Flux Power Holdings Inc (FLUX) 2023 Q4 法說會逐字稿

Greetings and welcome to the Flux Power Holdings fourth-quarter and fiscal year 2023 financial results conference call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to hand the call over to Carolyn Gordon, Marketing Manager. Carolyn?

Good afternoon. Your host today, Ron Dutt, Chief Executive Officer; and Chuck Scheiwe, Chief Financial Officer will present results of operations for the fiscal fourth-quarter and fiscal year ended June 30, 2023. A press release detailing these results crossed the wires this afternoon at 4:01 P.M. Eastern Time and is available in the Investor Relations section of our company's website fluxpower.com. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially.

You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only, as of the date of this presentation. Please keep in mind, we are not obligating ourselves to revise or publicly release the results of any revision to these forward-looking statements, in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K for a more complete discussion of these factors and other risks, particularly under the heading risk factors.

I will turn the call over to Flux Power Chief Executive Officer, Ron Dutt.

Thank you, Carolyn, and good afternoon, everyone. I'm pleased to welcome you to today's fiscal fourth-quarter and fiscal year 2023 financial results conference call. Firstly, please note that on slide 3, if you are following the deck, there is a short reminder of what we do, that is: electrifying commerce. We are powering material handling, airport ground support, solar energy storage, port authority equipment, and other applications with new and clean technology. Our products and services are focused on large nationwide fleets that are pursuing a better return on investment and a positive environmental impact, compared to lead-acid batteries.

Our reputation and brand are critical as we target the household names, which I'll point out shortly. We must have a strong reputation and do what we say, in order to satisfy these large fleets that has hundreds of facilities and need their batteries for new equipment or existing equipment, delivered on time without difficulty. Fortune 100 companies demand suppliers that are transparent, experienced, and accountable as they transition their fleets to do and clean technologies, which puts us in a very strong position in the electrification market.

Now on to our year-end results, our business priority this past fiscal year focused on progress to cash flow breakeven, while continuing to capture increasing demand for lithium batteries. Fiscal year 2023 reflected our cadence, a strong revenue growth, as we continue to focus on fulfilling orders. In fiscal 2023, revenues were $66.3 million, up 57% from $42.3 million in the prior year. Quarter-four '23 revenue was up 7% to $16.3 million, compared to Q4 of 2022 revenue of $15.2 million, marking our 20th consecutive quarter of year-over-year revenue growth.

We also continued to improve gross profit, increasing 134% to $17.1 million in fiscal year 2023, compared to $7.3 million in fiscal year 2022; and increasing 44% to 4.3 million in Q4 '23, compared to $3 million in Q4 '22. Gross margin was 26% in fiscal year 2023, compared to 17% in fiscal year 2022; and 27% in Q4 2023, compared to 20% in Q4 2022. Adjusted EBITDA loss decreased 74% to $3.7 million for the year ended June 30, 2023, compared to a loss of $14.1 million for the year ended June 30, 2022. And adjusted EBITDA decreased 73% to a loss of $600,000 for Q4 '23, compared to a loss of $2.2 million in Q4 of '22, and $700,000 in Q3 2023. In Q4, our customer order backlog increased from $25 million to $29 million, as of June 30, 2023, reflecting continued lithium adoption.

A new $50 million credit facility from Gibraltar Business Capital provides funds for working capital and replaces the $14 million line with Silicon Valley Bank. The new facility has a two-year term with provisions to increase a line to $20 million, and provides for our working capital needs of our planned business growth. We are highly focused on achieving cash flow breakeven in the near-term, reflected in the reduction of cash used by operations in fiscal 2023, which declined $20.3 million, or 85% compared to fiscal year 2022. Our cost and price initiatives also contributed to gross margin improvements to 26% in the fiscal year 2023, compared to 17% in fiscal year 2022; and 27% in Q4 of '23, compared to 20% in Q4 '22.

As well, our inventory balance has become more consistent due to improved inventory management, sourcing, and supply chain management. Taken together, we are executing on our strategy for cash flow breakeven and sustained profitability as we continue to drive expansion of our product lineup and service network. In the longer term, our strategy revolves around building scale, to sell our products to large fleets, building on our own momentum in revenue, gross margin, and operating leverage. Right now, we are growing organically and beginning to explore and develop strategies to build partnerships that can leverage revenue growth, technology, and profitability.

Our efforts on increasing revenue and margin improvement, specifically for adjusted EBITDA, are reflected on slide 7, showing the upward trend over the past fiscal year and our momentum toward breakeven. We are executing our specific supply chain and cost reduction initiatives to continue this momentum. Further, our realized successes are being applied across various customer applications. Our current potential pipeline of customers continues to expand with three new customers this past quarter and a total of eight new customers in the full-year 2023. Our full product line caters to large fleets who seek a relationship partner to meet current and future needs, not just one-time purchases. These customers represent a diverse space in multiple sectors, all of whom are seeking lower cost during the life to product and higher performance from lithium battery packs from a reliable partner.

For example, [Mexico] is hundreds of facilities across the country and we deliver to all of them. Our primary revenue has come from orders for our packs on new forklift deliveries. As customer adoption of lithium-ion solutions increases across fleets, we anticipating increasing orders to replace lead-acid batteries reaching their end of life prior to forklift in the life, given the generally longer life of lithium versus lead-acid. We have taken actions to restore our gross margin trajectory that was interrupted by the pandemic, with our goal now of sustained profitability. While full-year gross margin expanded 680-basis-points to 27% compared to the prior year, we continue to see some quarter-to-quarter lumpiness as shipment delays persist to delays in some selected heavier duty forklift model deliveries.

Our improvement initiatives include a number of actions that have begun to impact gross margin. Price increases to offset commodity increases, increased pack volumes, more competitive shipping costs, lower cost, more reliable and secondary suppliers of key components, improved manufacturing capacity and production processes, in transition of product lines to a new modular platform. All these initiatives are part of our plan to accelerate gross margins. During the fiscal fourth-quarter, our backlog increased to $29 million, due to new orders outpacing shipments. Normalization of global supply chains and ongoing adoption of our lean manufacturing principles, our driving throughput, and capacity improvements, as we continue to monetize a healthy customer backlog.

Our strategic initiatives are also improving sourcing actions to mitigate parts shortages, accelerating backlog, conversion to shipments, and increasing inventory turns to help mitigate backlog expansion. These initiatives are key drivers of gross margin, along with operating leverage discussed previously. During the quarter, we have slightly decreased our inventory of raw materials, finished goods, and component parts to $19 million as of June 30, 2023. All due to improved inventory management, while at the same time, supporting our strong revenue growth.

With that, I will now turn it over to Chuck Scheiwe, our Chief Financial Officer, to review the financial results for the quarter and fiscal year ended June 30, 2023. Chuck?

Thank you, Ron. Now, turning to review our financial results in the quarter ended June 30, 2023. As Ron mentioned, revenue for the fiscal fourth-quarter of 2023, increased by 7% to $16.3 million, compared to $15.2 million in the fiscal fourth quarter of 2022. So it's driven by the sale of energy storage solutions with higher average selling prices, a higher volume of units sold, and especially, significant increases in our GSE sales. The gross profit for the fiscal fourth-quarter of 2023 increased to $4.3 million, compared to a gross profit of $3 million, in the fiscal fourth quarter of 2022.

Gross margin was 27% in the fiscal fourth-quarter of 2023, as compared to 20% in the fiscal fourth-quarter of '22. This reflected higher volume of units sold, again, with higher gross margin, and just lower cost of sale as a result of the gross margin improvement initiatives we continue to work through. Selling and administrative expenses remained unchanged at $4.1 million in the fiscal fourth-quarter of '23. This is a contributing to our operating leverage we've discussed in the past.

Research and development expenses decreased to $1.3 million in the fourth-quarter of 2023, compared to $1.4 million in the fourth quarter of 2022; this is primarily due to lower expenses related to development of new products. Adjusted EBITDA loss decreased to $600,000 in the fiscal fourth-quarter of '23, from $22 million in the fiscal fourth-quarter of '22. This is mostly driven by the improved gross margins. Our continued initiatives, business growth, and operating leverage all contributed to drive this trajectory. Net loss for the fourth-quarter of 2023 decreased to $1.5 million, from a net loss of $2.7 million, in the fiscal fourth-quarter of 2022. It's principally reflecting increased gross profit, partially offset by increased operating expenses, along with some modest interest expense.

Now, turning to review our financial results in the year ended June 30. Revenue for the fiscal year of 2023 increased by 57% to $66.3 million, compared to $42.3 million in the fiscal year 2022. This is mainly result of sales of energy storage solutions with higher average selling prices, higher volume of units sold, and the significant increases in the GSE sales. Gross profit for FY2023 increased to $17.1 million, compared to gross profit of $7.3 million in FY2022. Gross margin was 26% in FY2023, as compared to 17% in FY2022; again reflects higher volume of units sold with greater gross margin, lower cost of sales, as a result of the gross margin improvement initiatives.

Selling and administrative expenses increased to $17.6 million in FY2023, from $15.5 million in FY2022. This is primarily attributable to increase in outbound shipping costs, insurance premiums, new hires and temporary labor, some severance expenses incurred, increases in depreciation expense, travel expenses increased, marketing expenses, and facility related costs, partially offset by decreases in our commissions, bad debt expenses, consulting and fees, public relation expenses, and stock-based compensation. Research and development expenses decreased to $4.9 million in FY2023; this is compared to $7.1 million in FY2022. This is primarily due to lower expenses related to development and testing of new products, by utilizing our in-house testing equipment we have purchased.

Adjusted EBITDA loss decreased to $3.7 million in FY2023. This is a significantly lower from the $14.1 million in FY 2022. So it's driven by the improved gross margins and the higher revenue. Net loss for FY2023 decreased to $6.7 million from a net loss of $15.6 million in FY2022, principally reflecting the increased gross profit and slightly decreased operating expenses, partially offset by increases in interest expense. Cash was $2.4 million at June 30, 2023, as compared to $500,000 at June 30, 2022.

Net cash used in operating activities decreased to $3.6 million in fiscal year 2023, compared to $23.9 million in fiscal year 2022. Again, this is primarily due to the decrease in net loss, lower inventory levels, and an increase in accounts payable. Available working capital includes our line of credit as of September 20, 2023, under our $15 million credit facility, which will roll through business capital, with the remaining available balance of $3.8 million and the $4 million available under the subordinated line of credit we have.

We recently announced that new $15 million credit facility from Gibraltar Business Capital to fund working capital and to refinance the existing credit facility with Silicon Valley Bank. This facility has been used to repay the credit facility with SVB, and along with our existing cash, is intended to help meet our anticipated working capital needs to fund planned operations, to meet the demands of our growth trajectory for the foreseeable future. In summary, the substantial progress made reducing fiscal full-year 2023 net cash used in our operating activities, now positions Flex Power toward an improved cash flow trajectory in fiscal year 2024, supported by a reinforced balance sheet and strong Fortune 500 customer order backlog.

I'd now like to pass it back to Ron to offer some closing remarks.

Thanks, Chuck. Looking at the positive momentum in fiscal 2023 that Chuck took you through, we are confident that we are on a strong trajectory towards near-term profitability, while balancing with continued revenue growth, gross margin improvement, and ongoing cost control initiatives. Our long-term growth strategy continues to focus on the strong demand for sustainable energy. We believe the combination of existing customer orders and the acquisition of new customers who want the benefits of lithium-ion technology business, can drive continued revenue growth. Product quality, leading technology, and service are key factors as to why we continue to attract and maintain business relationships, which will enable continuation of our growth trajectory that you've seen on the slides.

For our technology, and our proprietary technology by the way, we are now working to implement artificial intelligence features and capabilities into our SkyBMS telematics platform, which delivers insight into fleet management, so customers can make more informed and timely decisions to maximize operational efficiencies. With AI, we can add the capability to anticipate and resolve issues, sometimes before they happen, addressing the number one driver in fleet management pain points, and they want to minimize downtime of the equipment. In our current production facility should support annual revenue up to $150 million given our facility footprint, second chip build-out, and lean manufacturing implementation. Looking beyond reaching profitability and building on our success in the material handling industry, we are also focused on broadening our reach into related verticals such as warehouse robotics.

With our operational strategy, including eight assembly lines, we are well positioned to continue to leverage our capabilities, as the adoption of lithium energy solution continues to accelerate. We will also pursue relationships and initiatives to ensure leadership in technology that expand the product and service value to our customers, and then also to our shareholders in the end. And we ended the fiscal year supported by a new working capital line of credit of $15 million with Gibraltar Business Capital to support planned growth, with provisions to increase to $20 million, as Chuck had mentioned.

In summary, we are well positioned to execute our strategy of electrifying commerce, as we offer customers stored energy solutions to increase productivity at a lower cost during the product's life. We are encouraged by strong purchase orders and expansion of margins through improved sourcing and supply management, ongoing process improvement, and pricing. We continue to execute actions to improve adjusted EBITDA as shown on slide 7, which is a key indicator to achieving profitability. And further, we anticipate expanding into new markets having strong demand for our value proposition of high performance and service at lower total cost of ownership.

I look forward to providing our shareholders with further updates in the near-term, as we strengthen our leadership position in lithium-ion technology solutions, with our growing list of new and diverse large customers. I thank you all for attending.

And now, I'd like to hand the call over to the operator to begin our question-and-answer session. Operator?

Thank you. We'll now be conducting a question-and-answer session. (Operator Instructions) One moment, please, while we poll for questions.

Rob Brown, Lake Street Capital Markets.

Hi. Good afternoon and congratulations on all the progress.

Thank you, Rob.

I just wanted to get a little bit into the order activity. It appeared pretty strong in the quarter. Could you give some color on the uptick in orders you saw, and what's driving it, and maybe how that's playing out?

Yeah. You know, fortunately, we have a number of product lines and not only material handling, but GSE, which was really part of our strategy. And I mentioned, we want to continue to add those lines because it's helpful. Because particularly, during the last six months of this fiscal year, in the last quarter, of course, we saw a big increase in Delta's and Air Canada's orders in shipping, which was really well received, that was some pent-up demand from the supply chain disruption. And so that played well because they've been nearly zero for some period of time. And at the same time, as I mentioned in my remarks, we have seen some limited selected delays in new forklift deliveries from some of the major global OEMs being pushed out. So that didn't represent losing any business, just deferring more to the future.

There was certainly the benefit of that diversification. Of course, with all those orders, we have small, medium, and large packs, and there's a little bit of difference in the gross margin depending on the mix of those packs. So those were the key drivers in the revenue.

Okay. Great, thank you. And then on the gross margins, you had some bumpiness in the different -- compared to Q3, I guess was down a little bit. Could you expand on that? Are you where you want to be on pricing? Or do you have more to go on pricing? Or what had the margin retrench a little bit?

Yeah. You know, it's a good question, Rob. We're always looking at pricing in the marketplace, particularly what we've gone through in the past three years. With passing on price increases by vendors and -- abatement of a lot of those affects of the supply chain as we sit here now, but pricing is one of them. We've made progress in trying to achieve gross margin at sustainable levels for our product lines, and it ranges, larger packs tend to have a higher gross margin than the smaller packs.

But yes, in fact, we were just discussing earlier today some potential pricing actions done on a chunk of our business. And not something we continually look at, but the variation or lumpiness, however, you want to term it, in the past couple of quarters, it's driven by really these factors I've mentioned. The product mix can change, my lines, and as well. So, yeah, that's all part of what we manage. We feel confident in our overall management of trendline, and as it relates to our forecast accuracy, which is critical to manage the business to manage the business.

Okay, good. I think I'll turn it over. Thank you. I'll turn it over.

Thanks, Rob.

Matthew Galinko, Maxim Group.

All right. Thanks for taking my questions. I think you mentioned two new customers in the fourth quarter. Anything you can share about the market they're in or size or expected opportunity?

Yeah. You know, each quarter we've been adding two or three new customers. Some are different and some are the big 800-pound gorillas, which we try to really focus our effort on a very large fleet. Some of the more moderate fleets are important as well because they represent good diversity, good balance, and as part of our overall strategy for four larger fleets. We added two in the Pacific Northwest, and we also added a supplier who had picked up the business in the project. I don't know if you recall some quarters ago, we have a product and a project for 400-volt autonomous shuttle vehicles of eight people at limited speed.

So we see that as a segment, that is an adjacency, and they picked it up, and we understand they are going to expand that, so that's important. We like -- as part of our strategy to expanding to larger packs, whether they be 80-volt packs in material handling, 80-volt in DSC or more, and also 400-volts in this case. That demand, the sophistication of our engineering capabilities, and of course then, to gross margin. So pleased to see that happening.

Some quarters, we get bigger bumps in the new customers, but it's all part of all the new customers have a timeline of how fast they order, how fast they adapt, how many locations they have. So in summary, the diversification is a very welcome and part of our strategy.

Great, thanks very much. Follow-up, I guess, really around -- apologies if you covered this earlier, but how your visibility is for revenue over the next fiscal year, and just early -- even qualitative comments on what we might expect over the next year? I guess to qualify that a little bit, revenue ended the year a little lower than it entered the year, Q4 versus Q1, but obviously, we had the strong growth full-year in '23. So just how should we be thinking about the '24 trajectory on the top-line?

Yeah. No, good question. And we spend a lot of time looking at that, as you might imagine. And again, we live by the ordering patterns of the deliveries of the new forklifts, which is probably 95% of business, as opposed to replacing an end-of-life lead-acid battery. So depending on how all those order flow and who it's from, you could really get some variability in how that proceeds. At the same time, a number of our largest customers, a couple of them have been giving us letters of intent for all of calendar year '24 and '25, they're nonbinding of course; but certainly, the larger companies in the world -- where there's been some battle scars from shortages of parts, are very keen on ring-fencing the allotment that they get first.

So we're seeing that, very encouraging signs, continued growth, all of our customers are expanding through their tens and hundreds of facilities, and they typically do it one at a time and add them, and so you see that accumulation process. So we think this growth trajectory is going to continue because of that. Also in our slides we have on our deck that are on our website show you all the accounts that we're in very early stages, and a lot of them are household names, that have a very large fleet. And bringing those new customers on are going to add to that. How much, how fast, it's a little uncertain.

The other final element I would point to as we look to fiscal year revenue, as we said, we are in the process of rolling out some heavy-duty models of our current offerings. And these are, for example, for food companies like Subaru or Caterpillar, that are lifting heavy industrial items and need that heavier capacity. So we see, really, expansion of opportunity, given those models that we're just now starting to roll out over the next year. So we're optimistic for next year, but of course, cautiously optimistic. But very, very bullish over the next several years as all those factors I mentioned gain momentum.

Great. Thank you. I'll jump back in the queue.

(Operator Instructions) Jeff Grampp.

Hi, guys. Thanks for your time. Ron, in the release, you mentioned exploring and developing some partnership opportunities that could include vendors, technology partners, and -- other various opportunities. So I'm wondering, that can take a lot of different directions. Can you give us either maybe some examples of what you're assessing or maybe just high level the benefits you're looking to achieve through any of these kinds of opportunities that you guys are thinking about?

Yeah, there are none. That came because it goes with our strategy, which I mentioned many, many times, is to build scale, and we're executing to our plan right now building scale organically. But certainly, developing partnerships where they make sense, where it fits with our strategy, and with their partners we have that we can trust and work with. So I mean, I've done a dozen acquisitions in my time, and I could tell you: it's easy to do one, a bad one, and integration is a big part. But the two areas that we are in early stages of, are expanding our capability with, for example, automation of modularizing (technical difficulty) that's projects as well related to production and leveraging the most efficient source to those ends.

And also, we have a partner who is interested in licensing our packs in South America. We'll see the very early stages, we're not committing on anything, and I just wanted to give you some color of some of the type of things that we could do. Another one is technology. Billions are spent all over the world trying to get the next best increment of technology in the cells, lithium battery cells. And we have some discussion going on one opportunity. So I think it's a little bit like, in the world of acquisitions, with some of the you know, it's important to really explore these relationships because the timelines can be pretty long, but it's certainly part of our long-term strategy.

Great. That's super helpful. I appreciate that. And then, for my follow-up, you guys mentioned and highlighted the inventory being able to be worked down a little bit sequentially. How much more room is there to have that source of cash or a bit of a tailwind on the cash generation side of the business in the upcoming fiscal year?

Yeah. Chuck can handle that.

Yeah. We continue to work through that, and we do see some opportunity to continue to monetize some more of that. What we've been seeing lately is orders shifting around, some finished goods is higher than we would like it to be. I think we're running $4 million to $5 million typically, it should be down around $2 million to $3 million, so there's some space there. And then what we continue to do as we grow larger, we're able to push some inventory off the balance sheet to -- like we've have a Chinese supplier of truck adapters that holds it in their own inventory, at their risk. So we can start to look at more relationships like that or through common off-the-shelf parts and have them actually roll out to our property in stock, rather than us making orders, so we spend a lot of time working on tweaking that to just get the most out of that. But there's definitely a few million there. Couple million.

Great. Thank you, guys. Appreciate it.

Yeah. Thanks, Jeff.

Sameer Joshi, H.C. Wainwright.

Great. Thanks. Ron, Chuck, congratulations on the progress. I just have a couple of questions. I think you mentioned the AI initiative too for the SkyBMS. Should we look at this as additional functionality to remain competitive? Or should we consider this to be an effort to improve margins by upset like at selling this as an add-on service?

Yeah, I'm sorry. Our sound wasn't very good. Could you repeat that? I couldn't quite it.

Yeah. So basically, the AI initiative for the SkyBMS, should we consider it to be an additional service that could be improving the revenues or is it to give additional functionality that will make your product more competitive?

Yeah, you know, it's really both. I think it's very exciting. You're worried about AI every time you pick up something nowadays. But -- our SkyBMS is our battery management system, firmware software. It connects the path to the cloud, and then from the cloud, goes anywhere and everywhere. And the capabilities that that affords are just limitless and we're all keen on it, our CTO is leading that effort for a number of years now, and we're seeing. Given our experience, we're a prime mover in this, we are the first ones to have, you know, with batteries in 2014. So having that experience and understanding the spectrum of use opportunities, environmental factors, and our BMS, is allowing us to identify patterns early on, communicate them, communicate any necessary fixes to packs, to support people or to the customer before pack might go down if not attendant to, can identify service patterns that are needed, can identify the remaining length of life of packs so they can balance the use of packs over different pieces of equipment, some use energy faster than others. And in short, to help the asset management of their fleet.

Now, we believe this adds a lot of value, we're starting to sell it. It does help with the margin as well because it's essentially software-based, that certainly is a plus, both the revenue and the margin. And I'd say strategically, it's particularly important because our customers, we have a long-term relationship; and these Fortune 100, 500 hundred companies selected us because of our ability and proprietary technology to have continue to have leading technology for them in the future, because it's very disruptive for them to change vendors. They can always add a vendor, but to change vendors is very, very difficult. And a final point, is that one of our largest customers has asked us to partner with them in implementing a joint AI or SkyBMS or telemetry, if you will.

With the telemetry of the forklift, because it has planned maintenance and other information needed to manage that asset with ours and have it all in one location in one spot. So this really represents a breakthrough with the customer base we have. So we're really excited about the future with this and being in a leadership position, and being in a leadership position with the top global OEMs.

Great. Thanks, Ron, for that color. In terms of costs, I think there was question number around gross margins and you also gave some color on it. But it seems that the SG&A expense was also lower quarter-over-quarter. I think the third quarter SG&A was [4.7 versus 4.1], should we read anything into that? Or was that just some non-cash items?

Yes, Chuck.

It's not to read anything. I think the thing to read in that is we are keeping it sustained, so that's the bigger point is the operating levers. So -- there would be some, like you said, non-cash items and non-recurring type stuff hit. But we really want to keep that operating leverage going forward and keep OpEx stable here.

Yeah. It's really part of our lead, we've spoken to this a number of times. In order to secure, and particularly to keep these large customers that have these large fleets, we have to have the capability to deliver product, the product on time, and service, and service in a timely basis. So it does take -- think of it this way, a minimum level capability in your fixed costs, your operating costs, your operating resources, in order to do that, and if you look at our numbers, as you've seen for a number of quarters now, very impressive operating leverage of revenue growing much faster than operating expense, and we expect that to continue as we have made the investment in UL listings, our quality, lean manufacturing, ISO 9000 that we felt are necessary to be a leader, a sustainable leader in the sector.

Great. Thanks. And then the last -- we are already up towards the end of September, this quarter is coming to an end, I know for the fiscal 2024, you may not be able to give guidance, but for this next quarter, based on whatever you have seen thus far, should we expect a sequential or year-over-year improvements in the top-line? How should we look this quarter?

Well, I think this quarter, you know, this quarter, historically for us has often been the weaker quarter because of a number of our large customers, our beverage and food delivery companies that had do not like implementing new assets during the summer: July, August, and even September, so tend to shy away from that and how they how they pace their delivery, so I think that continues. It wasn't quite so much last year, but again, we are seeing it. Chuck, could you add anything to that?

No. It's exactly -- we are seeing that typical seasonality. We see in this July, August, September quarter is typically down a little bit over prior quarter. And a lot of that has driven -- some of our largest customer used to call -- the summer months, they go quiet because they're too busy delivering beverages.

Got it. Understood. Thanks and good luck. Thanks for taking my questions.

Yeah, thank you.

Thank you.

Thank you. There are no further questions at this time. I would now like to turn the call back to Mr. Dutt for closing remarks.

Thank you, operator. I'd like to thank each of you for joining our financial results conference call today, and look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions or didn't get to them, please reach out to our IR firm, MZ Group, who would be more than happy to assist. And this concludes our call. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.