Dragonfly Energy Reports Fourth Quarter and Full Year 2022 Financial Results

Dragonfly Energy, manufacturer of deep cycle lithium batteries for green energy storage

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Full year 2022 Revenue grew to $86.3 million, 10.6% higher compared to 2021

RENO, Nev., March 29, 2023 (GLOBE NEWSWIRE) — Dragonfly Energy Holdings Corp. (“Dragonfly” or the “Company”) (Nasdaq: DFLI), an industry leader in energy storage and producer of deep cycle lithium-ion storage batteries, today reported financial and operational results for the fourth quarter and full year of 2022.

Fourth Quarter 2022 Financial Highlights

  • Net Sales of $20.2 million were unchanged compared to Q4 2021
  • Gross Profit of $4.4 million, decreased $1.7 million from $6.1 million in Q4 2021
  • Operating expenses of $(12.5) million, were higher compared to $(6.2) million in Q4 2021
  • EBITDA was a negative $(7.8) million, lower compared to $0.1 million in Q4 2021
  • Adjusted EBITDA was a negative $(4.8) million, compared $1.0 million in Q4 2021

Full Year 2022 Financial Highlights

  • Net Sales of $86.3 million were 10.6% higher compared to $78.0 million in 2021
  • Gross Profit of $24.0 million was lower compared to $29.6 million in 2021
  • Operating expenses of $(37.5) million, increased compared to $(23.2) million in 2021
  • EBITDA for the full year 2022 was a negative $(12.6) million, compared to $7.1 million in 2021
  • Adjusted EBITDA for the full year 2022 was a negative $(7.9) million, compared to $8.5 million in 2021
  • Cash was $17.8 million, and debt was $76.2 million on December 31, 2022

Operational and Business Highlights

  • Number of batteries sold in 2022 was 28.6% higher at 95,949 units compared to 74,632 units sold in 2021
  • Launch of Dragonfly IntelLigence™ providing reliable communication capabilities via unique mesh network, enabling accurate remote monitoring for entire lithium battery banks via Dragonfly Mobile App
  • Granted patent for “systems and methods for dry powder coating layers of an electrochemical cell” enabling development of non-flammable cells

“We executed well in 2022, with strong Net Sales and record growth within the OEM segment, while effectively managing headwinds that challenged the wider industry,” said Denis Phares, CEO of Dragonfly Energy. “We have a robust patent portfolio and we continued to innovate, offering great new products like out IntelLigence line, and Dragonfly’s dry powder coating cell manufacturing technology and non-flammable battery technology, for which we have already begun production of the cell pilot. We are excited to execute on our plan for the next 18 months and we look forward to sharing our progress in the coming quarters.”

Fourth Quarter and Full Year 2022 Financial and Operating Results
Fourth quarter 2022 Net Sales were $20.2 million, which was unchanged versus the fourth quarter of 2021. Full year 2022 Net Sales increased 10.6% to $86.3 million compared to $78.0 million in 2021. While total battery unit sales increased, we saw a significant mix shift toward OEMs, which typically carry lower average sale prices.

Fourth quarter 2022 Gross Profit was $4.4 million, lower compared to $6.1 million in the fourth quarter of 2021. Full year 2022 Gross Profit was $24.0 million, lower than in 2021 at $29.6 million. The decline in both periods was primarily driven by a change in revenue mix that favored a larger percentage of lower margin OEM sales, as well as a relative increase in some components of cost of goods.

Fourth quarter 2022 Operating Expenses were $(12.5) million, which was higher compared to $(6.2) million in the fourth quarter of 2021. Full year 2022 Operating Expenses of $(37.5) million, increased compared to $(23.2) million in 2021. The fourth quarter and full year included business combination and other deal related expenses of $(1.1) million associated with the company going public in October 2022.

Fourth quarter 2022 Net Loss was $(11.7) million, compared to a Net Loss of $(0.1) million in the fourth quarter of 2021. The Company recognized a Net Loss for the full year 2022 of $(19.1) million, versus Net Income of $4.3 million in 2021.

Fourth quarter 2022 EBITDA was $(7.8) million, compared to $0.1 million in 2021. Full year 2022 EBITDA was $(12.6) million, compared to $7.1 million in 2021.

Fourth quarter 2022 Adjusted EBITDA, excluding stock-based compensation, deal-related expenses and other one-time items, was $(4.8) million, compared to $0.9 million in the fourth quarter of 2021. Full year 2022 Adjusted EBITDA excluding stock-based compensation, deal-related expenses and other one-time items, was $(7.9) million, compared to $8.5 million in 2021.

The Company ended the fourth quarter of 2022 with $17.8 million in cash and $76.2 million in debt. Dragonfly retains strong financial flexibility with access to a $150 million equity line of credit.

1Q & Full Year 2023 Guidance

First quarter 2023:

  • Net Sales are expected to range between $17 – $19 million, as softer demand from within the DTC segment is expected to be more than offset by growth within the OEM segment
  • Gross Margin is expected to increase modestly due to lower overhead, depreciation and labor costs
  • Operating Expenses are expected to be $11.5 – $12.5 million, in-line with recent quarters when excluding the impacts from our business combination
  • Other Income (Expense) is expected be an expense in the range of $(3.5) – $(3.7) million
  • Net Losses are expected to be between $(10.5) – $(11.5) million for the quarter, or ($0.27) – ($0.30) per share based on 38.7 million shares outstanding.

Full year 2023:

  • Revenue growth is expected to accelerate as the year passes, with particular strength coming from the OEM business in the second half of 2023
  • Net Sales are expected to be between $112 – $122 million, or 36% higher year-over-year at the mid-point of the range
  • Gross Margins are expected to increase modestly on a year-over-year basis
  • Operating Expenses are expected to increase, but at a slower rate than revenue
  • Net Income is expected to return to being positive in the second half of 2023

Webcast Information
The Dragonfly Energy management team will host a conference call to discuss its fourth quarter and full year 2022 financial results this afternoon, Wednesday, March 29, 2023, at 5pm ET. The call can also be accessed live via telephone by dialing (888) 886-7786 or for international callers (416) 764-8658, and referencing Dragonfly Energy. Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event. The live webcast of the conference will also be available at https://investors.dragonflyenergy.com/events-and-presentations/default.aspx on the Events and Presentations page on the Investor Relations section of Dragonfly’s website.

About Dragonfly
Dragonfly Energy Holdings Corp. (Nasdaq: DFLI) headquartered in Reno, Nevada, is a leading supplier of deep cycle lithium-ion batteries. Dragonfly’s research and development initiatives are revolutionizing the energy storage industry through innovative technologies and manufacturing processes. Today, Dragonfly’s non-toxic deep cycle lithium-ion batteries are displacing lead-acid batteries across a wide range of end-markets, including RVs, marine vessels, off-grid installations, and other storage applications. Dragonfly is also focused on delivering an energy storage solution to enable a more sustainable and reliable smart grid through the future deployment of the Company’s proprietary and patented solid-state cell technology. To learn more, visit www.dragonflyenergy.com/investors.

Forward-Looking Statements
The 2022 financial results contained in this press release are subject to finalization in connection with the completion of the audit and the preparation of the Company’s Annual Report Form 10-K report for the year ended December 31, 2022. This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding the Company’s guidance for 2023 results of operations and financial position, planned products and services, business strategy and plans, market size and growth opportunities, competitive position and technological and market trends. Some of these forward-looking statements can be identified by the use of forward-looking words, including “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “plan,” “targets,” “projects,” “could,” “would,” “continue,” “forecast” or the negatives of these terms or variations of them or similar expressions. These forward-looking statements are subject to risks, uncertainties, and other factors (some of which are beyond the Company’s control) which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to: the Company’s ability to recognize the anticipated benefits of the of the Company’s recent business combination with Chardan NexTech Acquisition 2 Corp. and related transactions; the Company’s ability to successfully increase market penetration into target markets; the growth of the addressable markets that the Company intends to target; the Company’s ability to access capital as and when needed under its $150 million ChEF Equity Facility; the Company’s ability to protect its patents and other intellectual property; and the Company’s ability to generate revenue from future product sales and its ability to achieve and maintain profitability. These and other risks and uncertainties are described more fully in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the Company’s Registration Statement on Form S-4 relating to the business combination declared effective by the U.S. Securities and Exchange Commission the (“SEC”) on September 16, 2022 and in the Company’s subsequent filings with the SEC.

If any of these risks materialize or any of the Company’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements contained in this press release speak only as of the date they were made. Except to the extent required by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made.

Dragonfly Contacts:

Investor Relations
Sioban Hickie, ICR, Inc.
[email protected]

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