Polar Power(POLA) - 2025 Q2 - Quarterly Results

Executive Summary This section provides a high-level overview of Polar Power's Q2 2025 business and operational highlights, alongside a summary of its financial performance Q2 2025 Business and Operational Highlights Polar Power's CEO highlighted continued telecom market dominance, significant growth in aftermarket services, and strategic restructuring of sales in the US, Middle East, and Africa. The company also announced plans for a new mobile EV charger - The telecom market continues to dominate Polar Power's customer base, representing 92% of total net sales in Q2 2025, a slight decrease from 95% in Q2 2024. Sales to military customers increased to 6% (from 3%), while international sales significantly declined to 3% (from 25%)[4] - Sales in aftermarket parts and services experienced substantial growth, increasing by approximately 288% compared to the same period in 2024[4] - The company is restructuring its US sales strategy to include distribution through domestic resellers, aiming to rebuild sales to pre-pandemic levels[4] - Sales staff in the Middle East and Africa are being restructured with new personnel and the establishment of overseas resellers, leading to increased field trials for DC generators in Southeast Asia and Africa telecoms[4] - Polar Power plans to release its 30 kW mobile EV charger during the fourth quarter of 2025, following one year of testing[4] Q2 2025 Financial Performance Summary Polar Power reported a significant decline in net sales and gross profit for Q2 2025 compared to Q2 2024, resulting in a net loss. Operating expenses decreased, but cash flow from operations shifted from positive to negative Q2 2025 Financial Performance (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (%) | | :-------------------------- | :--------------------- | :--------------------- | :--------- | | Net Sales | $2,708 | $4,660 | -42% | | Gross Profit | $930 | $1,832 | -49% | | Operating Expenses | $1,040 | $1,372 | -24% | | Net Income (Loss) | $(271) | $501 | N/A (loss from income) | | EPS (basic & diluted) | $(0.11) | $0.20 | N/A (loss from income) | | Cash used in operating activities | $(404) | $1,179 (provided) | N/A (change from provided to used) | Company Overview This section details Polar Power's business description, product portfolio, and specific applications of its DC power solutions across various industries Business Description and Product Portfolio Polar Power, Inc. is a global innovator in DC power solutions, offering advanced systems for various industrial applications. Its product portfolio is known for innovation, durability, and efficiency, supporting diverse energy sources - Polar Power, Inc. is a global provider of prime, backup, and solar hybrid DC power solutions, pioneering technological changes in power generation and offering advanced power and cooling systems[2][5] - The company's product portfolio includes standard products for telecom, military, renewable energy, marine, EV charging, residential, commercial, oil field, and mining applications[5] - Polar Power's systems are versatile, configurable to operate on any energy source, including photovoltaics, diesel, LPG (propane and butane), and renewable fuels[5] Product Applications and Solutions Polar Power provides specialized DC power solutions tailored for various sectors, including cost-effective telecom systems, compact military power, mobile EV charging, integrated residential systems, and micro/nano grid solutions for off-grid environments - Telecom power solutions offer significant cost savings in installation, permitting, site leases, and operation[7] - Military solutions provide compact, lightweight, fuel-efficient, and reliable power for robotics, drones, communications, and hybrid propulsion applications[7] - Mobile rapid battery charging technology enables on-demand roadside charging for electric vehicles[7] - Micro/nano grid solutions deliver lower cost energy in 'bad-grid or no-grid' environments, with recent enhancements including heat recovery to increase fuel-to-useful energy conversion[4][7] Financial Statements This section presents Polar Power's condensed balance sheets, unaudited statements of operations, and cash flow statements for the reported periods Condensed Balance Sheets As of June 30, 2025, Polar Power's total assets decreased, while total liabilities increased compared to December 31, 2024, leading to a reduction in total stockholders' equity. Cash and cash equivalents also saw a notable decline Condensed Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $16,546 | $17,546 | $(1,000) | | Total Liabilities | $9,562 | $9,034 | $528 | | Total Stockholders' Equity | $6,984 | $8,512 | $(1,528) | | Cash and cash equivalents | $175 | $498 | $(323) | | Inventories | $12,993 | $12,893 | $100 | | Line of credit | $5,302 | $4,797 | $505 | Unaudited Condensed Statements of Operations For the three months ended June 30, 2025, Polar Power experienced a significant year-over-year decline in net sales and gross profit, resulting in an operating loss and a net loss, contrasting with net income in the prior year period Unaudited Condensed Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $2,708 | $4,660 | $4,431 | $6,434 | | Cost of Sales | $1,778 | $2,828 | $3,183 | $5,005 | | Gross Profit | $930 | $1,832 | $1,248 | $1,429 | | Total Operating Expenses | $1,040 | $1,372 | $2,459 | $2,949 | | Income (loss) from operations | $(110) | $460 | $(1,211) | $(1,520) | | Net income (loss) | $(271) | $501 | $(1,536) | $(1,641) | | Net income (loss) per share – basic and diluted | $(0.11) | $0.20 | $(0.61) | $(0.65) | Unaudited Condensed Statements of Cash Flow For the six months ended June 30, 2025, cash flow from operating activities turned negative, while cash provided by financing activities increased. The period ended with a decrease in cash and cash equivalents compared to the prior year Unaudited Condensed Statements of Cash Flow (in thousands) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(988) | $190 | | Net cash used in investing activities | $0 | $(18) | | Net cash provided by financing activities | $665 | $398 | | Increase (Decrease) in cash and cash equivalents | $(323) | $570 | | Cash and cash equivalents, end of period | $175 | $1,119 | Forward-Looking Statements and Risks This section addresses the nature of forward-looking statements within the report and outlines various risks that could impact future results Safe Harbor Statement This section outlines the nature of forward-looking statements within the report, including specific company plans, and details various risks that could cause actual results to differ materially from these projections - The news release contains forward-looking statements regarding future events and business performance, identifiable by terms such as 'expects,' 'anticipates,' 'believes,' 'intends,' 'estimates,' 'plans,' and 'will'[9] - Specific forward-looking plans include improving operational efficiencies, expanding the customer base, releasing a 30 kW mobile EV charger during the fourth quarter, and further diversifying the customer base[9] - Actual future results could differ materially due to various risks, including adverse domestic and foreign economic and market conditions, trade tariffs on raw materials, changes in governmental regulations, inflation, supply chain constraints, and labor shortages[9] Company Information This section provides essential contact details for Polar Power, Inc Contact Information This section provides the official contact details for Polar Power, Inc., including its address, telephone number, email, and website - Polar Power, Inc. can be contacted at 249 E. Gardena Blvd., Gardena, CA 90248, via telephone at 310-830-9153, or email at ir@polarpowerinc.com. Further information is available on their website, **www.polarpower.com**[8](index=8&type=chunk)[10]