Successful diversification of revenue underway, with launch in Q4 2023 of all-electric auxiliary power units ("APU") to the trucking industry; Enables compliance with increasing anti-idling regulations, reduction in fuel costs, increased uptime and payloads, and the reduction of harmful emissions In Q4 2023, achieved successful deposition of cathode electrodes, and double-sided dry deposition of both anode and cathode electrodes, at scale, using the Company's patented dry electrode battery manufacturing process Continued expansion of recreational vehicle market share, with OGV Luxury Coach, a division of Forest River Inc., to provide Battle Born lithium batteries as standard equipment on all OGV units RENO, Nev., April 15, 2024 (GLOBE NEWSWIRE) -- Dragonfly Energy Holdings Corp. ("Dragonfly Energy" or the "Company") (NASDAQ:DFLI), maker of Battle Born Batteries® and an industry leader in energy storage, today reported its financial and operational results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Financial Highlights Net Sales were $10.4 million, compared to $20.2 million in Q4 2022 Gross Profit was $2.0 million, compared to $4.0 million in Q4 2022 Operating expenses were $(5.4) million, compared to $(32.9) million in Q4 2022 Net Income of $3.0 million, compared to a Net Loss of $(32.5) million in Q4 2022 Diluted Net Income per share was $0.05, compared to a Net Loss of $(0.76) per share in Q4 2022 EBITDA was $7.4 million, compared to $(28.0) million in Q4 2022 Adjusted EBITDA was $(2.1) million, compared to $(4.7) million in Q4 2022 Full Year 2023 Financial Highlights Net Sales of $64.4 million, compared to $86.3 million in 2022 Gross Profit of $15.4 million, compared to $23.6 million in 2022 Operating expenses of $(42.9) million, compared to $(58.0) million in 2022 EBITDA for the full year 2023 was $3.4 million, compared to $(32.8) million in 2022 Adjusted EBITDA for the full year 2023 was $(17.1) million, compared to $(7.9) million in 2022 Operational and Business Highlights Announced expanded market share with inclusion as standard equipment by recreational vehicle ("RV") giant, Forest River (link) Announced the John Lennon Educational Tour Bus is now powered by Battle Born Batteries, moving the nonprofit mobile recording studio toward improved sustainability (link) Announced partnership with Ameresco to boost renewable energy and power system applications (link) Announced Coachmen RVs will include Battle Born Batteries as an optional upgrade on its Entourage Class C Motorhomes (link) Announced entrance into heavy-duty trucking market, with new Battle Born All-Electric APU, enabling reduced fuel costs, increased uptime and payload, and lower harmful emissions (link) Announced successful cathode electrode dry deposition, at scale, for American made lithium batteries (link) "Despite the near-term growth and market headwinds, we have continued to execute and achieve our stated targets and milestones," said Denis Phares, Chief Executive Officer of Dragonfly Energy. "In 2023, we completed the pilot line for our patented chemistry-agnostic dry deposition process, proving that we could produce anode and cathode materials at scale, and are now in the process of delivering sample battery cells to customers across several different industries and markets. We are extremely excited about 2024 as the convergence of the new cell manufacturing, the expansion of our customer base and market segments, and the stabilization and return to growth of the RV markets sets the stage for an expected return to growth." Fourth Quarter and Full Year 2022 Financial and Operating ResultsFourth quarter 2023 Net Sales were $10.4 million, compared to $20.2 million in the fourth quarter of 2022. Full year 2023 Net Sales were $64.4 million, compared to $86.3 million in 2022. Direct-To-Consumer ("DTC") revenue decreased by $15.6 million as a result of decreased customer demand, particularly in the RV market, due to rising interest rates and inflation. Fourth quarter 2023 Gross Profit was $2.0 million, compared to $4.0 million in the fourth quarter of 2022. Full year 2023 Gross Profit was $15.4 million, down from $23.6 million in 2023. The year-over-year decline in 2023 gross profit was primarily driven by lower unit volume sales, a change in revenue mix that included a larger percentage of lower margin OEM sales, as well as higher material costs. Operating Expenses in the fourth quarter of 2023 were $(5.4) million, compared to $(32.9) million in the fourth quarter of 2022. Full year 2023 Operating Expenses were $(42.9) million, down from $(58.0) million. The decrease was primarily driven by the absence of expenses associated with the Business Combination in 2022 and lower overall employee-related costs, partially offset by an increase in stock-based compensation costs, as well as higher compliance, insurance, and professional fees related to public company costs. Total Other Income in the fourth quarter of 2023 was $6.3 million, compared to a Total Other Expense of $(2.7) million in the prior year quarter. Other Income for fiscal 2023 was approximately $13.6 million, compared to an Other Expenses of $(6.3) million in 2022. The income contribution in 2023 was primarily due to a change in fair market value of a warrant liability in the amount of $29.6 million, partially offset by interest expense of $16.0 million. The Company had Net Income of $3.0 million, or $0.05 per diluted share in the fourth quarter of 2023, compared to a Net Loss of $(32.5) million or $(0.76) per diluted share in the prior year quarter. For the full year 2023, the Company had a Net Loss of $(13.8) million, or $(0.26) per diluted share, compared to a Net Loss of $(40.0) million or $(1.04) per diluted share for the full year 2022. The full year results were driven by reduced demand in the RV market, partially offset by lower cost of goods sold, lower operating expenses and increased other income. EBITDA in the fourth quarter of 2023 was $7.4 million, compared to a negative $(28.0) million in the fourth quarter of 2022. Full year 2023 EBITDA totaled $3.4 million, compared to a negative $(32.8) million in 2022. In the fourth quarter of 2023, Adjusted EBITDA excluding stock-based compensation, changes in the fair market value of our warrants, and other one-time expenses, was a negative $(2.1) million, compared to a negative $(4.7) million for the fourth quarter of 2022. For the full year 2023, Adjusted EBITDA excluding stock-based compensation, changes in the fair market value of Dragonfly Energy's warrants, and other one-time expenses, was a negative $(17.1) million, compared to negative $(7.9) million for the year ended December 31, 2022. Q1 2024 OutlookThe Company believes that the RV market appears to have stabilized and is showing early signs of recovery. In addition, the Company's entry into the heavy-duty trucking market, while still in its early stages, is gaining traction and has the potential to be a more meaningful revenue contributor in the second half of 2024. Net Sales are expected to range between $12.0 - $13.0 million Gross Margin is expected in the range of 24.0% - 26.0% Operating Expenses are expected to be in a range of $(8.0) - $(9.0) million Other Income (Expense) is expected be an expense in the range of $(3.5) – $(4.5) million Net Loss is expected to be between $(8.0) - $(10.5) million for the first quarter of 2024, or $(0.13) - $(0.17) per share based on approximately 61.0 million shares outstanding Webcast InformationThe Dragonfly Energy management team will host a conference call to discuss its fourth quarter and full year 2023 financial results this afternoon, Monday, April 15, 2024, at 5:00 pm E.T. The call can also be accessed live via live webcast by clicking here, or through the Events and Presentations page within the Investor Relations section of Dragonfly Energy's website at https://investors.dragonflyenergy.com/events-and-presentations/default.aspx. The call can also be accessed live via telephone by dialing (206) 962-3782, toll-free in North America (888) 259-6580, or for international callers +1 (416) 764-8624, and referencing conference ID: 94560450. Please log in to the webcast or dial in to the call at least 10 minutes prior to the start of the event. An archive of the webcast will be available for a period of time shortly after the call on the Events and Presentations page on the Investor Relations section of Dragonfly Energy's website, along with the earnings press release. About Dragonfly Energy Dragonfly Energy Holdings Corp. (NASDAQ:DFLI) is a comprehensive lithium battery technology company, specializing in cell manufacturing, battery pack assembly, and full system integration. Through its renowned Battle Born Batteries® brand, Dragonfly Energy has established itself as a frontrunner in the lithium battery industry, with hundreds of thousands of reliable battery packs deployed in the field through top-tier OEMs and a diverse retail customer base. At the forefront of domestic lithium battery cell production, Dragonfly Energy's patented dry electrode manufacturing process can deliver chemistry-agnostic power solutions for a broad spectrum of applications, including energy storage systems, electric vehicles, and consumer electronics. The Company's overarching mission is the future deployment of its proprietary, nonflammable, all-solid-state battery cells. To learn more about Dragonfly Energy and its commitment to clean energy advancements, visit www.dragonflyenergy.com/investors. Forward-Looking StatementsThis press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company's intent, belief or expectations, including, but not limited to, statements regarding the Company's guidance for 2024 results of operations and financial position, planned products and services, business strategy and plans, market size and growth opportunities, competitive position and technological and market trends. Some of these forward-looking statements can be identified by the use of forward-looking words, including "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," "plan," "targets," "projects," "could," "would," "continue," "forecast" or the negatives of these terms or variations of them or similar expressions. These forward-looking statements are subject to risks, uncertainties, and other factors (some of which are beyond the Company's control) which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may impact such forward-looking statements include, but are not limited to: improved recovery in the Company's core markets, including the RV market; the Company's ability to successfully increase market penetration into target markets; the Company's ability to penetrate the heavy-duty trucking and other new markets; the growth of the addressable markets that the Company intends to target; the Company's ability to retain members of its senior management team and other key personnel; the Company's ability to maintain relationships with key suppliers including suppliers in China; the Company's ability to maintain relationships with key customers; the Company's ability to access capital as and when needed under its $150 million ChEF Equity Facility; the Company's ability to protect its patents and other intellectual property; the Company's ability to successfully utilize its patented dry electrode battery manufacturing process and optimize solid state cells as well as to produce commercially viable solid state cells in a timely manner or at all, and to scale to mass production; the Company's ability to achieve the anticipated benefits of its customer arrangements with THOR Industries and THOR Industries' affiliated brands (including Keystone RV Company); the impact of the coronavirus disease pandemic, including any mutations or variants thereof and/or the Russian/Ukrainian conflict; the Company's ability to generate revenue from future product sales and its ability to achieve and maintain profitability; and the Company's ability to compete with other manufacturers in the industry and its ability to engage target customers and successfully convert these customers into meaningful orders in the future. These and other risks and uncertainties are described more fully in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 to be filed with the SEC and in the Company's subsequent filings with the SEC available at www.sec.gov. If any of these risks materialize or any of the Company's assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that the Company presently does not know or that it currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements contained in this press release speak only as of the date they were made. Except to the extent required by law, the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date on which they were made. Investor Relations:Sioban +1 (775) 221-8892   Dragonfly Energy Holdings Corp. Unaudited Condensed Consolidated Balance Sheets (U.S. Dollars in Thousands, except share and per share data)      December 31,2023     December 31,2022   Current Assets           Cash and cash equivalents $12,713     $17,781   Accounts receivable, net of allowance for credit losses 1,639     1,444   Inventory 38,778     50,189   Prepaid expenses 772     1,624   Prepaid inventory 1,381     2,002   Prepaid income tax 519     525   Other current assets 118     267   Total Current Assets 55,920     73,832   Property and Equipment           Machinery and equipment 16,714     10,214   Office furniture and equipment 319     275   Leasehold improvements 1,727     1,709   Vehicle 33     195   Total 18,793     12,393   Less accumulated depreciation (2,824 )   (1,633 ) Property and Equipment 15,969     10,760   Operating lease right of use asset, net 3,315     4,513   Total Assets $75,204     $89,105                Current Liabilities           Accounts payable $10,258     $13,475   Accrued payroll and other liabilities 7,107     6,250   Accrued tariffs 1,713     932   Customer deposits 201     238   Uncertain tax position liability 91     128   Notes payable, current portion, net of debt issuance costs 19,683     19,242   Operating lease liability, current portion 1,288     1,188   Financing lease liability, current portion 36     10   Total Current Liabilities 40,377     41,463   Long‑Term Liabilities           Warrant liabilities 4,463     32,831   Accrued expenses-long term 152     492   Operating lease liability, net of current portion 2,234     3,541   Financing lease liability, net of current portion 66     35   Total Long‑Term Liabilities 6,915     36,899   Total Liabilities 47,292     78,362                Stockholders' Equity           Preferred stock, 5,000,000 shares at $0.0001 par value, authorized, no shares issued and outstanding as of December 31, 2023 and  2022, respectively -     -   Common stock, 250,000,000 shares at $0.0001 par value, authorized, 60,260,282 and 43,272,728 shares issued and outstanding as of December 31, 2023 and 2022, respectively 6     4   Additional paid in capital 69,445     38,461   Accumulated Deficit (41,539 )   (27,722 ) Total Stockholders' Equity 27,912     10,743   Total Liabilities and Stockholders' Equity $75,204     $89,105     Dragonfly Energy Holdings Corp. Unaudited Condensed Interim Consolidated Statements of Operations (U.S. Dollars in Thousands, except share and per share data)     Three Months Ended     Year Ended Ended     December 31,2023     December 31,2022     December 31,2023     December 31,2022