--- Record New Sales of $38.0 Million; Backlog
Reaches Record Level ---
Sunworks, Inc. (Nasdaq:SUNW), a provider of solar power solutions
for agriculture, commercial and industrial (ACI), public works and
residential markets, today announced financial results for the
third quarter and nine months ended September 30, 2017.
Q3 2017 Summary:
- Revenue of $18.8 million, an increase of 7.1% compared to $17.6
million recorded in the year-ago quarter
- Gross margin of 16.5% compared to 26.5% in the year-ago quarter
- Net loss of $2.0 million compared to net loss of $6.1 million
in the year-ago quarter
- Record backlog at September 30, 2017 of $63.8 million
Chuck Cargile, Sunworks Chief Executive Officer
said, “Several projects totaling approximately $4 million, which we
expected to begin during the quarter slipped into the fourth
quarter. In addition, we experienced more than $1 million of cost
over-runs on four large projects completed in the quarter, which
began in the first half of 2016. One of my primary initiatives
since joining Sunworks as its new CEO in April was to improve our
processes and controls and to strengthen our organization to
enhance the predictability of our financial results. This process
is taking longer than anticipated, but I am confident that orders
scheduled to be installed going forward will benefit from stronger
processes.”
Mr. Cargile continued, “I remain optimistic
about Sunworks’ future. We booked a record $38 million in new sales
during the third quarter, resulting in our record backlog for
projects scheduled to be completed primarily in the next 12 months.
The increasing sales momentum we are experiencing reflects our
progress in penetrating new public works programs and the continued
strength of our ACI business. In addition, we
continue to manage our operating expenses to ensure greater
profitability as the record new sales convert to increasing
revenue. Lastly, I am very encouraged by the strong profit
performance from our residential business which delivered revenue
of $6.6 million in the quarter and almost $1 million of operating
profit.”
Third Quarter 2017 Summary
Revenue from ACI customers represented
approximately 65% of total revenue and revenue from residential
customers represented 35% for the third quarter of
2017.
Gross profit was $3.1 million, or 16.5% gross
margin, for the three months ending September 30, 2017 compared to
$4.7 million, or 26.5% gross margin, for the three months ending
September 30, 2016. The decrease in gross margin was primarily a
result of approximately $1.3 million in cost overruns on certain
large projects originally began in 2016, which were completed in
the quarter.
Net loss for the three months ending September
30, 2017 was $2.0 million, or $0.09 per share versus a net loss of
$6.1 million, or $0.29 per share, for the corresponding period in
2016.
Year-to-Date 2017 Summary
Revenue for the nine months ending September 30,
2017 was $58.2 million compared to $68.0 million for the nine
months ending September 30, 2016. Gross profit was $12.6 million,
or 21.7% of sales, for the first nine months of 2017 compared to
$19.4 million, or 28.5% of sales, for the first nine months of
2016.
Net loss was $3.8 million, or $0.17 per share
for the first nine months of 2017 compared to the net loss of $5.7
million or $0.29 per share, for the same period last year.
Balance Sheet
The company had $6.4 million in cash and cash
equivalents as of September 30, 2017 compared to $11.1 million as
of December 31, 2016. In the third quarter of 2017 the cash
balance increased by $2.2 million.
As of September 30, 2017, the company had $2.2
million of debt outstanding, inclusive of convertible debt,
compared to $2.3 million as of December 31, 2016.
Conference Call Details:
Management will host a conference call to
discuss these results today, Tuesday, November 14, 2017 at 10 a.m.
ET. To access the call, please dial 1-866-682-6100 (toll
free) or 1-862-255-5401 (international). The conference call
will also be broadcast live over the Internet, which can be
accessed via the Investor Relations section of Sunworks' web site
at http://ir.sunworksusa.com. All participants should call or
access the website approximately 5 minutes before the conference
call begins.
The webcast will be available for replay for at
least 90 days. A telephonic replay of this conference call will
also be available by dialing 1-877-481-4010 (toll free) or
1-919-882-2331 (International) using Replay ID 18827, until 11:59
p.m. ET on November 28, 2017.
About Sunworks, Inc.
Founded in 1983, Sunworks, Inc. is a premier
provider of solar power solutions for both consumers and
businesses. We are committed to quality construction practices that
always exceed industry standards and uphold our ideals of ethics
and safety.
Today, Sunworks continues to grow its presence,
expanding nationally with regional and local offices. We strive to
consistently deliver high quality, performance oriented solutions
for the agriculture, commercial, federal, public works,
residential, and utility industries. Our dedication to excellence
is reflected in our 25-year warranty, a benchmark that we stand by
in order to support our customers above and beyond their
expectations.
Sunworks fields a diverse, seasoned workforce
that includes distinguished veterans who are devoted to providing
the very best customer experience. All of our employees, from
technicians to executives, uphold our company's guiding principles
each day. Sunworks is a member of the Solar Energy Industries
Association (SEIA) and is a proud advocate for the advancement of
solar power. For more information, visit www.sunworksusa.com
Safe Harbor Statement
Matters discussed in this press release contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this press
release, the words "anticipate," "believe," "estimate," "may,"
"intend," "expect" and similar expressions identify such
forward-looking statements. Actual results, performance or
achievements could differ materially from those contemplated,
expressed or implied by the forward-looking statements contained
herein. Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, these they are based
largely on the expectations of the Company and are subject to a
number of risks and uncertainties. These risks include, but are not
limited to, risks and uncertainties associated with: the impact of
economic, competitive and other factors affecting the Company and
its operations, markets, products, and prospects for sales, failure
to earn profit or revenue, higher costs than expected, persistent
operating losses, ownership dilution, inability to repay debt,
failure of acquired businesses to perform as expected, the impact
on the national and local economies resulting from terrorist
actions, and U.S. actions subsequently; and other factors detailed
in reports filed by the Company. We also refer you to the risks
described in “Risk Factors” in Part I, Item 1A of Sunworks, Inc.’s
Annual Report on Form 10-K and in the other reports and documents
we file with the Securities and Exchange Commission from time to
time.
Any forward-looking statement made by us in this
press release is based only on information currently available to
us and speaks only as of the date on which it is made. We undertake
no obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Investor Relations Contact:
Rob Fink Hayden IR646-415-8972
rob@haydenir.com
|
SUNWORKS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER
30, 2017 AND SEPTEMBER 30, 2016 |
(in thousands, except share and per share
data) |
(unaudited) |
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30,2017 |
|
September 30,2016 |
|
September 30,2017 |
|
September 30,2016 |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
18,797 |
|
|
$ |
17,557 |
|
|
$ |
58,159 |
|
|
$ |
67,981 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold |
|
|
15,704 |
|
|
|
12,902 |
|
|
|
45,554 |
|
|
|
48,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
3,093 |
|
|
|
4,655 |
|
|
|
12,605 |
|
|
|
19,365 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Selling
and marketing expenses |
|
|
1,751 |
|
|
|
3,294 |
|
|
|
5,291 |
|
|
|
9,139 |
|
General
and administrative expenses |
|
|
2,640 |
|
|
|
3,092 |
|
|
|
9,175 |
|
|
|
8,842 |
|
Stock
based compensation |
|
|
299 |
|
|
|
3,902 |
|
|
|
833 |
|
|
|
5,764 |
|
Depreciation and amortization |
|
|
102 |
|
|
|
101 |
|
|
|
308 |
|
|
|
218 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses |
|
|
4,792 |
|
|
|
10,389 |
|
|
|
15,607 |
|
|
|
23,963 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
before Other Income/(Expenses) |
|
|
(1,699 |
) |
|
|
(5,734 |
) |
|
|
(3,002 |
) |
|
|
(4,598 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Income/(Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expenses) |
|
|
1 |
|
|
|
(165 |
) |
|
|
(43 |
) |
|
|
(383 |
) |
Interest
expense |
|
|
(261 |
) |
|
|
(186 |
) |
|
|
(752 |
) |
|
|
(739 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income/(Expenses) |
|
|
(260 |
) |
|
|
(351 |
) |
|
|
(795 |
) |
|
|
(1,122 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
before Income Taxes |
|
|
(1,959 |
) |
|
|
(6,085 |
) |
|
|
(3,797 |
) |
|
|
(5,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
Tax Expense |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(Loss) |
|
$ |
(1,959 |
) |
|
$ |
(6,085 |
) |
|
$ |
(3,797 |
) |
|
$ |
(5,720 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS
PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.09 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.29 |
) |
Diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.29 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.29 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE COMMONSHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
22,455,664 |
|
|
|
20,853,921 |
|
|
|
22,060,186 |
|
|
|
20,009,862 |
|
Diluted |
|
|
22,455,664 |
|
|
|
20,853,921 |
|
|
|
22,060,186 |
|
|
|
20,009,862 |
|
|
|
SUNWORKS, INC. |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
AS OF SEPTEMBER 30, 2017 AND DECEMBER 31,
2016 |
|
|
(in thousands, except share and per share
data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
6,382 |
|
|
|
$ |
11,069 |
|
|
|
Restricted cash |
|
|
430 |
|
|
|
|
37 |
|
|
|
Accounts
receivable, net |
|
|
10,634 |
|
|
|
|
9,665 |
|
|
|
Inventory, net |
|
|
3,898 |
|
|
|
|
3,394 |
|
|
|
Costs in
excess of billings |
|
|
5,314 |
|
|
|
|
4,307 |
|
|
|
Other
current assets |
|
|
1,387 |
|
|
|
|
117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Assets |
|
|
28,045 |
|
|
|
|
28,589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
and Equipment, net |
|
|
1,392 |
|
|
|
|
1,674 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets |
|
|
|
|
|
|
|
|
|
Other
deposits |
|
|
68 |
|
|
|
|
53 |
|
|
|
Goodwill |
|
|
11,364 |
|
|
|
|
11,364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Other Assets |
|
|
11,432 |
|
|
|
|
11,417 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets |
|
$ |
40,869 |
|
|
|
$ |
41,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Current
Liabilities: |
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
11,977 |
|
|
|
$ |
12,979 |
|
|
|
Billings
in excess of costs |
|
|
7,210 |
|
|
|
|
4,997 |
|
|
|
Customer
deposits |
|
|
693 |
|
|
|
|
64 |
|
|
|
Loan
payable, current portion |
|
|
228 |
|
|
|
|
218 |
|
|
|
Acquisition convertible promissory note, current portion |
|
|
606 |
|
|
|
|
454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities |
|
|
20,714 |
|
|
|
|
18,712 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Long
Term Liabilities |
|
|
|
|
|
|
|
|
|
Loan
payable |
|
|
323 |
|
|
|
|
496 |
|
|
|
Acquisition convertible promissory notes, net of
beneficialconversion feature of $150 and $807, respectively |
|
|
708 |
|
|
|
|
505 |
|
|
|
Warranty
liability |
|
|
216 |
|
|
|
|
116 |
|
|
|
Convertible promissory notes |
|
|
384 |
|
|
|
|
654 |
|
|
|
Total
Long Term Liabilities |
|
|
1,631 |
|
|
|
|
1,771 |
|
|
|
Total
Liabilities |
|
|
22,345 |
|
|
|
|
20,483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity |
|
|
|
|
|
|
|
|
|
Preferred
stock Series B, $.001 par value; 5,000,000authorized shares;
1,506,024 shares issued and outstanding |
|
|
2 |
|
|
|
|
2 |
|
|
|
Common
stock, $.001 par value; 200,000,000 authorizedshares; 22,455,664
and 20,853,921 shares issued andoutstanding, respectively |
|
|
22 |
|
|
|
|
21 |
|
|
|
Additional paid in capital |
|
|
71,440 |
|
|
|
|
70,317 |
|
|
|
Accumulated Deficit |
|
|
(52,940 |
) |
|
|
|
(49,143 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total
Shareholders’ Equity |
|
|
18,524 |
|
|
|
|
21,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Shareholders’ Equity |
|
$ |
40,869 |
|
|
|
$ |
41,680 |
|
|
|
|
|
|
|
|
|
|
|
|
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