GARDENA, Calif., Jan. 25, 2019 /PRNewswire/ -- Polar Power,
Inc. (NASDAQ: POLA), a global provider of prime, backup and
solar hybrid DC power solutions, today announced preliminary 2018
revenue results, a business update, and a business outlook for
2019.
2018 PRELIMINARY REVENUES AND BUSINESS UPDATE
Preliminary (unaudited) 2018 Revenue – For 2018,
Polar Power expects total revenue to be between $23.7 million and $24.1
million, including fourth quarter total revenue of between
$8.0 million to $8.4 million. Both the full year 2018 and fourth
quarter 2018 revenues represent record growth for the company.
These results, which are subject to audit, represent annual
increases of $9.3 million to $$9.7
million, which translates into approximately 64% to 67%
year-over-year growth. Revenue for both the full year and fourth
quarter 2018 consist predominantly of sales to Tier-1 U.S.
telecommunication customers.
Sales Expansion –2018 marked the beginning of a
significant expansion of our sales to Tier-1 telecommunication
customers, as we saw over 80% of our total sales, approximately
$16.4 million, were generated by new
U.S. telecom customers. We attribute this sales growth to the
investments we have made in our sales infrastructure and the
expansion of our plant capacity during 2017 and 2018. In addition,
during the fourth quarter 2018, we also recorded a notable increase
in revenues and bookings from international customers resulting in
an estimated year-end backlog of approximately $16 million, a 777% increase as compared to the
$1.8 million backlog we reported at
year-end 2017.
The amount of backlog represents revenue that we anticipate
recognizing in the future, as evidenced by purchase orders received
from customers, but on which work has not yet been initiated or
with respect to which work is currently in progress. We believe
that most of our backlog will be shipped within the next six
months.
Plant Capacity Expansion – We believe that in order
for us to gain additional market share for backup generators in the
U.S. telecommunication markets, it is vital to demonstrate our
ability to deliver higher production volumes to our Tier-1
telecommunication customers. During 2018, through investments in
plant, equipment and automation we doubled our plant capacity to
increase our ability to ship higher production volumes in 2019.
These investments, combined with the training costs of new
manufacturing personnel, reduced our net margins during 2018. We
believe that these improvements in production efficiencies and
volumes should lead to improved net margins during second half of
2019.
Emerging Markets – International markets are a key
opportunity for our existing technologies and products and critical
strategic objective for the Company. During 2018, we established a
sales infrastructure, which included sales offices and service
maintenance facilities in Europe,
Africa, Australia, Caribbean, Latin
America and Asia. Growth
and expansion of our telecom infrastructure in these emerging
markets presents a key opportunity for us to establish a leadership
position in these markets. In order to increase average revenue per
site, we plan to deliver additional services including tower
installations, cell site maintenance and renewable storage
solutions to our emerging market customers. During 2018, we made
key breakthroughs in select overseas markets and received initial
orders that included ancillary products and services in target
markets such as Namibia,
Sri Lanka and Thailand.
Polar Power has not finalized its financial statement review
process for 2018. As a result, the preliminary unaudited 2018
selected financial information in this release is preliminary and
based upon the information available to Polar Power as of the date
of this release. During the course of Polar Power's annual
financial review process, including the audit process, items may be
identified by Polar Power and/or its auditors that would require
Polar Power to make adjustments, which could be material. As
a result, the preliminary unaudited 2018 selected financial
information above is forward-looking information and subject to
risks and uncertainties, including possible material
adjustments.
2019 OUTLOOK
Revenue Outlook – We believe that currently we have a
relatively small market share of the U.S. telecom backup power
generator market with significant opportunities among the top-tier
carriers as well as the fragmented "last mile" service
providers. During 2018, we narrowed the price difference
between our products and top brand AC generator products, while
delivering what we believe is a more reliable and fuel-efficient
product solution. During 2018, we received product certification
from most of the major Tier-1 telecommunication providers in the
U.S. market and initial orders from key international customers. We
believe these accomplishments, combined with expanded international
sales infrastructure, positions us for continued positive revenue
growth in 2019.
Operational Outlook – Our strategic investments in
plant automation and equipment has provided us with significantly
higher production capacity for 2019. We believe this increase
in plant capacity will enable us to not only increase market share
with our existing Tier-1 customers, but also provide us with the
ability to target and serve new customers and geographies. We
believe that customer and market diversification will enable us to
better anticipate our material, labor and plant equipment
requirements and drive more operational efficiencies and capital
utilization in 2019.
New Products Technologies – During 2018, a
significant portion of engineering and R&D investment was
allocated towards the development of new product configurations
utilizing existing core technologies. Looking ahead to 2019, a
significant portion of the R&D effort will be dedicated towards
development of new technologies related to natural gas generators,
lithium battery storage systems and efficient integration of
renewable energy with DC power supplies. To facilitate our
technology roadmap and growth strategy, we added additional
resources in the second half of 2018 to develop these technologies
and products, which will target what we believe to be a significant
market opportunity in the industrial, commercial and residential
power generation markets. Although we expect to see benefits from
our new product platform launches during 2019, we believe a
majority of the impact will be in 2020 and beyond as we leverage
our technology advantage to capture more market share in telecom
and develop new growth opportunities outside of telecom.
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 statements about its projected
financial results for 2018 and future operating results including
Polar Power's expectation of improved net margins during the second
half of 2019; Polar Power's expectation that as a result of
accomplishments made in 2018 combined with its expanded
international sales infrastructure, Polar Power is positioned for
continued positive revenue growth in 2019; Polar Power's
statements regarding its 2019 operational outlook including its
expectation for more operational efficiencies and capital
utilization in 2019; Polar Power's R&D expectations for 2019;
and Polar Power's expectation that it will benefit from its new
product launches in 2019 and beyond 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, the
review of Polar Power's results of operations for 2018 by its
auditors and potential material adjustments that they be required
upon the conclusion of such review, 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. Polar Power undertakes 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
Polar Power's reports filed with the Securities and Exchange
Commission.
Media and Investor Relations:
Shawn Severson
Integra Investor Relations
Shawn M. Severson
+1 415-233-7094
shawn@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
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SOURCE Polar Power, Inc.