RGS Energy (NASDAQ:RGSE), the nation’s original solar company since
1978, reported results for its third quarter ended September 30,
2017.
Financial Summary
|
|
|
|
|
|
|
|
|
|
(000’s omitted) |
|
Q3 2017 |
|
|
Q2 2017 |
|
|
Q3 2016 |
|
Net
loss |
$ |
(4,422 |
) |
$ |
(4,030 |
) |
$ |
(7,735 |
) |
Stockholders’
equity (deficit) |
|
9,503 |
|
|
13,904 |
|
|
(5,578 |
) |
Working
capital |
$ |
7,091 |
|
$ |
12,743 |
|
$ |
(3,210 |
) |
|
|
|
|
|
|
|
|
|
|
“Our strategy has been to expend cash, investing it in a manner
expected to allow us to meet and exceed our quarterly break-even
results during 2018,” stated Alan Fine, RGS Energy’s Chief
Financial Officer and Treasurer. “Further, we will continue to
expend cash during the fourth quarter of 2017 and, if as projected,
we achieve revenue to operate profitably during the second quarter
of 2018, our business will thereafter begin to operate on a
positive cash flow basis. To achieve this outcome, we have been
investing cash in our sales organization, marketing and a larger
inventory of equipment for future installations. We project our
cash balance at June 30, 2018, exclusive of cash expenditures
related to our new POWERHOUSE™ segment, to be approximately $2
million.”
Growth Strategy UpdateThe company issued a
business update on October 19, 2017 announcing progress on its
top-line revenue growth strategy. Third quarter of 2017 results
compared to the second quarter of 2017:
Sales and marketing
- Gross sales increased 33%
- Net sales increased 59%
- Size of the company’s sales organization increased 15%
- Average number of sales per residential direct sales person
increased 18%
- Residential acquisition cost-per-sale decreased 5%
Revenue and gross margin
- Total revenue increased 34%
- Residential cycle time reduced 11%
- Residential gross margin percentage increased 276%
“We made solid progress on our key metrics this quarter,” said
Seth Wiggins, RGS Energy’s senior vice president of the Solar
Division. “As we have explained before, we must first grow sales
and backlog before we expect to see revenue growth. Our backlog
increased 45% from June 30, 2017, and we are expecting continued
revenue
growth.” POWERHOUSE™
Solar Shingles System:
On September 29, 2017, the company entered into an exclusive
domestic and international license agreement with The Dow Chemical
Company for the POWERHOUSE™ solar shingles system, an innovative
and aesthetically pleasing solar shingle system developed by Dow
that has been deployed on more than 1,000 homes previously by Dow.
Images of the solar shingles and additional information about
POWERHOUSE™ solar shingles is available at RGSPOWERHOUSE.com.
RGS will lead all commercial activities for the product,
including supply chain management, marketing, sales, installation
and warranty.
“Beyond the progress on our revenue growth plan, on September
29th we were awarded the worldwide exclusive license for
POWERHOUSE™, an aesthetically innovative solar shingle system that
integrates into a house rooftop,” continued Lacey. “We believe that
the revenue potential for this product is huge and, as discussed
during our recent investor call announcing the license, we are
working toward UL certification during second quarter of 2018.”
Conference Call Due to management traveling in
China this week and Veterans Day (observed), RGS Energy will hold a
conference call to discuss its third quarter 2017 financial results
early next week.
Date: Monday, November 13, 2017Time: 4:30 p.m. Eastern time
(2:30 p.m. Mountain time)Toll-free dial-in number:
1-800-289-0438International dial-in number:
1-323-794-2423Conference ID: 4995962Webcast:
http://public.viavid.com/index.php?id=127150
The conference call will be webcast live and available for
replay via the investor relations section of the company's website
at RGSEnergy.com.
Please call the conference telephone number five minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after 7:30 p.m. Eastern
time on the same day through November 20, 2017.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 4995962
About RGS Energy RGS Energy (Nasdaq:RGSE)
is America’s Original Solar Company providing solar, storage and
energy services whose mission is clean energy savings. The company
sells, designs, installs solar systems for residential homeowners
and small business companies, and is also the exclusive
manufacturer of POWERHOUSE™, an innovative in-roof solar shingle
using technology developed by The Dow Chemical Company.
For more information, visit RGSEnergy.com, RGSPOWERHOUSE.com, on
Facebook at www.facebook.com/RGSEnergy and on Twitter at
twitter.com/rgsenergy. Information on such websites and the website
referred to above in this press release is not incorporated by
reference into this press release.
RGS Energy is the Company’s registered trade name. The Company
files periodic and other reports with the Securities and Exchange
Commission under its official name “Real Goods Solar, Inc.”
Forward-Looking Statements and Cautionary
Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 that involve risks and uncertainties, including statements
regarding the RGS Energy’s results of operations and financial
positions, and RGS Energy’s business and financial
strategies. Forward-looking statements are neither historical
facts nor assurances of future performance. Instead, they
provide our current beliefs, expectations, assumptions, forecasts,
and hypothetical constructs about future events, and include
statements regarding our future results of operations and financial
position, business strategy, budgets, projected costs, plans and
objectives of management for future operations. The words
“forecast,” “project,” “expect,” “plan,” “future,” “believe,”
“may,” “hypothetical,” “will,” “target,” “anticipate” and similar
expressions as they relate to RGS Energy are intended to identify
such forward-looking statements.
Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved, if at all. Forward looking
statements are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those
expressed in or suggested by the forward-looking statements.
Therefore, RGS Energy cautions you against relying on any of these
forward-looking statements.
Key risks and uncertainties that may cause a change in any
forward-looking statement or that could cause our actual results
and financial condition to differ materially from those indicated
in the forward-looking statements include: RGS Energy’s ability to
successfully implement its revenue growth strategy, achieve its
target level of sales, generate cash flow from operations, achieve
break-even and better results for its solar division, expand its
sales and installation teams and marketing, decrease its customer
acquisition cost, develop and implement new products and services,
and expand into new states; RGS Energy’s current capital resources
being sufficient to implement its revenue growth strategy; the
ability to successfully and timely commercialize POWERHOUSE™ 3.0;
the ability to obtain requisite certification of POWERHOUSE™ 3.0;
the adequacy of, and access to, capital necessary to commercialize
POWERHOUSE™ 3.0; RGS Energy’s ability to satisfy the conditions and
our obligations under the POWERHOUSE™ 3.0 license agreement; RGS
Energy’s ability to manage supply chain in order to have production
levels and pricing of the POWERHOUSE™ 3.0 shingles to be
competitive; the ability of RGS Energy to successfully expand its
operations and employees and realize profitable revenue growth from
the sale and installation of POWERHOUSE™ 3.0, and to the extent,
anticipated; the potential impact of the announcement of RGS
Energy’s expansion into the POWERHOUSE™ 3.0 business with
employees, suppliers, customers and competitors; RGS Energy’s
ability to successfully and timely expand its POWERHOUSE™ 3.0
business outside of the United States; foreign exchange risks
associated with the POWERHOUSE™ 3.0 business; and future
cancellations and backlog.
You should read the section entitled “Risk Factors” in our 2016
Annual Report on Form 10-K, as amended, and in our Quarterly Report
on Form 10-Q/A for the quarter ended June 30, 2017, each of which
has been filed with the Securities and Exchange Commission, which
identify certain of these and additional risks and uncertainties.
Any forward-looking statements made by us in this press release
speak only as of the date of this press release. Factors or events
that could cause our actual results to differ may emerge from time
to time, and it is not possible for us to predict all of them. We
do not undertake any obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
POWERHOUSE™ is a trademark of The Dow Chemical Company, used
under license.
Investor Relations ContactRon BothManaging
Partner, CMATel 1-949-432-7566RGSE@cma.team
RGS EnergyCondensed Consolidated
Balance Sheets (in thousands)
|
|
September 30, 2017 |
|
|
December 31, 2016 |
|
|
September 30, 2016 |
|
Cash |
$ |
4,658 |
|
$ |
2,940 |
|
$ |
1,378 |
|
Restricted Cash |
|
- |
|
|
173 |
|
|
8,250 |
|
Other current
assets |
|
7,969 |
|
|
6,742 |
|
|
8,305 |
|
Total
current assets |
|
12,627 |
|
|
9,855 |
|
|
17,933 |
|
Non-current assets |
|
5,448 |
|
|
4,518 |
|
|
4,306 |
|
Total
assets |
$ |
18,075 |
|
$ |
14,373 |
|
$ |
22,239 |
|
|
|
|
|
Debt |
$ |
1 |
|
$ |
787 |
|
$ |
5,907 |
|
Accounts payable |
|
991 |
|
|
2,019 |
|
|
6,354 |
|
Other current
liabilities |
|
4,544 |
|
|
3,469 |
|
|
8,882 |
|
Total
current liabilities |
|
5,536 |
|
|
6,275 |
|
|
21,143 |
|
Non-current
liabilities |
|
3,036 |
|
|
3,120 |
|
|
6,674 |
|
Total
liabilities |
|
8,572 |
|
|
9,395 |
|
|
27,817 |
|
|
|
|
|
|
|
Stockholders’ equity
(deficit) |
|
9,503 |
|
|
4,978 |
|
|
(5,578 |
) |
Total
liabilities and stockholders’ equity |
$ |
18,075 |
|
$ |
14,373 |
|
$ |
22,239 |
|
|
|
|
|
Other information: |
|
|
|
Working
Capital |
$ |
7,091 |
|
$ |
3,580 |
|
($3,210 |
) |
|
|
|
|
|
|
|
|
|
RGS EnergyConsolidated Summary Statements of
Operations(in thousands, except per share amounts)
|
|
|
Three Months Ended September
30, |
Six Months Ended September
30, |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
Contract Revenue: |
|
|
|
|
Sale and
Installation of Solar Systems |
$ |
3,685 |
|
$ |
2,304 |
|
$ |
9,755 |
|
$ |
11,857 |
|
Service |
|
320 |
|
|
159 |
|
|
888 |
|
|
429 |
|
Leasing |
|
14 |
|
|
15 |
|
|
39 |
|
|
43 |
|
Contract Expense: |
|
|
|
|
Installation of solar systems |
|
3,466 |
|
|
2,077 |
|
|
9,210 |
|
|
10,769 |
|
Service |
|
426 |
|
|
269 |
|
|
1,235 |
|
|
899 |
|
Customer acquisition
expense |
|
1,774 |
|
|
599 |
|
|
4,025 |
|
|
2.015 |
|
Contribution |
|
(1,647 |
) |
|
(467 |
) |
|
(3,788 |
) |
|
(1,354 |
) |
Operating expense |
|
2,662 |
|
|
2,571 |
|
|
8,094 |
|
|
8,339 |
|
Litigation expense |
|
77 |
|
|
- |
|
|
212 |
|
|
24 |
|
Operating loss |
|
(4,386 |
) |
|
(3,038 |
) |
|
(12,094 |
) |
|
(9,717 |
) |
Interest Expense |
|
- |
|
|
(1,330 |
) |
|
- |
|
|
(2,253 |
) |
Taxes |
|
- |
|
|
- |
|
|
- |
|
|
(27 |
) |
Derivative &
Other |
|
19 |
|
|
(535 |
) |
|
(351 |
) |
|
(251 |
) |
Debt accretion expense
and loss on extinguishment |
|
- |
|
|
(2,831 |
) |
|
0 |
|
|
(2,831 |
) |
Income (loss) from
continuing operations |
|
(4,367 |
) |
|
(7,734 |
) |
|
(12,445 |
) |
|
(15,079 |
) |
Income (loss) from
discontinued operations |
|
(55 |
) |
|
(1 |
) |
|
(43 |
) |
|
230 |
|
Net loss |
$ |
(4,422 |
) |
$ |
(7,735 |
) |
$ |
(12,488 |
) |
$ |
(14,849 |
) |
|
|
|
|
|
Other Information: |
|
|
|
|
Loss per Share |
$ |
(0.59 |
) |
|
(308.10 |
) |
$ |
(1.90 |
) |
$ |
(663.00 |
) |
Weighted average shares
outstanding |
|
7,481 |
|
|
25 |
|
|
6,567 |
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|