Exhibit 99.1

 

(graphic) 

 

Polar Power Reports Fourth Quarter and Full Year 2018 Financial Results

 

Management to Host Conference Call Today at 4:30 p.m. EDT

 

GARDENA, CA – March 26, 2019 –

Polar Power, Inc. (NASDAQ: POLA), a global provider of prime, backup and solar hybrid DC power solutions, today reported its financial results for the fourth quarter and full year ended December 31, 2018.

 

Key 2018 and Subsequent Highlights:

 

Financial Results for the Three and Twelve Months Ended December 31, 2018

 

Net sales in 2018 totaled $24 million, an increase of 67%, as compared to $14.4 million in 2017. Net sales totaled $8.3 million in Q4 2018, an increase of 108%, as compared to $4.0 million in Q4 2017. The increase in net sales was primarily a result of an increase in sales of DC power systems to Tier-1 wireless carrier customers, coupled with an increase in international and government sales during 2018.

 

Backlog totaled $16.0 million at December 31, 2018.

 

Gross profit increased by $2.7 million to $7.4 million as compared to $4.7 million in 2017; however, gross profit as a percentage of sales decreased to 30.9% in 2018, as compared to 33.0% in 2017. The decrease in gross profit as percentage of net sales was due to a combination of pricing concessions tied significantly to higher volume from our Tier-1 telecom customers and an increase in manufacturing overhead costs associated with the expansion of our manufacturing facilities. In addition, the company experienced higher raw material costs associated with new tariffs on aluminum and other imports from China.

 

Operating expenses increased to $8.5 million in 2018 from $5.6 million in 2017, an increase of $2.9 million. Of this amount, $0.6 million and $1.2 million was attributable to increased investments in R&D and sales and marketing activities, respectively. The increase in operating expenses in both periods was primarily due to investments in several major R&D projects.

 

Net loss in 2018 totaled $0.8 million, or ($0.08) per basic and diluted share, compared to a net loss of $0.8 million, or ($0.07) per basic and diluted share, in 2017. The decline in EPS is attributable to a combination of lower gross profit rate and an increase in operating expenses associated with investment in R&D and sales.

 

Cash at December 31, 2018 totaled $5.6 million, as compared to $14.2 million at December 31, 2017. The substantial reduction in cash balances are associated with a $7.8 million cash used by operating activities, of which $2.9 million was associated with an increase in inventory, and a $4.7 million increase in accounts receivable associated with increased shipments to Tier-1 carriers with net 90-day payment terms.

 

Management Commentary

 

“During 2018 we experienced significant growth resulting from an increase in shipments to Tier-1 telecom customers, which validated our technology and price competitiveness in the DC backup power generation market in the U.S.,” said Polar Power CEO, Arthur Sams. “We also made progress in reducing our customer concentration through sales to Tier-1 telecom providers. These improvements were offset to some degree by volume discounts from those customers.”

 

 

 

 

Mr. Sams continued, “International growth remains a key strategic initiative for the company and towards the second half of 2018 we made solid gains with increased sales to customers in Namibia, Sri Lanka, Australia and Thailand. We would like to note that our telecom customers in the emerging markets are well established regional telecom providers and we are optimistic that we will increase our market share as they gain more experience and familiarity with our products and technologies.”

 

“During 2018 we made significant progress on our renewable energy systems technology roadmap. Many of the emerging markets lack reliable electric grid infrastructure and a large portion of the telecom towers are located in off-grid or bad grid areas. During 2018, we demonstrated the DC hybrid systems in Sri Lanka, where our system is used as primary power, fully integrated with lithium battery storage and solar modules.”

 

“During 2018, our diversification efforts beyond telecom markets came to fruition as we delivered light weight, compact liquid-cooled DC power system for use in the U.S. Army’s Robotic Mule Project. We believe automated robotic vehicles have numerous applications beyond military and we plan to develop new technologies for commercial applications of these vehicles”.

 

“We also recently launched our new LPG and natural gas DC power systems designed for residential and mobile electric vehicle charging stations. We believe this is an exciting new opportunity for us and it’s the first product in a series designed for residential applications. We also believe that using a DC generator that is operating on natural gas, with or without a solar PV array, will be instrumental in helping electric utilities meet the increased power demand associated with electric car charging. Many homes and commercial businesses are without sufficient power to charge an EV or fleet of EVs and the cost to increase electrical service can be cost prohibitive. In addition, the utilities energy cost during peak demand may become too high making natural gas a cost competitive alternative to the electric grid”, concluded Mr. Sams.

 

Conference Call Details

 

Polar Power CEO Arthur Sams, COO Rajesh Masina and CFO Luis Zavala will host the conference call, followed by a question and answer period.

 

To access the call, please use the following information:

 

Date: Tuesday, March 26, 2019
Time: 4:30 p.m. ET, 1:30 p.m. PT
Toll-free dial-in number: 1-888-394-8218
International dial-in number: 1-323-794-2588
Conference ID: 8959903

 

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Integra Investor Relations at 1-415-233-7094.

 

The conference call will be broadcast live and available for replay http://public.viavid.com/index.php?id=133608 and via the investor relations section of the Company’s website at www.polarpower.com.

 

 

 

 

 

 

A replay of the conference call will be available after 7:30 p.m. Eastern Time through Tuesday April 2, 2019.

 

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 8959903

 

About Polar Power, Inc.  

Gardena, California-based Polar Power, Inc. (NASDAQ: POLA), designs, manufactures and sells direct current, or DC, power systems, lithium battery powered hybrid solar systems for applications in the telecommunications market and, in other markets, including military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply. Within the telecommunications market, Polar’s systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical power needs that cannot be without power in the event of utility grid failure. For more information, please visit www.polarpower.com. or follow us on www.linkedin.com/company/polar-power-inc/

 

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995  

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. With the exception of historical information, the matters discussed in this press release including, without limitation, Polar Power’s belief that it will increase its market share in international markets; Polar Power’s belief that automated robotic vehicles have numerous applications beyond military and its plans to deliver new technologies for commercial applications of those vehicles; and Polar Power’s belief that using a DC generator operating on natural gas, with or without a solar PV array, will be instrumental in helping electric utilities meet the increased power demand associated with electric car charging are forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Polar Power could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, adverse domestic and foreign economic and market conditions, including demand for DC power systems; trade tariffs on raw materials; changes in domestic and foreign governmental regulations and policies; and other events, factors and risks. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our reports filed with the Securities and Exchange Commission.

 

Media and Investor Relations:
Integra Investor Relations
Shawn M. Severson
+1 415-233-7094
info@integra-ir.com
@Integra IR
www.integra-ir.com

 

Company Contact: 

Polar Power, Inc. 

249 E. Gardena Blvd. 

Gardena, CA 90248 

Tel: 310-830-9153 

ir@polarpowerinc.com 

www.polarpower.com

 

 

 

 

POLAR POWER, INC.
BALANCE SHEETS

 

   December 31,
2018
   December 31,
2017
 
ASSETS          
Current assets          
Cash and cash equivalents (including restricted cash of $1,002,683 and $1,001,180 at December 31, 2018 and December 31, 2017, respectively)  $5,640,078   $14,201,163 
Accounts receivable   7,726,919    3,058,266 
Inventories, net   8,471,769    5,487,053 
Prepaid expenses   468,666    236,670 
Refundable income taxes   715,916    629,316 
Total current assets   23,023,348    23,612,468 
           
Other assets:          
Property and equipment, net   2,122,757    824,076 
Deposits   94,001    87,496 
           
Total assets  $25,240,106   $24,524,040 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities          
Accounts payable  $1,066,415   $757,753 
Customer deposits   79,184    40,039 
Accrued liabilities and other current liabilities   504,559    586,391 
Current portion of notes payable   283,388    110,237 
Total current liabilities   1,933,546    1,494,420 
Notes payable, net of current portion   924,539    126,818 
           
Total liabilities   2,858,085    1,621,238 
           
Commitments and Contingencies          
           
Stockholders’ Equity          
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding        
Common stock, $0.0001 par value, 50,000,000 shares authorized, 10,143,158 and, 10,143,158, shares issued and outstanding, respectively   1,014    1,014 
Additional paid-in capital   19,578,426    19,250,955 
Retained earnings   2,802,581    3,650,833 
Total stockholders’ equity   22,382,021    22,902,802 
           
Total liabilities and stockholders’ equity  $25,240,106   $24,524,040 

 

 

 

 

 

 

POLAR POWER, INC.
STATEMENTS OF OPERATIONS

 

   Three Months Ended   Years Ended 
   December 31,   December 31, 
   2018   2017   2018   2017 
                 
Net sales  $8,297,509   $3,979,965   $24,046,354   $14,418,726 
                     
Cost of sales   5,941,867    2,732,094    16,614,574    9,657,558 
                     
Gross profit   2,355,642    1,247,871    7,431,780    4,761,168 
                     
Operating Expenses                    
Sales and Marketing   611,305    487,224    2,579,457    1,348,455 
Research and development   535,829    387,210    1,907,810    1,334,637 
General and administrative   1,417,506    868,177    4,043,301    2,880,036 
Total operating expenses   2,564,640    1,742,611    8,530,568    5,563,128 
                     
Loss from operations   (208,998)   (494,740)   (1,098,788)   (801,960)
                     
Other income (expenses)                    
Interest expenses   (11,989)   (3,166)   (20,170)   (17,822)
Interest income   10,213    18,966    55,706    54,791 
Other income (expenses)   0    795        7,575 
Total other income (expense)   (1,776)   16,595    35,536    44,544 
                     
Loss before income taxes   (210,774)   (478,145)   (1,063,252)   (757,416)
Income tax benefit (provision)   215,000    (113,118)   215,000     
                     
Net income (loss)  $4,226   $(591,263)  $(848,252)  $(757,416)
                     
Net loss per share – basic and diluted  $0.00   $(0.06)  $(0.08)  $(0.07)
Weighted average shares outstanding, basic and diluted   10,143,158    10,143,158    10,143,158    10,143,158 

 

 

 

 

POLAR POWER, INC.
STATEMENTS OF CASH FLOWS

 

   Years Ended
December 31,
 
   2018   2017 
         
Cash flows from operating activities:          
Net loss  $(848,252)  $(757,416)
Adjustments to reconcile net loss to net cash used in operating activities:          
Fair value of vested stock options   327,471    8,240 
Depreciation and amortization   385,583    255,631 
Changes in operating assets and liabilities          
Accounts receivable   (4,668,653)   1,345,680 
Inventories   (2,984,716)   (647,462)
Prepaid expenses   (231,996)   (58,101)
Deposits   (6,505)   (20,700)
Refundable income taxes   (86,600)   (629,316)
Deferred tax assets       160,637 
Accounts payable   308,662    98,398 
Income taxes payable       (1,227,308)
Customer deposits   39,145    (31,915)
Accrued expenses and other current liabilities   (81,832)   (83,498)
Net cash used in operating activities   (7,847,693)   (1,587,130)
           
Cash flows from investing activities:          
Acquisition of property and equipment   (574,990)   (342,121)
Net cash used in investing activities   (574,990)   (342,121)
           
Cash flows from financing activities:          
Repayment of notes   (138,402)   (111,744)
Net cash provided (used) by financing activities   (138,402)   (111,744)
           
Decrease in cash and cash equivalents   (8,561,085)   (2,040,995)
Cash and cash equivalents, beginning of period   14,201,163    16,242,158 
Cash and cash equivalents, end of period  $5,640,078   $14,201,163 
           
Supplemental Cash Flow Information:          
Interest paid  $20,170   $10,193 
Taxes Paid       2,424,417 
Supplemental non-cash investing and financing activities:          
Assets acquired under notes payable  $1,109,275   $ 

 

 


The following information was filed by Polar Power, Inc. (POLA) on Tuesday, March 26, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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