Polar Power Reports 2016 Financial Results

GARDENA, CA--(Marketwired - March 06, 2017) - Polar Power, Inc. (NASDAQ: POLA), a global provider of prime and backup DC power solutions, reported financial results for the twelve months ended December 31, 2016.

Key 2016 Financial & Operational Highlights:

• Completed initial public offering on December 7, 2016 with $17 million in net proceeds
• Net sales increased 233% to $22.8 million, as compared to $6.8 million in 2015
• Gross margin increased to 45%, as compared to 33% in 2015
• Operating income increased 2,315% to $7.3 million, as compared to $0.3 million in 2015
• Net income increased to $4.4 million, or $0.58 per basic and diluted share, as compared to a net loss of $0.03 million, or ($0.01) per basic and diluted share, in 2015

Financial Results for the Twelve Months Ended December 31, 2016 Compared to 2015

Net sales totaled $22.8 million, an increase of 233%, as compared to $6.8 million in 2015, with order backlog of $3.1 million at December 31, 2016. The increase in sales was a result of the company's expansion of sales of DC power systems into other regions within the U.S. telecommunications sector.

Gross margin, as a percentage of net sales, improved to 45%, as compared to 33% in 2015. This improvement in gross margin was attributable to lower material costs and improved overhead absorption resulting from increased sales.

Operating expenses increased to $2.7 million from $1.9 million in 2015, representing 12% of net sales as compared to 29% of net sales in 2015. The increase in operating expenses was primarily due to the addition of sales and administrative personnel and an increase in consulting and accounting fees related to the initial public offering.

Operating income was up 2,315% to $7.4 million, as compared to $0.3 million in 2015. This improvement is largely attributable to higher sales and gross margins.

Net income increased to $4.4 million, or $0.58 per basic and diluted share, compared to a net loss of $0.03 million, or ($0.01) per basic and diluted share, in 2015.

Cash at December 31, 2016 totaled $16.2 million, as compared to $0.3 million at December 31, 2015. The increase in cash is primarily due to the successful completion of a $19.3 million initial public offering in December of 2016, resulting in net cash proceeds of $17 million.

Management Commentary

"We believe our strong sales growth in 2016 reflects the acceleration of telecom infrastructure investment nationwide," said Polar Power CEO, Arthur Sams. "Newer telecom sites are often outdoor sites requiring higher power generation while occupying less space. Our DC power systems, with a small footprint and weight, is meeting growing industry needs for higher efficiency and lower emissions power generating equipment."

"Today's reported financial results reflect a strong close to a productive high growth year for Polar Power. Our net sales for the year grew by over 233% while our gross margin increased from 33% to 45% as compared to 2015. These results reaffirm our strategy of investing in plant and equipment during 2015 to ramp up production capacity while expanding sales infrastructure. In addition, during 2016 we successfully completed our initial public offering to provide us with the necessary working capital to continue our expansion globally," continued Sams.

"Already in 2017, the global outlook for the telecommunications industry that we serve remains optimistic led by strong expansion in cellular tower infrastructure in Asia and Africa. The domestic market continues its growth through increased investments in telecom infrastructure by top tier telecom providers. We expect the market for DC generators, along with solar hybrid power generation equipment, will remain strong during 2017, supported by the growth of telecommunications infrastructure in rural and remote areas in developing nations. The work to expand our sales infrastructure has already begun, with us adding new sales personnel in both domestic and international markets, while we continue our investment in plant and equipment to further increase production capacity and reduce manufacturing costs."

"We look forward to sharing more on our developing story at the upcoming 29^th Annual ROTH Conference on March 14, 2017 in Dana Point, California," concluded Sams.

About Polar Power, Inc.

Gardena, California-based Polar Power, Inc. (NASDAQ: POLA), designs, manufactures and sells direct current, or DC, power systems, lithium battery powered hybrid solar systems for applications in the telecommunications market and, in other markets, including military, electric vehicle charging, cogeneration, distributed power and uninterruptable power supply. Within the telecommunications market, Polar's systems provide reliable and low-cost energy for applications for off-grid and bad-grid applications with critical power needs that cannot be without power in the event of utility grid failure. For more information, please visit www.polarpower.com.

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

With the exception of historical information, the matters discussed in this press release including, without limitation, the ability of Polar Power to meet industry needs with higher energy efficiency and lower emissions power generating equipment; Polar Power's expectation that the market for DC generators, along with solar hybrid power generation equipment, will remain strong during 2017, and the ability of Polar Power to add key telecom personnel throughout 2017 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 economic and market conditions, including demand for DC power systems; raw material and manufacturing costs; changes in governmental regulations and policies; and other events, factors and risks previously and from time to time disclosed in Polar Power's filings with the Securities and Exchange Commission including, specifically, those factors set forth in the "Risk Factors" section contained in Polar Power's Form S-1 filed with the Securities and Exchange Commission on November 30, 2016.