KULR Technology Group Inc (NYSE:KULR). has reported record revenues for the third quarter, which it described as “an inflection point” for the company.
In the quarter ended September 30, 2022, revenues came in at $1.4 million, a rise of $0.6 million on the same period last year, driven mainly by an increase in contract services and product sales revenues.
“The third quarter was an inflection point for KULR as we achieved record revenue results and began transitioning to the next chapter of our growth story,” said KULR CEO Michael Mo in a statement.
“The strategic investments made in the previous quarters into our employees, R&D, and sales & marketing initiatives, have effectively laid the groundwork to accelerate our expansion efforts. These investments will moderate going forward, and we expect to continue generating a strong ROI that will translate to top-line growth.
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“Additionally, there will be a fluctuation in gross margins in the short term as a result of conducting business with different customers for a wide range of products and services. With a strong cash position, a robust sales pipeline, and a clear pathway for success, we remain laser-focused on executing the game plan over the coming quarters and beyond to manifest our growth plans,” Mo added.
KULR ended the quarter with cash of $16.2 million, up from $14.9 million as of December 31, 2021.
The gross margin decreased to 33% in the quarter from 74% in the same year-ago period due to increased labor costs to produce finished goods, costs to procure customized finished goods and component material for a new product line, and shipping costs from the company’s contract manufacturer.
Research and development (R&D) expenses increased to $1.1 million from $0.5 million as a result of planned increases in headcount to build future capacity, and other R&D initiatives designed to build future revenue growth.
Operating losses widened to $5.0 million from $3.1 million, primarily driven by increases in R&D and selling and administration costs, while the net loss rose to $5.6 million, or a loss of $0.05 per share, compared to a net loss of $3.1 million, or a loss of $0.03 per share, in the third quarter last year.
Highlights from the third quarter included:
- Commenced phase 2 development of passive propagation resistant (PPR) battery systems for the Lockheed Martin (NYSE:LMT) Corporation, following a successful phase 1 trial;
- Secured deployment order totaling over $500,000 from a leading Department of Defense (DoD) contractor, with future considerations up to the multi-million-dollar amount over the next year;
- Secured two orders from a leading Fortune 20 e-commerce and cloud computing company for its next-generation Li-ion battery-powered commercial drone delivery fleet;
- Received an order from a leading Fortune 500 commercial aviation company for KULR’s suite of battery design and safety solutions in the development of its new electric vertical take-off and landing aircraft (eVTOL);
- Announced a production prototype order from a top-tier power tool manufacturer for KULR SafeCase, a reusable, safe, and high-energy battery transportation and storage solution;
- Received approval from the Department of Transportation (DoT) to increase the energy levels in three special permits from 2.1 kWh to 2.5 kWh, expanding usage for the SafeCase product;
- Launched KULR VIBE, an AI-driven vibration reduction solution, through its acquisition of VibeTech. KULR VIBE utilizes proprietary sensor processes with advanced learning algorithms to both achieve precision balancing solutions, and successfully predict component failure based on its comprehensive database of vibration signatures. Its enhanced AI learning algorithms pinpoint areas where excess vibrations cause a loss of energy that can lead to system malfunctions, weakened performance, and maintenance issues;
- Presented at the Federal Aviation Administration’s (FAA) Tenth Triennial International Fire and Cabin Safety Research Conference on the necessities of a holistic battery safety strategy for electrical aviation;
- Joined NAATBatt International, the premier trade association of developers, manufacturers, suppliers and users of battery technology in North America, as a platinum member.
KULR Technology develops, manufactures, and licenses next-generation carbon fiber thermal-management technologies for batteries and electronic systems. As the world of electronics demands increasing processing power and further miniaturization and transportation into electrification, KULR’s disruptive, game-changing thermal management technology strives to solve the challenge of keeping electronics cooler, lighter, and safer in an ethical and environmentally sustainable manner.
Contact the author at jon.hopkins@proactiveinvestors.com