Dragonfly Energy Holdings Corp. (“Dragonfly Energy” or the
“Company”) (Nasdaq: DFLI), an industry leader in energy storage and
producer of deep cycle lithium-ion storage batteries, today
reported its financial and operational results for the first
quarter of 2023 ended March 31, 2023.
First Quarter 2023 Financial
Highlights
- Net Sales of $18.8 million
increased 2.7% from $18.3 million in Q1 2022
- Gross Profit of $4.7 million
decreased $0.8 million from $5.5 million in Q1 2022
- Operating expenses of $(14.6)
million were higher compared to $(7.1) million in Q1 2022
- Net Income of $4.9 million,
compared to a Net Loss of $(2.3) million in Q1 2022
- Diluted Earnings Per Share of $0.10
compared to $(0.06) in Q1 2022
- EBITDA of $9.0 million, compared to
$(1.4) million in Q1 2022
Operational and Business
Highlights
- Announced the launch of Dragonfly
IntelLigence™ providing reliable communication capabilities via
unique mesh network, enabling accurate remote monitoring for entire
lithium battery banks via the Dragonfly Energy Mobile App
- Announced partnership with
Airstream, which will provide Battle Born batteries as standard
equipment across multiple models
- Announced a Commercial Offtake
Agreement with Ioneer Ltd., a Nevada-based lithium-boron producer,
providing Dragonfly Energy with a future source of domestic supply
of lithium carbonate
“We delivered a solid start to 2023, with
healthy sales and record growth within the OEM segment, while
effectively managing headwinds that challenged the wider industry,”
said Denis Phares, CEO of Dragonfly Energy. “In addition to our
healthy core business, we have a strong and growing patent
portfolio ranging from innovative new products, like our
IntelLigence™ line of battery packs, to groundbreaking new cell
manufacturing and design technologies that we believe offer
significant upside and long-term competitive advantages within the
energy storage market. We are excited to execute on our plan for
the next 18 months and we look forward to sharing our progress in
the coming quarters.”First Quarter 2023 Financial and
Operating ResultsFirst quarter 2023 Net Sales of $18.8
million increased 2.7% compared to the first quarter of 2022. This
increase was primarily due to higher original equipment
manufacturer (OEM) battery and accessory sales partially offset by
lower direct to consumer (DTC) sales.
First quarter 2023 Gross Profit was $4.7
million, a decrease of $0.8 million compared to $5.5 million in the
same period a year ago. The decrease in gross profit was primarily
due to a change in revenue mix that included a larger percentage of
lower margin OEM sales and a lower percentage of higher margin DTC
sales.
First quarter 2023 Operating Expenses of $(14.6)
million, an increase compared to $(7.1) million in the first
quarter of 2022. The operating expenses for the quarter ended March
31, 2023, included approximately $3.6 million in higher stock-based
compensation expenses due to the granting of Restricted Stock Units
(RSUs) associated with year-end awards, as well as higher public
company costs.
First quarter 2023 Net Income was $4.9 million,
or $0.10 per diluted share, compared to a Net Loss of $(2.3)
million or $(0.06) per diluted share in the first quarter of 2022.
Net Income in the first quarter of 2023 benefited from an increase
in other income due to an $18.5 million change in the fair market
value of the Company’s warrants.
First quarter 2023 EBITDA was $9.0 million,
compared to EBITDA of $(1.4) million in the first quarter of
2022.
First quarter 2023 Adjusted EBITDA, excluding
stock-based compensation, the change in fair market value of the
warrants and one-time items, was $(5.0) million, compared to $(0.4)
million in the first quarter of 2022.
The Company ended the first quarter of 2023 with
$15.8 million in cash and $77.4 million in debt. Dragonfly Energy
retains strong financial flexibility with access to a $150 million
equity line of credit.
2Q 2023 Outlook
- Net Sales are expected to range
between $18 - $22 million, as softer demand within the DTC segment
is expected to be more than offset by growth within the OEM
segment
- Gross Margin is expected to remain
relatively flat on a sequential basis
- Operating Expenses are expected to
be in a range of $10.5 - $13.5 million
- Other Income (Expense) is expected
be an expense in the range of $(3.6) - $(4.0) million
- Net Losses are expected to be
between $(9.5) - $(12.5) million for the quarter, or $(0.21) -
$(0.27) per share based on 46.0 million shares outstanding
Webcast InformationThe
Dragonfly Energy management team will host a conference call to
discuss its first quarter 2023 financial results this afternoon,
Monday, May 15, 2023, at 5:00 pm ET. The call can also be accessed
live via telephone by dialing (888) 886-7786 or for international
callers (416) 764-8658, and referencing Dragonfly Energy. Please
log in to the webcast or dial in to the call at least 10 minutes
prior to the start of the event. The live webcast of the conference
will also be available at
https://investors.dragonflyenergy.com/events-and-presentations/default.aspx
on the Events and Presentations page on the Investor Relations
section of Dragonfly’s website.
About Dragonfly
Dragonfly Energy Holdings Corp. (Nasdaq: DFLI)
headquartered in Reno, Nevada, is a leading supplier of deep cycle
lithium-ion batteries. Dragonfly Energy’s research and development
initiatives are revolutionizing the energy storage industry through
innovative technologies and manufacturing processes. Today,
Dragonfly Energy’s non-toxic deep cycle lithium-ion batteries are
displacing lead-acid batteries across a wide range of end-markets,
including RVs, marine vessels, off-grid installations, and other
storage applications. Dragonfly Energy is also focused on
delivering an energy storage solution to enable a more sustainable
and reliable smart grid through the future deployment of the
Company’s proprietary and patented solid-state cell technology. To
learn more, visit www.dragonflyenergy.com/investors.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. Forward-looking statements include all statements that
are not historical statements of fact and statements regarding the
Company’s intent, belief or expectations, including, but not
limited to, statements regarding the Company’s guidance for 2023
results of operations and financial position, planned products and
services, business strategy and plans, market size and growth
opportunities, competitive position and technological and market
trends. Some of these forward-looking statements can be identified
by the use of forward-looking words, including “may,” “should,”
“expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,”
“predict,” “plan,” “targets,” “projects,” “could,” “would,”
“continue,” “forecast” or the negatives of these terms or
variations of them or similar expressions.
These forward-looking statements are subject to
risks, uncertainties, and other factors (some of which are beyond
the Company’s control) which could cause actual results to differ
materially from those expressed or implied by such forward-looking
statements. Factors that may impact such forward-looking statements
include, but are not limited to: the Company’s ability to recognize
the anticipated benefits of the Company’s recent business
combination with Chardan NexTech Acquisition 2 Corp. and related
transactions; the Company’s ability to successfully increase market
penetration into target markets; the growth of the addressable
markets that the Company intends to target; the Company’s ability
to retain members of its senior management team and other key
personnel; the Company’s ability to maintain relationships with key
suppliers including suppliers in China; the Company’s ability to
maintain relationships with key customers; the Company’s ability to
access capital as and when needed under its $150 million ChEF
Equity Facility; the Company’s ability to protect its patents and
other intellectual property; the Company’s ability to successfully
optimize solid state cells and to produce commercially viable solid
state cells in a timely manner or at all, and to scale to mass
production; the Company’s ability to achieve the anticipated
benefits of its customer arrangements with THOR Industries and THOR
Industries’ affiliated brands (including Keystone RV Company); the
impact of the coronavirus disease pandemic, including any mutations
or variants thereof and/or the Russian/Ukrainian conflict; the
Company’s ability to generate revenue from future product sales and
its ability to achieve and maintain profitability; and the
Company’s ability to compete with other manufacturers in the
industry and its ability to engage target customers and
successfully convert these customers into meaningful orders in the
future. These and other risks and uncertainties are described more
fully in the sections entitled “Risk Factors” and “Cautionary Note
Regarding Forward-Looking Statements” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2022 and in the
Company’s subsequent filings with the SEC available at
www.sec.gov.
If any of these risks materialize or any of the
Company’s assumptions prove incorrect, actual results could differ
materially from the results implied by these forward-looking
statements. There may be additional risks that the Company
presently does not know or that it currently believes are
immaterial that could also cause actual results to differ from
those contained in the forward-looking statements. All
forward-looking statements contained in this press release speak
only as of the date they were made. Except to the extent required
by law, the Company undertakes no obligation to update such
statements to reflect events that occur or circumstances that exist
after the date on which they were made.
Investor Relations:Sioban Hickie, ICR,
Inc.DragonflyIR@icrinc.com
Dragonfly
Energy Holdings Corp. |
Unaudited
Condensed Consolidated Balance Sheets |
(in thousands,
except share and per share data) |
|
|
|
|
|
As of |
|
March 31, 2023 |
|
December 31, 2022 |
Current Assets |
|
|
|
Cash |
$ |
15,791 |
|
|
$ |
17,781 |
|
Accounts receivable, net of allowance for doubtful accounts |
|
2,969 |
|
|
|
1,444 |
|
Inventory |
|
51,812 |
|
|
|
49,846 |
|
Prepaid expenses |
|
1,820 |
|
|
|
1,624 |
|
Prepaid inventory |
|
1,703 |
|
|
|
2,002 |
|
Prepaid income tax |
|
525 |
|
|
|
525 |
|
Other current assets |
|
396 |
|
|
|
267 |
|
Total Current Assets |
|
75,016 |
|
|
|
73,489 |
|
Property and Equipment |
|
|
|
Property and Equipment, Net |
|
11,288 |
|
|
|
10,760 |
|
Operating lease right of use asset |
|
4,205 |
|
|
|
4,513 |
|
Total Assets |
$ |
90,509 |
|
|
$ |
88,762 |
|
|
|
|
|
Current Liabilities |
|
|
|
Accounts payable |
$ |
18,824 |
|
|
$ |
13,475 |
|
Accrued payroll and other liabilities |
|
8,199 |
|
|
|
6,295 |
|
Customer deposits |
|
418 |
|
|
|
238 |
|
Uncertain tax position liability |
|
128 |
|
|
|
128 |
|
Notes payable, net of deferred financing fees |
|
20,699 |
|
|
|
19,242 |
|
Notes payable, related party |
|
1,000 |
|
|
|
- |
|
Operating lease liability, current portion |
|
1,215 |
|
|
|
1,188 |
|
Total Current Liabilities |
|
50,483 |
|
|
|
40,566 |
|
Long‑Term Liabilities |
|
|
|
Warrant liabilities |
|
4,141 |
|
|
|
32,831 |
|
Accrued expenses, long-term |
|
361 |
|
|
|
492 |
|
Operating lease liability, net of current portion |
|
3,209 |
|
|
|
3,541 |
|
Total Long‑Term Liabilities |
|
7,711 |
|
|
|
36,864 |
|
Total Liabilities |
|
58,194 |
|
|
|
77,430 |
|
|
|
|
|
Equity |
|
|
|
Common stock, 170,000,000 shares at $0.0001 par value, authorized,
45,795,502 and 43,272,728 shares issued and outstanding as of March
31, 2023 and December 31, 2022, respectively |
|
|
|
Preferred stock, 5,000,000 shares at $0.0001 par value, authorized,
no shares issued and outstanding as of March 31, 2023 and December
31, 2022, respectively |
|
5 |
|
|
|
4 |
|
Additional
paid in capital |
|
54,551 |
|
|
|
38,461 |
|
Retained
deficit |
|
(22,241 |
) |
|
|
(27,133 |
) |
Total Equity |
|
32,315 |
|
|
|
11,332 |
|
Total Liabilities and Shareholders' Equity |
$ |
90,509 |
|
|
$ |
88,762 |
|
|
|
|
|
|
|
|
|
Dragonfly
Energy Holdings Corp. |
Unaudited
Condensed Interim Consolidated Statement of
Operations |
For the
Three Months Ended March 31, 2023, and 2022 |
(in thousands,
except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net
Sales |
$ |
18,791 |
|
|
$ |
18,303 |
|
|
|
|
|
Cost
of Goods Sold |
|
14,048 |
|
|
|
12,808 |
|
|
|
|
|
Gross Profit |
|
4,743 |
|
|
|
5,495 |
|
|
|
|
|
Operating Expenses |
|
|
|
Research and development |
|
880 |
|
|
|
339 |
|
General and administrative |
|
9,495 |
|
|
|
3,626 |
|
Selling and marketing |
|
4,184 |
|
|
|
3,092 |
|
|
|
|
|
Total Operating Expenses |
|
14,559 |
|
|
|
7,057 |
|
|
|
|
|
(Loss) Income From Operations |
|
(9,816 |
) |
|
|
(1,562 |
) |
|
|
|
|
Other Income (Expense) |
|
|
|
Interest expense |
|
(3,815 |
) |
|
|
(1,263 |
) |
Change in fair market value of warrant liability |
|
18,523 |
|
|
|
- |
|
Total Other Income (Expense) |
|
14,708 |
|
|
|
(1,263 |
) |
|
|
|
|
Income (Loss) Before Taxes |
|
4,892 |
|
|
|
(2,825 |
) |
|
|
|
|
Income Tax (Benefit) Expense |
|
- |
|
|
|
(527 |
) |
|
|
|
|
Net
Income (Loss) |
$ |
4,892 |
|
|
$ |
(2,298 |
) |
|
|
|
|
Income
(Loss) Per Share‑ Basic |
$ |
0.11 |
|
|
$ |
(0.06 |
) |
Income
(Loss) Per Share‑ Diluted |
$ |
0.10 |
|
|
$ |
(0.06 |
) |
Weighted
Average Number of Shares‑ Basic |
|
45,104,515 |
|
|
|
36,542,944 |
|
Weighted
Average Number of Shares‑ Diluted |
|
48,455,996 |
|
|
|
36,542,944 |
|
|
|
|
|
Dragonfly
Energy Holdings Corp. |
Unaudited
Condensed Consolidated Statement of Cash Flows |
For the
Three Months Ended March 31, 2023, and 2022 |
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
Cash flows from Operating Activities |
|
|
|
Net Income (Loss) |
$ |
4,892 |
|
|
$ |
(2,298 |
) |
Adjustments to Reconcile Net Income (Loss) to Net Cash |
|
|
|
Used in Operating Activities |
|
|
|
Stock based compensation |
|
4,487 |
|
|
|
288 |
|
Amortization of debt discount |
|
219 |
|
|
|
613 |
|
Change in fair market value of warrant liability |
|
(18,523 |
) |
|
|
- |
|
Deferred tax liability |
|
- |
|
|
|
(527 |
) |
Non‑cash interest expense (paid‑in-kind) |
|
1,238 |
|
|
|
- |
|
Provision for doubtful accounts |
|
52 |
|
|
|
- |
|
Depreciation and amortization |
|
297 |
|
|
|
192 |
|
Loss on disposal of property and equipment |
|
116 |
|
|
|
62 |
|
Changes in Assets and Liabilities |
|
|
|
Accounts receivable |
|
(1,577 |
) |
|
|
(1,217 |
) |
Inventories |
|
(1,966 |
) |
|
|
(5,946 |
) |
Prepaid expenses |
|
(196 |
) |
|
|
(502 |
) |
Prepaid inventory |
|
299 |
|
|
|
2,425 |
|
Other current assets |
|
(129 |
) |
|
|
(637 |
) |
Other assets |
|
308 |
|
|
|
274 |
|
Income taxes payable |
|
- |
|
|
|
(11 |
) |
Accounts payable and accrued expenses |
|
6,465 |
|
|
|
(4,119 |
) |
Customer deposits |
|
180 |
|
|
|
293 |
|
Total Adjustments |
|
(8,730 |
) |
|
|
(8,812 |
) |
Net Cash Used in Operating Activities |
|
(3,838 |
) |
|
|
(11,110 |
) |
|
|
|
|
|
Cash Flows From Investing Activities |
|
|
|
Purchase of property and equipment |
|
(589 |
) |
|
|
(4,524 |
) |
Net Cash Used in Investing Activities |
|
(589 |
) |
|
|
(4,524 |
) |
|
|
|
|
|
Cash Flows From Financing Activities |
|
|
|
Proceeds from public offering, net |
|
597 |
|
|
|
- |
|
Proceeds from note payable, related party |
|
1,000 |
|
|
|
- |
|
Proceeds from exercise of public warrants |
|
747 |
|
|
|
- |
|
Proceeds from exercise of options |
|
93 |
|
|
|
111 |
|
Net Cash Provided by Financing Activities |
|
2,437 |
|
|
|
111 |
|
|
|
|
|
|
Net (Decrease) / Increase in Cash and Restricted Cash |
|
(1,990 |
) |
|
|
(15,523 |
) |
Beginning cash and restricted cash |
|
17,781 |
|
|
|
28,630 |
|
Ending cash and restricted cash |
$ |
15,791 |
|
|
$ |
13,107 |
|
Use of Non-GAAP Financial
Measures
The Company provides non-GAAP financial measures
including EBITDA and Adjusted EBITDA as a supplement to GAAP
financial information to enhance the overall understanding of the
Company’s financial performance and to assist investors in
evaluating the Company’s results of operations, period over period.
Adjusted non-GAAP measures exclude significant unusual items.
Investors should consider these non-GAAP measures as a supplement
to, and not a substitute for financial information prepared on a
GAAP basis.
Adjusted EBITDAAdjusted EBITDA
is considered a non-GAAP financial measure under the rules of the
SEC because it excludes certain amounts included in net loss
calculated in accordance with GAAP. Specifically, the Company
calculates Adjusted EBITDA by GAAP net loss adjusted to exclude
stock-based compensation expense, business combination related
expenses and other one-time, non-recurring items.
The Company has included Adjusted EBITDA because
it is a key measure used by Dragonfly’s management team to evaluate
its operating performance, generate future operating plans, and
make strategic decisions, including those relating to operating
expenses. As such, the Company believes Adjusted EBITDA is helpful
in highlighting trends in the ongoing core operating results of the
business.
Adjusted EBITDA has limitations as an analytical tool, and it
should not be considered in isolation or as a substitute for
analysis of net loss or other results as reported under GAAP. Some
of these limitations are:
- Adjusted EBITDA does not reflect the Company’s cash
expenditures, future requirements for capital expenditures, or
contractual commitments;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, the Company’s working capital needs;
- Adjusted EBITDA does not reflect the Company’s tax expense or
the cash requirements to pay taxes;
- although amortization and depreciation are non-cash charges,
the assets being amortized and depreciated will often have to be
replaced in the future and Adjusted EBITDA does not reflect any
cash requirements for such replacements;
- Adjusted EBITDA should not be construed as an inference that
the Company’s future results will be unaffected by unusual or
non-recurring items for which the Company may adjust in historical
periods; and
- other companies in the industry may calculate Adjusted EBITDA
differently than the Company does, limiting its usefulness as a
comparative measure.
Reconciliations of Non-GAAP Financial
Measures
EBITDA and Adjusted EBITDAThe
following table presents reconciliations of EBITDA and Adjusted
EBITDA to the most directly comparable GAAP financial measure for
each of the periods indicated.
Dragonfly
Energy Holdings Corp. |
For the
Three Months Ended March 31, 2023, and 2022 |
(in thousands,
except share and per share data) |
|
|
2023 |
|
|
|
2022 |
|
EBITDA
Calculation |
|
|
|
Net
Income |
$ |
4,892 |
|
|
$ |
(2,298 |
) |
Interest Expense |
|
3,815 |
|
|
|
1,263 |
|
Taxes |
|
- |
|
|
|
(527 |
) |
Depreciation and Amortization |
|
297 |
|
|
|
192 |
|
EBITDA |
$ |
9,004 |
|
|
$ |
(1,370 |
) |
|
|
|
|
Adjustments
to EBITDA |
|
|
|
Stock Based Compensation |
|
4,487 |
|
|
|
288 |
|
ERP Implementation |
|
- |
|
|
|
233 |
|
Promissory Note Forgiveness |
|
- |
|
|
|
469 |
|
Change in fair market value of warrant liability |
|
(18,523 |
) |
|
|
- |
|
Adjusted
EBITDA |
$ |
(5,032 |
) |
|
$ |
(380 |
) |
Source: Dragonfly Energy Holdings Corp.
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