Enphase Energy, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 5, 2014

Attached files

file filename
8-K - 8-K - Enphase Energy, Inc.enph063020148-k.htm


Exhibit 99.1
 
Enphase Energy Reports Financial Results for the Second Quarter of 2014
Accelerated growth drives another record breaking quarter
PETALUMA, Calif., August 5, 2014—Enphase Energy, Inc. (NASDAQ: ENPH) announced today financial results for the second quarter ended June 30, 2014.
Second Quarter 2014 Highlights
•
Record revenue of $82.0 million, up 41 percent year-over-year
•
Shipped 132MW (AC) of microinverter systems, up 54 percent year-over-year
•
Record non-GAAP gross margin of 33.0 percent, up 490 basis points year-over-year
•
Non-GAAP operating income at breakeven
Enphase Energy reported total revenue for the second quarter of 2014 of $82.0 million, an increase of 41 percent compared to the second quarter of 2013, and an increase of 42 percent compared to the first quarter of 2014. During the second quarter of 2014, Enphase sold 132MW (AC) or 598,000 microinverters, an increase in MW of 54 percent compared to the second quarter of 2013.
GAAP gross margin for the second quarter of 2014 was 32.7 percent. Non-GAAP gross margin was 33.0 percent, an increase of 490 basis points compared to the second quarter of 2013.
GAAP operating expenses for the second quarter of 2014 were $29.3 million and non-GAAP operating expenses were $27.0 million.
GAAP operating loss for the second quarter of 2014 was $2.5 million, and non-GAAP operating income was $6,000, resulting in Enphase's second profitable quarter on a non-GAAP operating income basis. This compares to a non-GAAP operating loss of $4.0 million in the second quarter of 2013.
GAAP net loss for the second quarter of 2014 was $3.0 million, or a loss of $0.07 per share. On a non-GAAP basis, the net loss was $0.4 million, or a loss of $0.01 per share.
The Company exited the second quarter with a total cash balance of $37.6 million.
“Strong demand for our microinverter systems in our core U.S. residential market, as well as in the U.K. and Australia, continued to drive our business momentum into the second quarter, resulting in a 41 percent increase in revenue year-over-year,” said Paul Nahi, CEO of Enphase Energy. “The solar industry is experiencing strong growth, and Enphase is leading the way with our innovative microinverter system, providing higher power generation, ease of installation and best-in-class monitoring capabilities.”
“I am extremely pleased with our financial performance in the second quarter,” said Kris Sennesael, CFO of Enphase Energy. “The accelerated growth in demand for our microinverter system enabled us to achieve record-breaking results in our top line performance, further increase our gross margin to a record level, and achieve another quarter of positive non-GAAP operating income.”
Business Outlook
“We expect the top line growth to further accelerate in the third quarter,” stated Mr. Sennesael. “We expect revenue for the third quarter of 2014 to be within a range of $93 million to $98 million. At the midpoint of the revenue outlook range, revenue would be up 54 percent, compared to the third quarter of 2013. We expect gross margin to be within a range of 32 percent to 34 percent. We also expect non-GAAP operating expenses for the third quarter of 2014 to be approximately flat to up 4 percent, compared to the second quarter of 2014, as we continue to invest in the Company’s growth.”



Use of Non-GAAP Financial Measures
The Company has presented certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Conference Call Information
Enphase Energy will host a conference call for analysts and investors to discuss its second quarter results and third quarter 2014 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Open to the public, investors may access the call by dialing 877-644-1284; participant passcode 74640328. A live webcast of the conference call, together with accompanying presentation slides, will also be accessible from the “Investor Relations” section of the Company's website at investor.enphase.com. Following the webcast, an archived version will be available on the website for 30 days. In addition, an audio replay of the conference call will be available by calling 855-859-2056; participant pass code 74640328 beginning approximately one hour after the call.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Enphase Energy's financial performance, market demands for its microinverters, advantages of its technology, market trends and future financial performance. These forward-looking statements are based on the Company's current expectations and inherently involve significant risks and uncertainties. Enphase Energy's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to: the future demands for solar energy solutions; the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications; the Company's ability to achieve broader market acceptance of its microinverter systems and to develop new and enhanced products in response to customer demands and rapid market and technological changes in the solar industry; the success of competing solar solutions that are or become available; the Company's ability to effectively manage the growth of its organization and expansion into new markets and to maintain or achieve anticipated product quality, product performance and cost metrics; competition and other factors that may cause potential future price reductions for its products; the Company's ability to optimally match production with demand and dependence on a limited number of outside contract manufacturers and lack of supply contracts with these manufacturers; general economic conditions in domestic and international markets and other risks included under the captions “Risk Factors” and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, which is on file with the SEC and available on the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Enphase Energy's Quarterly Report on Form 10-Q for the quarter ended June 30, 2014, which will be filed with the SEC in the third quarter of 2014. All information set forth in this press release and its attachments is as of August 5, 2014. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.
A copy of this press release can be found on the investor relations page of Enphase Energy's website at investor.enphase.com.




About Enphase Energy, Inc.
Enphase Energy delivers microinverter technology for the solar industry that increases energy production, simplifies design and installation, improves system uptime and reliability, reduces fire safety risk and provides a platform for intelligent energy management. Our semiconductor-based microinverter system converts energy at the individual module level and brings a system-based, high technology approach to solar energy generation. www.enphase.com
###
Contacts
Media Relations
Kaitlyn Lyman, Enphase Energy
Global Corporate Communications
pr@enphaseenergy.com
+1-707-763-4784



ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net revenues
$
82,004

 
$
58,167

 
$
139,584

 
$
103,744

Cost of revenues
55,172

 
41,883

 
94,097

 
75,259

Gross profit
26,832

 
16,284

 
45,487

 
28,485

Operating expenses:
 
 
 
 
 
 
 
Research and development
11,148

 
8,484

 
20,234

 
17,510

Sales and marketing
10,493

 
7,365

 
19,321

 
14,215

General and administrative
7,679

 
5,926

 
14,205

 
11,962

Total operating expenses
29,320

 
21,775

 
53,760

 
43,687

Loss from operations
(2,488
)
 
(5,491
)
 
(8,273
)
 
(15,202
)
Other income (expense), net:
 
 
 
 
 
 
 
Interest expense
(486
)
 
(484
)
 
(935
)
 
(948
)
Other income (expense)
58

 
(297
)
 
165

 
(346
)
Total other expense, net
(428
)
 
(781
)
 
(770
)
 
(1,294
)
Loss before income taxes
(2,916
)
 
(6,272
)
 
(9,043
)
 
(16,496
)
Provision for income taxes
(115
)
 
(124
)
 
(224
)
 
(306
)
Net loss
$
(3,031
)
 
$
(6,396
)
 
$
(9,267
)
 
$
(16,802
)
Net loss per share, basic and diluted
$
(0.07
)
 
$
(0.15
)
 
$
(0.22
)
 
$
(0.41
)
Shares used in per share calculation, basic and diluted
42,648

 
41,617

 
42,428

 
41,384





1


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 
June 30,
2014
 
December 31,
2013
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
37,621

 
$
38,190

Accounts receivable, net
46,537

 
32,084

Inventory
15,724

 
16,580

Prepaid expenses and other
5,588

 
3,655

Total current assets
105,470

 
90,509

Property and equipment, net
25,127

 
24,853

Other assets
1,486

 
1,307

Total assets
$
132,083

 
$
116,669

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
19,509

 
$
7,363

Accrued liabilities
27,460

 
19,722

Deferred revenues
2,182

 
2,773

Term loans, current portion
2,805

 
3,507

Total current liabilities
51,956

 
33,365

Long-term liabilities:
 
 
 
Deferred revenues, noncurrent
13,398

 
11,284

Warranty obligations, noncurrent
24,492

 
25,490

Other liabilities
1,357

 
1,154

Term loans, noncurrent
3,726

 
5,170

Total liabilities
94,929

 
76,463

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Common stock and additional paid-in capital
199,124

 
192,916

Accumulated deficit
(162,206
)
 
(152,939
)
Accumulated other comprehensive income
236

 
229

Total stockholders’ equity
37,154

 
40,206

Total liabilities and stockholders’ equity
$
132,083

 
$
116,669





2


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Six Months Ended
June 30,
 
2014
 
2013
Cash flows from operating activities:
 
 
 
Net loss
$
(9,267
)
 
$
(16,802
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
 
 
 
Depreciation and amortization
3,902

 
3,369

Provision for doubtful accounts
711

 
28

Net loss on disposal of assets
28

 
31

Non-cash interest expense
191

 
215

Stock-based compensation
4,507

 
2,910

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(15,164
)
 
(4,389
)
Inventory
856

 
1,937

Prepaid expenses and other assets
(2,272
)
 
(526
)
Accounts payable, accrued compensation and other accrued liabilities
19,119

 
3,174

Deferred revenues
1,523

 
2,091

Net cash provided by (used in) operating activities
4,134

 
(7,962
)
Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(4,333
)
 
(3,467
)
Net cash used in investing activities
(4,333
)
 
(3,467
)
Cash flows from financing activities:
 
 
 
Repayments of term loans
(2,177
)
 
(1,196
)
Principal payments under capital leases
—

 
(40
)
Proceeds from issuance of common stock under employee stock plans
1,701

 
1,534

Net cash (used in) provided by financing activities
(476
)
 
298

Effect of exchange rate changes on cash
106

 
(187
)
Net decrease in cash and cash equivalents
(569
)
 
(11,318
)
Cash and cash equivalents—Beginning of period
38,190

 
45,294

Cash and cash equivalents—End of period
$
37,621

 
$
33,976




3


ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2014
 
2013
 
2014
 
2013
Gross profit (GAAP)
 
$
26,832

 
$
16,284

 
$
45,487

 
$
28,485

Stock-based compensation
 
194

 
64

 
343

 
172

Gross profit (Non-GAAP)
 
$
27,026

 
$
16,348

 
$
45,830

 
$
28,657

 
 
 
 
 
 
 
 
 
Gross margin (GAAP)
 
32.7
%
 
28.0
%
 
32.6
%
 
27.5
%
Stock-based compensation
 
0.3
%
 
0.1
%
 
0.2
%
 
0.1
%
Gross margin (Non-GAAP)
 
33.0
%
 
28.1
%
 
32.8
%
 
27.6
%
 
 
 
 
 
 
 
 
 
Operating expenses (GAAP)
 
$
29,320

 
$
21,775

 
$
53,760

 
$
43,687

Stock-based compensation(1)
 
(2,300
)
 
(1,411
)
 
(4,164
)
 
(2,738
)
Severance costs
 
—

 
—

 
—

 
(156
)
Operating expenses (Non-GAAP)
 
$
27,020

 
$
20,364

 
$
49,596

 
$
40,793

 
 
 
 
 
 
 
 
 
(1) Includes stock-based compensation as follows:
 
 
 
 
 
 
 
 
Research and development
 
$
778

 
$
438

 
$
1,391

 
$
916

Sales and marketing
 
649

 
397

 
1,181

 
775

General and administrative
 
873

 
576

 
1,592

 
1,047

Total
 
$
2,300

 
$
1,411

 
$
4,164

 
$
2,738

 
 
 
 
 
 
 
 
 
Loss from operations (GAAP)
 
$
(2,488
)
 
$
(5,491
)
 
$
(8,273
)
 
$
(15,202
)
Stock-based compensation
 
2,494

 
1,475

 
4,507

 
2,910

Severance costs
 
—

 
—

 
—

 
156

Income (loss) from operations (Non-GAAP)
 
$
6

 
$
(4,016
)
 
$
(3,766
)
 
$
(12,136
)
 
 
 
 
 
 
 
 
 
Net loss (GAAP)
 
$
(3,031
)
 
$
(6,396
)
 
$
(9,267
)
 
$
(16,802
)
Stock-based compensation
 
2,494

 
1,475

 
4,507

 
2,910

Severance costs
 
—

 
—

 
—

 
156

Non-cash interest expense
 
89

 
107

 
191

 
215

Net loss (Non-GAAP)
 
$
(448
)
 
$
(4,814
)
 
$
(4,569
)
 
$
(13,521
)
 
 
 
 
 
 
 
 
 
Net loss per share, basic and diluted (GAAP)
 
$
(0.07
)
 
$
(0.15
)
 
$
(0.22
)
 
$
(0.41
)
Stock-based compensation
 
0.06

 
0.03


0.11


0.07

Severance costs
 
—

 
—


—


—

Non-cash interest expense
 
—

 
—


—


0.01

Net loss per share, basic and diluted (Non-GAAP)
 
$
(0.01
)
 
$
(0.12
)

$
(0.11
)

$
(0.33
)
 
 
 
 
 
 
 
 
 
Shares used in per share calculation, basic and diluted
 
42,648

 
41,617

 
42,428

 
41,384

 
 
 
 
 
 
 
 
 

4

Enphase Energy, Inc. Reports