Vista-based Flux Power Holdings, Inc. is stepping up support for its East Coast customer base with a new support facility in Atlanta. Flux Power (NASDAQ: FLUX) opened the 5,000-square-foot building equipped with ramp and truck access on May 1. The new office will provide customer support for the company’s lithium-ion batteries designed for use in commercial vehicles and industrial equipment.
The East Coast expansion follows a Q2 2023 earnings report in February that was the company’s 18th consecutive quarter posting year-over-year growth, driven by existing customers that include Fortune 500 and 100 companies.
“Over the past four years, we have experienced high annual double-digit growth, driving the need for expansion to supplement product support and infrastructure,” said Flux Power CEO Ron Dutt. “Investment in the Atlanta office broadens our geographic footprint to bring comprehensive and responsive services to customers in the eastern half of the U.S. while also, and importantly, resulting in lower service logistics costs incurred by our company.”
Increasing efficiency in logistics has been a key strategy at Flux. In the February earning report, Dutt highlighted several resent steps the company has taken to mitigate supply chain shortages and address disruptions. Those efforts include expanding its in-house testing and product validation capabilities; increasing inventory of raw materials and component parts; and utilizing more reliable secondary suppliers of key components such as cells, steel, electronics and circuit boards.
“Our strategic initiatives to improve sourcing actions to mitigate part shortages, accelerate backlog conversion to shipments, and increase inventory turns have helped to mitigate backlog expansion from delayed shipments,” Dutt said.
The strategic initiatives have been working for the company. In its second quarter, Flux increased its revenue from shipments of batteries ordered 123% to $17.2 million compared to $7.7 million in the same quarter last year. Flux saw gross profits increase 294% to $4.1 million, up from $1 million, and gross margins expand to 24%, up from 14% over Q2 2022.
Even with the added efficiency in its supply chain, as of Dec. 31, 2022, the end of Flux’s second quarter, the company had a backlog of orders for its batteries totaling $30.4 million.
Dutt said that existing customers drove most of the revenue growth in Q2 2023 with 95% of all revenue for the company coming from customers that the company has had long-term relationships with.
“Our commitment, consistent performance, and trustworthiness are the foundation for long-term, sustainable relationships with our customers,” he said.
To provide service to long-term customers, Flux has fostered an ongoing partnership with Cleveland-based Acron Equipment, Inc., Flux’s warranty and authorized service provider, to deliver full lifecycle service equipment handling, maintenance and end-of-life battery services. The new Atlanta facility will complement Flux’s partnership with Acron.
“We are pleased to support the rapid growth of Flux Power lithium-ion battery packs in our service role,” said John Gelsimino, president of Arcon Equipment. “We look forward to increasing demand from packs in the field, including end-of-life management of packs.”
Flux Power Holdings, Inc.
CEO: Ron Dutt
Business: Manufacturer of lithium battery packs for commercial vehicles
Stock: FLUX (NASDAQ)
Revenue: $42.3 million (FY 2022)
Notable: Flux battery packs include computer telemetry for remote performance tracking.