Dragonfly Energy Reports First Quarter 2024 Financial and Operational Results
Dragonfly Energy (Nasdaq: DFLI) reported its Q1 2024 financial results. Net sales decreased to $12.5 million from $18.8 million in Q1 2023, mainly due to lower battery and accessory sales. Gross profit also fell to $3.1 million from $4.7 million. Operating expenses were reduced to $8.9 million from $14.6 million, but the company still posted a net loss of $10.4 million, compared to a net income of $4.8 million in Q1 2023. EBITDA was negative at $5.3 million, a sharp decline from $8.9 million in Q1 2023. Operational highlights include new orders in the trucking industry, certification for energy storage products in the oil & gas sector, and partnerships with Velociti Inc. and National Forest Foundation.
Dragonfly Energy expects net sales of $14.0 - $15.0 million for Q2 2024, with gross margins between 24% and 26%, and operating expenses ranging from $8.5 - $9.5 million. The company anticipates a net loss of $8.0 - $10.0 million for the quarter.
- Operating expenses decreased to $8.9 million from $14.6 million in Q1 2023.
- New orders for Battle Born® All-Electric APUs and Battle Born® Liftgate Power Systems in the trucking industry.
- Certification for energy storage products in the oil & gas sector in North America.
- Partnership with Velociti Inc. providing access to Instant ROI and VeloCare programs.
- Partnership with the National Forest Foundation for environmental sustainability.
- Business of the Year Award for 2024 at the Nevada Business Awards.
- Successful production of PFAS-free lithium battery cells.
- Net sales decreased to $12.5 million from $18.8 million in Q1 2023.
- Gross profit fell to $3.1 million from $4.7 million in Q1 2023.
- Net loss of $10.4 million, compared to a net income of $4.8 million in Q1 2023.
- EBITDA was negative $5.3 million, down from $8.9 million in Q1 2023.
- Cash position declined to $8.5 million from $12.7 million at the end of 2023.
- DTC net sales decreased by $4.8 million due to rising interest rates and inflation.
- OEM revenue decreased by $1.5 million mainly due to a change in product offering by the largest RV customer.
Insights
Dragonfly Energy's first quarter of 2024 reveals a challenging financial landscape. Net sales declined to
Operating expenses significantly dropped to
One point of interest for retail investors is the company's utilization of cash. They ended the quarter with
The outlook for Q2 2024 suggests a slight improvement, with net sales expected between
The expansion into the trucking industry and certification for oil & gas operations represent significant strategic moves for Dragonfly Energy. These new markets could provide substantial revenue streams, especially given the company's focus on sustainable and innovative solutions like the PFAS-free electrodes and their dry electrode battery manufacturing process. However, the immediate impact on the financials won't be visible until later in 2024, as the company expects contributions to net sales from the oil & gas market by Q4 2024. Similarly, the trucking market, while showing early traction, will need more time to become a significant revenue contributor.
The announcement of a recovery in the RV market is another positive sign, as it suggests a potential rebound in one of their core markets. The company's strategic partnerships, such as those with Forest River and Velociti Inc., might bolster their market position and drive future sales growth. However, the shift of their largest RV customer’s product from a standard offering to an option underscores the competitive nature of this market and the challenges in maintaining consistent sales.
For retail investors, the strategic expansion and partnerships indicate a forward-thinking approach but come with risks. The immediate financials are underwhelming, but the long-term growth potential in new markets holds promise if executed well.
- Dragonfly Energy has continued its expansion into the trucking industry, taking new orders for both its Battle Born® All-Electric APUs and Battle Born® Liftgate Power Systems from fleet operators since the beginning of 2024.
- The Company is announcing certification of its energy storage products for use in oil & gas operations in North America, and identification of first customer within the sector.
- The Company anticipates a continuing recovery in the RV market throughout 2024, which is expected to benefit the OEM business line, particularly with ongoing market share growth.
RENO, Nev., May 14, 2024 (GLOBE NEWSWIRE) -- Dragonfly Energy Holdings Corp. (“Dragonfly Energy” or the “Company”) (Nasdaq: DFLI), maker of Battle Born Batteries® and an industry leader in energy storage, today reported its financial and operational results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial Highlights
- Net Sales were
$12.5 million , compared to$18.8 million in Q1 2023 - Gross Profit was
$3.1 million , compared to$4.7 million in Q1 2023 - Operating expenses were
$(8.9) million , compared to$(14.6) million in Q1 2023 - Net Loss of
$(10.4) million , compared to Net Income of$4.8 million in Q1 2023 - Diluted Net Loss per share was
$(0.17) , compared to Net Income of$0.10 per share in Q1 2023 - EBITDA was
$(5.3) million , compared to$8.9 million in Q1 2023 - Adjusted EBITDA was
$(5.2) million , compared to$(5.1) million in Q1 2023
Operational and Business Highlights
- The Company has begun taking orders for its Battle Born® All-Electric auxiliary power units (“APUs”) and Battle Born® Liftgate Power Systems from trucking providers and fleet operators
- Today announced certification of the Company’s energy storage products for use in oil & gas operations in North America
- Announced partnership with the National Forest Foundation to plant trees in honor of Earth Day (link)
- Announced the results of a cost and sustainability assessment of the Company’s patented dry electrode battery manufacturing process, which concluded that Dragonfly Energy’s process was significantly more sustainable than conventional battery cell manufacturing processes (link)
- Announced partnership with Velociti Inc. to provide the Company’s customers access to Velociti’s Instant ROI and VeloCare programs when deploying its Battle Born® All-Electric APU (link)
- Announced receipt of the Business of the Year award for 2024 at the annual Nevada Business Awards (link)
- Announced the successful production of lithium battery cells with PFAS-free electrodes, in anticipation of tightening regulation of “forever chemicals” (link)
“I am incredibly excited about where Dragonfly Energy stands right now as a company and our opportunities for growth over the long-term,” said Dr. Denis Phares, Chief Executive Officer of Dragonfly Energy. “Combining a valuable brand, a robust intellectual property portfolio, a recovering core market, and the potential for rapid expansion into significant adjacent markets we believe uniquely positions us to further transform the battery industry. Our focus remains on the cost-effective domestic manufacturing of lithium battery cells, a technology we expect will be a critical component of the global energy landscape for decades to come.”
First Quarter 2024 Financial and Operating Results
First quarter 2024 Net Sales were
First quarter 2024 Gross Profit was
Operating Expenses in the first quarter of 2024 were
Total Other Expense in the first quarter of 2024 was
The Company had a Net Loss of
EBITDA in the first quarter of 2024 was
In the first quarter of 2024, Adjusted EBITDA excluding stock-based compensation, changes in the fair market value of the Company’s warrants, and other one-time expenses, was a
The Company ended the first quarter with
The Company’s
Oil & Gas Market Entry
The Company is proud to announce that it has achieved full certification for its energy storage products to be deployed for use in oil & gas operations in North America. As a result of this certification, the Company is pleased to announce it is working with its previously announced partner, Connexa Energy Company (“Connexa”), to deliver a power product to market leading natural gas compressor packager Alegacy Equipment and their dedicated affiliate Agnes Systems.
The power system, which Connexa will integrate, will be used in natural gas compression equipment to reduce methane emissions across the oilfield. The Company expects the first of these systems to be deployed over the summer.
Dragonfly Energy expects this new business line to begin contributing to net sales by the fourth quarter of 2024.
Q2 2024 Outlook
The Company believes that the RV market is showing signs of recovery. In addition, the Company believes that its entry into the heavy-duty trucking market, while still in its early stages, is gaining traction and has the potential to be a more meaningful revenue contributor in the second half of 2024.
Q2 2024 Guidance
- Net Sales are expected to range between
$14.0 -$15.0 million - Gross Margin is expected in the range of
24.0% -26.0% - Operating Expenses are expected to be in a range of
$(8.5) -$(9.5) million - Other Income (Expense) is expected be an expense in the range of
$(3.0) –$(4.0) million - Net Loss is expected to be between
$(8.0) -$(10.0) million for the second quarter of 2024, or$(0.13) -$(0.16) per share based on approximately 61.0 million shares outstanding
Webcast Information
The Dragonfly Energy management team will host a conference call to discuss its first quarter 2024 financial and operational results this afternoon, Tuesday, May 14, 2024, at 5:00 pm E.T. The call can be accessed live via webcast by clicking here, or through the Events and Presentations page within the Investor Relations section of Dragonfly Energy’s website at https://investors.dragonflyenergy.com/events-and-presentations/default.aspx. The call can also be accessed live via telephone by dialing (646) 564-2877, toll-free in North America (800) 549-8228, or for international callers +1 (289) 819-1520, and referencing conference ID: 23810. Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event.
An archive of the webcast will be available for a period of time shortly after the call on the Events and Presentations page on the Investor Relations section of Dragonfly Energy’s website, along with the earnings press release.
About Dragonfly Energy
Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) is a comprehensive lithium battery technology company, specializing in cell manufacturing, battery pack assembly, and full system integration. Through its renowned Battle Born Batteries® brand, Dragonfly Energy has established itself as a frontrunner in the lithium battery industry, with hundreds of thousands of reliable battery packs deployed in the field through top-tier OEMs and a diverse retail customer base. At the forefront of domestic lithium battery cell production, Dragonfly Energy’s patented dry electrode manufacturing process can deliver chemistry-agnostic power solutions for a broad spectrum of applications, including energy storage systems, electric vehicles, and consumer electronics. The Company's overarching mission is the future deployment of its proprietary, nonflammable, all-solid-state battery cells.
To learn more about Dragonfly Energy and its commitment to clean energy advancements, visit www.dragonflyenergy.com/investors.
Forward-Looking Statements
This 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 2024, 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: improved recovery in the Company’s core markets, including the RV market; the Company’s ability to successfully increase market penetration into target markets; the Company’s ability to penetrate the heavy-duty trucking and other new 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
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:
Caldwell Bailey
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, 2024 | December 31, 2023 | |||||||||
| Current Assets | ||||||||||
| Cash | $ | 8,501 | $ | 12,713 | ||||||
| Accounts receivable, net of allowance for credit losses | 2,247 | 1,639 | ||||||||
| Inventory | 33,578 | 38,778 | ||||||||
| Prepaid expenses | 843 | 772 | ||||||||
| Prepaid inventory | 1,468 | 1,381 | ||||||||
| Prepaid income tax | 345 | 519 | ||||||||
| Other current assets | 709 | 118 | ||||||||
| Total Current Assets | 47,691 | 55,920 | ||||||||
| Property and Equipment | ||||||||||
| Property and Equipment, Net | 16,770 | 15,969 | ||||||||
| Operating lease right of use asset | 23,988 | 3,315 | ||||||||
| Total Assets | $ | 88,449 | $ | 75,204 | ||||||
| Current Liabilities | ||||||||||
| Accounts payable | $ | 9,550 | $ | 10,258 | ||||||
| Accrued payroll and other liabilities | 8,295 | 7,107 | ||||||||
| Accrued tariffs | 1,800 | 1,713 | ||||||||
| Customer deposits | 231 | 201 | ||||||||
| Uncertain tax position liability | 91 | 91 | ||||||||
| Notes payable, net of deferred financing fees | 21,837 | 19,683 | ||||||||
| Operating lease liability, current portion | 1,682 | 1,288 | ||||||||
| Financing lease liability, current portion | 37 | 36 | ||||||||
| Total Current Liabilities | 43,523 | 40,377 | ||||||||
| Long-Term Liabilities | ||||||||||
| Warrant liabilities | 4,227 | 4,463 | ||||||||
| Accrued expenses, long-term | 69 | 152 | ||||||||
| Operating lease liability, net of current portion | 22,763 | 2,234 | ||||||||
| Financing lease liability, net of current portion | 56 | 66 | ||||||||
| Total Long-Term Liabilities | 27,115 | 6,915 | ||||||||
| Total Liabilities | 70,638 | 47,292 | ||||||||
| Equity | ||||||||||
| Preferred stock, 5,000,000 shares at | ||||||||||
| Common stock, 250,000,000 shares at | ||||||||||
| - | - | |||||||||
| 6 | 6 | |||||||||
| Additional paid in capital | 69,711 | 69,445 | ||||||||
| Retained deficit | (51,906 | ) | (41,539 | ) | ||||||
| Total Equity | 17,811 | 27,912 | ||||||||
| Total Liabilities and Stockholders' Equity | $ | 88,449 | $ | 75,204 | ||||||
| Dragonfly Energy Holdings Corp. | ||||||||||
| Unaudited Condensed Interim Consolidated Statement of Operations | ||||||||||
| For the Three Months Ended March 31, | ||||||||||
| (in thousands, except share and per share data) | ||||||||||
| 2024 | 2023 | |||||||||
| Net Sales | $ | 12,505 | $ | 18,791 | ||||||
| Cost of Goods Sold | 9,454 | 14,124 | ||||||||
| Gross Profit | 3,051 | 4,667 | ||||||||
| Operating Expenses | ||||||||||
| Research and development | 1,333 | 880 | ||||||||
| General and administrative | 4,813 | 9,495 | ||||||||
| Selling and marketing | 2,744 | 4,184 | ||||||||
| Total Operating Expenses | 8,890 | 14,559 | ||||||||
| Loss From Operations | (5,839 | ) | (9,892 | ) | ||||||
| Other Income (Expense) | ||||||||||
| Interest expense | (4,760 | ) | (3,856 | ) | ||||||
| Other Expense | (4 | ) | - | |||||||
| Change in fair market value of warrant liability | 236 | 18,523 | ||||||||
| Total Other (Expense) Income | (4,528 | ) | 14,667 | |||||||
| Net (Loss) Income Before Taxes | (10,367 | ) | 4,775 | |||||||
| Income Tax (Benefit) Expense | - | - | ||||||||
| Net (Loss) Income | $ | (10,367 | ) | $ | 4,775 | |||||
| Net (Loss) Income Per Share- Basic | $ | (0.17 | ) | $ | 0.11 | |||||
| Net (Loss) Income Per Share- Diluted | $ | (0.17 | ) | $ | 0.10 | |||||
| Weighted Average Number of Shares- Basic | 60,260,282 | 45,104,515 | ||||||||
| Weighted Average Number of Shares- Diluted | 60,260,282 | 48,455,996 | ||||||||
| Dragonfly Energy Holdings Corp. | ||||||||||
| Unaudited Condensed Consolidated Statement of Cash Flows | ||||||||||
| For the Three Months Ended March 31, | ||||||||||
| (in thousands) | ||||||||||
| 2024 | 2023 | |||||||||
| Cash flows from Operating Activities | ||||||||||
| Net (Loss) Income | $ | (10,367 | ) | $ | 4,775 | |||||
| Adjustments to Reconcile Net Income (Loss) to Net Cash | ||||||||||
| Used in Operating Activities | ||||||||||
| Stock based compensation | 266 | 4,487 | ||||||||
| Amortization of debt discount | 894 | 219 | ||||||||
| Change in fair market value of warrant liability | (236 | ) | (18,523 | ) | ||||||
| Non-cash interest expense (paid-in-kind) | 1,260 | 1,238 | ||||||||
| Provision for credit losses | 47 | 52 | ||||||||
| Depreciation and amortization | 332 | 297 | ||||||||
| Amortization of right of use assets | 422 | 308 | ||||||||
| Loss on disposal of property and equipment | - | 116 | ||||||||
| Changes in Assets and Liabilities | ||||||||||
| Accounts receivable | (655 | ) | (1,577 | ) | ||||||
| Inventories | 5,200 | (1,966 | ) | |||||||
| Prepaid expenses | (71 | ) | (196 | ) | ||||||
| Prepaid inventory | (87 | ) | 299 | |||||||
| Other current assets | (591 | ) | (129 | ) | ||||||
| Income taxes payable | 174 | - | ||||||||
| Accounts payable and accrued expenses | (100 | ) | 6,465 | |||||||
| Accrued tariffs | 87 | 117 | ||||||||
| Customer deposits | 30 | 180 | ||||||||
| Total Adjustments | 6,972 | (8,613 | ) | |||||||
| Net Cash Used in Operating Activities | (3,395 | ) | (3,838 | ) | ||||||
| Cash Flows From Investing Activities | ||||||||||
| Purchase of property and equipment | (817 | ) | (589 | ) | ||||||
| Net Cash Used in Investing Activities | (817 | ) | (589 | ) | ||||||
| Dragonfly Energy Holdings Corp. |
| Unaudited Condensed Consolidated Statement of Cash Flows |
| For the Three Months Ended March 31, |
| (in thousands) |
| 2024 | 2023 | |||||||||
| Cash Flows From Financing Activities | ||||||||||
| Proceeds from public offering, net | - | 597 | ||||||||
| Proceeds from note payable, related party | 2,700 | 1,000 | ||||||||
| Repayment of note payable, related party | (2,700 | ) | - | |||||||
| Proceeds from exercise of public warrants | - | 747 | ||||||||
| Proceeds from exercise of options | - | 93 | ||||||||
| Net Cash Provided by Financing Activities | - | 2,437 | ||||||||
| Net Decrease in Cash and cash equivalents | (4,212 | ) | (1,990 | ) | ||||||
| Cash and cash equivalents - Beginning of period | 12,713 | 17,781 | ||||||||
| Cash and cash equivalents - end of period | $ | 8,501 | $ | 15,791 | ||||||
| Supplemental Disclosures of Cash Flow Information: | ||||||||||
| Cash paid for interest | $ | 2,390 | $ | 2,003 | ||||||
| Purchases of property and equipment, not yet paid | $ | 412 | $ | 352 | ||||||
| Recognition of right of use asset obtained in exchange for operating lease liability | $ | 21,095 | $ | - | ||||||
| Cashless exercise of liability classified warrants | $ | - | $ | 10,167 | ||||||
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 EBITDA
Adjusted 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 EBITDA
The following table presents reconciliations of EBITDA and Adjusted EBITDA to the most directly comparable GAAP financial measure for each of the periods indicated.
Source: Dragonfly Energy Holdings Corp.
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