Company Narrows Quarterly Net Loss and Achieves Positive Adjusted
EBITDA
ROSEVILLE, Calif., Nov. 07, 2018 (GLOBE NEWSWIRE) -- 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, 2018.
Third Quarter 2018 Summary:
- Revenue of $18.3 million for the third quarter of 2018.
- Net loss of $0.4 million versus a $2.0 million loss in the prior year third quarter; and positive earnings before interest,
taxes, depreciation, amortization and stock compensation (“Adjusted EBITDA) of $0.1 million for the third quarter of 2018.
- Gross margin was 18.4% for the third quarter of 2018, marking the highest level in five quarters.
- Backlog of projects scheduled for installation in the next 12 months as of September 30, 2018 was $52.4 million.
- Cash balance at September 30, 2018 was $3.6 million.
Chuck Cargile, Sunworks Chief Executive Officer said, “Our third quarter results reflect continued progress in
our transformation of Sunworks. Our gross margin improved versus recent quarters, despite continuing to work through a number of
older projects entered into before our internal controls on pricing and estimating were in place. Operating expenses, excluding
stock-based compensation, of $3.4 million in the quarter decreased for the 8th consecutive quarter and these expenses are at the
lowest level in over three years. Most importantly, we achieved positive Adjusted EBITDA for the quarter. As we stabilize the
financial position of the company, we are enhancing our focus on attracting new business to add to our pipeline of projects for
2019. We remain determined to transform the business into one that achieves consistent, predictable profitable results.”
Third Quarter Financial Summary
Total revenue for the quarter ended September 30, 2018 was $18.3 million compared to $18.8 million in the same
period last year. The reduction in revenue is primarily due to lower revenue in our ACI and residential business offset in part by
a strong increase in Public Works revenue.
Gross margin for the third quarter of 2018 was 18.4% compared to 16.5% in the year ago period. The prior year
period gross margin was marked by a number of low-margin projects and adjustments for costs in excess of original estimates.
Although the company continues to work on some older low margin projects, there were no meaningful negative adjustments to project
estimates in the quarter.
Selling, general and administrative expenses, excluding stock-based compensation, were $3.4 million, or 18.5% of
revenue for the third quarter of 2018, marking a 25% decrease from $4.5 million, or 23.9% of revenue, in the comparable prior year
quarter.
Net loss for the quarter ended September 30, 2018 was $0.4 million, or ($0.01) per basic and diluted share,
compared to net loss of $2.0 million or ($0.09) per basic and diluted share in the third quarter of 2017.
Fourth Quarter 2018 Expectations:
- Management noted that although it is difficult to predict the quarterly timing of installation revenue, they expect to
generate $18 - $20 million in revenue in the fourth quarter of 2018.
- Management expects the company to generate positive Adjusted EBITDA for the fourth quarter of 2018.
Conference Call Details
Management will host a conference call to discuss these results at 11:30 a.m. ET. To access the call, please
dial 1-877-407-0778 (toll free) or 1-201-689-8565. 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://www.ir.sunworksusa.com. All participants should call or access the website approximately
5 minutes before the conference 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) and using the replay ID # 40109 until 11:59 p.m. ET on November 14,
2018.
About Sunworks, Inc.
Sunworks, Inc. (NASDAQ:SUNW) is a premier provider of high performance solar power systems. We are committed to
quality business practices that exceed industry standards and uphold our ideals of ethics and safety. Sunworks continues to grow
its presence, expanding nationally with regional and local offices. We strive to consistently deliver high quality,
performance-oriented solutions for customers in a wide range of industries including agricultural, commercial and industrial,
federal, public works, and residential. Our dedication to excellence is reflected in our 25-year warranty, a benchmark that we
stand by to support our customers above and beyond their expectations. Sunworks’ diverse, seasoned workforce includes distinguished
veterans who bring a sense of pride, discipline, and professionalism to their interaction with customers. All our employees 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," “will,”
"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, regulatory, environmental and other
factors affecting the Company and its operations, markets, products, and prospects for sales, lower revenues, failure to earn
profit, higher costs than expected, persistent operating losses, ownership dilution, inability to repay debt, failure of acquired
businesses to perform as expected, the inability to complete projects within anticipated timeframes and costs, the impact of
tariffs imposed by governmental bodies, 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 IR
646-415-8972
rob@haydenir.com
| |
| SUNWORKS, INC. |
| CONDENSED CONSOLIDATED BALANCE
SHEETS |
| AS OF SEPTEMBER 30, 2018 AND DECEMBER 31,
2017 |
| (in thousands, except share and per share
data) |
| |
|
|
|
|
|
| |
September 30,
2018 |
|
December 31,
2017 |
| |
(Unaudited) |
|
|
| Assets |
|
|
|
|
|
| Current Assets |
|
|
|
|
|
| Cash and cash equivalents |
$ |
3,635 |
|
|
$ |
6,356 |
|
| Restricted cash |
|
446 |
|
|
|
475 |
|
| Accounts receivable, net |
|
9,390 |
|
|
|
11,330 |
|
| Inventory, net |
|
3,933 |
|
|
|
4,450 |
|
| Contract assets |
|
5,181 |
|
|
|
3,790 |
|
| Other current assets |
|
129 |
|
|
|
2,081 |
|
| |
|
|
|
|
|
| Total Current Assets |
|
22,714 |
|
|
|
28,482 |
|
| |
|
|
|
|
|
| Property and Equipment, net |
|
948 |
|
|
|
1,233 |
|
| |
|
|
|
|
|
| Other Assets |
|
|
|
|
|
| Other deposits |
|
71 |
|
|
|
68 |
|
| Goodwill |
|
11,364 |
|
|
|
11,364 |
|
| |
|
|
|
|
|
| Total Other Assets |
|
11,435 |
|
|
|
11,432 |
|
| |
|
|
|
|
|
| Total Assets |
$ |
35,097 |
|
|
$ |
41,147 |
|
| |
|
|
|
|
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
| Current Liabilities |
|
|
|
|
|
| Accounts payable and accrued liabilities |
$ |
11,588 |
|
|
$ |
13,090 |
|
| Contract liabilities |
|
6,252 |
|
|
|
7,288 |
|
| Customer deposits |
|
117 |
|
|
|
2,905 |
|
| Loan payable, current portion |
|
198 |
|
|
|
229 |
|
| Convertible promissory notes, current portion |
|
100 |
|
|
|
- |
|
| Acquisition convertible promissory note, current portion |
|
757 |
|
|
|
606 |
|
| |
|
|
|
|
|
| Total Current Liabilities |
|
19,012 |
|
|
|
24,118 |
|
| |
|
|
|
|
|
| Long Term Liabilities |
|
|
|
|
|
| Loan payable |
|
127 |
|
|
|
267 |
|
| Promissory note payable, net |
|
3,655 |
|
|
|
- |
|
| Convertible promissory notes |
|
- |
|
|
|
149 |
|
| Acquisition convertible promissory notes |
|
252 |
|
|
|
707 |
|
| Warranty liability |
|
336 |
|
|
|
246 |
|
| Total Long Term Liabilities |
|
4,370 |
|
|
|
1,369 |
|
| Total Liabilities |
|
23,382 |
|
|
|
25,487 |
|
| |
|
|
|
|
|
| Shareholders’ Equity |
|
|
|
|
|
| Preferred stock Series B, $.001 par value; 5,000,000 authorized
shares; 0 and 1,506,024 shares issued and outstanding, respectively |
|
- |
|
|
|
2 |
|
| Common stock, $.001 par value; 200,000,000 authorized shares;
25,678,322 and 20,853,921 shares issued and outstanding, respectively |
|
26 |
|
|
|
23 |
|
| Additional paid in capital |
|
73,350 |
|
|
|
72,000 |
|
| Accumulated Deficit |
|
(61,661 |
) |
|
|
(56,365 |
) |
| |
|
|
|
|
|
| Total Shareholders’ Equity |
|
11,715 |
|
|
|
15,660 |
|
| |
|
|
|
|
|
| Total Liabilities and Shareholders’ Equity |
$ |
35,097 |
|
|
$ |
41,147 |
|
| |
|
|
|
|
|
| SUNWORKS, INC. |
| CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
| FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2018 AND 2017 |
| (in thousands, except share and per share
data) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended
(unaudited) |
|
Nine Months Ended
(unaudited) |
| |
|
September 30, 2018 |
|
|
September 30, 2017 |
|
September 30, 2018 |
|
|
September 30, 2017 |
| |
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
18,281 |
|
|
|
$ |
18,797 |
|
|
$ |
51,722 |
|
|
|
$ |
58,159 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of Goods Sold |
|
|
14,916 |
|
|
|
|
15,704 |
|
|
|
43,048 |
|
|
|
|
45,554 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross Profit |
|
|
3,365 |
|
|
|
|
3,093 |
|
|
|
8,674 |
|
|
|
|
12,605 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling and marketing expenses |
|
|
891 |
|
|
|
|
1,751 |
|
|
|
3,048 |
|
|
|
|
5,291 |
|
| General and administrative expenses |
|
|
2,399 |
|
|
|
|
2,640 |
|
|
|
7,666 |
|
|
|
|
9,175 |
|
| Stock based compensation |
|
|
151 |
|
|
|
|
299 |
|
|
|
1,183 |
|
|
|
|
833 |
|
| Depreciation and amortization |
|
|
96 |
|
|
|
|
102 |
|
|
|
289 |
|
|
|
|
308 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Operating Expenses |
|
|
3,537 |
|
|
|
|
4,792 |
|
|
|
12,186 |
|
|
|
|
15,607 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before Other Expenses |
|
|
(172 |
) |
|
|
|
(1,699 |
) |
|
|
(3,512 |
) |
|
|
|
(3,002 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Income/(Expenses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income (expense) |
|
|
(13 |
) |
|
|
|
1 |
|
|
|
(26 |
) |
|
|
|
(43 |
) |
| Interest expense |
|
|
(191 |
) |
|
|
|
(261 |
) |
|
|
(353 |
) |
|
|
|
(752 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Other Income/(Expenses) |
|
|
(204 |
) |
|
|
|
(260 |
) |
|
|
(379 |
) |
|
|
|
(795 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before Income Taxes |
|
|
(376 |
) |
|
|
|
(1,959 |
) |
|
|
(3,891 |
) |
|
|
|
(3,797 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income Tax Expense |
|
|
- |
|
|
|
|
- |
|
|
|
- |
|
|
|
|
- |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
|
$ |
(376 |
) |
|
|
$ |
(1,959 |
) |
|
$ |
(3,891 |
) |
|
|
$ |
(3,797 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOSS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
(0.01 |
) |
|
|
$ |
(0.09 |
) |
|
$ |
(0.16 |
) |
|
|
$ |
(0.17 |
) |
| Diluted |
|
$ |
(0.01 |
) |
|
|
$ |
(0.09 |
) |
|
$ |
(0.16 |
) |
|
|
$ |
(0.17 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
25,709,915 |
|
|
|
|
22,455,664 |
|
|
|
24,559,382 |
|
|
|
|
22,060,186 |
|
| Diluted |
|
|
25,709,915 |
|
|
|
|
22,455,664 |
|
|
|
24,559,382 |
|
|
|
|
22,060,186 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Loss |
|
$ |
(376 |
) |
|
|
$ |
(1,959 |
) |
|
$ |
(3,891 |
) |
|
|
$ |
(3,797 |
) |
| Stock based compensation |
|
|
151 |
|
|
|
|
299 |
|
|
|
1,183 |
|
|
|
|
833 |
|
| Depreciation and amortization |
|
|
96 |
|
|
|
|
102 |
|
|
|
289 |
|
|
|
|
308 |
|
| Interest expense |
|
|
191 |
|
|
|
|
261 |
|
|
|
353 |
|
|
|
|
752 |
|
| Adjusted EBITDA |
|
$ |
62 |
|
|
|
$ |
(1,297 |
) |
|
$ |
(2,066 |
) |
|
|
$ |
(1,904 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
