2020 and Recent Highlights
- Added approximately 29,000 customers in 2020, bringing total
customer count to 107,500 as of December 31, 2020;
- Reduced adjusted operating expense per weighted average
customer by 9.5% in 2020;
- Met all 2020 guidance targets despite unprecedented public
health and macro-economic challenges;
- Recently closed a $189 million asset-backed securitization at
the strongest terms the industry has seen; and
- Entered into a definitive merger agreement to acquire Lennar's
residential solar platform SunStreet, accelerating Sunnova's growth
and increasing Sunnova's operating leverage.
Sunnova Energy International Inc. ("Sunnova") (NYSE: NOVA), one
of the leading U.S. residential solar and storage service
providers, today announced financial results for the fourth quarter
and full year ended December 31, 2020.
"We are incredibly proud of our fourth quarter and full year
results as we skillfully navigated the challenges presented by the
global pandemic," said William J. (John) Berger, Chief Executive
Officer of Sunnova. "Despite an incredibly challenging year, in
2020 we achieved a 57% customer growth rate, saw record levels of
demand for our energy storage offerings, expanded our strategic
technology partnerships, strengthened our differentiated dealer
base, and met our operational and financial targets.”
"As we look ahead to 2021 and beyond, we are excited about the
growth and tailwinds our industry is experiencing. Sunnova is well
positioned to navigate the current market environment and to lead a
decarbonized and decentralized energy transition while providing
our customers with a better energy service at a better price."
Recent Business Development
On February 17, 2021, Sunnova and Len X, LLC, a technology
focused subsidiary of Lennar Corporation ("Lennar") (NYSE: LEN and
LEN.B), one of the nation's leading homebuilders, announced they
have entered into a definitive agreement under which Sunnova will
acquire Lennar's residential solar platform ("SunStreet"). In
addition to Sunnova's acquisition of SunStreet, Sunnova will become
Lennar's exclusive residential solar and storage service provider
for new home communities with solar across the country.
"We are thrilled to have announced our plans to acquire
SunStreet and for Sunnova to become Lennar's exclusive residential
solar and storage service provider," added Mr. Berger. "Our
acquisition of SunStreet will increase customer growth and further
scale our business, while our relationship with Lennar will
ultimately position Sunnova as a market leader in the development
and management of microgrids for communities across the U.S."
"This transformational opportunity is structured to align the
strategic and economic interests of both companies with a focus on
unlocking Sunnova and SunStreet's full growth potential while
enhancing the lives of homeowners."
The acquisition of SunStreet is expected to be completed during
the second quarter of 2021, subject to regulatory approvals and
other customary closing conditions.
Fourth Quarter and Full Year 2020 Results
Revenue increased to $38.0 million, or by $4.4 million, in the
three months ended December 31, 2020 compared to the three months
ended December 31, 2019. Revenue increased to $160.8 million, or by
$29.3 million, in the year ended December 31, 2020 compared to the
year ended December 31, 2019. These increases were primarily the
result of an increase in the number of customers served.
Total operating expense, net increased to $56.0 million, or by
$13.2 million, in the three months ended December 31, 2020 compared
to the three months ended December 31, 2019. This increase was
primarily the result of an increase in the number of customers
served and greater depreciation expense.
Total operating expense, net increased to $196.6 million, or by
$42.8 million, in the year ended December 31, 2020 compared to the
year ended December 31, 2019. This increase was primarily the
result of an increase in the number of customers served, greater
depreciation expense, and higher period-over-period general and
administrative expenses due to the hiring of personnel to support
growth.
Adjusted Operating Expense increased to $28.0 million, or by
$5.2 million, in the three months ended December 31, 2020 compared
to the three months ended December 31, 2019. This increase was
primarily the result of an increase in the number of customers
served.
Adjusted Operating Expense increased to $101.2 million, or by
$18.0 million, in the year ended December 31, 2020 compared to the
year ended December 31, 2019. This increase was primarily the
result of an increase in the number of customers served and higher
period-over-period general and administrative expenses due to the
hiring of personnel to support growth.
Sunnova incurred a net loss of $128.8 million for the three
months ended December 31, 2020 compared to a net loss of $13.8
million for the three months ended December 31, 2019. Sunnova
incurred a net loss of $307.8 million for the year ended December
31, 2020 compared to a net loss of $133.4 million for the year
ended December 31, 2019. These larger net losses were primarily the
result of a loss on the extinguishment of debt from the conversion
of convertible notes for common stock and higher net interest
expense.
Adjusted EBITDA was $10.0 million for the three months ended
December 31, 2020 compared to $10.8 million for the three months
ended December 31, 2019, a decrease of $0.8 million. Customer
principal (net of amounts recorded in revenue) and interest
payments received from solar loans increased to $9.5 million and
$6.4 million, respectively, for the three months ended December 31,
2020, or by $2.4 million and $2.9 million, respectively, compared
to the three months ended December 31, 2019. Adjusted EBITDA was
$59.6 million for the year ended December 31, 2020 compared to
$48.3 million for the year ended December 31, 2019, an increase of
$11.3 million. Customer principal (net of amounts recorded in
revenue) and interest payments received from solar loans increased
to $32.6 million and $23.2 million, respectively, for the year
ended December 31, 2020, or by $12.5 million and $11.7 million,
respectively, compared to the year ended December 31, 2019. These
overall increases were primarily driven by customer growth
increasing at a faster rate than expenses.
Net cash used in operating activities was $29.7 million for the
three months ended December 31, 2020 compared to $95.7 million for
the three months ended December 31, 2019. This decrease was
primarily the result of a decrease in purchases of inventory and
prepaid inventory with net outflows of $19.5 million in 2020
compared to $110.4 million in 2019. This decrease was offset by an
increase in realized loss on interest rate swaps of $12.1
million.
Net cash used in operating activities was $131.5 million for the
year ended December 31, 2020 compared to $170.3 million for the
year ended December 31, 2019. This decrease was primarily the
result of a decrease in purchases of inventory and prepaid
inventory with net outflows of $41.5 million in 2020 compared to
$118.5 million in 2019 and a decrease in payments to dealers for
exclusivity and other bonus arrangements with net outflows of $25.8
million in 2020 compared to $31.7 million in 2019. These decreases
were offset by an increase in realized loss on interest rate swaps
of $38.1 million.
Adjusted Operating Cash Flow was $10.2 million in the three
months ended December 31, 2020 compared to $19.3 million for the
three months ended December 31, 2019. This decrease was primarily
driven by higher working capital requirements in the fourth quarter
of 2020.
Adjusted Operating Cash Flow was $10.7 million in the year ended
December 31, 2020 compared to $6.4 million for the year ended
December 31, 2019. This increase was primarily the result of
customer growth increasing at a faster rate than cash
expenditures.
Liquidity & Capital Resources
As of December 31, 2020, Sunnova had total cash of $377.9
million, including restricted and unrestricted cash.
2021 Guidance
Management increases full-year 2021 guidance for customer
additions, Adjusted EBITDA, and Recurring Operating Cash Flow.
- Customer additions increases from 42,000 - 48,000 to 55,000 -
58,000;
- Adjusted EBITDA increases from $77 million - $83 million to $80
million - $85 million;
- Customer principal payments received from solar loans, net of
amounts recorded in revenue of $57 million - $63 million
reaffirmed;
- Customer interest payments received from solar loans of $28
million - $34 million reaffirmed;
- Adjusted Operating Cash Flow of $20 million - $30 million
reaffirmed; and
- Recurring Operating Cash Flow increases from $(15) million - $5
million to $(5) million - $5 million.
Non-GAAP Financial Measures
We present our operating results in accordance with accounting
principles generally accepted in the U.S. ("GAAP"). We believe
certain financial measures, such as Adjusted EBITDA, Adjusted
Operating Expense, Adjusted Operating Cash Flow, and Recurring
Operating Cash Flow, which are non-GAAP measures, provide users of
our financial statements with supplemental information that may be
useful in evaluating our business. We use Adjusted EBITDA and
Adjusted Operating Expense as performance measures, and believe
investors and securities analysts also use Adjusted EBITDA and
Adjusted Operating Expense in evaluating our performance. While
Adjusted EBITDA effectively captures the operating performance of
our leases and PPAs, it only reflects the service portion of the
operating performance under our loan agreements. Therefore, we
separately show customer P&I payments. Adjusted EBITDA is also
used by our management for internal planning purposes, including
our consolidated operating budget, and by our board of directors in
setting performance-based compensation targets. We use Adjusted
Operating Cash Flow and Recurring Operating Cash Flow as liquidity
measures and believe Adjusted Operating Cash Flow and Recurring
Operating Cash Flow are supplemental financial measures useful to
management, analysts, investors, lenders and rating agencies as an
indicator of our ability to internally fund origination activities,
service or incur additional debt and service our contractual
obligations. We believe investors and analysts will use Adjusted
Operating Cash Flow and Recurring Operating Cash Flow to evaluate
our liquidity and ability to service our contractual obligations.
Further, we believe that Recurring Operating Cash Flow allows
investors to analyze our ability to service the debt and customer
obligations associated with our in-service assets. However,
Adjusted Operating Cash Flow and Recurring Operating Cash Flow have
limitations as analytical tools because they do not account for all
future expenditures and financial obligations of the business or
reflect unforeseen circumstances that may impact our future cash
flows, all of which could have a material effect on our financial
condition and results of operations. We believe that such non-GAAP
measures, when read in conjunction with our operating results
presented under GAAP, can be used both to better assess our
business from period to period and to better assess our business
against other companies in our industry, without regard to
financing methods, historical cost basis or capital structure. Our
calculation of these non-GAAP financial measures may differ from
similarly-titled non-GAAP measures, if any, reported by other
companies. In addition, other companies may not publish these or
similar measures. Such non-GAAP measures should be considered as a
supplement to, and not as a substitute for, financial measures
prepared in accordance with GAAP. Sunnova is unable to reconcile
projected Adjusted EBITDA, Adjusted Operating Expense, Adjusted
Operating Cash Flow, and Recurring Operating Cash Flow to the most
comparable financial measures calculated in accordance with GAAP
because of fluctuations in interest rates and their impact on our
unrealized and realized interest rate hedge gains or losses.
Sunnova provides a range for the forecasts of Adjusted EBITDA,
Adjusted Operating Expense, Adjusted Operating Cash Flow, and
Recurring Operating Cash Flow to allow for the variability in the
timing of cash receipts and disbursements, customer utilization of
our assets, and the impact on the related reconciling items, many
of which interplay with each other. Therefore, the reconciliation
of projected Adjusted EBITDA, Adjusted Operating Expense, Adjusted
Operating Cash Flow, and Recurring Operating Cash Flow to projected
net income (loss), total operating expense, or net cash provided by
(used in) operating activities, as the case may be, is not
available without unreasonable effort.
Fourth Quarter and Full Year 2020 Financial and Operational
Results Conference Call Information
Sunnova is hosting a conference call for analysts and investors
to discuss its fourth quarter and full year 2020 results at 8:30
a.m. Eastern Time, on February 25, 2021. To register for this
conference call, please use the link
http://www.directeventreg.com/registration/event/5276028.
After registering, a confirmation will be sent through email,
including dial-in details and unique conference call codes for
entry. To ensure you are connected for the full call we suggest
registering at a minimum 10 minutes before the start of the call. A
replay will be available two hours after the call and can be
accessed by dialing 800-585-8367, or for international callers,
416-621-4642. The conference ID for the live call and the replay is
5276028. The replay will be available until March 4, 2021.
Interested investors and other parties may also listen to a
simultaneous webcast of the conference call by logging onto the
Investor Relations section of Sunnova’s website at
www.sunnova.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements generally relate to future
events or Sunnova’s future financial or operating performance. In
some cases, you can identify forward-looking statements because
they contain words such as "may," "will," "should," "expects,"
"plans," "anticipates," "going to," "could," "intends," "target,"
"projects," "contemplates," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of these words or other
similar terms or expressions that concern Sunnova’s expectations,
strategy, priorities, plans or intentions. Forward-looking
statements in this release include, but are not limited to,
statements regarding our liquidity position and its ability to
support our growth, our level of growth, our ability to handle
macro challenges, our ability to manage costs, the ability to
achieve our 2020 and 2021 operational and financial targets, and
references to future rate of customer and dealer additions,
Adjusted EBITDA, customer P&I payments from solar loans,
Recurring Operating Cash Flow and Adjusted Operating Cash Flow.
Similarly, statements herein that describe the acquisition,
including its financial and operational impact, impacts on
shareholder value or customer growth, the timing of the
acquisition, and other statements of the parties’ or management's
plans, expectations, objectives, projections, beliefs, intentions,
goals, and statements about the benefits of the acquisition,
statements that describe the strategic partnership, including its
financial and operational impact, the terms of the strategic
partnership, including exclusivity and duration, new energy
technologies, any commitments with respect to tax equity, the
ownership of Sunnova by LENX, and other statements that are not
historical facts are also forward-looking statements. It is
uncertain whether any of the events anticipated by the
forward-looking statements will transpire or occur, or if any of
them do, what impact they will have on the results of operations
and financial condition of Sunnova, SunStreet, Lennar, LENX or the
price of Sunnova stock or Lennar stock. Sunnova’s expectations and
beliefs regarding these matters may not materialize, and actual
results in future periods are subject to risks and uncertainties
that could cause actual results to differ materially from those
projected, including risks regarding our ability to forecast our
business due to our limited operating history, the effects of the
coronavirus pandemic on our business and operations, results of
operations and financial position, our competition, fluctuations in
the solar and home-building markets, availability of capital, our
ability to attract and retain dealers and customers and manage our
dealer and strategic partner relationships, the unpredictability of
the commercial success of Sunnova's, SunStreet's, Lennar's or
LENX's respective businesses or operations; potential adverse
reactions or changes to business or employee relationships,
including those resulting from the announcement or completion of
the acquisition; the risk that any announcements relating to the
acquisition could have adverse effects on the market price of
common stock of Sunnova or Lennar; the ability of the parties to
consummate the acquisition on a timely basis or at all and the
satisfaction of the conditions precedent to consummation of the
acquisition, including, but not limited to, negotiation and
delivery of the strategic partnership agreements and other
agreements, completion of satisfactory diligence and regulatory
approvals; the ability of the parties to negotiate the terms of the
strategic partnership and other agreements or at all; the
favorability to either party of the terms of the strategic
partnership; the possibility that the acquisition may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; the ability to successfully integrate
the businesses; the ability of Sunnova to implement its plans,
forecasts and other expectations with respect to SunStreet's
business or the strategic partnership after the completion of the
acquisition and realize expected benefits and the diversion of
management's attention from ongoing business operations and
opportunities. The forward-looking statements contained in this
release are also subject to other risks and uncertainties,
including those more fully described in Sunnova’s filings with the
Securities and Exchange Commission, including Sunnova’s annual
report on Form 10-K for the year ended December 31, 2020. The
forward-looking statements in this release are based on information
available to Sunnova as of the date hereof, and Sunnova disclaims
any obligation to update any forward-looking statements, except as
required by law.
About Sunnova
Sunnova Energy International Inc. (NYSE: NOVA) is a leading
residential solar and energy storage service provider with
customers across the U.S. and its territories. Sunnova's goal is to
be the source of clean, affordable and reliable energy with a
simple mission: to power energy independence so that homeowners
have the freedom to live life uninterruptedTM.
SUNNOVA ENERGY INTERNATIONAL
INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
amounts and share par values)
As of December 31,
2020
2019
Assets
Current assets:
Cash
$
209,859
$
83,485
Accounts receivable—trade, net
10,243
10,672
Accounts receivable—other
21,378
6,147
Other current assets, net of allowance of
$707 and $112 as of December 31, 2020 and 2019, respectively
215,175
174,016
Total current assets
456,655
274,320
Property and equipment, net
2,323,169
1,745,060
Customer notes receivable, net of
allowance of $16,961 and $979 as of December 31, 2020 and 2019,
respectively
513,386
297,975
Other assets
294,372
169,712
Total assets (1)
$
3,587,582
$
2,487,067
Liabilities, Redeemable
Noncontrolling Interests and Equity
Current liabilities:
Accounts payable
$
39,908
$
36,190
Accrued expenses
34,049
39,544
Current portion of long-term debt
110,883
97,464
Other current liabilities
26,013
21,804
Total current liabilities
210,853
195,002
Long-term debt, net
1,924,653
1,346,419
Other long-term liabilities
171,395
127,406
Total liabilities (1)
2,306,901
1,668,827
Redeemable noncontrolling interests
136,124
127,129
Stockholders' equity:
Common stock, 100,412,036 and 83,980,885
shares issued as of December 31, 2020 and 2019, respectively, at
$0.0001 par value
10
8
Additional paid-in capital—common
stock
1,482,716
1,007,751
Accumulated deficit
(530,995)
(361,824)
Total stockholders' equity
951,731
645,935
Noncontrolling interests
192,826
45,176
Total equity
1,144,557
691,111
Total liabilities, redeemable
noncontrolling interests and equity
$
3,587,582
$
2,487,067
(1) The consolidated assets as of December 31, 2020 and 2019
include $1,471,796 and $790,211, respectively, of assets of
variable interest entities ("VIEs") that can only be used to settle
obligations of the VIEs. These assets include cash of $13,407 and
$7,347 as of December 31, 2020 and 2019, respectively; accounts
receivable—trade, net of $2,953 and $1,460 as of December 31, 2020
and 2019, respectively; accounts receivable—other of $583 and $4 as
of December 31, 2020 and 2019, respectively; other current assets
of $182,646 and $47,606 as of December 31, 2020 and 2019,
respectively; property and equipment, net of $1,257,953 and
$726,415 as of December 31, 2020 and 2019, respectively; and other
assets of $14,254 and $7,379 as of December 31, 2020 and 2019,
respectively. The consolidated liabilities as of December 31, 2020
and 2019 include $32,345 and $13,440, respectively, of liabilities
of VIEs whose creditors have no recourse to Sunnova Energy
International Inc. These liabilities include accounts payable of
$2,744 and $1,926 as of December 31, 2020 and 2019, respectively;
accrued expenses of $827 and $35 as of December 31, 2020 and 2019,
respectively; other current liabilities of $3,284 and $612 as of
December 31, 2020 and 2019, respectively; and other long-term
liabilities of $25,490 and $10,867 as of December 31, 2020 and
2019, respectively.
SUNNOVA ENERGY INTERNATIONAL
INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except share
and per share amounts)
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Revenue
$
38,024
$
33,614
$
160,820
$
131,556
Operating expense:
Cost of revenue—depreciation
16,311
12,716
58,431
43,536
Cost of revenue—other
1,432
963
6,747
3,877
Operations and maintenance
7,699
2,120
16,313
8,588
General and administrative
30,573
27,002
115,148
97,986
Other operating income
(13)
(32)
(41)
(161)
Total operating expense, net
56,002
42,769
196,598
153,826
Operating loss
(17,978)
(9,155)
(35,778)
(22,270)
Interest expense, net
26,776
8,169
154,580
108,024
Interest expense, net—affiliates
—
—
—
4,098
Interest income
(6,442)
(3,615)
(23,741)
(12,483)
Loss on extinguishment of long-term debt,
net
92,051
—
142,772
—
Loss on extinguishment of long-term debt,
net—affiliates
—
—
—
10,645
Other (income) expense
(1,577)
53
(1,752)
880
Loss before income tax
(128,786)
(13,762)
(307,637)
(133,434)
Income tax expense
5
—
181
—
Net loss
(128,791)
(13,762)
(307,818)
(133,434)
Net income (loss) attributable to
redeemable noncontrolling interests and noncontrolling
interests
(37,021)
3,747
(55,534)
10,917
Net loss attributable to stockholders
(91,770)
(17,509)
(252,284)
(144,351)
Dividends earned on Series A convertible
preferred stock
—
—
—
(19,271)
Dividends earned on Series C convertible
preferred stock
—
—
—
(5,454)
Net loss attributable to common
stockholders—basic and diluted
$
(91,770)
$
(17,509)
$
(252,284)
$
(169,076)
Net loss per share attributable to common
stockholders—basic and diluted
$
(0.96)
$
(0.21)
$
(2.87)
$
(4.14)
Weighted average common shares
outstanding—basic and diluted
95,598,897
83,980,885
87,871,457
40,797,976
SUNNOVA ENERGY INTERNATIONAL
INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Year Ended December
31,
2020
2019
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss
$
(307,818)
$
(133,434)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
66,066
49,340
Impairment and loss on disposals, net
5,824
1,772
Amortization of deferred financing
costs
9,031
9,822
Amortization of debt discount
15,685
3,018
Non-cash effect of equity-based
compensation plans
10,873
9,235
Non-cash payment-in-kind interest on
loan—affiliates
—
2,716
Unrealized (gain) loss on derivatives
(13,768)
19,237
Unrealized (gain) loss on fair value
option instruments
(907)
150
Loss on extinguishment of long-term debt,
net
142,772
—
Loss on extinguishment of long-term debt,
net—affiliates
—
10,645
Other non-cash items
14,962
8,442
Changes in components of operating assets
and liabilities:
Accounts receivable
(4,297)
(9,349)
Other current assets
(24,256)
(131,741)
Other assets
(42,411)
(40,118)
Accounts payable
(1,141)
5,292
Accrued expenses
(4,504)
15,099
Other current liabilities
5,397
8,452
Long-term debt—paid-in-kind—affiliates
—
(719)
Other long-term liabilities
(2,974)
1,879
Net cash used in operating activities
(131,466)
(170,262)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property and equipment
(578,369)
(430,822)
Payments for investments and customer
notes receivable
(285,238)
(159,303)
Proceeds from customer notes
receivable
35,479
21,604
State utility rebates and tax credits
641
668
Other, net
(2,032)
(463)
Net cash used in investing activities
(829,519)
(568,316)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from long-term debt
1,651,765
883,360
Payments of long-term debt
(963,872)
(342,540)
Proceeds of long-term debt from
affiliates
—
15,000
Payments of long-term debt to
affiliates
—
(56,236)
Payments on notes payable
(4,981)
(4,672)
Payments of deferred financing costs
(24,084)
(12,110)
Payments of debt discounts
(3,374)
(1,084)
Proceeds from issuance of common stock,
net
152,277
164,452
Proceeds from equity component of debt
instrument, net
73,657
13,984
Proceeds from issuance of convertible
preferred stock, net
—
(2,510)
Contributions from redeemable
noncontrolling interests and noncontrolling interests
320,245
157,149
Distributions to redeemable noncontrolling
interests and noncontrolling interests
(6,527)
(7,559)
Payments of costs related to redeemable
noncontrolling interests and noncontrolling interests
(6,517)
(5,395)
Other, net
(2)
(16)
Net cash provided by financing
activities
1,188,587
801,823
Net increase in cash and restricted
cash
227,602
63,245
Cash and restricted cash at beginning of
period
150,291
87,046
Cash and restricted cash at end of
period
377,893
150,291
Restricted cash included in other current
assets
(73,020)
(10,474)
Restricted cash included in other
assets
(95,014)
(56,332)
Cash at end of period
$
209,859
$
83,485
Key Financial and Operational
Metrics
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
(in thousands)
Reconciliation of Net Loss to Adjusted
EBITDA:
Net loss
$
(128,791)
$
(13,762)
$
(307,818)
$
(133,434)
Interest expense, net
26,776
8,169
154,580
108,024
Interest expense, net—affiliates
—
—
—
4,098
Interest income
(6,442)
(3,615)
(23,741)
(12,483)
Income tax expense
5
—
181
—
Depreciation expense
18,255
14,353
66,066
49,340
Amortization expense
8
9
32
29
EBITDA
(90,189)
5,154
(110,700)
15,574
Non-cash compensation expense (1)
2,484
2,261
10,873
10,512
ARO accretion expense
609
454
2,186
1,443
Financing deal costs
948
133
4,454
1,161
Natural disaster losses and related
charges, net
—
—
31
54
IPO costs
—
—
—
3,804
Loss on unenforceable contracts
—
2,381
—
2,381
Loss on extinguishment of long-term debt,
net
92,051
—
142,772
—
Loss on extinguishment of long-term debt,
net—affiliates
—
—
—
10,645
Unrealized (gain) loss on fair value
option instruments
(742)
53
(907)
150
Realized (gain) loss on fair value option
instruments
(835)
—
(835)
730
Amortization of payments to dealers for
exclusivity and other bonus arrangements
585
328
1,820
583
Legal settlements
—
—
—
1,260
Provision for current expected credit
losses
3,145
—
7,969
—
Non-cash inventory impairment
1,934
—
1,934
—
Adjusted EBITDA
$
9,990
$
10,764
$
59,597
$
48,297
(1)
Amount includes non-cash effect
of equity-based compensation plans of $2.5 million and $2.3 million
for the three months ended December 31, 2020 and 2019,
respectively, and $10.9 million and $9.2 million for the years
ended December 31, 2020 and 2019, respectively, and partial
forgiveness of a loan to an executive officer used to purchase our
capital stock of $1.3 million for the year ended December 31,
2019.
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
(in thousands)
Interest income from customer notes
receivable
$
6,360
$
3,432
$
23,239
$
11,588
Principal proceeds from customer notes
receivable, net of related revenue
$
9,476
$
7,058
$
32,580
$
20,044
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
(in thousands)
Reconciliation of Net Cash Used in
Operating Activities to Adjusted Operating Cash Flow:
Net cash used in operating activities
$
(29,670)
$
(95,724)
$
(131,466)
$
(170,262)
Principal proceeds from customer notes
receivable
10,451
7,532
35,479
21,604
Financed insurance payments
(1,964)
(2,495)
(4,981)
(4,672)
Derivative breakage fees from financing
structure changes
11,778
—
48,672
12,080
Distributions to redeemable noncontrolling
interests and noncontrolling interests
(2,043)
(1,270)
(6,527)
(7,559)
Payments to dealers for exclusivity and
other bonus arrangements
1,458
—
25,849
31,733
Net inventory and prepaid inventory
purchases
19,483
110,366
41,548
118,549
Payments of non-capitalized costs related
to IPO
—
884
—
4,944
Payments of non-capitalized costs related
to equity offerings
611
—
2,031
—
Direct sales costs
108
—
108
—
Adjusted Operating Cash Flow
$
10,212
$
19,293
$
10,713
$
6,417
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
(in thousands, except per
customer data)
Reconciliation of Total Operating
Expense, Net to Adjusted Operating Expense:
Total operating expense, net
$
56,002
$
42,769
$
196,598
$
153,826
Depreciation expense
(18,255)
(14,353)
(66,066)
(49,340)
Amortization expense
(8)
(9)
(32)
(29)
Non-cash compensation expense
(2,484)
(2,261)
(10,873)
(10,512)
ARO accretion expense
(609)
(454)
(2,186)
(1,443)
Financing deal costs
(948)
(133)
(4,454)
(1,161)
Natural disaster losses and related
charges, net
—
—
(31)
(54)
IPO costs
—
—
—
(3,804)
Loss on unenforceable contracts
—
(2,381)
—
(2,381)
Amortization of payments to dealers for
exclusivity and other bonus arrangements
(585)
(328)
(1,820)
(583)
Legal settlements
—
—
—
(1,260)
Provision for current expected credit
losses
(3,145)
—
(7,969)
—
Non-cash inventory impairment
(1,934)
—
(1,934)
—
Adjusted Operating Expense
$
28,034
$
22,850
$
101,233
$
83,259
Adjusted Operating Expense per weighted
average customer
$
272
$
301
$
1,099
$
1,215
As of December 31,
2020
2019
Number of customers
107,500
78,600
Three Months Ended
December 31,
Year Ended December
31,
2020
2019
2020
2019
Weighted average number of customers
(excluding loan agreements)
85,900
65,600
77,900
60,100
Weighted average number of customers with
loan agreements
17,000
10,300
14,200
8,400
Weighted average number of customers
102,900
75,900
92,100
68,500
As of December 31,
2020
2019
(in millions, except per
customer data)
Estimated gross contracted customer
value
$
2,607
$
1,879
Estimated gross contracted customer value
per customer
$
24,256
$
23,906
Key Terms for Our Key Metrics and Non-GAAP Financial
Measures
Estimated Gross Contracted Customer Value. Estimated
gross contracted customer value as of a specific measurement date
represents the sum of the present value of the remaining estimated
future net cash flows we expect to receive from existing customers
during the initial contract term of our leases and power purchase
agreements ("PPAs"), which are typically 25 years in length, plus
the present value of future net cash flows we expect to receive
from the sale of related solar renewable energy certificates
("SRECs"), either under existing contracts or in future sales, plus
the carrying value of outstanding customer loans on our balance
sheet. From these aggregate estimated initial cash flows, we
subtract the present value of estimated net cash distributions to
redeemable noncontrolling interests and noncontrolling interests
and estimated operating, maintenance and administrative expenses
associated with the solar service agreements. These estimated
future cash flows reflect the projected monthly customer payments
over the life of our solar service agreements and depend on various
factors including but not limited to solar service agreement type,
contracted rates, expected sun hours and the projected production
capacity of the solar equipment installed. For the purpose of
calculating this metric, we discount all future cash flows at
6%.
Number of Customers. We define number of customers to
include each unique customer that is party to a solar service
agreement or purchased a solar energy system from us outright,
which we subsequently placed in service. For all solar energy
systems installed by us, in-service means the related solar energy
system and, if applicable, energy storage system, must have met all
the requirements to begin operation and be interconnected to the
electrical grid. We do not include in our number of customers any
customer under a lease, PPA or loan agreement that has reached
mechanical completion but has not received permission to operate
from the local utility or for whom we have terminated the contract
and removed the solar energy system. We also do not include in our
number of customers any customer that has been in default under his
or her solar service agreement in excess of six months. We track
the total number of customers as an indicator of our historical
growth and our rate of growth from period to period.
Weighted Average Number of Customers. We calculate the
weighted average number of customers based on the number of months
a given customer is in-service during a given measurement period.
The weighted average number of customers reflects the number of
customers at the beginning of a period, plus the total number of
new customers added in the period adjusted by a factor that
accounts for the partial period nature of those new customers. For
purposes of this calculation, we assume all new customers added
during a month were added in the middle of that month. We track the
weighted average customer count in order to accurately reflect the
contribution of the appropriate number of customers to key
financial metrics over the measurement period.
Definitions of Non-GAAP Measures
Adjusted EBITDA. We define Adjusted EBITDA as net income
(loss) plus net interest expense, depreciation and amortization
expense, income tax expense, financing deal costs, natural disaster
losses and related charges, net, amortization of payments to
dealers for exclusivity and other bonus arrangements, legal
settlements and excluding the effect of certain non-recurring items
we do not consider to be indicative of our ongoing operating
performance such as, but not limited to, costs of our initial
public offering ("IPO"), losses on unenforceable contracts, losses
on extinguishment of long-term debt, realized and unrealized gains
and losses on fair value option instruments and other non-cash
items such as non-cash compensation expense, asset retirement
obligation ("ARO") accretion expense, provision for current
expected credit losses and non-cash inventory impairment.
Adjusted Operating Cash Flow. We define Adjusted
Operating Cash Flow as net cash used in operating activities plus
principal proceeds from customer notes receivable, financed
insurance payments and distributions to redeemable noncontrolling
interests and noncontrolling interests less derivative breakage
fees from financing structure changes, payments to dealers for
exclusivity and other bonus arrangements, net inventory and prepaid
inventory (sales) purchases, payments of non-capitalized costs
related to our IPO and equity offerings and direct sales costs to
the extent the related solar energy system is financed through a
loan.
Adjusted Operating Expense. We define Adjusted Operating
Expense as total operating expense less depreciation and
amortization expense, financing deal costs, natural disaster losses
and related charges, net, amortization of payments to dealers for
exclusivity and other bonus arrangements, legal settlements and
excluding the effect of certain non-recurring items we do not
consider to be indicative of our ongoing operating performance such
as, but not limited to, costs of our IPO, losses on unenforceable
contracts and other non-cash items such as non-cash compensation
expense, ARO accretion expense, provisions for current expected
credit losses and non-cash inventory impairment.
Recurring Operating Cash Flow. We define Recurring
Operating Cash Flow as Adjusted Operating Cash Flow less principal
payments on our securitizations and corporate capital expenditures,
plus sales-related and sales-allocated cash operating expenses and
interest expense from our credit warehouses and inventory
facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210224006076/en/
Investor Relations: Rodney McMahan, Vice President Investor
Relations IR@sunnova.com 877-770-5211
Media: Alina Eprimian, Media Relations Manager
Alina.Eprimian@sunnova.com
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