Flux Power Holdings, Inc., a developer of advanced lithium-ion battery packs for commercial and industrial equipment, issued a letter to shareholders from Ron Dutt, CEO of Flux Power.
In reviewing the calendar year 2021, Flux Power experienced continued high growth amidst numerous challenges and opportunities. The year was highlighted by increasing demand for our lithium-ion battery packs and the addition of new customers and products. The year ended with over 10,000 high-performance battery packs in the field for lift trucks and other industrial equipment including airport ground support equipment (GSE), and stationary energy storage for EV charging. These accomplishments have resulted in now 13 consecutive quarters of year-over-year revenue growth, record gross margin, and a record $28.0 million customer order backlog. We also strengthened our balance sheet during the year, raising net proceeds of $14.1M from a registered direct offering and converting all debt to equity.
With ongoing global supply chain disruptions and COVID-19 pandemic headwinds throughout the year, we continued to innovate new approaches to serve our customers, while maintaining a business growth trajectory of over 50% per year. The pandemic pressures have created frustrating shipment delays and part shortages but have in turn made us stronger and more resilient.
To meet our goals and challenges, during the year we improved and expanded our supply chain and production staff and processes. Our supplier management has been assessed and improved from end to end. The pressure tests invoked by the pandemic have driven specific actions including supplier management actions, launching lean manufacturing, adding new shippers, implementing high-performance cycling equipment, and strengthening staff capabilities.
Throughout 2021, we continued to see our market expand with the increasing rate of fleet electrification and supportive government regulations. Companies are becoming more aware of the consequences of carbon emissions and the role batteries and electrification can play as a solution. Our customers are looking for energy solutions that support their sustainability initiatives. Lithium-ion battery packs have a small share of the market today, but a high and growing adoption rate in the material handling industry.
Building on our success in the material handling industry, we are broadening our reach to include shipments of battery packs used for stationary energy storage and electric autonomous shuttles.
Looking ahead into 2022, we are focused on delivering quality products, meeting delivery requirements, and achieving customer satisfaction that is best-in-class.
Some of the initiatives we have planned for 2022 include:
New product designs for margin enhancement, part commonality, and improved serviceability;
Production facility improvements to increase throughput and support our record backlog;
New customer acquisition with Fortune 100 & 500 companies;
Deployment of our Sky BMS telematics technology;
New investor engagement to proactively communicate Flux Power’s growing financial performance, Fortune 500 customer base, and record backlog that is positioning the Company to be a global leader in lithium-ion energy storage solutions for large commercial and industrial fleets.
We continue to leverage our first-mover position in lithium-ion adoption with our growing list of new and diverse Fortune 500 customers, giving us validation of our strategy. Our commitment, consistent performance, and trustworthiness are the foundation for long-term, sustainable relationships with our customers.
2022 presents an exciting opportunity for Flux Power to continue our growth trajectory with customers, collaborate with OEMs, improve margins in the face of supply chain disruptions, and increase shareholder value. Withstanding the volatility in the electrification sector, we believe continued execution of our strategy will support increasing shareholder value for the future.