Flux Power Holdings, Inc

$FLUX - OTCUS - Electrical Equipment
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Flux ( $FLUX ) Power Sees Growing Pace of Lithium Forklift Battery Demand with National Accounts;
Projects Record LiFT Pack Shipments in Q3 ‘15

Vista, CA – March 19, 2015 -- Flux Power Holdings, Inc. (OTCQB: FLUX), a developer of advanced lithium batteries for industrial applications including electric forklifts, provided an update today on accelerating interest and demand for its LiFT Pack lithium batteries to power Class III electric forklifts or pallet jacks.

Flux has been stimulating growing customer traction, including pilots and initial orders, within the material handling industries of food and beverage distribution, grocery chains, logistics and trucking, and retail. Flux’s third quarter ending March 31st (Q3’15) looks to be the strongest quarter yet for LiFT Pack activity, with unit shipment growth of 40% compared with Q2’15. While Flux is still in the early stages of its sales and marketing efforts, the demand trends are very encouraging.

With the launch of its LiFT Pack line last year, Flux has played a pioneering role in introducing the performance and cost benefits of lithium batteries versus legacy lead-acid solutions in the material handling industry. Flux Power’s lithium batteries deliver substantially improved performance and a lower total cost of ownership compared to lead-acid batteries. The table below reviews piloting and initial purchases of Flux LiFT Packs with a select group of sixteen Flux regional and national accounts.

Flux Power Holdings, Inc.
& Regional Account Progress
Walkie Pallet Jack LiFT Pack Line
as of March 18, 2015)
Customer Flux Progress
Customer Type Size (Est. Purchase Status Pilot Status
Annual Sales)
Beverage Producer - Global >$60B Initial Packs Completed
Beverage Producer - Global >$45B Initial Packs Completed
Consumer Products – National $1B Initial Packs Completed
Food & Beverage – National >$9B Initial Packs Completed
Food Production – National $1.5B Initial Packs Completed
Food Production – Regional n/a Initial Packs Completed
Grocery Chain – National >$3.5B Initial Packs Completed
Grocery Chain – National n/a Initial Packs Completed
Specialty Retailer – National >$9B Initial Packs Completed
Wholesale Grocery – Regional $9.5B Initial Packs Completed
Food Distribution – National $1B -- Since Jan. 2015
Grocery Chain – Regional $4B -- Starts Apr. 2015
Logistics / Trucking – National >$6B -- Since Feb. 2015
Wholesale Grocery – National >$25B -- Since Jan. 2015
Wholesale Grocery – National $6B -- Since Feb. 2015
Wholesale Grocery – Regional $2B -- Since Nov. 2014

Flux Power CEO Ron Dutt commented, “After a year of active market development, we are very pleased with the growing interest for our lithium power solutions in the material handling industry. We are grateful to our partners and customers who have taken time to get to know us and learn how state-of-the-art power storage can bring substantial efficiency and cost benefits to logistics-intensive businesses.

“With an expanding base of distributors and customers that have tested our solutions and made initial purchases, we are excited to see them progress to repeat orders to extend their deployments. We are looking forward to build on this momentum at the ProMat 2015 convention in Chicago next week.”

About Flux Power Holdings, Inc. (www.fluxpwr.com)
Flux Power develops and markets advanced lithium-ion energy storage systems (‘batteries’) based on its proprietary battery management system (BMS) and in-house engineering and product design. Flux storage solutions deliver improved performance, extended cycle life and greater return on investment than legacy solutions. Flux sells direct and through a growing base of distribution relationships. Products include advanced battery packs for motive power in the lift equipment, tug and tow and robotics markets, portable power for military applications and stationary power for grid storage.

Flux Blog: Flux Power Currents
Facebook: FLUXPower
Twitter Company: @FLUXpwr Investor Relations: @FluxPowerIR
LinkedIn Flux Power
BoardVote: BoardVote.com/symbol/FLUX

This release contains certain "forward-looking statements" relating to Flux’s business, that are often identified by the use of "believes," "expects" or similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from those anticipated, believed, estimated, expected, etc. Such forward-looking statements include the development and success of new products, distribution partnerships and business opportunities and the uncertainties of customer acceptance of new products. Actual results could differ from those projected in due to numerous factors. These forward-looking statements are made as of the date of this news release, and we assume no obligation to update these statements or the reasons why actual results could differ from those projected. Although we believe that beliefs, plans, expectations and intentions in this press release are reasonable, there can be no assurance that they will prove to be accurate. Investors should refer to the risk factors outlined in our Form 10-K, 10-Q and other reports filed with the SEC and available at www.sec.gov/edgar.

Flux, Flux Power and associated logos are trademarks of Flux Power Holdings, Inc.

Flux Power: Media & Investor Relations:
Kerri Taylor Chris Eddy
Director of Business Development Catalyst Global LLC
877-505-3589 212-924-9800
enquiries @FLUXpwr .com FLUX @catalyst -ir.com
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Anthony Christopher Lee performs 1 transactions with code "J" on 3,000,000 shares of Flux Power Holdings, Inc (FLUX) stock
VISTA, CA —Anthony Christopher Lee used transaction code "J" on 3,000,000 shares of Flux Power Holdings, Inc (FLUX) stock as noted in an SEC Filing today. View items submitted with this filing: FORM 4 (sec.gov) READ MORE
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$FLUX new battery product debut at premier materials handling & supply chain event #ProMat 2015 in Chicago #forklifts http://stks.co/g1tuG
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Flux Power Holdings, Inc files Form 8-K (Events or Changes Between Quarterly Reports) SEC Filing
VISTA, CA — Flux Power Holdings, Inc filed Form 8-K (Events or Changes Between Quarterly Reports) today. All items submitted with this filing are below. View items submitted with this filing: 8-K (sec.gov) EXHIBIT 3.1 (sec.gov) READ MORE
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@CatalystIR asked: What sort of revenue guidance can you give for the balance of this year or next year?
@FluxPowerIR of $FLUX: The simple answer is that we do not provide financial or revenue guidance; it’s just too early for us to be able to predict with any level of accuracy when and at what scope we will be able to develop our sales.

But I would emphasize he things that we can say, which include comments in our Q2 press release that point at “potential” scope, including our pipeline of orders in discussion which is now $1.2 million, net of Q2 sales, a 50% increase over the same measure just one quarter ago. To put this into perspective, we estimate the total market potential for just walkie LiFT Packs is well in excess of $180 million. The question is at what pace will the industry move to lithium storage – a superior solution at a lower total cost of ownership but with a higher initial purchase price.

I think we’ve been through the hardest part of the product lunch – and now with ramping sales and some major customer & OEM endorsements, the pace is very likely to accelerate.

Additionally, the RFP we mentioned for a large, high power materials handling storage application, is in excess of $500,000 for the prototype phase and well in excess of $5 million for the full deployment. We may or may not be selected, but it shows you the scope of just one significant project.
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@CatalystIR asked: What is in the pipeline other than LiFT Packs for Walkie pallet jack forklifts?
@FluxPowerIR of $FLUX: Flux is developing a new line of LiFT Pack solutions for Class III “Stand On” pallet jacks. “Stand On’s” are larger and require more power than pallet jacks, but are based on all the fundamental science and engineering that are built into our earlier product lines. And I am very pleased to point out that the development of this new line of products actually resulted from a number of customer requests. They liked what we were doing for Walkies and told us they’d be interested in a comparable product for their larger lift trucks. Of course, our long-term strategy is to build out a full line of storage solutions for the full range of lift equipment. We entered the market at the ground level via the walkie solution, as that seemed to offer the most attractive risk/reward and would be the most efficient means to jump start our materials handling experience.

Importantly, given the increased size & performance requirements, we do anticipate higher margins on these products that cost roughly twice as much as our walkie LiFT Packs.

Importantly, we will be selling these packs through the same sales channels that we have developed already. What will help our cause in the market for Stand On’s are the pre-existing relationships Flux has with leading OEM’s. In fact, the two OEM’s with the lions share of the Class III lift equipment market have granted technical approval for the full product lineup of Flux LiFT Packs for Walkie pallet jacks. The technical approval process for Stand On’s should therefore be quicker since they know our core technology.
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@CatalystIR asked: Recent sales of LiFT Packs to a global consumer packaged goods company were relatively small. What makes you excited about this development?
@FluxPowerIR of $FLUX: National (let alone global) accounts take their time to test and adopt new products. It’s the benefit of having strong organizations with talented management. Now that we have secured national approval for fleet manager purchases, we will work to convert that validation into further deployments within the customer’s regions.

Of equal importance, the customer and OEM validation that was required to get to this point, casts a very positive glow across all other potential sales & distribution relationships. We will not be shy in highlighting this very significant approval – and the comprehensive testing behind it – in all customer and distribution dialogues. It’s a very powerful endorsement that we’ve only just begun to leverage. While the sales cycle of demo to fleet approval and orders did take a lot of time, now that it’s public, we expect it will help accelerate adoption across all market segments.
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@CollinsIR asked: Q: How is Flux building a brand in its markets? Isn’t that hard as a new entrant?
@FluxPowerIR of $FLUX: A: Our view on branding is that to be successful in the materials handling industry, Flux has to demonstrate its core values to the market, not just talk about it. Most industries are hesitant about new vendors and particularly with new products or technology. There’s no shortcut to building trust and appreciation for the value you deliver, and we’ve focused our small team on making sure that we demonstrate our care and concern for our customers each and every day. We have elected to move a bit more slowly than perhaps our shareholders would like, but that is because you really only have one shot at gaining industry engagement & trust.

In the material handling industry there are several key areas of influence – and we are working to build awareness, interest and trust in each of them. There are the forklift OEMs who dictate the standards and are critical in their approvals of new technologies as far as warranties go. Then there are the equipment dealers who can play a very important role in making their customers aware of our solutions and then specifying them – both in the replacement and initial, purchase cycles. Finally, and perhaps most importantly are the battery distributors – who do most of the heavy lifting in the battery replacement market, the largest revenue opportunity. We must earn their trust and ensure we put in place suitable terms and business practices to make sure that they will prosper when they introduce Flux to their customers.

Of course, at the end of the day, the customer is the one that sets the ground rules for all of us, and so we also need to develop awareness with customers that helps to 'pull' our solutions into the market. Frankly, one of the major factors that has allowed us to get this far, has been the enthusiasm and support we have received from a few very substantial national and global customers. Their interest drives the entire channel, and has helped to “electrify” the industry toward the concept of lithium power.

I am extremely proud of the progress we have made in establish Flux as a brand in the materials handling market and in other areas. We have kept in very close dialogue with customers every step of the way. We listen to their views, and we respond quickly to any problems – and there will always be problems when you are developing new technologies. Through our customer orientation and ongoing dialogue regarding their needs and preferences, we have developed roughly 15 separate enhancements to our product over the last year. That is a win/win dynamic for us all.

The Flux brand needs to mean more than just lithium batteries – it needs to mean integrity, reliability and value. There are no shortcuts to building that brand value, but now that it is forming, we are able to leverage this growing interest via an active slate of sales & marketing efforts including participation at several key industry conferences including PROMAT in March and the BevOps Fleet Summit and DC Power, both in April.

In addition to this outreach, we also plan to expand our base of training and sales programs for our distribution and dealer networks. All of these resource investments are putting Flux on the roadmap, both for our technology but also for the business ethics that will make us a valued partner.

(we should note that all "A's" in this Q&A are from Flux CEO Ron Dutt)
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@CollinsIR asked: Q: Status of your lithium battery solution for the Class III Stand-On pallet jack market? Unit prices and/or market size? [Feel free to send questions to me and I will post the on the BoardVote Q&A - flux @catalyst -ir.com is the address for questions]
@FluxPowerIR of $FLUX: A: Our stand-on lift truck battery pack is in the final stages of development, including initial field testing with several beta customers. This storage solution is expected to sell for roughly double the price of our walkie LiFT packs which retail between $2,500 and $3,900, because the stand-on packs are larger, more complex and powerful.

Industry estimates suggest that this segment of the Class III market addresses a total market of approximately 30,000 new vehicle sales per year, with addressable annual revenue, including replacement packs, of $800 million.

As you can see, this product line extension provides a very significant increase to our total market opportunity and sales potential. We expect to be in a position to commence commercial sales of this product at some point in the second half of calendar 2015, which is the first half of our fiscal year ending June 2016.
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@CollinsIR asked: Q: Flux is very enthusiastic about the future prospects for sales of LiFT Packs. What’s preventing sales from taking off?
@FluxPowerIR of $FLUX: A: Entering a market and simultaneously launching a solution based on new technology is a process that takes time. Before a sales ramp can engage, you must first establish awareness, credibility and trust that you provide a high quality product, that you are committed to the market, that you stand behind your product and intend to be a long term vendor.

There is no quick way to develop credibility and trust, so we have been building industry relationships step by step. It requires responsiveness, listening to their needs, concerns and suggestions and persistence.

While our sales performance has been relatively modest to date, we are building a very strong foundation for our business. We have achieved OEM approvals for our products with the three largest forklift manufacturers, built a solid base of dealer and battery distributor relationships and spent substantial time in cultivating key customer relationships with companies that demonstrate “first-mover” interest.

We’ve now spent over a year working with key industry players in refining our solutions, learning about their needs and refining our products to meet their requirements. We are very confident, as reflected in our growing base of orders in negotiation (which increased 50% from the end of our first quarter) that we are nearing the point of accelerated engagement.

Lastly, we are a small company and our personnel and financial resources are limited. This position limits what we can do on the sales and marketing front, but also imposes focus and solid discipline as to where we are putting our energy. We are actively working on shareholder friendly ways to provide greater financial and personnel resources to the Company, at the same time we are moving the ball forward and providing some visibility on the very exciting opportunity we have developed.

Said another way, the first few 1000 packs are the hardest… but what keeps us focused and motivated is the tremendous response we are getting from customers and partners on their reaction to our Flux LiFT Pack solutions. They absolutely love them in virtually all cases and when they talk about their experience, they tend to be grinning from ear to ear. That makes us feel the work is worthwhile and that continued driving toward our goals should be met with success.
 

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