Beam Global 2023 Form 10-K Summary
Business context and reporting period
Beam Global designs, manufactures and sells renewable-energy infrastructure for electric-vehicle charging, energy storage, energy security and disaster preparedness, and related outdoor infrastructure. Its principal products include EV ARC, SolarTree, EV Standard under development, UAV ARC under development, and Beam AllCell battery systems. The filing covers the fiscal year ended December 31, 2023, with comparison to 2022. Beam acquired Amiga DOO Kraljevo, a Serbian manufacturer of electronically integrated steel structures, on October 20, 2023. Amiga contributed $3.4 million of revenue from acquisition through year-end.
Financial performance and key metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Revenue | $67.4 million | $22.0 million | Up 206% |
| Gross profit (loss) | $1.2 million | $(1.7) million | Improved by $2.9 million |
| Gross margin | Approximately 1.8% | Approximately (7.6)% | Improved by about 9 percentage points |
| Operating expenses | $17.5 million | $18.0 million | Down $0.6 million |
| Loss from operations | $(16.3) million | $(19.7) million | Improved by $3.5 million |
| Net loss | $(16.1) million | $(19.7) million | Improved by $3.6 million |
| Net loss per diluted share | $(1.30) | $(1.99) | Improved |
| Net cash used in operating activities | $(13.3) million | $(18.1) million | Improved by $4.8 million |
| Cash at year-end | $10.4 million | $1.7 million | Up $8.7 million |
Federal customers generated $41.2 million, or 64% of product sales. Government customers overall represented 80% of revenue, compared with 62% in 2022. Energy-storage revenue was $8.5 million, up 63%, and Amiga contributed $3.4 million after acquisition. The U.S. Army and Department of Veterans Affairs represented approximately 38% and 16% of total revenue, respectively.
Year-end current assets were $40.7 million and current liabilities were $16.9 million, resulting in working capital of $23.8 million. Accounts receivable increased to $15.9 million from $4.4 million, while inventory was $11.9 million versus $12.2 million. Total liabilities were $28.1 million and included $0.2 million of notes payable, $7.4 million of contingent consideration, $3.8 million of acquired long-term liabilities and $1.7 million of deferred tax liabilities. The filing does not present a material conventional debt balance; liquidity is primarily supported by cash, equity financing and operating collections.
Cash used in investing activities was $5.7 million, including $4.7 million for the Amiga acquisition and $0.9 million for equipment. Financing activities provided $27.7 million, including $25.4 million of net public-offering proceeds, $2.1 million from the committed equity facility and $0.2 million from warrant exercises.
Material changes versus the prior comparable period
- Revenue increased substantially, driven primarily by large federal orders received in late 2022 and delivered in 2023, including orders for the U.S. Army and Department of Veterans Affairs.
- Beam moved from a gross loss to a gross profit. Management attributed the improvement to higher production volumes, improved fixed-cost absorption, labor efficiencies, lower costs for certain materials, and EV ARC design changes that reduced the bill of materials, particularly in the fourth quarter.
- Net loss narrowed despite increased revenue. The 2022 period included a $5.5 million increase in the fair value of All Cell contingent consideration; the comparable 2023 expense was approximately $0.3 million.
- Production increased from approximately 260 EV ARC units in 2022 to more than 700 units in 2023. Management believes the San Diego facility could eventually produce approximately 4,000 units annually.
- Backlog declined to $21.7 million at December 31, 2023, from $59.3 million at December 31, 2022.
- Common shares outstanding increased to 14.4 million at December 31, 2023, from 10.2 million a year earlier, reflecting the public offering, acquisition-related shares and other equity issuances.
- Amiga added European manufacturing capacity, $3.4 million of fourth-quarter revenue and $11.9 million of acquired-operation revenue for the year, but also added integration, international, foreign-currency and control-related risks.
Guidance, outlook, commentary, risks and unusual items
Management expects continued growth in EV charging infrastructure and believes 2024 gross margins should benefit from 2023 price increases, a full-year effect from design changes, material-cost reductions and greater overhead absorption. Management expects continued losses for a period of time and cannot predict when positive cash flow will be achieved, although it believes current resources can fund operations and contractual obligations for at least twelve months from the filing date.
Beam announced a $7.4 million U.S. Army Corps of Engineers order in January 2024. The company also expects Amiga to support European sales, manufacturing and development of the EV Standard product. The Drive on Sunshine outdoor-media sponsorship initiative remains lower priority because Beam had not secured a sponsor.
- Beam has sustained annual losses since inception and had an accumulated deficit of $93.4 million at December 31, 2023.
- Operating cash flow remained negative, and the $9.5 million increase in accounts receivable materially consumed cash.
- Management may need additional equity or debt financing. Beam had the right to sell up to $30 million, subject to a two-million-share limit, under its B. Riley committed equity facility. It had not drawn on its $100 million receivables-backed supply-chain facility.
- Customer and government-contract concentration is significant. California and GSA contract vehicles represented 77% of 2023 revenue, and the California contract expires in June 2025 unless extended.
- The company identified material weaknesses in internal control over financial reporting relating to inventory tracking and costing, ERP change management and user access, segregation of duties, and documentation of reconciliations and approvals. NetSuite implementation in the fourth quarter is intended to address these weaknesses, but remediation is not yet complete. Amiga was excluded from management’s control assessment because of the short period since acquisition.
- Amiga consideration includes $2.7 million of deferred cash paid in January 2024, $4.7 million of estimated contingent consideration, potential stock earnouts tied to 2024 and 2025 revenue milestones, and a possible payment related to specified litigation recoveries.
- Key operating risks include competition, dependence on EV adoption and government incentives, component costs and tariffs, battery and product defects, supply-chain constraints, technology changes, international operations and foreign-currency exposure, cybersecurity, customer collection risk and potential equity dilution.
- Approximately $10.9 million of cash deposits exceeded federally insured limits at year-end, creating exposure to bank-counterparty and liquidity-access risk.
Most important facts for investors to verify
- Whether the significant 2023 federal orders represent repeatable demand or a temporary concentration of deliveries.
- Conversion of the $21.7 million year-end backlog into revenue and the current status of the California and GSA contracts.
- Fourth-quarter and 2024 gross-margin performance after the price increases, product redesigns and material-cost reductions.
- Accounts-receivable collections and the company’s ability to reduce recurring operating cash burn.
- Progress in remediating the material weaknesses, including inventory controls and NetSuite access, change-management and reconciliation controls.
- Amiga’s post-acquisition revenue, profitability, integration costs, contingent consideration and European growth contribution.
- Future financing needs, equity issuance and dilution from the committed equity facility, warrants, options and acquisition earnouts.
- Whether management achieves positive cash flow and profitability; the filing provides no firm timetable or quantitative earnings guidance.