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 third quarter
ended September 30, 2022. Results reflect performance of the
Hawaiian operations; future results will reflect the SUNation
acquisition that closed last week.
Pineapple CEO Kyle Udseth commented, “The SUNation acquisition
fundamentally transforms Pineapple, launching us on our path of
intended growth. SUNation triples our current revenue run rate, and
opens a large new geography for us in the Northeast U.S. We now
have an even stronger team, an expanded service offering, and are
starting to show our potential for national scale. As important,
this deal demonstrates our ability to execute our
acquisition-driven growth strategy. With each new acquisition, we
fortify our track record, making subsequent deals easier to source
and close, and making capital more accessible at lower cost. We
believe the SUNation deal establishes our ‘street credibility’,
showing the world that Pineapple is an emerging force in our
industry.”
Pineapple CFO Eric Ingvaldson added, “Third quarter results
demonstrate a solid foundation upon which we intend to grow.
Revenue and gross profit grew sequentially, and new incoming orders
outpaced our ability to install, driving robust backlog growth.
Battery storage, which is a key incremental offering that adds
revenue and margin per install, is seeing high demand. We had an
90% attach rate in the third quarter and anticipate ongoing high
demand in the quarters ahead due to the compelling value
proposition of stable reliable power.”
Third Quarter Business Highlights
- Solid performance at our Hawaii operations (Q3 2022 vs
Q3 2021)
- kW sold +105%
- Battery capacity sold +107%
- Battery attachment rate of 90%
- kW installed +37%
- Battery capacity installed +52%
- Customer acquisition cost per watt – 62%
- Revenue, gross profit, and operating expense
improvement in the third quarter of 2022 resulted in a 43%
improvement in adjusted EBITDA from the second quarter of
2022
Subsequent Events
- Appointed Eric Ingvaldson as Chief Financial
Officer
On October 10, 2022, Eric Ingvaldson took the helm of all
financial operations at Pineapple. Mr. Ingvaldson came to the
Company with a track record of driving financial success at
multiple companies. His experience includes “Big 4” accounting, as
well as audit and corporate finance roles at large public
companies, middle market companies and early-stage start-ups.
- Transformative acquisition of New York-based solar
installer SUNation
On November 9, 2022, Pineapple closed the acquisition of
SUNation, a 19-year-old company in Long Island, New York that
installs solar and battery energy storage systems for residential
and small commercial customers. SUNation generated revenue of $48
million in the trailing twelve months ended September 30, 2022. The
acquisition was valued at approximately $21.9 million. SUNation is
a transformative acquisition for Pineapple, helping move toward a
national service footprint, creating a substantial positive
financial impact, and fortifying the team with an outstanding group
of solar professionals.
Third Quarter 2022
Results1
|
3rd Quarter 2022 |
2nd Quarter 2022 |
3rd Quarter 2021 |
Revenue |
$7,709,062 |
$5,890,636 |
$25,417 |
Gross Profit |
$2,013,742 |
$1,276,262 |
$25,417 |
Operating Expense |
$4,414,721 |
$4,473,164 |
$1,144,986 |
Net (Loss) Income |
$(2,519,996) |
$1,442,652 |
$(1,395,263) |
Adjusted EBITDA2 |
$(1,050,722) |
$(1,834,584) |
($216,311) |
Cash, restricted cash & investments3 |
$10,236,453 |
$17,863,301 |
$66,624 |
Diluted Earnings (Loss) per share |
$(0.34) |
$0.15 |
$(0.45) |
All figures are for the third quarter of 2022 unless noted
otherwise. Because Pineapple had no meaningful operations in the
third quarter of 2021, all comparisons are sequential with the
second quarter of 2022, unless noted otherwise.
Total revenue of $7.7 million was up 31% sequentially, driven by
an increased pace of installation and increasing penetration of
battery storage add-on sales.
Gross profit of $2.0 million was up 58% sequentially, driven by
the increase in revenue and improved margins from battery storage
add-on sales.
Adjusted EBITDA loss of $(1.05) million was reduced by 43%
sequentially, due to higher revenue, higher gross margins, and a
slight improvement in operating expenses.
________________________________
1 Includes ongoing Pineapple operations and legacy CSI
operations that have not yet been divested.2 Adjusted EBITDA is a
non-GAAP financial measure. See “Non-GAAP Financial Measures” and
the reconciliations in this release for further information.3
Includes restricted cash and liquid investments of $4,578,099 as of
September 30, 2022 and $14,368,066 as of June 30, 2022, earmarked
for payment of contingent value rights.
Outlook
Fourth quarter results will reflect approximately seven weeks of
contribution from SUNation. SUNation’s revenue run rate is
approximately double that of Pineapple’s Hawaii operations with
similar margins.
About Pineapple Energy
Pineapple 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 Statements
This 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 the expected financial impact of, and results
following, the SUNation acquisition. 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.comThe Blueshirt GroupGary
Dvorchak, CFAManaging Director+1 (323)
240-5796Gary@blueshirtgroup.com |
|
PINEAPPLE ENERGY INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
|
|
|
|
ASSETS |
|
September 30 |
|
December 31 |
|
2022 |
|
2021 |
CURRENT
ASSETS: |
|
|
|
|
|
Cash and cash equivalents |
$ |
5,658,354 |
|
|
$ |
18,966 |
|
Restricted cash and cash equivalents |
|
1,923,716 |
|
|
|
— |
|
Investments |
|
2,654,383 |
|
|
|
— |
|
Trade accounts receivable, less allowance for |
|
|
|
|
|
doubtful accounts of $70,000 and $0, respectively |
|
3,938,002 |
|
|
|
— |
|
Inventories, net |
|
1,793,093 |
|
|
|
— |
|
Prepaid income taxes |
|
14,671 |
|
|
|
— |
|
Other current assets |
|
1,223,013 |
|
|
|
— |
|
TOTAL CURRENT ASSETS |
|
17,205,232 |
|
|
|
18,966 |
|
PROPERTY, PLANT
AND EQUIPMENT, net |
|
341,518 |
|
|
|
— |
|
OTHER ASSETS: |
|
|
|
|
|
Investments |
|
250,000 |
|
|
|
— |
|
Goodwill |
|
16,566,853 |
|
|
|
— |
|
Operating lease right of use asset |
|
63,684 |
|
|
|
— |
|
Intangible assets, net |
|
16,777,225 |
|
|
|
2,780,270 |
|
Other assets, net |
|
44,843 |
|
|
|
— |
|
TOTAL OTHER ASSETS |
|
33,702,605 |
|
|
|
2,780,270 |
|
TOTAL ASSETS |
$ |
51,249,355 |
|
|
$ |
2,799,236 |
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
CURRENT
LIABILITIES: |
|
|
|
|
|
Accounts payable |
$ |
2,404,964 |
|
|
$ |
2,233,371 |
|
Accrued compensation and benefits |
|
458,177 |
|
|
|
307,828 |
|
Operating lease liability |
|
53,879 |
|
|
|
— |
|
Other accrued liabilities |
|
96,631 |
|
|
|
— |
|
Working capital note payable |
|
— |
|
|
|
350,000 |
|
Customer deposits |
|
4,992,632 |
|
|
|
— |
|
Deferred revenue |
|
663,480 |
|
|
|
— |
|
TOTAL CURRENT LIABILITIES |
|
8,669,763 |
|
|
|
2,891,199 |
|
LONG-TERM
LIABILITIES: |
|
|
|
|
|
Loan payable and related interest |
|
1,257,038 |
|
|
|
6,194,931 |
|
Related party payables |
|
— |
|
|
|
2,350,000 |
|
Operating lease liability |
|
16,632 |
|
|
|
— |
|
Deferred revenue |
|
327,189 |
|
|
|
— |
|
Contingent value rights |
|
10,743,224 |
|
|
|
— |
|
TOTAL LONG-TERM LIABILITIES |
|
12,344,083 |
|
|
|
8,544,931 |
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY |
|
|
|
|
|
Convertible preferred stock, par value $1.00 per share; 3,000,000
shares authorized; 32,000 and 0 shares issued and outstanding,
respectively |
|
32,000 |
|
|
|
— |
|
Common stock, par value $0.05 per share; 37,500,000 shares
authorized; |
|
|
|
|
|
7,435,586 and 3,074,998 shares issued and outstanding,
respectively |
|
371,779 |
|
|
|
153,750 |
|
Additional paid-in capital |
|
41,562,362 |
|
|
|
(53,750 |
) |
Accumulated deficit |
|
(11,697,872 |
) |
|
|
(8,736,894 |
) |
Accumulated other comprehensive loss |
|
(32,760 |
) |
|
|
— |
|
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) |
|
30,235,509 |
|
|
|
(8,636,894 |
) |
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY |
$ |
51,249,355 |
|
|
$ |
2,799,236 |
|
PINEAPPLE ENERGY INC. |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Sales |
$ |
7,709,062 |
|
|
$ |
25,417 |
|
|
$ |
13,918,498 |
|
|
$ |
25,417 |
|
Cost of sales |
|
5,695,320 |
|
|
|
— |
|
|
|
10,533,362 |
|
|
|
— |
|
Gross profit |
|
2,013,742 |
|
|
|
25,417 |
|
|
|
3,385,136 |
|
|
|
25,417 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses |
|
3,122,976 |
|
|
|
241,728 |
|
|
|
6,653,796 |
|
|
|
697,985 |
|
Amortization expense |
|
1,026,362 |
|
|
|
357,324 |
|
|
|
2,410,045 |
|
|
|
1,071,971 |
|
Transaction costs |
|
265,383 |
|
|
|
545,934 |
|
|
|
1,447,284 |
|
|
|
1,977,436 |
|
Total operating expenses |
|
4,414,721 |
|
|
|
1,144,986 |
|
|
|
10,511,125 |
|
|
|
3,747,392 |
|
Operating loss |
|
(2,400,979 |
) |
|
|
(1,119,569 |
) |
|
|
(7,125,989 |
) |
|
|
(3,721,975 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Investment and other income |
|
8,215 |
|
|
|
— |
|
|
|
106,974 |
|
|
|
— |
|
Gain on sale of assets |
|
14,573 |
|
|
|
— |
|
|
|
1,229,133 |
|
|
|
— |
|
Fair value remeasurement of earnout consideration |
|
13,000 |
|
|
|
— |
|
|
|
4,684,000 |
|
|
|
— |
|
Fair value remeasurement of contingent value rights |
|
— |
|
|
|
— |
|
|
|
(1,214,560 |
) |
|
|
— |
|
Interest and other expense |
|
(154,805 |
) |
|
|
(275,694 |
) |
|
|
(640,536 |
) |
|
|
(1,004,964 |
) |
Other income (expense), net |
|
(119,017 |
) |
|
|
(275,694 |
) |
|
|
4,165,011 |
|
|
|
(1,004,964 |
) |
Net loss before income
taxes |
|
(2,519,996 |
) |
|
|
(1,395,263 |
) |
|
|
(2,960,978 |
) |
|
|
(4,726,939 |
) |
Income tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Net loss |
|
(2,519,996 |
) |
|
|
(1,395,263 |
) |
|
|
(2,960,978 |
) |
|
|
(4,726,939 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive gain
(loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on available-for-sale securities |
|
38 |
|
|
|
— |
|
|
|
(32,760 |
) |
|
|
— |
|
Total other comprehensive gain
(loss) |
|
38 |
|
|
|
— |
|
|
|
(32,760 |
) |
|
|
— |
|
Comprehensive loss |
$ |
(2,519,958 |
) |
|
$ |
(1,395,263 |
) |
|
$ |
(2,993,738 |
) |
|
$ |
(4,726,939 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net loss per share: |
$ |
(0.34 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.54 |
) |
Diluted net loss per
share: |
$ |
(0.34 |
) |
|
$ |
(0.45 |
) |
|
$ |
(0.49 |
) |
|
$ |
(1.54 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Basic Shares
Outstanding |
|
7,435,586 |
|
|
|
3,074,998 |
|
|
|
6,049,611 |
|
|
|
3,074,998 |
|
Weighted Average Dilutive
Shares Outstanding |
|
7,435,586 |
|
|
|
3,074,998 |
|
|
|
6,049,611 |
|
|
|
3,074,998 |
|
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures that
differ from financial measures calculated in accordance with U.S.
generally accepted accounting principles (“GAAP”).
Adjusted EBITDA is a non-GAAP financial measure provided in this
release, and is net (loss) income, calculated in accordance with
GAAP, adjusted for interest, income taxes, depreciation,
amortization, transaction costs, 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 Net (Loss) Income to Adjusted EBITDA:
|
Three Months Ended September 30 |
|
Three Months Ended June 30 |
|
2022 |
|
2021 |
|
2022 |
Net (Loss) Income |
$ |
(2,519,996 |
) |
|
$ |
(1,395,263 |
) |
|
$ |
1,442,652 |
|
Interest expense |
|
151,025 |
|
|
|
275,694 |
|
|
|
131,568 |
|
Interest income |
|
(5,960 |
) |
|
|
- |
|
|
|
(5,143 |
) |
Income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
Depreciation |
|
45,464 |
|
|
|
- |
|
|
|
27,723 |
|
Amortization |
|
1,026,362 |
|
|
|
357,324 |
|
|
|
1,026,220 |
|
Transaction costs |
|
265,383 |
|
|
|
545,934 |
|
|
|
213,396 |
|
Fair value remeasurement of earnout consideration |
|
(13,000 |
) |
|
|
- |
|
|
|
(4,671,000 |
) |
Adjusted
EBITDA |
$ |
(1,050,722 |
) |
|
$ |
(216,311 |
) |
|
$ |
(1,834,584 |
) |
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