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Sunworks, Inc.$1.47$.053.52%

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 Sunworks Reports First Quarter 2017 Results
   Thursday, May 11, 2017 7:01:33 AM ET

Record Backlog of $59.8 Million; Wet Weather Impacts Quarterly Revenues

ROSEVILLE, CA --(Marketwired - May 11, 2017) - Sunworks, Inc. (SUNW ), a provider of solar power solutions for agriculture, commercial and industrial (ACI) and residential markets, today announced financial results for the quarter ended March 31, 2017.

Q1 2017 Summary:

Revenue of $14.4 million, compared to $19.4 million in the year-ago quarter

Gross margin of 19.4% compared to 28.7% in the year-ago quarter

Net loss of $2.9 million compared to net loss of $0.4 million in the year-ago quarter

New sales of $25.7 million compared to $9.9 million in the year-ago quarter

Backlog of $59.8 million compared to $39.8 million in the year-ago quarter

"The first quarter marked an important transition for Sunworks," said Chuck Cargile, Sunworks’ Chief Executive Officer. "The unusually rainy weather limited the number of days our teams could spend installing, particularly in the ACI part of our business. As a result, our revenue was relatively low and we incurred a loss for the quarter. However, our new sales more than doubled and our backlog is at a record level. In addition, as drier weather returns to California, we expect our installation revenue to increase significantly in the second quarter."

Mr. Cargile added, "We continued to transition our business to a more variable cost model to be more nimble in responding to variability in revenue. We expect to benefit from this improved cost structure and return to profitability as we convert our record backlog to revenue."

The company’s cash balance was $4.2 million as of March 31, 2017. Total debt outstanding (including convertible debt) was $2.2 million at the end of the first quarter of 2017.

Backlog:

                         Q1’ 17 - Q4 ’16   Q1’ 17 - Q1 ’16
             Q1 2017    Q4 2016    Q1 2016    % Change          % Change
(in Millions USD)                           
Beginning backlog   $48.5      $42.7      $49.3      13.6%             -1.6%
New sales           25.7       24.2       9.9        6.2%              159.6%
Revenue             (14.4)     (18.4)     (19.4)     -21.7%            -25.8%
Ending backlog      $59.8      $48.5      $39.8      23.3%             50.3%
(In Megawatts)                              
Beginning backlog   15.8       13.8       16.1       14.5%             -1.9%
New sales           12.5       8.1        3.2        54.3%             290.6%
Revenue             (4.7)      (6.1)      (6.3)      -23.0%            -25.4%
Ending backlog      23.6       15.8       13.0       49.4%             81.5%
                                     
                                     

Adjusted EBITDA:

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

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues and expenses during the reporting period.

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.

                   
(in Thousands USD)                   Q1’ 17 - Q4 ’16   Q1’ 17 - Q1 ’16
Adjusted EBITDA          Q1 2017    Q4 2016    Q1 2016    $ Change          $ Change
Net (loss)               $(2,905)   $(3,660)   $(378)     $755              $(2,527)
Add back:                                        
Interest                 244        294        266        (50)              (22)
Taxes                    0          0          0          0                 0
Stock based compensation 217        277        28         (60)              189
Depreciation             103        105        21         (2)               82
Adjusted EBITDA (loss)   $(2,341)   $(2,984)   $(63)      $643              $(2,278)
                                          

Conference Call Details:

Management will host a conference call to discuss these results today, Thursday May 11, 2017 at 10:00 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 10362, until 11:59 p.m. ET on May 25, 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 MONTHS ENDED MARCH 31, 2017, DECEMBER 31, 2016 AND MARCH 31, 2016
(in thousands, except share and per share data)
(unaudited)
                                         Three months ended
                                         March 31, 2017       December 31, 2016       March 31, 2016
                                                                         
Sales                                        $         14,350            $         18,440               $         19,428
                                                                         
Cost of Goods Sold                              11,572               15,695                  13,845
                                                                         
Gross Profit                                    2,778                2,745                   5,583
                                                                         
Operating Expenses                                                              
Selling and marketing expenses                  1,747                3,191                   2,561
General and administrative expenses             3,329                2,592                   2,880
Stock based compensation                        217                  277                     28
Depreciation and amortization                   103                  105                     21
                                                                         
Total Operating Expenses                        5,396                6,165                   5,490
                                                                         
(Loss) Income before Other Income/(Expenses)    (2,618)              (3,420)                 93
                                                                         
Other Income/(Expenses)                                                         
Other income (expenses)                         (43)                 54                      (205)
Interest expense                                (244)                (294)                   (266)
                                                                         
Total Other Income/(Expenses)                   (287)                (240)                   (471)
                                                                         
(Loss) before Income Taxes                      (2,905)              (3,660)                 (378)
                                                                         
Income Tax Expense                              -                    -                       -
                                                                         
Net (Loss)                                   $         (2,905)           $         (3,660)              $         (378)
                                                                         
LOSS PER SHARE:                                                                 
Basic                                        $         (0.14)            $         (0.18)               $         (0.02)
Diluted                                      $         (0.14)            $         (0.18)               $         (0.02)
                                                                         
WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING                                      
Basic                                           21,264,046           20,853,921              18,811,871
Diluted                                         21,264,046           20,853,921              18,811,871
                                                                                                                                                                                                           
SUNWORKS, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
AS OF MARCH 31, 2017 AND DECEMBER 31, 2016 
(in thousands, except share and per share data) 
  
                                                                                                                                             March 31, 2017        December 31, 2016  
                                                                                                                                             (Unaudited)                       
Assets                                                                                                                                                                         
Current Assets                                                                                                                                                          
Cash and cash equivalents                                                                                                                    $        4,196        $        11,069    
Restricted cash                                                                                                                                37             37        
Accounts receivable, net                                                                                                                       11,541         9,665     
Inventory                                                                                                                                             3,980          3,394     
Costs in excess of billings                                                                                                                    3,735          4,307     
Other current assets                                                                                                                           255            117       
                                                                                                                                                          
Total Current Assets                                                                                                                           23,744         28,589    
                                                                                                                                                          
Property and Equipment, net                                                                                                                    1,612          1,674     
                                                                                                                                                          
Other Assets                                                                                                                                              
Other deposits                                                                                                                                 61             53        
Goodwill                                                                                                                                              11,364         11,364    
                                                                                                                                                          
Total Other Assets                                                                                                                             11,425         11,417    
                                                                                                                                                          
Total Assets                                                                                                                                 $        36,781       $        41,680    
                                                                                                                                                          
Liabilities and Shareholders’ Equity                                                                                                                             
Current Liabilities:                                                                                                                                      
Accounts payable and accrued liabilities                                                                                                     $        9,152        $        12,979    
Billings in excess of costs                                                                                                                    6,221          4,997     
Customer deposits                                                                                                                              277            64        
Loan payable, current portion                                                                                                                  222            218       
Acquisition convertible promissory notes, net of beneficial conversion feature of $590 and $807, respectively                           1,177          959       
                                                                                                                                                          
                                                                                                                                                          
Total Current Liabilities                                                                                                                      17,049         19,217    
                                                                                                                                                          
Long Term Liabilities                                                                                                                                     
Loan payable                                                                                                                                   438            496       
Warranty liability                                                                                                                             131            116       
Convertible promissory notes                                                                                                                   384            654       
Total Long Term Liabilities                                                                                                                    953            1,266     
Total Liabilities                                                                                                                              18,002         20,483    
                                                                                                                                                          
Shareholders’ Equity                                                                                                                                             
Preferred stock Series B, $.001 par value; 5,000,000 authorized shares; 1,506,024 shares issued and outstanding, respectively           2              2         
Common stock, $.001 par value; 200,000,000 authorized shares; 22,440,664 and 20,853,921 shares issued and outstanding, respectively     22             21        
Additional paid in capital                                                                                                                     70,803         70,317    
Accumulated Deficit                                                                                                                            (52,048  )            (49,143  )
                                                                                                                                                          
Total Shareholders’ Equity                                                                                                                     18,779         21,197    
                                                                                                                                                          
Total Liabilities and Shareholders’ Equity                                                                                                   $        36,781       $        41,680    

Investor Relations Contact: Rob Fink/John Roginski Hayden IR 646-415-8972 / 570-569-2479 rob@haydenir.com / john@haydenir.com



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