Dragonfly Energy(DFLI)2024-11-15 02:01Financial Data and Key Metrics Changes - Dragonfly Energy generated net sales of 15.9 million in Q3 2023, attributed to weakness in direct-to-consumer battery sales [31] - Gross profit in Q3 2024 was approximately 4.6 million in Q3 2023, with gross margin decreasing from 28.9% to 22.5% [32] - Net loss in Q3 2024 was 0.11 loss per share, compared to a net loss of 0.17 loss per share in Q3 2023 [34] - EBITDA in Q3 2024 was negative 5.7 million in Q3 2023 [35] - Cash at the end of Q3 2024 was approximately 4.7 million at the end of Q2 2024 [36] Business Line Data and Key Metrics Changes - OEM sales increased from 7.4 million in Q3 2024, representing a 10% increase, attributed to a recovering RV market and the introduction of smart battery products [20][22] - Direct-to-consumer segment generated net sales of 10.3 million in Q3 2023 [31] - The company recognized its first meaningful trucking revenue in Q3 2024, with expectations for continued growth in this segment [9] Market Data and Key Metrics Changes - The RV Industry Association forecasts continued recovery in the RV market, with unit production reaching the mid 300,000 per year range [22] - The heavy-duty trucking market is expected to see increased revenue due to the introduction of Dragonfly Intelligent technology, which offers real-time insights into energy systems [24] Company Strategy and Development Direction - The company is focusing on diversifying revenue streams and enhancing technology, particularly in the trucking and oil and gas sectors [6][7] - Dragonfly Energy aims to leverage its experience in transitioning from lead-acid to lithium solutions, with a strategic emphasis on partnerships and research and development [7][8] - The company is exploring North American expansion and establishing a Canadian subsidiary for cell manufacturing [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic headwinds impacting consumer discretionary spending but expressed confidence in the company's adaptability [6] - The company expects Q4 2024 to be its strongest quarter of the year, with revenues projected between 14.0 million [37] - Management anticipates notable growth in trucking revenue and a return to growth in direct-to-consumer markets with the release of new products [37] Other Important Information - The company has made strides in partnerships, particularly with Stryten Energy, to enhance its battery technology and expand market reach [12][13] - Dragonfly Energy is committed to vertical integration through a lithium sourcing agreement with Ioneer, which received federal approval for its lithium mine [16][17] Q&A Session Summary Question: Thoughts on dry electrode battery technologies - Management discussed their long-term work on dry electrode technology, emphasizing its potential for cost reduction and scalability compared to competitors [41][44] Question: Details on non-dilutive capital for production - Management is in advanced negotiations for financing through a Canadian subsidiary to support half-gigawatt-hour production [46] Question: Revenue potential from auxiliary power and market recovery - Management indicated that revenue growth will depend on market acceptance, fleet trials, and overall transportation market recovery [50] Question: Update on methane reduction pilot and market potential - Positive feedback was received from pilot programs, with ongoing negotiations indicating strong market interest regardless of potential regulatory changes [51]