Critical Power Business Segment Revenue Up
130%
Declares One-time Special Cash Dividend of
$1.50 per share
Guides to $27 Million to $29 Million of Revenue
for 2025
Pioneer Power Solutions, Inc. (Nasdaq: PPSI) (“Pioneer”
or the “Company”), a leader in the design, manufacture, and service
of distributed energy resources, power generation equipment and
mobile electric vehicle (“EV”) charging solutions, today provided a
business update and announced unaudited financial results for the
quarter ended September 30, 2024.
On October 29, 2024, the Company announced that it had sold its
Pioneer Custom Electrical Products, LLC (“PCEP”) business unit to
Mill Point Capital LLC (“Mill Point”), a middle-market private
equity firm located in New York City, for $50 million in a cash and
equity transaction. Consequently, the Company is now solely focused
on the growth and profitability of its Critical Power and eMobility
business.
Also, as a result of the sale, the Company’s Board of Directors
declared a one-time special cash dividend of $1.50 per share to be
paid on January 7, 2025, to stockholders of record as of December
17, 2024. The special dividend will result in an aggregate
distribution of approximately $16.5 million based on the current
number of shares outstanding. The special dividend will be funded
with the proceeds from the sale of the Company’s Electrical
Infrastructure Equipment segment.
Nathan Mazurek, Pioneer’s Chairman and Chief Executive Officer,
commented, “Our Critical Power business segment delivered
outstanding year-over-year revenue growth of 130% and generated
positive income from operations. The opportunities for future
growth for this business, which is anchored by our e-Boost
platform, are massive. Through rapid and effective product
innovation, we believe we are setting the standard for off-grid
mobile EV charging solutions.”
Financial Highlights from the Company’s Critical Power
Business Segment for the Three Months Ended September 30, 2024
(Unaudited):
- Revenue was $6.4 million, an increase of 130% as compared to
$2.8 million during the third quarter of 2023.
- Gross profit was $1.5 million, or a gross margin of
approximately 24%, as compared to $439,000, or a gross margin of
approximately 16%, during the third quarter of 2023.
- Income from operations was $211,000, compared to a loss from
operations of $621,000 during the third quarter of 2023, a
year-over-year improvement of $832,000.
- Backlog was $24.0 million as of September 30, 2024, up
approximately 200% as compared to $8.0 million as of September 30,
2023.
Recent Business Highlights
- Sold its PCEP business unit for $50 million in a cash and
equity transaction.
- Completed and delivered multiple e-Boost units to satisfy a
contract with BC Hydro and Power Authority recognizing
approximately $3.0 million in revenue.
- Delivered two e-Boost units to SparkCharge, Inc.
(“SparkCharge”) as part of a groundbreaking collaboration launched
in August of this year and expects to deliver approximately 10 more
e-Boost units in 2025.
- Executed multiple lease extensions with our top three e-Boost
leasing customers.
Mazurek continued, “We have narrowed our focus to our Critical
Power business and the broad opportunities in the mobile EV
charging market to fuel our future growth. As a result of our
innovative solutions, e-Boost is now synonymous with reliable and
sustainably powered, off-grid mobile EV charging solutions. We
believe we have a robust backlog of orders, our collaboration with
SparkCharge is exceeding expectations and we have the capital to
take this Critical Power and eMobility business to new heights. We
expect strong double-digit revenue growth and an increase in
profitability for 2025.”
Third Quarter 2024 Consolidated Financial Results
(Unaudited)
Revenue
Consolidated revenue for the three months ended September 30,
2024, was $10.9 million, a decrease of 4.7%, as compared to $11.5
million during the third quarter of last year, primarily due to a
decrease in sales of equipment in the Electrical Infrastructure
segment. Revenue from the Electrical Infrastructure segment
decreased by 48%, and revenue from the Critical Power segment
increased by 130% during the third quarter of 2024 as compared to
the same period last year.
Gross Profit/Margin
Consolidated gross profit for the third quarter of 2024 was $2.1
million, or 18.9% of revenue, compared to $3.7 million, or 32.3% of
revenue, for the same period in 2023. The decrease in consolidated
gross profit and margin is primarily due to a decrease in sales of
power systems and switchgear equipment in the Electrical
Infrastructure segment, which was partially offset by an increase
in sales of our e-Boost equipment in the eMobility business and an
increase in service sales.
Operating Income (Loss)
For the three months ended September 30, 2024, loss from
operations was $1.1 million, as compared to income from operations
of $940,000 for the third quarter of 2023, a decrease of $2.0
million.
Net Income (Loss)
The Company’s net loss during the three months ended September
30, 2024, was $1.1 million, or $(0.10) per basic and diluted share,
as compared to net income of $1.0 million, or $0.10 per basic and
diluted share, during the same period last year.
Balance Sheet Summary
As of September 30, 2024, the Company had $3.1 million of cash
on hand and working capital of $9.1 million, compared to $3.6
million of cash on hand and working capital of $9.4 million as of
December 31, 2023. The Company had no bank debt on the balance
sheet as of September 30, 2024.
Subsequent to the quarter end, the Company received net cash
proceeds of approximately $48 million from the sale of its PCEP
business.
2025 Outlook
Management withdraws its financial guidance for 2024 given the
sale of the Company’s PCEP business unit on October 29, 2024.
Management expects revenue of $27 to $29 million for the full
year 2025, which represents year-over-year growth of approximately
25%.
The foregoing projected outlook constitutes forward-looking
information and is intended to provide information about
management's current expectations for the Company's 2025 fiscal
year. Although considered reasonable as of the date hereof, this
outlook, and the underlying assumptions may prove to be inaccurate.
Accordingly, actual results could differ materially from the
Company's expectations as set forth herein. See "Forward-Looking
Statements."
In preparing the above outlook, the Company assumed, among other
things, (i) that the Company’s backlog orders will translate into
revenue, (ii) that the Company will be able to satisfactorily
complete and deliver all orders and (iii) the timely payment by
customers for all billings. This section includes forward-looking
statements. See "Forward-Looking Statements."
Earnings Conference Call:
Management will host a conference call Monday, November 18,
2024, at 4:30 p.m. Eastern Time to discuss Pioneer’s third quarter
2024 financial results with the investment community.
Anyone interested in participating should call 1-877-407-0789 if
calling within the United States or 1-201-689-8562 if calling
internationally. When asked, please reference the conference ID:
PIONEER.
A replay will be available until Monday, December 2, 2024, which
can be accessed by dialing 1-844-512-2921 if calling within the
United States or 1-412-317-6671 if calling internationally. Please
use Access ID: 13750028 to access the replay.
The call will also be accompanied live by webcast over the
Internet and accessible at
https://viavid.webcasts.com/starthere.jsp?ei=1696559&tp_key=fb977214c6.
About Pioneer Power Solutions, Inc.
Pioneer Power Solutions, Inc. is a leader in the design,
manufacture, integration, refurbishment, service and distribution
of electric power systems, distributed energy resources, power
generation equipment and mobile EV charging solutions for
applications in the utility, industrial and commercial markets. To
learn more about Pioneer, please visit its website at
www.pioneerpowersolutions.com.
Forward-Looking Statements:
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995, as amended. Such statements may be preceded by the words
“intends,” “may,” “will,” “plans,” “expects,” “anticipates,”
“projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,”
“potential” or similar words. Forward-looking statements are not
guarantees of future performance, are based on certain assumptions
and are subject to various known and unknown risks and
uncertainties, many of which are beyond the Company’s control, and
cannot be predicted or quantified and consequently, actual results
may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include,
without limitation, risks and uncertainties associated with (i) the
Company’s ability to successfully operate its business after the
divestiture of its E-Bloc business, (ii) the Company’s ability to
successfully increase its revenue and profit in the future, (iii)
general economic conditions and their effect on demand for
electrical equipment, (iv) the effects of fluctuations in the
Company’s operating results, (v) the fact that many of the
Company’s competitors are better established and have significantly
greater resources than the Company, (vi) the Company’s dependence
on two customers for a large portion of its business, (vii) the
potential loss or departure of key personnel, (viii) unanticipated
increases in raw material prices or disruptions in supply, (ix) the
Company’s ability to realize revenue reported in the Company’s
backlog, (x) future labor disputes, (xi) changes in government
regulations, (xii) the liquidity and trading volume of the
Company’s common stock, (xiii) an outbreak of disease, epidemic or
pandemic, such as the global coronavirus pandemic, or fear of such
an event, (xiv) risks associated with litigation and claims, which
could impact our financial results and condition, and (xv) the
Company’s ability to maintain compliance with the continued listing
requirements of the Nasdaq Capital Market.
More detailed information about the Company and the risk factors
that may affect the realization of forward-looking statements is
set forth in the Company’s filings with the Securities and Exchange
Commission, including the Company’s Annual and Quarterly Reports on
Form 10-K and Form 10-Q, respectively. Investors and security
holders are urged to read these documents free of charge on the
SEC’s web site at www.sec.gov. The Company assumes no obligation to
publicly update or revise its forward-looking statements as a
result of new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20241114221404/en/
Brett Maas, Managing Partner Hayden IR (646) 536-7331
brett@haydenir.com
Pioneer Power Solutions (NASDAQ:PPSI)
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