Polar Power(US:POLA)2019-11-13 02:51Financial Data and Key Metrics Changes - Revenues for Q3 2019 were $6.9 million, a 30% increase from $5.0 million in the same quarter last year [41] - Gross profit for the quarter was $2.2 million, a 46% increase compared to $1.5 million in Q3 2018 [43] - Net income for Q3 2019 totaled $48,000, compared to a net loss of $0.7 million in Q3 2018 [45] - Current assets grew to $24.3 million as of September 30, 2019, compared to $23 million at the end of 2018 [46] Business Line Data and Key Metrics Changes - Backlog at the end of Q3 2019 was $3 million, down from $11.5 million at the end of the same quarter last year, primarily due to reduced lead times and lower sales to Tier-1 telecom customers [41][42] - Operating expenses decreased to $2.2 million in Q3 2019 from $2.3 million in Q3 2018 [44] Market Data and Key Metrics Changes - The domestic telecom market is seen as a compelling growth area, despite experiencing short-term volatility due to budget shifts towards 5G rollouts [14][42] - The company is expanding its U.S. distribution network and targeting last mile carriers to diversify its customer base [15][17] Company Strategy and Development Direction - The company is focusing on optimizing resources to pursue growth opportunities and diversifying its business plan [9] - Plans to introduce new products, including propane and natural gas generators powered by Toyota engines, are underway [15][16] - The company aims to expand into markets outside of telecom, with significant interest in solar hybrid LPG systems for various applications [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term value of their products despite short-term volatility in the telecom sector [42] - The company is optimistic about the future demand for backup power solutions due to increasing power outages and the need for reliable energy sources [22][34] - Management highlighted the importance of diversifying the customer base to mitigate risks associated with reliance on Tier-1 telecom customers [90][92] Other Important Information - The company has completed emissions testing required by the EPA and is awaiting certification to market its environmentally friendly product line [16][145] - The company is actively recruiting and training personnel to improve manufacturing efficiencies and support sales efforts [29] Q&A Session Summary Question: Can you walk us through the inventory increase and its implications? - Management indicated that inventory levels are increasing to secure timely delivery and that a significant portion consists of engines and components [53][56] Question: What products do you have for the 5G rollout? - The company is working directly with manufacturers of 5G equipment and is adapting its offerings to meet the evolving power needs of wireless carriers [61][62] Question: What is the status of the military market opportunities? - The military market presents long-term opportunities, with the potential for follow-on orders and R&D funding, although it requires custom solutions [72][74] Question: What are the challenges in the international market? - Management acknowledged difficulties in predicting contract timelines and emphasized the need for better support for field sales efforts [76][77] Question: Can you provide details on the new residential product pricing? - The company expects its residential products to be priced between $18,000 and $35,000, emphasizing their efficiency and multi-functional capabilities [110][112]