Expion360 Reports Q3 2023 Results, Revenue Up 37% YOY – RVBusiness – Breaking RV Industry News
REDMOND, Ore. – Expion360, Inc. (NASDAQ: XPON), an industry leader in lithium-ion battery power storage solutions, reported results for the three months ended September 30, 2023. All third quarter 2023 comparisons are to the same year-ago period unless otherwise noted.
Q3 2023 Financial Highlights
- Revenues totaled $1.9 million, up 10% sequentially and up 37% from the same year-ago period.
- Gross profit increased 17% to $473,000.
- Net loss totaled $1.8 million compared to a loss of $1.3 million in the same year-ago quarter as the company continued to invest in new product development and launches.
Q3 2023 Operational Highlights
- Expanded sales and distribution partnership with Meyer Distributing, a leading national marketer and distributor of automotive and RV specialty products. Meyer’s distribution network includes more than 90 warehousing facilities across the U.S. and Canada that service thousands of customers and hundreds of dealers.
- Expion360 Li-ion batteries are now available through more than 300 dealers, wholesalers, private-label customers and OEMs nationwide, up from 213 at the end 2022.
- Advanced the company’s industry leadership and competitiveness with introduction of new 12 Volt 450 Ah e360 SmartTalk™ lithium iron phosphate (LiFePO4) batterybased on breakthrough cell technology that increases energy density by more than 32 percent versus traditional 3.4 Ah 26650 cells.
- Strengthened corporate governance with appointment of tech industry veteran, innovator and business leader, Tien Q. Nguyen, to the board of directors. He brings to Expion360 more than 30 years of entrepreneurial and senior-level experience driving innovation in electrical technology, including product financing, engineering, development, and commercialization.
- Continued to elevate the Expion360 brand by exhibiting the company’s e360 lithium-ion (Li-ion) battery power solutions at the RV Dealer Open House, the world’s largest RV dealer show held in Elkhart, Indiana. E360 batteries were demonstrated at a number of OEM customer booths, including Chinook RV and Imperial Outdoors.
- Expion360 e360 lithium-ion were featured on the award-winning automotive television program, Motorhead Garage, which was broadcast across the U.S. and Canada.
Subsequent Event
In October, Expion360 has started working with Renewable Energy Products Manufacturing Corp. (REPM), a pioneer in sustainable home and commercial solar technology and installations, to offer Expion360’s new home and commercial e360™ energy storage solutions to REPM’s customers. The offering will begin with the launch of a pilot program, with installations expected to start in the first quarter of 2024.
Following the successful completion of the pilot program, the Expion360 energy storage solution will be made available to REPM’s expanding installation pipeline across the U.S.
The transformative energy storage solution aims to optimize efficiency and sustainability, and enable home and business owners to benefit from having their own ‘micro-grid’ of stored energy.
Management Commentary
“In Q3, we generated our fourth consecutive quarter of 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. “We are using the current recreational vehicle downturn to press forward our advantage by focusing on safety, quality, service and innovation. Our revenue is up quarter over quarter while the current RV market is expected to ship half the number of units as they did in 2021.
“As anticipated, our Li-ion battery business for RVs was impacted by the lower sales of such vehicles industry-wide, as increased interest rates slowed the loan market and associated RV activity. For our newest vertical for light electric vehicles (LEVs), we expect golf cart battery sales to continue to progress with upward momentum as more installers test and begin using our newly introduced 48v GC2 battery design.
“We increased R&D activity during the quarter as we continued to focus on innovation and expanding our product line. In fact, a significant portion of our increased R&D expense was related to new product development, such as our new home energy storage solution and our most energy dense 4.5 Ah battery cell which we introduced in late Q3.
“We have been making production shipments to several OEMs who engaged us as their strategic supply partner earlier this year, which includes Addax, Imperial Outdoors, Chinook RV, Cube Series and Xtreme Outdoors. We anticipate additional orders and new OEM partnerships as the RV market recovers given our marketing initiatives and expanding product line.
“In 2023, the level of orders has been significantly less than we originally anticipated. We believe this is due to the aforementioned slowdown in the RV market. To offset this, we continued to focus on other verticals and channels, such as marine, overland and light electric vehicles, and introducing products for home energy and commercial applications.
“During the quarter, we announced an expanded sales and distribution partnership with Meyer Distributing, a leading national marketer and distributor of automotive and RV specialty products. This expanded relationship reflects the increasing scale of our customer base and product lines that we believe will benefit from Meyer’s marketing and distribution capabilities. We see their professional sales teams and logistics expertise providing us a competitive edge as we look to grow our B2B business while sustaining our high level of customer service.
“In September, our new AURA POWERCAP inverter was featured on the award-winning automotive television program, Motorhead Garage and again earlier this month in an unboxing video on YouTube.
“Our pilot program with REPM is an important first step in introducing our new and innovative solutions for the renewable energy space. Through our collaboration with REPM, we aim to deliver energy storage solutions with leading-edge technology and further our mission of creating a sustainable future. We believe the combination of our Li-ion battery technology with REPM’s solar energy expertise will offer affordable, reliable, high-energy, eco-friendly solutions to communities across the U.S. Through REPM, we expect that our first installations of our home energy storage system will begin in the first quarter of 2024.
“Our new partnerships, OEM strategic supply agreements and expanded sales and distribution partnerships have further broadened our market opportunities in new and existing verticals. We are working on engaging additional major OEM partners as we prepare for the launch of new products.”
Q3 2023 Financial Summary
Revenue in the third quarter of 2023 totaled $1.9 million, up 37% from $1.4 million in the same year-ago quarter. The increase was primarily due to expanded relationships with OEMs and integration partners.
Gross profit totaled $473,000 or 25.0% of revenue as compared to $403,000 or 29.1% of revenue in the same year-ago quarter. The decrease in gross profit as a percentage of revenue was due to changes in the company’s product mix that resulted in reduced margins, purchasing of tooling and molds to continue intellectual property development, and additional warehouse capacity.
Selling, general and administrative expenses increased to $2.3 million compared to $1.7 million in the same year-ago quarter. The increase was primarily due toincreases of $199,000 in salary and benefits, $330,000 in legal and professional, and $104,000 in research and development.
Net loss totaled $1.8 million or $(0.26) per share, increasing from a net loss of $1.3 million or $(0.19) per share in the same year-ago period. The increase in net loss was primarily the result of increased SG&A expenses.
Cash and cash equivalents totaled $2.9 million at September 30, 2023, compared to $3.6 million at June 30, 2023.
Inventory on hand, combined with pre-paid/in-transit inventory, totaled $4.3 million at September 30, 2023, decrease from $5.1 million at June 30, 2023, and $4.7 million at end of last year.
First Nine Months 2023 Financial Summary
For the first nine months of 2023, revenue totaled $5.1 million, decreasing 11% from $5.7 million in the first nine months of 2022. The decrease was primarily due to the unusually large initial stocking order for one of the company’s resellers in the first half of 2022, as well as the shipment of back orders in the second quarter of 2022 that were fulfilled with inventory purchased with IPO proceeds.
Gross profit totaled $1.4 million or 26.8% of revenue, as compared to $2.0 million or 34.3% of revenue in the same year-ago period. The decrease in gross profit as a percentage of revenue was due to lower sales volume resulting in lower absorption of the company’s fixed facilities costs and labor, changes in its product mix that resulted in reduced margins, discount levels related to specific customer groups, the purchase of tooling and molds, and supplier and shipping costs.
Selling, general and administrative expenses decreased to $6.4 million compared to $6.5 million in the same year-ago period. The decrease in SG&A expenses is primarily due to a decrease in non-cash stock-based compensation of $2.1 million, which was partially offset by a $1.1 million increase in legal and professional services, a $163,000 increase in sales and marketing, and a $163,000 increase in research and development.
Net loss totaled $5.3 million or $(0.77) per share, improving from a net loss of $6.1 million or $(1.03) per share in the same year-ago period. Approximately $282,000 of the net loss in the first nine months of 2023 was due to a one-time settlement recorded in the first quarter.
Capital Structure Summary
The company’s outstanding common stock as of September 30, 2023, totaled 6,910,717 shares. As of September 30, 2023, there were 802,830 warrants, 1,075,000 options issued, and 48,780 restricted stock units which brings the fully diluted shares to 8,837,327 shares of common stock. The public float was approximately 4,918,161 shares as of September 30, 2023.
For additional information, please see the company’s quarterly report on Form 10-Q filed with the SEC.
Source: https://rvbusiness.com/expion360-reports-q3-2023-results-revenue-up-37-yoy/
