Dragonfly Energy(US:DFLI)2024-05-18 07:54Financial Data and Key Metrics Changes - Dragonfly's gross profit in Q1 2024 was approximately $3.1 million, down from $4.7 million in Q1 2023 [12] - Net loss in Q1 2024 was $10.4 million or negative $0.17 per diluted share, compared to net income of $4.8 million or $0.10 per diluted share in Q1 2023 [13] - Net sales in Q1 2024 were $12.5 million, down from $18.8 million in Q1 2023, aligning with guidance of $12 million to $13 million [30] - Operating expenses in Q1 2024 were $8.9 million, down from $14.6 million in Q1 2023 [32] - EBITDA in Q1 2024 was negative $5.3 million, compared to positive $8.9 million in Q1 2023 [34] - Cash position at the end of Q1 2024 was approximately $8.5 million, down from $12.7 million at the end of 2023 [35] Business Line Data and Key Metrics Changes - OEM revenue in Q1 2024 was $7.3 million, down from $8.8 million in Q1 2023; however, excluding Keystone, OEM revenue grew year-over-year by 70% [24][31] - Direct-to-consumer segment generated net sales of $5.2 million in Q1 2024, down from $10.0 million in Q1 2023 [79] Market Data and Key Metrics Changes - The RV Industry Association forecasts a medium annual growth rate of 13.8%, with RV shipments up 9% for Q1 compared to the previous quarter [8] - The company is entering the heavy-duty trucking market, which is expected to contribute more meaningfully to revenue in the second half of 2024 [14] Company Strategy and Development Direction - The company aims to leverage its technology in lithium batteries to expand into adjacent markets, including heavy-duty trucking and oil and gas [4][9] - Dragonfly is focusing on domestic cell production and has garnered interest from large customers in various sectors [10] - The company is pursuing opportunities in the industrial solar and stationary storage markets, driven by new EPA mandates [25][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the RV market and the potential for growth in the heavy-duty trucking market [14][39] - The company expects revenue in Q2 2024 to be in the range of $14.0 million to $15.0 million, representing approximately 16% sequential growth [36] - Management highlighted the importance of eliminating PFAS chemicals in production, which provides a competitive advantage [66] Other Important Information - The company has achieved necessary certifications for deployment in the oil and gas industry and identified a large new customer in this space [9] - The dry electrode process has shown significant potential for scalability and quality, attracting interest from various sectors [10][28] Q&A Session Summary Question: Impact of Section 301 tariffs on business - Management indicated that the increase in tariffs on non-EV batteries would not affect immediate business but is positive for long-term domestic cell manufacturing [42] Question: Optimism in the RV market - Management noted a recovery in the RV market, with increased orders from Keystone and a growing preference for lithium options [46][47] Question: Revenue opportunity in oil and gas market - Management discussed potential regulations and the environmental benefits of their technology, which could lead to thousands of deployments over the next 18 months [48][52] Question: Adoption patterns in trucking - Management expects adoption rates to align with fleet turnover cycles, estimating that 20%-25% of fleets are turned over annually [54] Question: Competitive landscape and PFAS elimination - Management emphasized the environmental advantages of their PFAS-free batteries and their competitive positioning in both the U.S. and Europe [66]