses and other current liabilities     (81,832 )       (83,498 )  
Net cash used in operating activities     (7,847,693 )       (1,587,130 )  
                 
Cash flows from investing activities:                
Acquisition of property and equipment     (574,990 )       (342,121 )  
Net cash used in investing activities     (574,990 )       (342,121 )  
                 
Cash flows from financing activities:                
Repayment of notes     (138,402 )       (111,744 )  
Net cash provided (used) by financing activities     (138,402 )       (111,744 )  
                 
Decrease in cash and cash equivalents     (8,561,085 )       (2,040,995 )  
Cash and cash equivalents, beginning of period     14,201,163         16,242,158    
Cash and cash equivalents, end of period   $ 5,640,078       $ 14,201,163    
                 
Supplemental Cash Flow Information:                
Interest paid   $ 20,170       $ 10,193    
Taxes Paid             2,424,417    
Supplemental non-cash investing and financing activities:                
Assets acquired under notes payable   $ 1,109,275       $    
                     

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