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 Sunworks Reports Fourth Quarter 2018 Results
   Tuesday, March 12, 2019 4:05:00 PM ET

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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Source: Sunworks, Inc.


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