REDMOND, Ore. – Expion360, Inc. (NASDAQ: XPON), an industry leader in lithium-ion battery power storage solutions, reported results for the three months ended March 31. All comparisons are to the same year-ago period unless otherwise noted.
- Revenue up 6% sequentially to $1.5 million in the first quarter.
- Gross profit increased 40% sequentially to $443,000 in Q1.
- Net loss totaled $2.0 million, versus a loss of $697,000 in the same year-ago period. Approximately $552,000 of the loss in the first quarter was due to settlement expense plus one-time costs associated with management reorganization, legal and professional.
- Cash and cash equivalents totaled $5.7 million at March 31, 2023, as compared to $7.2 million at December 31, 2022.
- Inventory on hand combined with pre-paid/in-transit inventory totaled $5.2 million at March 31, 2023, an increase of $483,000 versus at year end.
Q1 2023 Operational Highlight
- Chosen by Xtreme Outdoors pursuant to an exclusive arrangement as a strategic supplier of high-energy lithium-ion batteries and power system components for all of its Little Guy lightweight camper trailers.
- Selected by Cube Series pursuant to an exclusive arrangement as a strategic supplier of high-energy lithium-ion batteries and power system components for a new ultra-lightweight, hard sided foldable camper designed for light duty trucks. The lightweight camper is available to order today through more than 30 Cube Series dealerships in the U.S. and Canada.
- Introduced AURA POWERCAP 600™ and AURA POWERCAP 800™, the first accessories that can transform Expion360 Li-ion batteries into a portable 600-watt or 800-watt powerpack.
“In Q1, we generated sequential revenue growth largely due to our expanded product offerings and distribution network, as well as increased OEM market penetration,” stated Brian Schaffner, CEO of Expion360. “The revenue decrease from the year-ago quarter was primarily due to an exceptionally large initial stocking order from one of our largest resellers in that year-ago quarter.
“In January, we expanded our product portfolio with the introduction of our AURA POWERCAP battery accessory. It is a great value-add to our existing line of state-of-the-art Li-ion batteries, expanding their usefulness as a mobile power source. The POWERCAP enables overland and marine enthusiasts to enjoy power on-the-go and truly Power the Pursuit™ of their adventures. Whether heading off-grid in an e360-powered overland trailer or prepping for home emergencies, the AURA POWERCAP can keep important electronic gear up and running in a portable, power-dense package.
“Also during the quarter, we announced major exclusive OEM supplier arrangements with Cube Series and Xtreme Outdoors. We had begun shipping battery samples to Cube Series in December, which led to the supplier arrangement, and we expect production shipments to begin in the second quarter of 2023.
“We also began receiving orders from Xtreme Outdoors, which sells one of the world’s most recognizable teardrop brands with more than 130 dealers across the U.S. and Canada. We continue to see many upsell opportunities across their large dealership network. At the beginning of the year, we began initial shipments of lithium batteries for an overland trailer to be branded and sold by a top U.S. sports utility vehicle manufacturer. We continue to actively make shipments to the customer under the company’s previously announced exclusive supplier arrangement.
“In terms of future products, we continue to develop our new home energy storage solution, which remains on track to launch in 2024. We are designing and engineering it to directly address the ‘Energy Trilemma’ of reliability, affordability and sustainability. To further build upon our growing customer base and attract new customers, we have a number of additional new product launches we are planning to announce over the next few months.
“We will continue to focus on expanding our go-to-market channels, including growing our distribution network and our family of OEM partners, particularly those looking to achieve greater power density, better reliability and superior materials and construction to meet their energy storage needs. As a market leader in Li-ion batteries for RV and marine applications, our e360™ Li-ion batteries offer such greater capacity and space savings compared to lead-acid batteries, as well as superior design, construction and reliability versus alternative Li-ion batteries. We believe this is why lithium-ion batteries are expected to displace lead-acid batteries as the best solution for green energy storage.
“We had a strong start to Q2, putting us on track for another quarter of sequential growth, with this largely fueled by the continued ramp up in OEM sales. In all, the stronger foundation we’ve laid over the past year in terms of expanding our customer base and distribution channels, as well as broadening our product portfolio and strengthening our sales force, has set the stage for what we anticipate to be the best year yet for Expion360.”
Q1 2023 Financial Summary
Revenue in the first quarter of 2023 totaled $1.5 million, up 6% sequentially and down 30% from a record $2.2 million in the same year-ago quarter. The sequential increase was primarily due to increased sales of lithium-ion batteries and accessories to dealerships, wholesalers, and OEMs. The year over year decrease was primarily attributable to a large initial stocking order for one of the company’s resellers that was placed in 2022.
Gross profit totaled $443,000 or 29.4% of revenue as compared to $862,000 or 40.0% of revenue in the same year-ago quarter. The decrease in gross profit was primarily attributable to increased facility costs and labor as the company expanded its operations. The decrease was also due to discount levels related to specific customer groups, and supplier and shipping costs which the company is currently monitoring.
Selling, general and administrative expenses increased to $2.1 million compared to $1.2 million in the same year-ago quarter. The increase was primarily due to legal and professional costs related to changes in management, enhancement of key legal documents, litigation expenses, and payment of key advisory services. The increase in selling, general and administrative expenses was also due to increased costs for supporting the company’s sales growth and business development.
Net loss totaled $2.0 million or $(0.29) per share compared to a net loss of $0.7 million or $(0.16) per share in the same year-ago period. Approximately $552,000 of the loss in the first quarter was due to settlement expense plus one-time costs associated with management reorganization, legal and professional costs.
Cash and cash equivalents totaled $5.7 million at March 31, 2023, as compared to $7.2 million at December 31, 2022.
Capital Structure Summary
The company’s outstanding common stock as of March 31, 2023, totaled 6,900,566 shares. As of March 31, 2023, there were 800,436 warrants and 829,500 options issued which brings the fully diluted shares to 8,530,502 shares of common stock. The public float was approximately 4,743,296 shares as of March 31, 2023.
For additional information, see the company’s annual report on Form 10-Q filed with the SEC.