Energy Focus(EFOI) - 2024 Q3 - Quarterly Results

Financial Performance - Net sales for Q3 2024 were $1.2 million, a decrease of 10.7% compared to $1.3 million in Q3 2023, driven by a 29.7% decline in commercial sales[2][9] - Net sales for Q3 2024 were $1,196,000, a decrease of 22.9% from $1,553,000 in Q2 2024 and an increase of 4.3% from $1,339,000 in Q3 2023[20] - Military maritime products generated $846,000 in net sales for Q3 2024, an increase from $841,000 in Q3 2023, while commercial sales decreased to $350,000 from $498,000[23] Profitability - Gross profit margin improved to 15.7% in Q3 2024, up from a gross loss of (3.6)% in Q3 2023, primarily due to lower fixed costs[3][10] - Gross profit for Q3 2024 was $188,000, compared to a gross loss of $48,000 in Q3 2023, indicating a significant improvement in profitability[20] - Actual gross profit for the quarter was $188,000, representing a gross margin of 15.7%, compared to a gross margin of 8.1% in the previous quarter[28] - Adjusted gross margin for Q3 2024 was 24.5%, significantly higher than 1.0% in Q3 2023, reflecting improved variable margins[11] - Adjusted gross profit increased to $293,000, reflecting a gross margin of 24.5%, up from 18.3% in the previous quarter[28] Losses and Expenses - Operating loss for Q3 2024 was $0.4 million, an improvement from a loss of $0.9 million in Q3 2023[4][12] - Net loss for Q3 2024 was $0.3 million, or $(0.06) per share, compared to a net loss of $0.9 million, or $(0.27) per share, in Q3 2023[4][12] - The net loss for Q3 2024 was $316,000, a decrease from a net loss of $944,000 in Q3 2023, representing a 66.5% improvement[20] - Adjusted EBITDA for Q3 2024 was $(395,000), compared to $(937,000) in Q3 2023, showing a 57.8% improvement[27] - Total operating expenses decreased to $586,000 in Q3 2024 from $855,000 in Q3 2023, reflecting a reduction of 31.5%[20] Cash Flow and Liquidity - Cash balance as of September 30, 2024, was $0.8 million, down from $2.0 million at the end of 2023[5][17] - Cash used in operating activities for Q3 2024 was $(267,000), a decrease from $(1,035,000) in Q3 2023, indicating improved cash flow management[22] - Cash at the end of Q3 2024 was $819,000, down from $1,691,000 at the end of Q3 2023[22] - Net cash used in operating activities for the nine months ended September 30, 2024, was $1.0 million, with a net loss of $1.3 million during the same period[13] Financing Activities - The company raised approximately $850 thousand through a private placement of 534,591 shares at $1.59 per share in June 2024[6] - The company issued common stock and warrants totaling $851,000 in Q2 2024, contributing to financing activities[22] Strategic Initiatives - The company plans to expand its product portfolio by adding high-efficiency GaN power supply products in 2023[14] - The company is focusing on reducing operating expenses and improving gross margins through strategic adjustments in product development and inventory management[24] Liabilities - Total liabilities decreased to $3.2 million as of September 30, 2024, from $7.1 million at the end of 2023[18] Inventory Management - Changes in excess and obsolete inventory reserves amounted to $105,000, which is 8.8% of net sales, compared to 10.2% in the previous quarter[28]