Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue growth of 9% year-over-year in the first quarter, driven by increased shipments and higher average selling prices.
- Gross profit margins improved to 32% in Q1 and 33% in Q2, supported by cost reductions and strategic supply chain initiatives.
- Strong backlog of $19.5 million as of February 28, 2025, indicating a positive long-term outlook.
- Introduction of new heavy-duty models and expansion of product lines to meet customer demand and fill market gaps.
- Successful pilot stage of the SkyBMS telemetry product with a Fortune 50 company, showcasing innovative asset management features.
Negative Points
- Second quarter revenue decreased by 8% year-over-year, affected by order lumpiness and lower demand in the material handling market.
- Adjusted EBITDA loss of $1 million in Q2, compared to a gain in the same quarter of the previous year, due to order lumpiness.
- Increased operating expenses, including stock-based compensation and professional fees, impacting net loss figures.
- Challenges with order delays due to revised timing of forklift deliveries and economic uncertainties.
- Cash position remains low at $900,000 as of December 31, 2024, with reliance on credit facilities for working capital.
Q & A Highlights
Q: Can you elaborate on the order activity and where you're seeing strength in the market?
A: Kelly Frey, Chief Revenue Officer, explained that there is strong demand for lithium solutions, particularly in the ground support equipment and material handling markets. Customers are excited about the integration of lithium with telemetry, which provides smarter battery management and data integration into their infrastructure.
Q: When will the heavy-duty model introduction start generating revenue, and what is the opportunity there?
A: Ronald Dutt, Senior Adviser and former CEO, stated that the heavy-duty models are being rolled out for major product lines, particularly Class 2 and Class 3, to meet the needs of aggressive operations. These models will be introduced over the coming months.
Q: What improvements have been made to the balance sheet, and is positive cash flow feasible by the end of the year?
A: Kevin Royal, CFO, noted significant improvements in inventory and receivables, with debt reduction. While Q3 may not be positive, Q4 is expected to be break-even or positive in cash flow, driven by revenue levels.
Q: Can you provide details on the price increases and their impact on the backlog?
A: Kevin Royal explained that price increases were implemented at the beginning of the fiscal year, affecting about half of the product line with mid-single-digit increases. Some of these increases will impact Q3 and Q4 due to existing backlog and customer quotes.
Q: Is there a business model around the telemetry software, and how significant could it become?
A: Krishna Vanka, CEO, confirmed that there is a revenue-generating model for the telemetry software, which provides valuable operational data. The company aspires for software to become a material part of the revenue mix in the future.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
