SOURCE: Sunworks, Inc.

Sunworks, Inc.

August 10, 2017 07:00 ET

Sunworks Reports Second Quarter Revenue of $25.0 Million and Earnings per Share of $0.05

Focused effort to enhance operational efficiency drives sequential increase in operating margin, net income and earnings

ROSEVILLE, CA--(Marketwired - August 10, 2017) - Sunworks, Inc. (NASDAQ: SUNW), a provider of solar power solutions for agriculture, commercial and industrial (ACI) and residential markets, today announced financial results for the second quarter and six months ended June 30, 2017.

Q2 2017 Summary:

  • Revenue of $25.0 million, a decrease of 19.3% compared to the record $31.0 million recorded in the year-ago quarter and a sequential increase of 73.6% versus the $14.4 in the first quarter of 2017.
  • Gross margin of 26.9% compared to 29.4% in the year-ago quarter and 19.4% in the first quarter of 2017.
  • Net income of $1.1 million compared to net income of $0.7 million in the year-ago quarter and a net loss of $2.9 million in the first quarter of 2017.
  • Backlog of $58.2 million compared to $59.8 million at March 31, 2017 and $43.8 million at June 30, 2016.

Chuck Cargile, Sunworks Chief Executive Officer said, "We executed well in the second quarter to achieve our near-term objective of returning Sunworks to profitability. Our revenue and gross margins improved sequentially and we reduced our operating expenses while strengthening our back-office systems and internal controls. As a result, we generated a 43.5% year-over-year increase in net income on a lower base of revenue, demonstrating the earnings power of Sunworks. Today, we have a stable platform for profitable growth firmly in place. Our backlog for scheduled installations remains strong and our pipeline for new sales is robust, giving us confidence for even greater profitability in the second half of this year. We are intensely focused on driving higher revenue and profitability to significantly increase shareholder value."

"The second quarter last year represented a record level of revenue for Sunworks, more than 60% above previous records," added Mr. Cargile. "The $25 million reported in the second quarter this year is the second-highest revenue level in our history, and we are confident we have the backlog and demand to support sustainable and profitable growth going forward."

As of June 30, 2017, the company's cash balance was $4.2 million and total debt outstanding (including convertible debt) was $2.2 million.

 
Backlog:
Three Months Ended
   Q2 2017  Q2 2016  % Change
(in Millions USD)         
Beginning backlog  $59.8  $39.6  51.0%
New sales  23.4  35.2  -33.6%
Revenue  (25.0)  (31)  -19.4%
Ending backlog  $58.2  $43.8  32.9%
(In Megawatts)         
Beginning backlog  23.6  13.0  81.5%
New sales  10.9  14.0  -22.1%
Revenue  (12.1)  (12.5)  -3.5%
Ending backlog  22.4  14.5  54.8%
       

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA):

Adjusted EBITDA is a supplemental non-GAAP financial measure that the Company believes is an important measure of operating performance.

The following is a non-GAAP measure of cash flow, or adjusted EBITDA, which adds back non-cash items including interest, taxes, stock based compensation and depreciation and amortization.

       

Adjusted EBITDA:
        
Three Months Ended  Q2 2017  Q2 2016  $ Change
(in Thousands USD) Net income  $1,068  $744  $324
Add back:         
 Interest  246  286  (40)
 Taxes  0  0  0
 Stock based compensation  317  1,834  (1,517)
 Depreciation and amortization  103  96  7
Adjusted EBITDA  $1,734  $2,960  $(1,226)
As a percentage of revenue  6.9%  9.5%   
          

Conference Call Details:

Management will host a conference call to discuss these results today, Thursday August 10, 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 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 August 24, 2017.

About Sunworks, Inc.

Founded in 1983, Sunworks, Inc. is a premier provider of solar power solutions for both consumers and businesses. We're 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. These forward-looking statements 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 commercialize our technology, failure of technology to perform as expected, 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.

   
SUNWORKS, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND JUNE 30, 2016  
(in thousands, except share and per share data)  
(unaudited)  
                  
   Three Months Ended   Six Months Ended  
   June 30, 2017   June 30, 2016   June 30, 2017   June 30, 2016  
                  
Revenues  $25,011   $30,995   $39,362   $50,424  
                      
Cost of Goods Sold   18,278    21,869    29,850    35,714  
                      
Gross Profit   6,733    9,126    9,512    14,710  
                      
Operating Expenses                     
 Selling and marketing expenses   1,793    3,284    3,540    5,845  
 General and administrative expenses   3,204    2,869    6,534    5,750  
 Stock based compensation   317    1,834    534    1,862  
 Depreciation and amortization   103    96    206    116  
                      
  Total Operating Expenses   5,417    8,083    10,814    13,573  
                      
(Loss) Income before Other Expenses   1,316    1,043    (1,302 )  1,137  
                      
Other Expenses                     
 Other expenses   (2 )  (13 )  (45 )  (218 )
 Interest expense   (246 )  (286 )  (491 )  (533 )
                      
  Total Other Expenses   (248 )  (299 )  (536 )  (771 )
                      
(Loss) Income before Income Taxes   1,068    744    (1,838 )  366  
                      
Income Tax Expense   -    -    -    -  
                      
Net (Loss) Income  $1,068   $744   $(1,838 ) $366  
                      
EARNINGS PER SHARE:                     
 Basic  $0.05   $0.04   $(0.08 ) $0.02  
 Diluted  $0.04   $0.03   $(0.08 ) $0.02  
                      
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING                     
 Basic   22,447,752    20,354,517    21,859,169    19,583,194  
 Diluted   25,831,671    24,321,750    21,859,169    23,051,023  
                  
   
SUNWORKS, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
AS OF JUNE 30, 2017 AND DECEMBER 31, 2016  
(in thousands, except share and per share data)  
          
   June 30, 2017   December 31, 2016  
   (Unaudited)      
Assets         
Current Assets         
 Cash and cash equivalents  $4,165   $11,069  
 Restricted cash   250    37  
 Accounts receivable, net   16,674    9,665  
 Inventory   3,698    3,394  
 Costs in excess of billings   5,839    4,307  
 Other current assets   623    117  
            
 Total Current Assets   31,249    28,589  
            
 Property and Equipment, net   1,494    1,674  
            
Other Assets           
 Other deposits   65    53  
 Goodwill   11,364    11,364  
            
 Total Other Assets   11,429    11,417  
            
 Total Assets  $44,172   $41,680  
            
Liabilities and Shareholders' Equity         
Current Liabilities:           
 Accounts payable and accrued liabilities  $12,153   $12,979  
 Billings in excess of costs   8,879    4,997  
 Customer deposits   534    64  
 Loan payable, current portion   225    218  
 Acquisition convertible promissory note, current portion   606    454  
            
            
 Total Current Liabilities   22,397    18,712  
            
Long Term Liabilities           
 Loan payable   381    496  
 Acquisition convertible promissory notes, net of beneficial conversion feature of $370 and $807, respectively   640    505  
 Warranty liability   186    116  
 Convertible promissory notes   384    654  
  Total Long Term Liabilities   1,591    1,771  
  Total Liabilities   23,988    20,483  
            
  Shareholders' Equity           
  Preferred stock Series B, $.001 par value; 5,000,000 authorized shares; 1,506,024 shares issued and outstanding   2    2  
  Common stock, $.001 par value; 200,000,000 authorized shares; 22,455,664 and 20,853,921 shares issued and outstanding, respectively   22    21  
  Additional paid in capital   71,141    70,317  
  Accumulated Deficit   (50,981 )  (49,143 )
              
  Total Shareholders' Equity   20,184    21,197  
              
  Total Liabilities and Shareholders' Equity  $44,172   $41,680  
           

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