Polar Power Reports First Quarter 2025 Financial Results

Rhea-AI Summary

Polar Power (NASDAQ: POLA) reported its Q1 2025 financial results, showing mixed performance. Net sales remained flat at $1.7 million compared to Q1 2024. The company achieved significant improvement in gross profit, reaching $320,000 (18.6% margin) compared to a loss of $402,000 in the previous year. Net loss decreased by 41% to $1.2 million, or $(0.50) per share.

Telecom customers represented 82% of total sales, while international markets accounted for 18%. The company's aftermarket parts and services contributed 28% of total sales. Polar Power plans to implement remote monitoring systems on over 5,000 legacy units in the next 12 months. The company maintains $13 million in raw materials inventory and reports manufacturing capacity potential for over $50 million in annual revenue.

Positive

• Gross profit improved significantly to $320,000 (18.6% margin) from a loss of $402,000
• Net loss reduced by 41% to $1.2 million from $2.1 million YoY
• Operating expenses declined 10% to $1.4 million
• Cash burn from operations improved to $584,000 from $989,000 YoY
• Aftermarket parts and services grew to 28% of total sales
• International sales increased to 18% from 6% YoY

Negative

• Net sales remained stagnant at $1.7 million YoY
• Significant cash burn continues with only $68,000 in cash reserves
• High debt level with $4.8 million line of credit and $429,000 in related party notes
• Military sales declined to 17% from 26% YoY

Insights

Financial Analyst

Polar Power improved margins and reduced losses despite flat sales, showing operational progress amid continued financial challenges.

Polar Power's Q1 results paint a picture of a company making operational improvements while still facing significant financial challenges. Despite flat revenue of $1.7 million year-over-year, the company achieved a dramatic turnaround in gross profitability, switching from a gross loss of $402,000 last year to a gross profit of $320,000 this quarter—representing a substantial 18.6% gross margin versus last year's negative margin.

The company reduced its net loss by 41% to $1.2 million ($0.50 per share), improved from last year's $2.1 million loss ($0.85 per share). This improvement stems from both better gross margins and a 10% reduction in operating expenses to $1.4 million. Cash burn from operations also improved, with cash used down to $584,000 from $989,000 in the year-ago period.

The revenue composition reveals interesting shifts: telecom customers now represent 82% of sales (up from 71%), international sales grew to 18% (from 6%), while military sales declined to 17% (from 26%). The growing contribution from higher-margin aftermarket parts and services—now 28% of total sales—appears to be a key driver behind the gross margin improvement.

Despite these operational improvements, Polar Power's balance sheet shows concerning liquidity levels with only $68,000 in cash (down from $498,000 at year-end) against total current liabilities of $9.1 million. The company carries substantial inventory of $13.1 million, which management sees as beneficial for reducing future cash burn, but this represents capital tied up in non-liquid assets.

The upcoming remote monitoring system deployment across 5,000+ legacy units presents a concrete opportunity for revenue growth through additional aftermarket parts and service revenue. Combined with management's mention of increased bookings toward quarter-end due to declining customer inventory levels, this provides some potential for improved performance, though the company remains unprofitable with significant cash burn relative to available resources.

GARDENA, CA, May 16, 2025 (GLOBE NEWSWIRE) -- Polar Power, Inc. (“Polar Power” or the “Company”) (NASDAQ: POLA), a global provider of prime, backup, and solar hybrid DC power solutions, reports its financial results for the three months ended March 31, 2025.

Q1 2025 Financial Highlights

●	Net sales were $1.7 million, compared to $1.7 million in the same period last year
●	Gross profit increased to $320,000, or 18.6% of sales, representing an improvement of 180% from a gross loss of $402,000, or (22.6)% of sales, in the same period last year
●	Operating expenses declined 10% to $1.4 million, compared to $1.5 million in the same period last year
●	Net loss declined $877,000 to $1.2 million, or $(0.50) per basic and diluted share, representing an improvement of 41% from a net loss of $2.1 million, or $(0.85) per basic and diluted share in the same period last year
●	Cash used in operating activities was $584,000, compared to $989,000 in the same period last year

Arthur Sams, Chairman and CEO of Polar Power, commented, “We continue to improve our operational efficiency and increase sales in aftermarket parts and service, which provide higher margins, as we expand our customer base. During the first quarter, we received orders and shipped products to first time customers who are in process of evaluating and integrating our products into their operations. Our focus on addressing aftermarket parts and service on a large equipment fleet has resulted in sales of aftermarket parts and services representing 28% of our total net sales in the first quarter of 2025. During this quarter, we jointly worked with our telecom customer to implement monitoring equipment on legacy units to report performance and maintenance data, which we believe improves product uptime and longevity. We plan to jointly implement this remote monitoring system on over five thousand legacy units during the next twelve months, which we expect to generate additional aftermarket parts and service revenue. During the first quarter of 2025, sales to our telecom customers represented 82% of total net sales, compared to 71% in the same period in 2024. Sales to international markets represented 18% of total net sales in the first quarter of 2025, compared to 6% in the same period in 2024. Sales to military customers represented 17% of total net sales in the first quarter of 2025, compared to 26% in the same period in 2024.”

“We have seen a steady decline in excess inventory at our largest customer which was reflected by higher bookings towards the end of the first quarter. During the first quarter, we have seen benefits of implementation of companywide ERP systems which helped streamlined manufacturing operations, thereby improving our labor efficiencies and manufacturing lead times. During the forty years of our business, we have significant installed base of our equipment in the field, which are still being used by second or third-tier users. We are contacting these users to promote product upgrades, repairs or new equipment sales opportunities. Currently, we have approximately $13 million of raw materials in inventory which helps reduce our cash burn for the rest of the year. We have also made substantial improvements to our manufacturing capacity in recent years, giving us the potential to produce products of more than $50 million in revenue per year, assuming sufficient bookings are in place,” concluded Mr. Sams.

Polar Power, Inc.

Polar Power (NASDAQ: POLA) is pioneering technological changes that radically change the production, consumption, and environmental impact of power generation and is a provider of DC advanced power and cooling systems, pioneering innovations across diverse industrial applications. Its product portfolio, known for innovation, durability, and efficiency, presently includes standard products for telecom, military, renewable energy, marine, automotive, residential, commercial, oil field and mining applications. Polar Power’s systems can be configured to operate on any energy source including photovoltaics, diesel, LPG (propane and butane), and renewable fuels.

Polar Power’s telecom power solutions offer significant cost savings with installation, permitting, site leases, and operation. Its military solutions provide compact, lightweight, fuel efficient, reliable power solutions for robotics, drone, communications, hybrid propulsion, and other applications. Its mobile rapid battery charging technology enables on-demand roadside charging for electric vehicles. Its combined heat and power (CHP) residential systems offer innovative vehicle charging and integrated home power systems via natural gas or propane feedstocks, optimizing performance and system costs. Polar Power’s micro / nano grid solutions provide lower cost energy in “bad-grid or no-grid” environments. Its commitment to technological advancement extends to hybrid propulsion systems for marine and specialty vehicles, ensuring efficiency, comfort, reliability, and cost savings.

For more information, please visit www.polarpower.com. or follow Polar Power on www.linkedin.com/company/polar-power-inc/.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates,” “plans,” “will,” “outlook” and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. With the exception of historical information, the matters discussed in this press release including, without limitation, Polar Power’s expectations to see higher sales due to reductions in inventory at our largest customer; that implementation of remote monitoring will lead to higher after market service sales; that the Company will be successful in increasing sales of aftermarket parts with second and third-tier users; or that it’s improvements in it’s manufacturing capacity will produce in excess of $50 million in revenue per year in the future are forward-looking statements and considerations that involve a number of risks and uncertainties. The actual future results of Polar Power could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, adverse domestic and foreign economic and market conditions, including demand for its; trade tariffs on raw materials; changes in domestic and foreign governmental regulations and policies; the impact of inflation and changing prices on raw materials; supply chain constraints causing significant delays in sourcing raw materials; labor shortages as a result of the pandemic, low unemployment rates, or other factors limiting the availability of qualified workers; and other events, factors and risks. The Company undertakes no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond Polar Power’s control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in Polar Power’s reports filed with the Securities and Exchange Commission.

Company Contact:

Polar Power, Inc.
249 E. Gardena Blvd.
Gardena, CA 90248
Tel: 310-830-9153
ir@polarpowerinc.com
www.polarpower.com

POLAR POWER, INC.
CONDENSED BALANCE SHEETS
(in thousands, except share and per share data)

		March 31, 2025				December 31, 2024
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	68			$	498
Accounts receivable			1,687				2,153
Inventories			13,134				12,893
Prepaid expenses			74				53
Total current assets			14,963				15,597
Other assets:
Operating lease right-of-use assets			1,343				1,645
Property and equipment, net			178				196
Deposits			108				108
Total assets		$	16,592			$	17,546
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	709			$	408
Customer deposits			758				607
Accrued liabilities and other current liabilities			1,117				1,100
Line of credit			4,788				4,797
Notes payable-related party			429				266
Current portion of operating lease liabilities			1,339				1,382
Total current liabilities			9,140				8,560
Operating lease liabilities, net of current portion			197				474
Total liabilities			9,337				9,034
Commitments and Contingencies
Stockholders’ Equity
Preferred stock, $0.0001 par value, 5,000,000 shares authorized, no shares issued and outstanding			—				—
Common stock, $0.0001 par value, 50,000,000 shares authorized, 2,514,029 shares issued and 2,511,532 shares outstanding on March 31, 2025, and 2,511,350 shares issued and 2,508,853 shares outstanding on December 31, 2024			—				2
Additional paid-in capital			38,896				38,886
Accumulated deficit			(31,601	)			(30,336	)
Treasury Stock, at cost (2,497 shares)			(40	)			(40	)
Total stockholders’ equity			7,255				8,512
Total liabilities and stockholders’ equity		$	16,592			$	17,546

POLAR POWER, INC.
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)

		Three Months Ended March 31,
		2025				2024
Net Sales		$	1,723			$	1,775
Cost of Sales			1,403				2,177
Gross profit (loss)			320				(402	)
Operating Expenses
Sales and marketing			260				231
Research and development			160				220
General and administrative			1,001				1,126
Total operating expenses			1,421				1,577
Loss from operations			(1,101	)			(1,979	)
Other income (expenses)
Interest expense and finance costs			(164	)			(163	)
Total other income (expenses), net			(164	)			(163	)
Net loss		$	(1,265	)		$	(2,142	)
Net loss per share – basic and diluted		$	(0.50	)		$	(0.85	)
Weighted average shares outstanding, basic and diluted			2,510,669				2,508,802

POLAR POWER, INC.
UNAUDITED CONDENSED STATEMENTS OF CASH FLOW
(in thousands)

		Three Months Ended March 31,
		2025				2024
Cash flows from operating activities:
Net loss		$	(1,265	)		$	(2,142	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			17				66
Changes in operating assets and liabilities
Accounts receivable			466				394
Inventories			(241	)			301
Prepaid expenses			(21	)			11
Operating lease right-of-use asset			302				288
Accounts payable			309				(568	)
Customer deposits			151				927
Accrued expenses and other current liabilities			17				(20	)
Operating lease liabilities			(319	)			(246	)
Net cash used in operating activities			(584	)			(989	)
Cash flows from financing activities:
Proceeds from advances from credit facility			—				676
Proceeds from notes payable-related party			163				—
Repayment of advances from credit facility			(9	)			—
Repayment of notes payable			—				(24	)
Net cash provided by financing activities			154				652
Decrease in cash and cash equivalents			(430	)			(337	)
Cash and cash equivalents, beginning of period			498				549
Cash and cash equivalents, end of period		$	68			$	212
Supplemental Cash Flow Information:
Interest paid		$	188			$	202
Taxes Paid		$	—			$	—
Supplemental non-cash investing and financing activities:
Issuance of common stock to director for accrued fees		$	8			$	—

FAQ

What were Polar Power's (POLA) Q1 2025 financial results?

In Q1 2025, Polar Power reported net sales of $1.7 million, gross profit of $320,000 (18.6% margin), and a net loss of $1.2 million ($0.50 per share), showing a 41% improvement in net loss compared to Q1 2024.

How much did POLA's aftermarket parts and services contribute to revenue in Q1 2025?

Aftermarket parts and services represented 28% of Polar Power's total net sales in Q1 2025, reflecting the company's focus on expanding this higher-margin business segment.

What is Polar Power's current manufacturing capacity?

Polar Power reports having manufacturing capacity potential to produce over $50 million in revenue per year, subject to sufficient bookings being in place.

How much cash does POLA have and what is their debt position as of Q1 2025?

As of March 31, 2025, POLA had $68,000 in cash and cash equivalents, with $4.8 million in line of credit and $429,000 in related party notes payable.

What percentage of POLA's sales came from telecom customers in Q1 2025?

Sales to telecom customers represented 82% of total net sales in Q1 2025, up from 71% in the same period in 2024.