Pineapple Energy Inc. (NASDAQ: PEGY), a leading provider of
sustainable solar energy and back-up power to households and small
businesses, today announced financial results for the second
quarter ended June 30, 2023.
Pineapple CEO Kyle Udseth commented, “We were able to deliver an
excellent second quarter, against a backdrop of uncertainty in the
residential solar industry and counter to the weak results turned
in by many of our larger public peers. This was not by accident. We
kept the focus on execution and in our Hawaii and New York markets,
while responsibly managing corporate overhead. Our strategy is
proving out, as selective acquisitions of leading super-local and
regional companies, supported and enhanced by a lean corporate
shared services model, continue to unlock value. We are on-track to
hit our previously issued guidance of revenue between $80-$85
million and positive adjusted EBITDA for 2023. A big thanks to our
employees across the country, for their hard work and commitment to
delivering an exceptional customer experience. We are excited about
the momentum we have carried into Q3 and the back half of
2023.”
Pineapple CFO Eric Ingvaldson commented, “We were able to
achieve meaningful year-over-year revenue growth due to the
SUNation acquisition in the fourth quarter of 2022 and strong
organic growth in Hawaii. Gross profit margins increased due to the
SUNation acquisition, normalization of the supply chain and our
ability to buy better as a larger organization. While gross profit
increased 691% year-over-year, operating expenses increased only
122% year-over-year, resulting in our second consecutive quarter of
positive adjusted EBITDA.”
Second Quarter Business Highlights
- Strong operating metrics (pro forma)
- Residential kW installed +29% in Q2 2023 vs Q2 2022
- Residential battery attachment rate improved to 43% in Q2 2023,
up from 38% Q2 2022
- Backlog increased to $42M as of June 2023, up from $38M March
2023
- $7.5M debt financing closed with Decathlon Capital
Partners
- Sale of substantially all of the assets of legacy subsidiaries
JDL Technologies, Inc., and Ecessa Corporation completed
Second Quarter 2023 GAAP Results from Continuing
Operations1
|
2nd Quarter
2023 |
2nd Quarter
20223 |
Revenue |
$19,836,291 |
$4,218,453 |
Gross Profit |
$7,136,934 |
$902,443 |
Operating Expense |
$8,552,254 |
$3,848,226 |
Operating Loss |
$(1,415,320) |
$(2,945,783) |
Other Income |
$1,078,616 |
$4,639,554 |
Net (Loss) Income |
$(333,810) |
$1,693,771 |
Cash, restricted cash & investments2 |
$8,041,343 |
$16,512,388 |
Diluted (Loss) Income per Share |
($0.03) |
$0.17 |
1 Includes continuing operations and excludes discontinued
operations.
2 Includes restricted cash and liquid investments of $5,599,373
as of June 30, 2023, and $13,017,153 as of June 30, 2022, earmarked
for payment of contingent value rights.
3 As the determination for discontinued operations was made for
the period ending December 31, 2022, the 2nd Quarter 2022 numbers
have been adjusted to reflect continuing operations only.
Total revenue was $19.8 million in the second quarter of 2023,
up $15.6 million, or 370%, from the second quarter of 2022. The
increase in revenue was a result of the SUNation acquisition in Q4
of 2022 and organic growth in Hawaii.
Total gross profit was $7.1 million, an increase of $6.2
million, or 691%, year-over-year. Gross profit increased due to
increased revenue and an improved gross profit margin. Gross profit
margin improvements were a result of the SUNation acquisition,
normalization of the supply chain and better buying power as a
larger organization.
Total operating expenses were $8.6 million, an increase of $4.7
million, or 122%, year-over-year. The increase in operating
expenses was primarily a result of the SUNation acquisition in Q4
of 2022.
Other income was $1.1 million, a decrease of $3.6 million, or
77%, year-over-year. Other income declined primarily due to the
$4.7 million favorable fair value remeasurement of merger earnout
consideration and the $1.2 million gain on sale of assets in the
second quarter of 2022, offset by the $1.6 million favorable fair
value remeasurement of the contingent value rights (“CVRs”) in the
second quarter of 2023.
Net loss from continuing operations attributable to common
stockholders was $0.3 million, or $(0.03) per diluted share in the
second quarter of 2023. This was a decline from the net income from
continuing operations of $1.7 million in the second quarter of 2022
due to the decline in other income resulting from balance sheet
fair market value adjustments.
As of June 30, 2023, cash, cash equivalents, restricted cash,
and investments were $8.0 million. Of that amount, $5.6 million was
held as restricted cash and investments that can only be used for
the legacy CSI business and will be distributed to holders of CVRs
(Contingent Value Rights).
Second Quarter 2023 Pro Forma Comparisons
To facilitate analysis of the Company’s operating business,
below is an unaudited pro forma presentation of results as if the
Company had completed the SUNation merger, the CSI merger, and the
HEC/E-Gear asset acquisition as of January 1, 2022.
|
|
Three Months Ended June 30 |
|
|
2023 |
|
2022 |
Revenue |
$ |
19,836,291 |
$ |
16,125,345 |
Net Income
(Loss) |
|
(333,810) |
|
1,539,575 |
|
|
|
|
|
Adjusted
EBITDA* |
|
319,001 |
|
(1,650,881) |
* Adjusted EBITDA is a non-GAAP financial
measure. See “Pro Forma Results and Non-GAAP Financial Measures”
and the reconciliations in this release for further
information.
Pro forma revenue was up 23% due to a 29% increase in
residential kilowatts installed, an increase in the residential
battery attachment rate to 43%, and a 31% increase in service and
other revenue, partially offset by a decline in commercial revenue
due to the timing of significant projects completed in Q2 of
2022.
Pro forma adjusted EBITDA increased $1.97 million driven by
overall margin improvement and increased operating leverage by
controlling costs at SUNation, HEC (Hawaii Energy Connection) and
Corporate.
The unaudited pro forma financial information above is not
necessarily indicative of consolidated results of operations of the
combined business had the acquisition occurred at the beginning of
the respective period, nor is it necessarily indicative of future
results of operations of the combined company. The above unaudited
pro forma results are not adjusted for the level of corporate
overhead costs needed to support the go-forward strategy and
instead include a higher cost structure based on operating legacy
businesses and the structure in place while carrying out plans to
complete the CSI merger transaction. The unaudited pro forma
financial information above includes adjustments to amortization
expense for intangible assets totaling $0 and $347,092 and excludes
transaction costs totaling $0 and $213,396 for the three months
ended June 30, 2023, and 2022, respectively.
Outlook
For the full year 2023, the Company reiterates its revenue
guidance of $80 to $85 million, positive adjusted EBITDA and cash
flow from operations in 2023.
Status of Contingent Value RightsThe CVR
(Contingent Value Rights) liability as of June 30, 2023, was
estimated at $6,010,520 and represents the estimated fair value as
of that date of the legacy CSI assets to be distributed to CVR
holders.
About Pineapple EnergyPineapple is focused on
growing leading local and regional solar, storage, and energy
services companies nationwide. Our vision is to power the energy
transition through grass-roots growth of solar electricity paired
with battery storage. Our portfolio of brands (SUNation, Hawaii
Energy Connection, E-Gear, Sungevity, and Horizon Solar Power)
provide homeowners and small businesses with an end-to-end product
offering spanning solar, battery storage, and grid services.
Forward Looking StatementsThis press release
includes certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including
statements regarding future financial performance, future growth or
growth opportunities, future opportunities, future flexibility to
pursue acquisitions, future cash flows and future earnings. These
statements are based on the Company’s current expectations or
beliefs and are subject to uncertainty and changes in
circumstances. Actual results may vary materially from those
expressed or implied by the statements here due to changes in
economic, business, competitive or regulatory factors, and other
risks and uncertainties, including those set forth in the Company’s
filings with the Securities and Exchange Commission. The
forward-looking statements in this press release speak only as of
the date of this press release. The Company does not undertake any
obligation to update or revise these forward-looking statements for
any reason, except as required by law.
Contacts:
Pineapple EnergyKyle UdsethChief Executive Officer+1 (952)
996-1674Kyle.Udseth@pineappleenergy.comEric IngvaldsonChief
Financial Officer+1 (952)
996-1674Eric.Ingvaldson@pineappleenergy.com
PINEAPPLE ENERGY INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE (LOSS) INCOME |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30 |
|
Six Months Ended June 30 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Sales |
$ |
19,836,291 |
|
|
$ |
4,218,453 |
|
|
$ |
41,901,716 |
|
|
$ |
4,450,321 |
|
Cost of sales |
|
12,699,357 |
|
|
|
3,316,010 |
|
|
|
26,758,466 |
|
|
|
3,482,170 |
|
Gross profit |
|
7,136,934 |
|
|
|
902,443 |
|
|
|
15,143,250 |
|
|
|
968,151 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
7,230,555 |
|
|
|
2,816,516 |
|
|
|
15,292,678 |
|
|
|
3,090,266 |
|
Amortization expense |
|
1,216,699 |
|
|
|
863,433 |
|
|
|
2,483,397 |
|
|
|
1,220,896 |
|
Transaction costs |
|
— |
|
|
|
168,277 |
|
|
|
2,020 |
|
|
|
1,136,782 |
|
Fair value remeasurement of SUNation earnout consideration |
|
105,000 |
|
|
|
— |
|
|
|
930,000 |
|
|
|
— |
|
Total operating expenses |
|
8,552,254 |
|
|
|
3,848,226 |
|
|
|
18,708,095 |
|
|
|
5,447,944 |
|
Operating loss |
|
(1,415,320 |
) |
|
|
(2,945,783 |
) |
|
|
(3,564,845 |
) |
|
|
(4,479,793 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Investment and other income |
|
35,756 |
|
|
|
103,903 |
|
|
|
55,289 |
|
|
|
98,759 |
|
Gain on sale of assets |
|
— |
|
|
|
1,214,560 |
|
|
|
244,271 |
|
|
|
1,214,560 |
|
Fair value remeasurement of merger earnout consideration |
|
— |
|
|
|
4,671,000 |
|
|
|
— |
|
|
|
4,671,000 |
|
Fair value remeasurement of contingent value rights |
|
1,642,195 |
|
|
|
(1,214,560 |
) |
|
|
1,392,195 |
|
|
|
(1,214,560 |
) |
Interest and other expense |
|
(599,335 |
) |
|
|
(135,349 |
) |
|
|
(1,057,553 |
) |
|
|
(485,731 |
) |
Other income, net |
|
1,078,616 |
|
|
|
4,639,554 |
|
|
|
634,202 |
|
|
|
4,284,028 |
|
Net (loss) income before
income taxes |
|
(336,704 |
) |
|
|
1,693,771 |
|
|
|
(2,930,643 |
) |
|
|
(195,765 |
) |
Income tax expense |
|
(2,894 |
) |
|
|
— |
|
|
|
2,838 |
|
|
|
— |
|
Net (loss) income from
continuing operations |
|
(333,810 |
) |
|
|
1,693,771 |
|
|
|
(2,933,481 |
) |
|
|
(195,765 |
) |
Net loss from discontinued
operations, net of tax |
|
(1,216,934 |
) |
|
|
(251,119 |
) |
|
|
(1,172,252 |
) |
|
|
(245,217 |
) |
Net (loss) income |
|
(1,550,744 |
) |
|
|
1,442,652 |
|
|
|
(4,105,733 |
) |
|
|
(440,982 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive gain
(loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on available-for-sale securities |
|
20,125 |
|
|
|
(15,731 |
) |
|
|
44,530 |
|
|
|
(32,798 |
) |
Total other comprehensive gain
(loss) |
|
20,125 |
|
|
|
(15,731 |
) |
|
|
44,530 |
|
|
|
(32,798 |
) |
Comprehensive (loss)
income |
$ |
(1,530,619 |
) |
|
$ |
1,426,921 |
|
|
$ |
(4,061,203 |
) |
|
$ |
(473,780 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss) income per
share: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.03 |
) |
|
$ |
0.23 |
|
|
$ |
(0.29 |
) |
|
$ |
(0.04 |
) |
Discontinued operations |
|
(0.13 |
) |
|
|
(0.04 |
) |
|
|
(0.12 |
) |
|
|
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
0.19 |
|
|
$ |
(0.41 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net (loss) income per
share: |
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.03 |
) |
|
|
0.17 |
|
|
|
(0.29 |
) |
|
|
(0.04 |
) |
Discontinued operations |
|
(0.13 |
) |
|
|
(0.02 |
) |
|
|
(0.12 |
) |
|
|
(0.04 |
) |
|
$ |
(0.16 |
) |
|
$ |
0.15 |
|
|
$ |
(0.41 |
) |
|
$ |
(0.08 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Basic Shares
Outstanding |
|
9,948,836 |
|
|
|
7,435,586 |
|
|
|
9,934,324 |
|
|
|
5,345,137 |
|
Weighted Average Dilutive
Shares Outstanding |
|
9,948,836 |
|
|
|
9,788,522 |
|
|
|
9,934,324 |
|
|
|
5,345,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Results and Non-GAAP Financial
MeasuresThis press release includes unaudited pro forma
information, which represents the results of operations as if the
Company had completed the CSI merger, the HEC and E-Gear asset
acquisitions and the SUNation acquisition as of January 1, 2022.
The unaudited pro forma financial information presented in this
press release is not necessarily indicative of consolidated results
of operations of the combined business had the acquisitions
occurred at the beginning of the respective period, nor is it
necessarily indicative of future results of operations of the
combined company.
For the three months ended June 30, 2023, and 2022, the
unaudited pro forma financial information includes adjustments to
amortization expense for intangible assets totaling $0 and
$347,092, respectively, and excludes transaction costs totaling $0
and $213,396, respectively.
This press release also includes non-GAAP financial measures
that differ from financial measures calculated in accordance with
U.S, (United States) generally accepted accounting principles
(“GAAP”). Adjusted EBITDA is a non-GAAP financial measure provided
in this release, and is net (loss) income, on a pro forma basis
calculated in accordance with GAAP, adjusted for pro forma
interest, income taxes, depreciation, amortization, stock
compensation, gain on sale of assets, and non-cash fair value
remeasurement adjustments as detailed in the reconciliations
presented below in this press release. These non-GAAP financial
measures are presented because the Company believes they are useful
indicators of its operating performance. Management uses these
measures principally as measures of the Company’s operating
performance and for planning purposes, including the preparation of
the Company’s annual operating plan and financial projections. The
Company believes these measures are useful to investors as
supplemental information and because they are frequently used by
analysts, investors, and other interested parties to evaluate
companies in its industry. The Company also believes these non-GAAP
financial measures are useful to its management and investors as a
measure of comparative operating performance from period to period.
The non-GAAP financial measures presented in this release should
not be considered as an alternative to, or superior to, their
respective GAAP financial measures, as measures of financial
performance or cash flows from operations as a measure of
liquidity, or any other performance measure derived in accordance
with GAAP, and they should not be construed to imply that the
Company’s future results will be unaffected by unusual or
non-recurring items. In addition, these measures do not reflect
certain cash requirements such as tax payments, debt service
requirements, capital expenditures and certain other cash costs
that may recur in the future. Adjusted EBITDA contains certain
other limitations, including the failure to reflect our cash
expenditures, cash requirements for working capital needs and cash
costs to replace assets being depreciated and amortized. In
evaluating non-GAAP financial measures, you should be aware that in
the future the Company may incur expenses that are the same as or
similar to some of the adjustments in this presentation. The
Company’s presentation of non-GAAP financial measures should not be
construed to imply that its future results will be unaffected by
any such adjustments. Management compensates for these limitations
by primarily relying on the Company’s GAAP results in addition to
using non-GAAP financial measures on a supplemental basis. The
Company’s definition of these non-GAAP financial measures is not
necessarily comparable to other similarly titled captions of other
companies due to different methods of calculation.
Reconciliation of Non-GAAP to GAAP Financial
Information
Reconciliation of Pro Forma Net (Loss) Income to Pro Forma
Adjusted EBITDA:
|
Three Months Ended June 30 |
|
2023 |
|
2022 |
Pro Forma Net (Loss) Income |
$ |
(333,810 |
) |
|
$ |
1,539,575 |
|
Interest expense |
|
599,335 |
|
|
|
157,263 |
|
Interest income |
|
(24,818 |
) |
|
|
(5,145 |
) |
Income taxes |
|
(2,894 |
) |
|
|
27,962 |
|
Depreciation |
|
101,147 |
|
|
|
89,799 |
|
Amortization |
|
1,216,699 |
|
|
|
1,210,665 |
|
Stock compensation |
|
300,537 |
|
|
|
- |
|
Gain on sale of assets |
|
- |
|
|
|
(1,214,560 |
) |
FV remeasurement of contingent value rights |
|
(1,642,195 |
) |
|
|
1,214,560 |
|
FV remeasurement of earnout consideration |
|
105,000 |
|
|
|
(4,671,000 |
) |
Pro Forma Adjusted
EBITDA |
$ |
319,001 |
|
|
$ |
(1,650,881 |
) |
Pineapple Energy (NASDAQ:PEGY)
Historical Stock Chart
From May 2024 to Jun 2024
Pineapple Energy (NASDAQ:PEGY)
Historical Stock Chart
From Jun 2023 to Jun 2024