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CST: 18/07/2019 15:09:37   

Sunworks Reports Fourth Quarter 2018 Results

127 Days ago

Company Reports Positive Net Income Before Non-Cash Goodwill Adjustment

ROSEVILLE, Calif., March 12, 2019 (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 fourth quarter and year ended December 31, 2018.

Fourth Quarter 2018 Summary:

  • Revenue of $19.2 million for the fourth quarter of 2018.

  • Net loss, as reported, of $1.8 million, inclusive of a $1.9 million non-cash, one-time charge to adjust the carrying value of goodwill.

  • The company highlighted that net income would have been $51,000 without the non-cash goodwill impairment.

  • Gross margin was 18.6% for the fourth quarter of 2018, marking the highest level in six quarters.

  • Backlog of projects scheduled for installation in the next 12 months as of December 31, 2018 was $46.1 million.

  • Cash balance at December 31, 2018 was $4.1 million.

Chuck Cargile, Sunworks Chief Executive Officer, said, “As a result of the process improvements we have implemented and our ongoing success in reducing fixed costs, we entered 2019 in a stronger position to achieve more consistent, predictable and profitable results. Our fourth quarter results reflect continued progress in our transformation. Excluding the non-cash charge, we earned a profit and our gross margin reached the highest level in more than a year. We also reduced our operating expenses for the 9th consecutive quarter. As we stabilize the financial position of the company, we are pivoting our efforts to attract new business to add to our pipeline of projects for 2019. We remain focused on continuous improvement and delivering more consistent, predictable profitable results, which will lead to greater shareholder value.”

Fourth Quarter Financial Summary

Total revenue for the quarter ended December 31, 2018 was $19.2 million compared to $19.3 million in the same period last year.

Gross margin for the fourth quarter of 2018 was 18.6% compared to 5.4% 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.

Selling, general and administrative expenses, excluding the goodwill impairment, stock-based compensation and depreciation and amortization, were $3.1 million, or 16.2% of revenue for the fourth quarter of 2018, marking a 21% decrease from $3.9 million, or 20.4% of revenue, in the comparable prior year quarter.

The net loss for the quarter ended December 31, 2018 was $1.8 million, after including the $1.9 million expense for the impairment of goodwill or ($0.07) per basic and diluted share compared to a net loss of $3.4 million or ($0.15) per basic and diluted share in the fourth quarter of 2017.  

First Quarter 2019 Expectations:

  • Management noted the first quarter of 2019 revenue is expected to reflect normal slow installation activity due to seasonality exacerbated by the unusually rainy weather in California. Revenue for the first quarter is expected to be similar to the first quarter of 2018, or approximately $13 million. The company expects revenue levels to increase in the subsequent quarters of 2019.

  • Management expects to incur a loss in the first quarter of 2019, but to generate positive net income in each subsequent quarter of 2019.  

Conference Call Details

Management will host a conference call to discuss these results today at 4:30 p.m. ET. To access the call, please dial 1-844-602-0380 (toll free) or 1-862-298-0975. 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 https://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 # 44904 until 4:30 p.m. ET on March 26, 2019.

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, 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 with the Securities and Exchange Commission. 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.
  CONSOLIDATED BALANCE SHEETS
  AS OF DECEMBER 31, 2018 AND DECEMBER 31, 2017
  (in thousands, except share and per share data)
                 
      December 31, 2018     December 31, 2017
      (unaudited)      
  Assets              
  Current Assets              
  Cash and cash equivalents   $ 3,628       $ 6,356  
  Restricted cash     447         475  
  Accounts receivable, net     8,201         11,330  
  Inventory, net     3,233         4,450  
  Contract assets     6,153         3,790  
  Other current assets       150           2,081  
                 
  Total Current Assets     21,812         28,482  
                 
  Property and Equipment, net     852         1,233  
                 
  Other Assets              
  Other deposits     68         68  
  Goodwill     9,464         11,364  
                 
  Total Other Assets     9,532         11,432  
                 
  Total Assets   $ 32,196       $ 41,147  
                 
  Liabilities and Shareholders’ Equity              
  Current Liabilities:              
  Accounts payable and accrued liabilities   $ 11,858       $ 13,090  
  Contract liabilities     5,069         7,288  
  Customer deposits     58         2,905  
  Loan payable, current portion     179         229  
  Convertible promissory notes, current portion     100           -   
  Acquisition promissory note, current portion     757         606  
                 
  Total Current Liabilities     18,021         24,118  
                 
  Long Term Liabilities              
  Loan payable     88         267  
  Promissory note payable, net     3,669           -   
  Convertible promissory notes       -          149  
  Acquisition promissory note     101         707  
  Warranty liability     321         246  
  Total Long Term Liabilities     4,179         1,369  
  Total Liabilities     22,200         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; 26,110,723 and 23,150,930 shares issued and
outstanding, respectively
      26           23  
  Additional paid in capital       73,480           72,000  
  Accumulated deficit       (63,510 )         (56,365 )
                 
  Total Shareholders’ Equity       9,996           15,660  
                 
  Total Liabilities and Shareholders’ Equity   $   32,196       $   41,147  
 

 

                                 
  SUNWORKS, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
  FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2018 AND DECEMBER 31, 2017
  (in thousands, except share and per share data)
   
      Three Months Ended     Twelve Months Ended
      December 31, 2018     December 31, 2017     December 31, 2018     December 31, 2017
      (unaudited)     (unaudited)     (unaudited)      
  Revenue   $ 19,242       $ 19,290       $ 70,965       $ 77,448  
                                 
  Cost of Goods Sold     15,654         18,242         58,701         63,785  
                                 
  Gross Profit     3,588         1,048         12,264         13,663  
                                 
  Operating Expenses                              
  Selling and marketing expenses     776         1,171         3,824         6,462  
  General and administrative expenses     2,334         2,771         10,001         11,946  
  Goodwill Impairment       1,900           -          1,900           -   
  Stock based compensation     130         326         1,313         1,159  
  Depreciation and amortization       95           102           384           410  
                                 
  Total Operating Expenses       5,235           4,370           17,422           19,977  
                                 
  Loss before Other Income/(Expenses)       (1,647 )         (3,322 )         (5,158 )         (6,314 )
                                 
  Other Income/(Expenses)                              
  Other income (expense)       (11 )       58           (38 )       16  
  Interest expense       (191 )         (173 )         (544 )         (924 )
                                 
  Total Other Income/(Expenses)       (202 )         (115 )         (582 )         (908 )
                                 
  Loss before Income Taxes       (1,849 )         (3,437 )         (5,740 )         (7,222 )
                                 
  Income Tax Expense       -            -            -            -   
                                 
  Net Loss   $   (1,849 )     $   (3,437 )     $   (5,740 )     $   (7,222 )
                                 
  LOSS PER SHARE:                              
  Basic   $   (0.07 )     $   (0.15 )     $   (0.23 )     $   (0.32 )
  Diluted   $   (0.07 )     $   (0.15 )     $   (0.23 )     $   (0.32 )
                                 
  WEIGHTED-AVERAGE COMMON
SHARES OUTSTANDING
                             
  Basic     26,094,916         22,712,610         24,946,421         22,224,632  
  Diluted     26,094,916         22,712,610         24,946,421         22,224,632  
                                 
  RECONCILIATION OF NET (LOSS) TO
ADJUSTED EBITDA
   
  Net (Loss)   $   (1,849 )     $   (3,437 )     $   (5,740 )     $   (7,222 )
  Goodwill Impairment       1,900           -            1,900           -   
  Stock based compensation       130           326           1,313           1,159  
  Depreciation and amortization       95           102           384           410  
  Interest expense       191           173           544           924  
  Adjusted EBITDA   $   467       $   (2,836 )     $   (1,599 )     $   (4,729 )
 

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