Core Viewpoint - Flux Power Holdings, Inc. is conducting its Q3 2025 earnings conference call, indicating a focus on financial results and future outlook [1]. Group 1: Company Overview - The conference call features key company participants including the CEO, CFO, and VP of Operations, highlighting the leadership team's involvement in discussing financial performance [1][5]. - A press release detailing the financial results was issued prior to the call, emphasizing the company's commitment to transparency and investor communication [4]. Group 2: Financial Performance - The call is set to present important factors that may influence the company's predictions regarding its financial performance, indicating a proactive approach to addressing potential uncertainties [4].

Strategic Initiatives - The company is focused on profitable growth, operational efficiencies, solution selling, building the right products, and increasing software & recurring revenue[20] - The company launched the G96 product, featuring real-time battery performance data monitoring, higher energy capacities, and zero emissions[22, 23, 25, 27] - The company is piloting the SkyEMS AI platform with select customers to support the full life cycle of intelligent batteries, aiming to have every battery cloud-connected[28, 30, 31] Operational Updates - The company is rapidly reviewing and accelerating the evaluation of new suppliers to respond to tariffs[38] - The company is committed to LFP (Lithium Iron Phosphate) while investigating new chemistries[38] - The company is focusing on partnership, supplier diversification, and strengthening the diversified supply chain for the long term[39] - The company is focusing on US capacity expansion, accelerated R&D, tariff-resistant product design, innovation partnerships, margin preservation, sustainable growth, and long-term competitiveness[46]

Company Performance - Flux Power Holdings, Inc. reported a quarterly loss of $0.12 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.09, but an improvement from a loss of $0.16 per share a year ago, indicating a surprise of -33.33% [1] - The company posted revenues of $16.74 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 2.62% and showing an increase from $14.46 million in the same quarter last year [2] - Over the last four quarters, Flux Power has not surpassed consensus EPS estimates, but it has topped consensus revenue estimates twice [2] Stock Performance - Flux Power shares have increased by approximately 20.9% since the beginning of the year, contrasting with a decline of -4.3% in the S&P 500 [3] - The company's current consensus EPS estimate for the upcoming quarter is -$0.06 on revenues of $16.61 million, and for the current fiscal year, it is -$0.36 on revenues of $65.9 million [7] Industry Outlook - The Electronics - Miscellaneous Products industry, to which Flux Power belongs, is currently ranked in the bottom 40% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Flux Power's stock performance [5]

Financial Data and Key Metrics Changes - Revenue for the third fiscal quarter increased 16% to $16.7 million compared to $14.5 million in the same quarter of the previous year, driven by higher demand in material handling and ground support equipment markets [18] - Gross profit increased 32.5% to $5.3 million, with gross margin rising to 32% from 28% year-over-year [18] - Net loss for the quarter was $1.9 million, an improvement from a net loss of $3 million in the same quarter last year [19] Business Line Data and Key Metrics Changes - The company reported unit growth of 1025% in the material handling and ground support equipment markets [18] - Selling and administrative expenses increased to $5.7 million, primarily due to professional fees related to a multi-year restatement of financial statements [19] - Research and development expenses decreased to $1.1 million, driven by lower salaries and severance costs [19] Market Data and Key Metrics Changes - The company is experiencing increased interest from Tier 1 customers in adopting lithium-ion solutions for distribution centers, indicating a shift towards electrification [30] - The company is seeing a rise in quotation activities as part of its sales force, suggesting a growing demand in the market [31] Company Strategy and Development Direction - The company has aligned five strategic initiatives: profitable growth, operational efficiencies, solution selling, product innovation, and software/recurring revenue [5][7] - The launch of the G96 solution aims to electrify airline drone support equipment, addressing demands for higher power and sustainable operations [8] - The company is focusing on building a diversified and agile supply network to support long-term scalability and innovation [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining operational resilience despite geopolitical complexities and tariff pressures [12] - The company is optimistic about its future, emphasizing the importance of software-driven value and intelligent energy solutions [21] - Management noted that customer commitment to environmental goals remains strong, despite potential impacts from tariffs and subsidy reductions [25] Other Important Information - The company announced a patent award for an AI-based algorithm for Intelligent Battery Lifecycle Maximization, indicating a shift towards becoming a technology-driven energy solutions provider [11] - Cash on hand was $500,000 as of March 31, 2025, reflecting changes in working capital management [20] Q&A Session Summary Question: Sensitivity of customers to pricing actions from tariffs - Management indicated that customers are committed to their ESG goals and the transformation process, with minimal impact from tariffs at this stage [25] Question: Feedback on Sky BMS and potential ROI - Management highlighted that Sky BMS is crucial for customers to realize value, with expected ROI from reduced maintenance visits and better integration with existing technologies [27] Question: Order trends and visibility - Management noted good inventory levels that are not subject to tariffs, anticipating minimal impact on Q4 demand [43] Question: Changes in sales personnel and market penetration - Management reported positive changes from new sales personnel, emphasizing the opportunity to position the company as a software provider with strong battery solutions [36][37] Question: Timeline for deployment of new models - Management confirmed that the G96 model is already in customer testing and production, with plans to expand into higher voltage categories [39]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 16% to $16.7 million compared to $14.5 million in Q3 2024, driven by higher demand in material handling and ground support equipment markets [15] - Gross profit for Q3 2025 increased by 32.5% to $5.3 million, with gross margin rising to 32% from 28% in Q3 2024 [15][16] - Net loss for Q3 2025 was $1.9 million, an improvement from a net loss of $3.0 million in Q3 2024 [17] Business Line Data and Key Metrics Changes - Unit growth in material handling and ground support equipment markets was reported at 1025% [15] - Selling and administrative expenses increased to $5.7 million in Q3 2025 from $5.3 million in Q3 2024, primarily due to professional fees related to a multi-year restatement of financial statements [16] Market Data and Key Metrics Changes - The company is experiencing increased interest from Tier 1 customers in adopting lithium-ion solutions for distribution centers, indicating a shift towards electrification despite economic uncertainties [28] Company Strategy and Development Direction - The company has aligned five strategic initiatives: profitable growth, operational efficiencies, solution selling, product innovation, and software/recurring revenue [5][6] - The launch of the G96 solution aims to advance electrification in airline drone support equipment, positioning the company as a technology leader in clean, high-performance ground support equipment [7][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining operational resilience despite tariff pressures and geopolitical complexities, focusing on supplier diversification and domestic assembly capabilities [12][14] - The company anticipates minimal impact from tariff increases in Q4 2025 due to good inventory levels [40] Other Important Information - The company announced a patent award for an AI-based algorithm for Intelligent Battery Lifecycle Maximization, indicating a shift towards becoming a technology-driven energy solutions provider [9][10] Q&A Session Summary Question: Sensitivity of customers to pricing actions from tariffs - Management noted that customers are committed to their ESG goals and transformation efforts, indicating a stable business environment despite tariff impacts [22] Question: Feedback on Sky BMS and potential ROI - Management highlighted that Sky BMS is crucial for customers to realize value, with expected ROI from reduced maintenance visits and better integration with existing technologies [24][25] Question: Adoption of lithium-ion in the forklift market - Management reported increased interest from customers in adopting lithium solutions, with competitors facing challenges due to tariffs, potentially providing a market share advantage [28] Question: Changes from new sales personnel - Management indicated positive changes from new sales personnel, positioning the company as a software provider with strong battery solutions [34] Question: Deployment timeline for G96 model - Management confirmed that the G96 model is in customer testing and production, with expectations for rapid deployment in the GSE market [37]

Financial Performance - Revenues for the three months ended March 31, 2025, increased to $16,742,000, up 15.8% from $14,457,000 in the same period of 2024[17] - Gross profit for the nine months ended March 31, 2025, was $15,968,000, representing a 17.0% increase compared to $13,641,000 for the same period in 2024[17] - Operating loss for the three months ended March 31, 2025, improved to $(1,577,000), a reduction of 38.7% from $(2,572,000) in the prior year[17] - Net loss for the nine months ended March 31, 2025, was $(5,495,000), a decrease of 9.8% compared to $(6,089,000) for the same period in 2024[22] - Revenues for Q1 2025 were $16,742,000, a 16% increase from $14,457,000 in Q1 2024, driven by higher demand in material handling and ground support markets[155] - Gross profit for Q1 2025 was $5,287,000, representing 32% of revenue, up from 28% in Q1 2024, due to decreased warranty-related expenses[157] - Net loss for Q1 2025 decreased to $1,939,000 from $3,005,000 in Q1 2024, primarily due to increased gross profit[161] - Revenues for the nine months ended March 31, 2025, were $49,697,000, an increase of $2,250,000 or 5% compared to $47,447,000 for the same period in 2024[164] - Net loss for the nine months ended March 31, 2025, was $5,495,000, an improvement from a net loss of $6,089,000 in 2024[170] Cash Flow and Liquidity - Cash at the end of the period was $505,000, down from $643,000 at the beginning of the period, indicating a decrease of 21.5%[21] - The Company generated cash flows from operations of $2.2 million for the nine months ended March 31, 2025[41] - Cash flow from operating activities was $2,208,000 for the nine months ended March 31, 2025, compared to a cash outflow of $4,274,000 in 2024[177] - As of March 31, 2025, the company had a cash balance of $0.5 million and anticipated that existing resources would not be sufficient to meet capital needs for the next twelve months[176] Liabilities and Debt - Total current liabilities increased to $34,191,000 as of March 31, 2025, compared to $30,674,000 as of June 30, 2024, reflecting a 11.0% rise[15] - The Company has relied on debt and equity financing for additional funds due to insufficient revenues and operating cash flows[41] - The Company has a revolving loan facility with GBC for up to $15.0 million, maturing on July 28, 2025[49] - The Company entered into a Credit Facility Agreement with Cleveland Capital, L.P. for a line of credit of up to $2,000,000 for working capital purposes[70] - The Company had multiple drawdowns under the GBC Credit Facility totaling $46.9 million and made repayments totaling $49.7 million during the nine months ended March 31, 2025[52] - As of March 31, 2025, the outstanding balance under the GBC Credit Facility was approximately $11.0 million, with up to $5.0 million available for future borrowings[52] - The Company received a waiver for a default related to the EBITDA covenant for the trailing three-month period ended April 30, 2024, subject to certain conditions[53] - The Company paid a non-refundable closing fee of $112,500 upon the execution of the GBC Credit Facility Agreement[50] - The Company agreed to pay GBC a non-refundable amendment fee of $50,000 in cash for the Third Amendment to the Loan and Security Agreement[55] Inventory and Receivables - Accounts receivable increased slightly to $9,847,000 as of March 31, 2025, compared to $9,773,000 as of June 30, 2024[15] - Inventories decreased from $16.977 million as of June 30, 2024, to $16.433 million as of March 31, 2025[47] Operational Challenges and Strategies - The Company expects to increase selling prices of its products to offset the impact of tariffs, which may negatively affect revenues and cash flows[35] - The Company is facing uncertainties due to increased tariffs and supply chain disruptions, which may impact future operations[33] - Management is evaluating strategies to improve profitability, including planned price increases and cost-saving initiatives[45] - The company is actively pursuing alternative sourcing strategies to mitigate the impact of U.S. tariffs on imported materials, particularly from China[138] - The company experienced delays in new orders due to deferrals of forklift purchases, attributed to lower capital spending and interest rate variability[133] Legal and Compliance Issues - The company is involved in various legal proceedings, including a shareholder derivative action related to the same allegations as the securities class action[203] - The company has received a notice from Nasdaq regarding non-compliance with continued listing requirements, which could lead to delisting if not addressed[210] - The company intends to take all reasonable measures to regain compliance with Nasdaq Listing Rules and maintain its listing[211] Research and Development - The company has filed three new patents related to advanced lithium-ion energy storage solutions, focusing on optimizing battery life, enhancing user understanding of battery health, and applying artificial intelligence for predictive balancing[130] - A new partnership was announced to enhance the recycling process for end-of-life lithium-ion batteries, marking a commitment to environmental responsibility[136] - The company is expanding its telemetry solution to improve asset management and service maintenance for customers[135] Employee and Stock Compensation - The Company reported stock-based compensation of $831,000 for the nine months ended March 31, 2025, down from $1,233,000 in the same period of 2024[22] - The 2021 Equity Incentive Plan allows for the issuance of awards for up to 2,000,000 shares, with 872,039 shares available for future grants as of March 31, 2025[93] - The company had 68,228 Restricted Stock Units (RSUs) outstanding as of March 31, 2025, with a weighted average grant date fair value of $4.25[97] - The company granted no stock options during the nine months ended March 31, 2025, while the expected volatility for this period was 80.06%[95]

Revenue Growth - Q3 2025 revenue increased 16% to $16.7 million compared to $14.5 million in Q3 2024, driven by higher demand in material handling and ground support markets, with unit growth of 10% and 25% respectively[12]. - Revenues for the three months ended March 31, 2025, were $16,742,000, an increase of 15.8% compared to $14,457,000 for the same period in 2024[34]. Profitability and Loss - Gross profit for Q3 2025 rose 31% to $5.3 million, with gross margin increasing to 32% from 28% in Q3 2024, reflecting a 374 basis point improvement due to reduced warranty-related expenses[13]. - The company reported a net loss of $1.9 million in Q3 2025, an improvement from a loss of $3.0 million in Q3 2024, primarily due to increased gross profit[16]. - Adjusted EBITDA loss improved to $1.1 million in Q3 2025 from a loss of $1.7 million in Q3 2024, indicating operational efficiency gains[15]. - Operating loss for the three months ended March 31, 2025, was $1,577,000, an improvement from a loss of $2,572,000 in the same period of 2024[34]. - Net loss for the nine months ended March 31, 2025, was $5,495,000, compared to a net loss of $6,089,000 for the same period in 2024[34]. Cash Flow and Financial Position - Cash on hand was $0.5 million as of March 31, 2025, with available working capital including a $16.0 million credit facility[17]. - Cash flows from operating activities for the nine months ended March 31, 2025, provided $2,208,000, a significant improvement from cash used of $(4,274,000) in the same period of 2024[36]. - The company reported a net cash change of $(138,000) for the nine months ended March 31, 2025, compared to $(1,129,000) for the same period in 2024[36]. - Total current assets decreased to $27,347,000 as of March 31, 2025, from $28,338,000 as of June 30, 2024[32]. - Total liabilities increased to $34,938,000 as of March 31, 2025, compared to $32,107,000 as of June 30, 2024[32]. - The company’s accumulated deficit increased to $(105,207,000) as of March 31, 2025, from $(99,712,000) as of June 30, 2024[32]. Product Development and Innovation - The new SkyEMS software platform aims to create a recurring revenue stream by enhancing battery life management through AI and machine learning features[3]. - Flux Power launched the G-Series G96-G2 High Voltage lithium-ion energy solution, designed for demanding ground support equipment applications in the airline industry[3]. - Flux Power was awarded a patent for its Intelligent Battery Cycle Life Maximization Algorithm, enhancing its transition to a technology-driven energy solutions provider[9]. Orders and Backlog - The company received purchase orders totaling over $6 million from six new large North American airlines, with an open order backlog of $16.9 million as of March 31, 2025[4]. Shareholder Information - The weighted average number of common shares outstanding for the three months ended March 31, 2025, was 16,684,320, compared to 16,538,998 for the same period in 2024[34].

Core Points - The Board of Directors of Fluxys Belgium SA has invited shareholders to attend the Ordinary and Extraordinary General Meetings on May 13, 2025, starting at 2:30 PM [1] - The meetings will take place at the BNP Event Center, located at Rue Royale 20, 1000 Brussels [1] - Additional documents related to the General Meetings and the integrated annual report for 2024 are available on the Fluxys Belgium website [1]

Summary of Flux Power Holdings Fiscal First and Second Quarter 2025 Financial Results Conference Call Company Overview - **Company**: Flux Power Holdings - **Industry**: Lithium-ion energy storage solutions, focusing on ground support equipment and material handling markets Key Points and Arguments Leadership and Vision - Krishna Vanka appointed as CEO, bringing 18 years of experience in technology sectors including renewable energy and EV transition [6][7] - Emphasis on building Flux Power into a market leader in lithium-ion energy storage solutions [7] Financial Performance - **Q1 2025**: Revenue increased by 9% year-over-year to $16.1 million, driven by higher shipments in ground support equipment [8][24] - **Q2 2025**: Revenue decreased by 8% year-over-year to $16.8 million but increased by 4% sequentially from Q1 [9][26] - Gross profit for Q1 2025 rose 23% to $5.2 million, with gross margin improving to 32% from 29% in Q1 2024 [9][24] - Q2 2025 gross profit increased by 2% to $5.5 million, with gross margin at 33% compared to 30% in Q2 2024 [10][26] - Adjusted EBITDA loss improved to $600,000 in Q1 2025 from a loss of $1.2 million in Q1 2024, while Q2 2025 saw a loss of $1 million [9][10][22] Market Dynamics and Demand - Increased demand for lithium-ion solutions, particularly in ground support and material handling markets [11][35] - Anticipated growth in order flow, with a backlog of $21.2 million as of September 30, 2024, and $17.5 million as of December 31, 2024 [9][10] - Customers are increasingly interested in transitioning from lead-acid to lithium-ion batteries, with telemetry features enhancing product appeal [35][36] Product Development and Innovation - Introduction of new heavy-duty models to meet customer demand, particularly in aggressive operations [11][37] - Telemetry product, Sky BMS, in pilot stage for a Fortune 50 company, enhancing asset management capabilities [11][17] - Strategic partnership with a top forklift OEM to launch a private label battery program, enhancing product safety and durability [16] Operational Challenges and Strategic Initiatives - Experienced delays in orders due to revised timing of forklift deliveries and economic uncertainties [14] - Focus on expanding sales and marketing initiatives to capitalize on fleet-wide replacement trends [14][15] - No known lost customers or orders to competition, indicating strong market position [15] Financial Outlook - Q3 2025 revenues expected to align with Q2 results, with a stronger trajectory anticipated in Q4 [29][55] - Positive cash flow anticipated in Q4 2025, with revenue growth projected between 5% to 10% [30][55] - Continued focus on cost reductions and strategic supply chain improvements to enhance profitability [22][23] Customer Engagement and Market Position - Achieved deployment of over 25,000 lithium-ion packs across North America, with strong customer retention [15][18] - New accounts secured in various sectors, including medical supply and food and beverage industries [19][20] - Emphasis on proactive demand generation and solution selling to enhance market penetration [58] Software and Telemetry Revenue Potential - Potential for software revenue generation from telemetry data, with aspirations to make it a material part of the revenue mix [67][69] Additional Important Content - The company has implemented measures to rectify inventory accounting issues and is now caught up with financial filings [29] - The leadership team has been strengthened with key appointments to drive growth and innovation [12][31] This summary encapsulates the critical insights and developments discussed during the conference call, highlighting Flux Power's strategic direction, financial performance, and market opportunities.

Financial Performance - Operating revenue for Fluxys Belgium reached EUR 608.8 million in 2024, an increase of EUR 16.0 million from EUR 592.8 million in 2023 [2] - Consolidated net profit rose to EUR 82.1 million in 2024, up from EUR 77.4 million in 2023, marking an increase of EUR 4.7 million [4][20] - EBITDA for 2024 was EUR 302.3 million, compared to EUR 285.8 million in 2023 [1] Investments and Assets - Investments in property, plant, and equipment totaled EUR 92.1 million in 2024, a decrease from EUR 167.7 million in 2023 [6] - Total property, plant, and equipment stood at EUR 1.8 billion in 2024, down from EUR 1.87 billion in 2023 [1] - Net financial debt decreased to EUR 159.8 million in 2024 from EUR 219.4 million in 2023 [1] Operational Highlights - The switch to high-calorific gas was successfully completed in 2024, eliminating the use of low-calorific gas in Belgium [9] - The first biomethane plant connected to the Fluxys network began operations in October 2024, producing enough biomethane for approximately 7,000 households [10] - Fluxys hydrogen was appointed as the operator of the hydrogen transmission network in Belgium, aligning with the federal hydrogen strategy [11][12] Regulatory and Strategic Developments - The 2024-2027 tariff methodology established by the regulator CREG aims to cover all reasonable costs and incentivize efficiency [5] - Fluxys Belgium is actively involved in the HY4Link project to develop cross-border hydrogen transmission infrastructure with partners in Luxembourg and France [13][14] - The company is committed to carbon capture, usage, and storage (CCUS) initiatives to support decarbonization efforts in Belgium [15] Workforce and ESG Initiatives - In 2024, Fluxys Belgium hired 91 new employees, bringing the total workforce to 982 [19] - The company is on track to meet its Environment, Social, and Governance (ESG) targets set in 2023 [18]