RGS Energy (Nasdaq: RGSE), a nationwide leader of turnkey solar
energy solutions for residential, commercial, and utility
customers, reported results for the fourth quarter and year ended
December 31, 2013. The company plans to file its Annual Report on
Form 10-K in accordance with regulatory guidelines on or before
March 31, 2014.
Q4 2013 Commercial Highlights
- Completed largest installation to date, a 4.2 megawatt (MW)
solar electric system in Massachusetts.
- Deployed the largest project in Vermont to date, a 2.7 MW solar
farm in Saint Albans, building on the company's strong historical
presence and success in the state.
- Partnered with Green Lantern Capital, a Vermont based solar
developer, to co-develop seven solar projects totaling 4.5
MWs.
Q4 2013 Residential Highlights
- Q4 marked the highest level of residential installations with
780 installs representing $18.6 million in installed systems of 5.2
MW, despite persistent and unusually severe weather conditions.
Residential installations increased by more than 50% for all of
2013 compared to 2012.
- Continued to invest in back office systems and capabilities, as
well as increase engineering and field resources, in preparation
for anticipated growth in 2014.
Q4 & FY2013 Financial Highlights
- Q4 net revenue up 12% to $29.9 million, full year 2013 up 9% to
$101.3 million.
- Q4 adjusted EBITDA loss improved to $2.2 million from $2.9
million in Q4 2012, and to $8.7 million for the full year 2013 from
$14.1 million in 2012.
- At December 31, 2013, the company's cash totaled $12.5 million,
up from $10.4 million at December 31, 2012.
Q4 2013 Financial Results
Net revenue for the fourth quarter of 2013 was $29.9 million, up
12% from $26.8 million in the same year-ago quarter. The
improvement reflects an increase in total solar systems constructed
to 8.8 megawatts in the fourth quarter of 2013 compared to 7.6
megawatts in the fourth quarter of 2012. The increase was achieved
despite harsh weather which negatively impacted the company's
anticipated installations in both commercial and residential
markets.
Gross profit was $5.7 million or 19.0% of net revenue in the
fourth quarter of 2013, compared to $5.5 million or 20.5% of net
revenue in the same quarter last year. The decline in gross profit
percentage reflects, in part, the negative effect on labor
efficiency caused by inclement weather conditions.
Total expenses were $10.1 million for the fourth quarter of
2013. Excluding non-cash expenses (stock option compensation,
depreciation and charges related to early extinguishment of debt)
and costs incurred related to acquisitions, operating expenses were
$7.9 million in the fourth quarter of 2013, as compared to $8.5
million in the same quarter last year. Operating expenses were
26.4% of revenue for the fourth quarter of 2013, compared to 31.5%
in the same quarter last year. The decrease reflects the company's
ongoing focus on cost control.
Net loss for the fourth quarter of 2013 improved to $2.5 million
or $(0.08) per share, compared to a net loss of $3.8 million or
$(0.14) per share in the same quarter last year.
Adjusted EBITDA was a loss of $2.2 million in the fourth quarter
of 2013 versus a loss of $2.9 million in the fourth quarter of
2012. See "About Presentation of Adjusted EBITDA" below for the
definition of adjusted EBITDA, a non-GAAP financial metric.
Full Year 2013 Financial Results
Net revenue was $101.3 million, up 9% compared to $92.9 million
in 2012. The increase in revenue reflects an increase in solar
systems constructed to a record 29.7 megawatts in 2013 from 26.6
megawatts in 2012.
Gross profit was $22.3 million or 22.0% of net revenue, compared
to $23.0 million or 24.8% of net revenue in 2012. The decline in
gross profit reflects competitive pricing pressure as well as the
adverse impact of inclement weather on labor utilization
efficiency.
Operating expenses, excluding non-cash charges and acquisition
related costs were $31.0 million, compared to $36.9 million in
2012. The decrease in operating expenses reflects the company's
continuing efforts to increase operating efficiency and lower
customer acquisition costs.
Net loss in 2013 improved to $11.3 million or $(0.38) per share,
compared to a loss of $47.2 million or $(1.77) per share in 2012.
The year-ago period included goodwill and other asset impairments
of $22 million and a $9.3 million increase in the provision for
income taxes, which reflects the establishment of a valuation
allowance for net deferred tax assets.
Adjusted EBITDA was a loss of $8.7 million in 2013 versus a loss
of $14.1 million in 2012.
Cash totaled $12.5 million at December 31, 2013, compared to
$10.4 million at December 31, 2012. Working capital increased $13.0
million year over year. The increase in cash and working capital
are primarily attributable to the sale of shares and warrants in
November 2013, which raised net proceeds of $18.4 million. At
December 31, 2013 there were no borrowings outstanding under the
$6.5 million revolving line of credit with Silicon Valley Bank.
Subsequent to the end of 2013, the Mercury acquisition added
approximately $10 million in cash.
Management Commentary
"2013 was a successful and pivotal year for RGS Energy on a
number of fronts," said RGS Energy CEO Kam Mofid. "Our focus on
revenue growth in conjunction with driving productivity and
operational efficiency yielded double digit growth in megawatts
deployed and a nearly 20% decrease in operating expenses. Net loss
and cash flow, as measured by adjusted EBITDA, both significantly
improved. In addition, two strategic acquisitions, one closed
subsequent to year end, expanded our depth and breadth in both the
residential and commercial solar markets.
"Our improved operational performance allowed us to raise
additional capital during 2013. As a result we finished the year
with a significantly strengthened balance sheet, enabling an
increased investment in our sales and marketing capabilities. The
increased availability of investment capital also allowed us to
expand our partner-provided customer finance offerings and to
initiate development of our own in-house offerings. We believe that
these efforts position us to participate more effectively in the
growth of both the residential and commercial solar markets in 2014
and 2015.
"Our recently formed joint venture, RGS Energy Asset Management,
provides us the option to participate in the ownership of
commercial solar assets. The joint venture requires minimal initial
capital, and provides an avenue to larger project ownership if we
determine that returns on capital are attractive. The joint venture
also allows us to increase the rate of conversion in our commercial
business through a more seamless project origination and financing
process.
"During the fourth quarter we initiated development efforts to
expand our suite of residential customer finance options. These
efforts are reflected in two recent announcements. The first, a
program with Solar Mosaic, is expected to allow us to offer a type
of crowd sourced loan product to homeowners. The second represents
our expected development of an in-house lease offering for our
residential customers.
"We have already made significant progress and our recent key
hire is part of our larger 2014 investment strategy which will
allow us to participate in the long-term ownership value of
residential solar systems. RGS Energy's suite of financial
services, currently delivered by various third-party partners,
provides a range of options with compelling economics for our
residential solar customers. We expect the development of an
in-house lease program and expanded financing capabilities to
support a strong foundation for growth in 2014."
Outlook
RGS Energy does not plan to currently provide financial
guidance. However, RGS Energy expects total deployments of solar
energy systems in 2014 to increase to a range of 50-55 megawatts,
compared to 35 megawatts in 2013 (which includes pro-forma 2013
results reflecting the addition of the company's recently closed
Mercury acquisition).
Normal seasonal variance in revenue, the continued impact of
inclement weather in first quarter of 2014, as well as continued
investments in sales, marketing and in-house leasing capabilities
is expected to affect results in the near term.
Conference Call and Webcast
RGS Energy will hold a conference call to discuss its fourth
quarter and full year 2013 financial results on Tuesday, March 25,
2014 at 4:30 p.m. Eastern time. Management will host the
presentation, followed by a question and answer period.
| Date: Tuesday, March 25, 2014 |
| Time: 4:30 p.m. Eastern time (2:30 p.m.
Mountain time) |
| Dial-In number: 1-877-941-1427 |
| International: 1-480-629-9664 |
| Conference ID: 4672949 |
| Webcast:
http://public.viavid.com/index.php?id=108201 |
The conference call will be webcast live and available for
replay via the investor relations section of the company's website
at RGSEnergy.com.
Please call the conference telephone number five minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Liolios Group at
1-949-574-3860.
A replay of the call will be available after 7:30 p.m. Eastern
time on the same day through April 1, 2014.
| Toll-free replay number: 1-877-870-5176 |
| International replay number:
1-858-384-5517 |
| Replay ID: 4672949 |
About RGS Energy RGS Energy (Nasdaq:RGSE) is
one of the nation's pioneering solar energy companies serving
commercial, residential, and utility customers. Beginning with one
of the very first photovoltaic panels sold to the public in the
U.S. in 1978, the company has installed more than 19,000 solar
power systems representing well over 170 megawatts of 100% clean
renewable energy. RGS Energy makes it very convenient for customers
to save on their energy bill by providing a comprehensive solar
solution, from design, financing, permitting and installation to
ongoing monitoring, maintenance and support. As one of the nation's
largest and most experienced solar power players, the company has
17 offices across the West and the Northeast. For more information,
visit RGSEnergy.com, on Facebook at www.facebook.com/rgsenergy and
on Twitter at www.twitter.com/rgsenergy. RGS Energy is a trade name
and RGS Energy makes filings with the Securities and Exchange
Commission under its official name "Real Goods Solar, Inc."
Cautionary Statement Regarding Forward-Looking
Statements
This communication includes forward-looking statements relating
to matters that are not historical facts. Forward-looking
statements may be identified by the use of words such as "expect,"
"intend," "believe," "will," "should" or comparable terminology or
by discussions of strategy. While RGS Energy believes its
assumptions and expectations underlying forward-looking statements
are reasonable, there can be no assurance that actual results will
not be materially different. Risks and uncertainties that could
cause materially different results include, among others, RGS
Energy's ability to successfully develop and manage an in-house
residential leasing program, introduction of new products and
services, completion and integration of acquisitions, possibility
of negative impact from weather conditions, possibility of negative
economic conditions and other risks and uncertainties included in
RGS Energy's filings with the Securities and Exchange Commission.
RGS Energy assumes no duty to update any forward-looking
statements.
About Presentation of Adjusted EBITDA
Beginning with the reporting of results for the third quarter of
2013, the company began to report the measures of adjusted EBITDA.
Adjusted EBITDA is not a financial measure calculated and presented
in accordance with U.S. generally accepted accounting principles
(GAAP) and should not be considered as an alternative to net
income, operating income or any other financial measures so
calculated and presented, nor as an alternative to cash flow from
operating activities as a measure of liquidity. The company defines
adjusted EBITDA as income or loss from operations before interest,
depreciation, taxes, non-cash stock-based compensation and the
one-time charges (acquisition costs and other one-time charges as
included in the table below). Other companies (including
competitors) may define adjusted EBITDA differently. The company
presents adjusted EBITDA because management believes it is an
important supplemental measure of performance that is commonly used
by securities analysts, investors and other interested parties in
the evaluation of companies in our industry. Management also uses
this information internally for forecasting and budgeting. It may
not be indicative of the historical operating results of Real Goods
Solar Inc. nor is it intended to be predictive of potential future
results. Investors should not consider adjusted EBITDA in isolation
or as a substitute for analysis of the company's results as
reported under GAAP.
| Reconciliation of
Adjusted EBITDA to Operating Loss |
| |
|
|
|
|
| |
Three Months Ended |
Twelve Months Ended |
| |
December
31, |
December
31, |
| |
2013 |
2012 |
2013 |
2012 |
| Loss from operations |
$ (4,363) |
$ (3,321) |
$ (12,339) |
$ (37,696) |
| |
|
|
|
|
| Depreciation and amortization |
357 |
336 |
1,019 |
1,196 |
| Non-cash share-based compensation |
85 |
69 |
368 |
349 |
| Acquisition costs and other one-time
charges |
|
|
|
|
| Acquisition and integration
costs |
1,454 |
— |
2,010 |
— |
| Non-operating loss on early
repayment of debt |
245 |
|
245 |
|
| Impairment of goodwill and
other intangible assets |
— |
— |
— |
22,012 |
| |
|
|
|
|
| Adjusted EBITDA |
$ (2,222) |
$ (2,916) |
$ (8,697) |
$ (14,139) |
| |
|
|
|
|
| |
|
|
|
|
| REAL GOODS SOLAR,
INC. |
| Condensed Consolidated
Balance Sheets |
| |
|
|
| |
December 31, |
December 31, |
| (in thousands, except
share and per share data) |
2013 |
2012 |
| |
|
|
| ASSETS |
|
|
| Current assets: |
|
|
| Cash |
$12,449 |
$10,390 |
| Accounts receivable,
net |
11,926 |
13,902 |
| Costs in excess of billings on
uncompleted contracts |
4,556 |
5,288 |
| Inventory, net |
6,715 |
5,711 |
| Deferred costs on uncompleted
contracts |
1,421 |
896 |
| Receivable and deferred tax
assets |
179 |
200 |
| Other current assets |
1,091 |
1,930 |
| Total current
assets |
38,337 |
38,317 |
| Property and equipment, net |
3,159 |
3,991 |
| Intangible assets |
1,400 |
— |
| Goodwill |
872 |
— |
| Total assets |
$43,768 |
$42,308 |
| |
|
|
| LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
| Current liabilities: |
|
|
| Line of credit |
$ — |
$6,498 |
| Accounts payable |
14,059 |
15,951 |
| Accrued liabilities |
3,611 |
5,156 |
| Billings in excess of costs on
uncompleted contracts |
395 |
2,975 |
| Term loan |
2,000 |
— |
| Related party debt |
4,150 |
6,850 |
| Other current
liabilities |
787 |
510 |
| Total current
liabilities |
25,002 |
37,940 |
| Accrued liabilities |
446 |
443 |
| Common stock warrant liability |
15,071 |
— |
| Total liabilities |
40,519 |
38,383 |
| |
|
|
| Commitments and contingencies |
|
|
| Shareholders' equity: |
|
|
| Class A common stock,
$.0001 par value, 150,000,000 shares authorized, 36,415,839 and
26,693,696 shares issued and outstanding at December 31, 2013 and
December 31, 2012, respectively |
4 |
3 |
| Additional paid-in
capital |
92,808 |
82,185 |
| Accumulated deficit |
(89,563) |
(78,263) |
| Total
shareholders' equity |
3,249 |
3,925 |
| Total liabilities
and shareholders' equity |
$43,768 |
$42,308 |
| |
|
|
| |
|
|
| REAL GOODS SOLAR,
INC. |
| Condensed Consolidated
Statements of Operations |
| |
|
|
|
|
| |
For the Three Months Ended |
For the Twelve Months Ended |
| |
December 31, |
December 31, |
| (in thousands, except
per share data) |
2013 |
2012 |
2013 |
2012 |
| |
(unaudited) |
(unaudited) |
| Net revenue |
$29,900 |
$26,829 |
$101,342 |
$92,891 |
| Cost of goods sold |
24,211 |
21,281 |
79,032 |
69,859 |
| Gross profit |
5,689 |
5,548 |
22,310 |
23,032 |
| |
|
|
|
|
| Expenses: |
|
|
|
|
| Selling and
operating |
6,751 |
6,367 |
25,667 |
29,807 |
| General and administrative |
1,846 |
2,502 |
6,972 |
8,909 |
| Acquisition and other
costs |
1,454 |
— |
2,010 |
— |
| Goodwill and other asset
impairments |
— |
— |
— |
22,012 |
| Total
expenses |
10,051 |
8,869 |
34,649 |
60,728 |
| Loss from operations |
(4,362) |
(3,321) |
(12,340) |
(37,696) |
| Interest and other income
(expense) |
1,900 |
(494) |
1,098 |
(790) |
| Loss before income taxes |
(2,462) |
(3,815) |
(11,242) |
(38,486) |
| Income tax expense (benefit) |
42 |
— |
58 |
8,720 |
| Net loss |
$ (2,504) |
$ (3,815) |
$ (11,300) |
$ (47,206) |
| |
|
|
|
|
| Net loss per share: |
|
|
|
|
| Basic |
$ (0.08) |
$ (0.14) |
$ (0.38) |
$ (1.77) |
| Diluted |
$ (0.08) |
$ (0.14) |
$ (0.38) |
$ (1.77) |
| |
|
|
|
|
| Weighted-average shares outstanding: |
|
|
|
|
| Basic |
33,077 |
26,694 |
29,846 |
26,673 |
| Diluted |
33,077 |
26,694 |
29,846 |
26,673 |
| |
|
|
|
|
CONTACT: Media and Investor Relations Contact
Ron Both
Liolios Group, Inc.
Tel 1-949-574-3860
RGSE@liolios.com