Backlog and Pipeline Increased to $40.8
Million
The Peck Company Holdings, Inc. (NASDAQ: PECK) (the “Company” or
“Peck”), a leading commercial solar engineering, procurement and
construction (EPC) company, today announced the Company’s financial
results for the first quarter ended March 31, 2020 (“Q1 2020”).
Key Financial Highlights for Q1
2020
- Revenues increased 4% to $4.0 million
- Gross profit decreased 66% to $0.3 million
- Backlog and pipeline increased to $40.8 million
Subsequent to the End of Q1
2020
On April 22, 2020, Peck and GreenBond Advisors formed a
strategic Green Bond partnership to align capital for construction
of new solar projects. The partnership will acquire, build and own
the new solar projects. The new investment partnership is designed
to increase Peck’s access to capital for the construction of new
solar projects and to scale its existing pipeline of new EPC
business. Peck has partnered with GreenSeed Investors LLC and its
affiliate GreenBond Advisors LLC to gain access to the rapidly
growing Green Bond segment of the fixed income markets. Of note,
this partnership provides Peck with access to project growth
capital through additional EPC contract work from Green Bond
proceeds while improving working capital and strengthening
liquidity ratios.
GreenBond Advisors was recently formed to deliver financial
product innovation into the Green Bond market. They have created a
new Green Bond product that allows risk-adverse investment capital
to be more easily directed into new green energy infrastructure
development at an earlier stage of the project development cycle
than is typically the case for existing Green Bonds. This
innovation by Green Bond Advisors will provide Peck with a
strategic advantage in the marketplace as an EPC company, because
Peck can bring a level of funding certainty to developers for early
stage projects that will meet the project performance criteria.
Management Commentary
The Peck Company Holdings Chief Executive Officer, Jeffrey Peck,
commented, “The first quarter is seasonally our slowest time of the
year, and given the outbreak of the COVID-19 pandemic in the U.S.,
we are pleased with our single-digit revenue growth. We continue to
execute on our strategic plan while we navigate through this
uncertain economic landscape brought upon by the COVID-19 pandemic.
Our before-mentioned Green Bond partnership exemplifies that as we
have implemented a differentiated strategy to increase our
involvement in development-stage solar projects. The GreenBond
Advisors partnership enables us to accelerate the growth of our
business and become a part-owner of the solar project’s recurring
cash flows without additional equity dilution to our shareholders
and without incurring debt on our balance sheet. The partnership
and strategy reinforce our disciplined financial and operational
approach to find opportunities to advance our mission to be a
leader in the commercial solar EPC industry.”
Mr. Peck, continued, “We are starting to see the light at the
end of the tunnel as the region of New England begins to open back
up; albeit in stages. Vermont, which has been home to the majority
of our business has announced gradual reopening of business will
begin on May 18, with an additional opening phase set for June 1.
Vermont, with less than 1,000 total cases and 5 people currently
hospitalized, is likely to be one of the earliest states to return
to pre-COVID-19 business activity. We expect other New England
states to follow that trend as well, with Maine ranking sixth
lowest in the nation in terms of positive cases and New Hampshire
having already moved to a second phase of business re-opening.”
Mr. Peck, concluded, “Given our role in critical infrastructure,
including utilities and telecommunications and our support for the
local IBEW 300, we expect a smooth transition once new construction
projects resume. I want to personally thank our dedicated team
which has allowed us to continue providing service and maintenance
in support of critical infrastructure, including utilities and
telecommunications during these difficult times. We look forward to
getting back to work on new projects, hiring additional employees
and contractors and continuing on the path of the transition to
clean, renewable energy for the U.S.”
Financial Results for the Three Months
Ended March 31, 2020
Revenue for the three months ended March 31, 2020 was $3.98
million, an increase of $0.13 million, or 4%, compared to $3.85
million for the three months ended March 31, 2019. The Company had
a few projects that were ceased or delayed due to the current
COVID-19 pandemic. The Company anticipates that these projects will
continue or begin once the current Stay at Home orders are lifted
or relaxed.
Backlog and pipeline at March 31, 2020 was $40.8 million.
Gross profit for the three months ended March 31, 2020 was $0.3
million, a decrease of $0.5 million, or 66%, compared to $0.8
million for the three months ended March 31, 2019. The resulting
gross margin was 7.5% for the three months ended March 31, 2020,
compared to 23.0% for the three months ended March 31, 2019. Lower
gross margin for the three months ended March 31, 2020 was the
result of inefficiencies in labor costs due to the uncertainty of
the COVID-19 pandemic. In addition, the Company incurred unplanned
expenditures on two large solar projects due to the winter
conditions in the Northeast.
General and administrative expenses for the three months ended
March 31, 2020 were $0.6 million, an increase of $0.3 million, or
134%, compared to $0.3 million for the three months ended March 31,
2019. The increase in general and administration expenses were
primarily due to activities related to administrative expenses
costs of becoming a public company as well as supporting
infrastructure expansion in the three months ended March 31, 2020,
compared to the three months ended March 31, 2019.
Warehousing and other operating expenses for the three months
ended March 31, 2020 were $0.2 million, compared to $0.2 million
for the three months ended March 31, 2019. Warehousing and other
operating expenses include Company-owned solar array depreciation
and salaries associated with Company-owned solar arrays, general
warehousing costs, project-related travel and performance related
expenses.
Operating loss for the three months ended March 31, 2020 was
$0.6 million, compared to an operating income of $0.4 million for
the three months ended March 31, 2019. The decrease in operating
income was primarily due to an increase in the operational
infrastructure required to support the current growth trajectory as
well as the additional expense of being a publicly listed
company.
Depreciation expenses for the three months ended March 31, 2020
were $155,012, compared to $150,483 for the three months ended
March 31, 2019. Depreciation expenses were stable when compared to
the three months ended March 31, 2019 as the Company has not had
significant capital expenditures for the three months ended March
31, 2020.
Income tax benefit for the three months ended March 31, 2020 was
$142,311 compared to the income tax provision for the three months
ended March 31, 2019 of $500.
Net loss for the three months ended March 31, 2020 was $0.4
million, compared to a net income of $0.4 million for the there
months ended March 31, 2019. The net loss was the result of
inefficiencies in labor costs due to the uncertainty of the
COVID-19 pandemic. In addition, the Company incurred unplanned
expenditures on two large solar projects due to the winter
conditions in the Northeast. The resulting earnings per share (EPS)
for the three months ended March 31, 2020 was a loss of ($0.08) per
diluted share, compared to $0.12 for the three months ended March
31, 2019.
Adjusted EBITDA for the three months ended March 31, 2020 was a
loss of $0.3 million, compared to income of $0.6 million for the
three months ended March 31, 2019.
Adjusted EPS for the three months ended March 31, 2020 was a
loss of ($0.06), compared to $0.18 for the three months ended
December 31, 2019.
The reconciliations of EBITDA, Adjusted EBITDA to net (loss)
income, the most directly comparable financial measure calculated
and presented in accordance with GAAP, are shown in the table
below:
Three months ended March 31,
2020
2019
Net (loss) income
$
(432,632
)
$
376,652
Depreciation and amortization
155,012
150,483
Other (income) expense, net
80,766
44,659
Income tax (benefit) provision
(142,311
)
500
EBITDA
(339,165
)
572,294
Weighted Average shares outstanding
5,298,159
3,234,501
Adjusted EPS
$
(0.06
)
$
0.18
Certain Non-GAAP
Measures
We periodically review the following key non-GAAP measures to
evaluate our business and trends, measure our performance, prepare
financial projections and make strategic decisions.
EBITDA, Adjusted EBITDA and Earnout Adjusted EBITDA
Included in this presentation are discussions and
reconciliations of earnings before interest, income tax and
depreciation and amortization (“EBITDA”) and EBITDA adjusted for
certain non-cash, non-recurring or non-core expenses (“Adjusted
EBITDA”) to net income in accordance with GAAP. Adjusted EBITDA
excludes certain non-cash and other expenses, certain legal
services costs, professional and consulting fees and expenses, and
one-time business combination expenses and certain adjustments. We
believe that these non-GAAP measures illustrate the underlying
financial and business trends relating to our results of operations
and comparability between current and prior periods. We also use
these non-GAAP measures to establish and monitor operational
goals.
These non-GAAP measures are not in accordance with, or an
alternative to, GAAP and should be considered in addition to, and
not as a substitute or superior to, the other measures of financial
performance prepared in accordance with GAAP. Using only the
non-GAAP financial measures, particularly Adjusted EBITDA, to
analyze our performance would have material limitations because
such calculations are based on a subjective determination regarding
the nature and classification of events and circumstances that
investors may find significant. We compensate for these limitations
by presenting both the GAAP and non-GAAP measures of our operating
results. Although other companies may report measures entitled
“Adjusted EBITDA” or similar in nature, numerous methods may exist
for calculating a company’s Adjusted EBITDA or similar measures. As
a result, the methods that we use to calculate Adjusted EBITDA may
differ from the methods used by other companies to calculate their
non-GAAP measures.
About The Peck Company Holdings,
Inc.
Headquartered in South Burlington, VT, The Peck Company
Holdings, Inc. is a 2nd-generation family business founded in 1972
and rooted in values that align people, purpose, and profitability.
Ranked by Solar Power World as one of the leading commercial solar
contractors in the Northeastern United States, the Company provides
EPC services to solar energy customers for projects ranging in size
from several kilowatts for residential properties to multi-megawatt
systems for large commercial and utility scale projects. The
Company has installed over 125 megawatts worth of solar systems
since it started installing solar in 2012 and continues its focus
on profitable growth opportunities. Please visit
www.peckcompany.com for additional information.
Forward Looking
Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, as amended. Words or phrases such as
"may," "should," "expects," "could," "intends," "plans,"
"anticipates," "estimates," "believes," "forecasts," "predicts" or
other similar expressions are intended to identify forward-looking
statements, which include, without limitation, earnings forecasts,
effective tax rate, statements relating to our business strategy
and statements of expectations, beliefs, future plans and
strategies and anticipated developments concerning our industry,
business, operations and financial performance and condition.
The forward-looking statements included in this press release
are based on our current expectations, projections, estimates and
assumptions. These statements are only predictions, not guarantees.
Such forward-looking statements are subject to numerous risks and
uncertainties that are difficult to predict. These risks and
uncertainties may cause actual results to differ materially from
what is forecast in such forward-looking statements, and include,
without limitation, the risk factors described from time to time in
our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K.
All forward-looking statements included in this press release
are based on information currently available to us, and we assume
no obligation to update any forward-looking statement except as may
be required by law.
The Peck Company Holdings,
Inc.
Condensed Balance Sheets
(Unaudited)
March 31, 2020 and December 31,
2019
March 31, 2020
December 31, 2019
Assets
Current Assets:
Cash
$
56,548
$
95,930
Accounts receivable, net of allowance
7,127,680
7,294,605
Costs and estimated earnings in excess of
billings
1,470,076
1,272,372
Other current assets
139,048
201,326
Total current assets
8,793,352
8,864,233
Property and equipment:
Building and improvements
672,727
672,727
Vehicles
1,283,364
1,283,364
Tools and equipment
517,602
517,602
Solar arrays
6,386,025
6,386,025
8,859,718
8,859,718
Less accumulated depreciation
(2,348,019
)
(2,193,007
)
6,511,911
6,666,711
Other Assets:
Captive insurance investment
198,105
140,875
Total assets
$
15,503,156
$
15,671,819
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable, includes bank overdrafts
of $631,936 and $1,496,695 at March 31, 2020 and December 31, 2019,
respectively
$
2,496,275
$
4,274,517
Accrued expenses
138,125
119,211
Billings in excess of costs and estimated
earnings on uncompleted contracts
287,451
126,026
Due to stockholders
51,315
342,718
Line of credit
5,622,691
3,185,041
Current portion of deferred
compensation
27,880
27,880
Current portion of long-term debt
376,814
426,254
Total current liabilities
9,000,551
8,501,647
Long-term liabilities:
Deferred compensation, net of current
portion
81,133
88,883
Deferred tax liability
955,420
1,098,481
Long-term debt, net of current portion
1,881,923
1,966,047
Total liabilities
11,919,027
11,655,058
Commitments and Contingencies (Note 9)
Stockholders’ equity:
Preferred stock – 0.0001 par value
1,000,000 shares authorized, 0 issued and outstanding
-
-
Common stock – 0.0001 par value 49,000,000
shares authorized, 5,298,159 issued and outstanding as of March 31,
2020 and December 31, 2019, respectively
529
529
Additional paid-in capital
412,356
412,356
Retained earnings
3,171,244
3,603,876
Total Stockholders’ equity
3,584,129
4,016,761
Total liabilities and stockholders’
equity
$
15,503,156
$
15,671,819
The Peck Company Holdings,
Inc.
Condensed Statements of
Operations (Unaudited)
For the three months ended March
31, 2020 and 2019
Three Months ended
March 31,
2020
2019
Earned revenue
$
3,984,680
$
3,850,477
Cost of earned revenue
3,668,167
2,963,450
Gross profit
316,513
887,027
Warehousing and other operating
expenses
192,942
207,507
General and administrative expenses
617,748
257,709
Total operating expenses
810,690
456,216
Operating (loss) income
(494,177
)
421,811
Other expenses
Interest expense
(80,766
)
(44,659
)
Income (loss) before income taxes
(574,943
)
377,152
(Benefit) provision for income taxes
(142,311
)
500
Net (loss) income
$
(432,632
)
$
376,652
Proforma information
Net income
$
377,152
Income tax expense
104,547
$
272,605
Net (loss) income per share:
Weighted average shares outstanding
Basic
5,298,159
3,234,501
Diluted
5,298,159
3,234,501
Basic
$
(0.08
)
$
0.12
Diluted
$
(0.08
)
$
0.12
The Peck Company Holdings,
Inc.
Condensed Statements of Cash
Flows (Unaudited)
For the Three Months Ended March
31, 2020 and 2019
2020
2019
Cash flows from operating activities
Net (loss) income
$
(432,632
)
$
376,652
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation
155,012
150,483
Deferred finance charge amortization
1,535
-
Deferred tax benefit
(143,061
)
-
Changes in operating assets and
liabilities:
Accounts receivable
166,925
(585,222
)
Other current assets
62,278
-
Costs and estimated earnings in excess of
billings
(197,704
)
-
Accounts payable
(1,778,242
)
136,232
Accrued expenses
18,914
(2,025
)
Billings in excess of costs and estimated
earnings on uncompleted contracts
161,425
-
Deferred compensation
(7,750
)
(13.376
)
Net cash (used in) provided by operating
activities
(1,993,300
)
62,744
Cash flows from investing activities:
Purchase of solar arrays and equipment
-
(18,798
)
Investment in captive insurance
(57,230
)
(58,215
)
Net cash used in investing activities
(57,230
)
(77,013
)
Cash flows from financing activities:
Net borrowings on line of credit
2,437,650
317,568
Payments of long-term debt
(135,099
)
(124,428
)
Payments to stockholders
(291,403
)
(112,968
)
Stockholder distributions paid
-
(190,199
)
Net cash provided by (used in) financing
activities
2,011,148
(110,027
)
Net decrease in cash
(39,382
)
(124,296
)
Cash, beginning of period
95,930
313,217
Cash, end of period
$
56,548
$
188,921
Supplemental disclosure of cash flow
information
Cash paid during the year for:
Interest
$
79,231
$
44,659
Income taxes
366
250
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200514005923/en/
Michael d’Amato IR@peckcompany.com p802-264-2040
Peck (NASDAQ:PECK)
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