Vivint Solar Announces Third Quarter 2017 Results
LEHI, Utah, Nov. 7, 2017 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2017.
Third Quarter 2017 Operating Highlights
Key operating and development highlights for the quarter ended September 30, 2017 include:
-- MW Booked of approximately 53 MWs for the quarter.
-- MW Installed of approximately 47 MWs. Total cumulative MWs installed
were approximately 820 MWs.
-- Installations were 7,076 for the quarter. Cumulative installations were
120,363.
-- Estimated Nominal Contracted Payments Remaining increased by
approximately $111 million during the quarter to approximately $2.9
billion.
-- Estimated Retained Value increased by approximately $75 million during
the quarter to approximately $1.5 billion.
-- Estimated Retained Value per Watt was $1.98.
-- Cost per Watt was $2.94, an increase from $2.88 in the second quarter of
2017 and up from $2.85 in the third quarter of 2016.
Third Quarter 2017 GAAP Financial Results
Summary GAAP financial results for the quarter ended September 30, 2017 include:
-- Operating Leases and Incentives Revenue was $45.9 million, up 37% from
$33.4 million in the third quarter of the prior year. Total revenue for
the quarter was $75.1 million, up 82% from $41.3 million in the third
quarter of the prior year.
-- Cost of Revenue - Operating Leases and Incentives was $34.7 million,
down from $39.3 million in the same period of 2016.
-- Total Operating Expenses, including cost of revenue, were $87.1 million,
compared to $74.6 million in the third quarter of 2016.
-- Loss from Operations was $12.0 million compared to $33.3 million in the
same period of 2016.
-- GAAP Net Income Available (Loss Attributable) per Share to Common
Stockholders was $0.06, down from $0.15 in the third quarter of 2016.
-- Non-GAAP Net Loss Attributable Before Non-Controlling Interests and
Redeemable Non-Controlling Interests per Share was ($0.33), up from
($0.36) in the same period of 2016. See below for a further discussion
of Non-GAAP Loss per Share.
-- Cash and Cash Equivalents as of September 30, 2017 were $101.8 million.
Financing Activity
As of September 30, 2017, the company had $15 million in undrawn capacity in the working capital facility, had $275 million in undrawn capacity in the aggregation facility, and had approximately 76 MWs of installation capacity remaining in its tax equity funds.
Guidance for Fourth Quarter 2017
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding 2017 financial results.
For the fourth quarter of 2017, Vivint Solar expects:
-- MW Installed: 46 to 50 MWs
-- Cost per Watt: $2.90 - $3.00
Earnings Conference Call
Vivint Solar will host an investor conference call and live webcast today, Tuesday, November 7, 2017, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.844.579.6824 or 1.763.488.9145 for international callers. The conference ID is 9870 3603. A listen-only webcast will be accessible on the investor relations page of the Company's website at investors.vivintsolar.com/ and will be archived and available on this site until November 30, 2017. Participants should follow the instructions provided on the website to download and install the necessary audio applications in advance of the call. In addition, the earnings presentation slides will be available on the investor relations page of the site by 5:00 p.m. ET along with this press release and the financial information discussed on today's conference call at investors.vivintsolar.com/.
About Vivint Solar
Vivint Solar is a leading full-service residential solar provider in the United States. With Vivint Solar, customers can power their homes with clean, renewable energy and typically achieve significant financial savings over time. Offering integrated residential solar solutions for the entire customer lifecycle, Vivint Solar designs and installs the solar energy systems for its customers, and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, customers may benefit from Vivint Solar's affordable, flexible financing options, power purchase agreements, or lease agreements, where available. Through an exclusive collaboration, Vivint Solar also offers solar plus storage systems with Mercedes-Benz batteries. For more information, visit www.vivintsolar.com or follow @VivintSolar on Twitter.
Note on Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding Vivint Solar's guidance for megawatts installed and cost per watt, installation capacity remaining in tax equity funds, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, including the assumptions related to the calculation of the foregoing metrics.
Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements should not be read as a guarantee of future performance or results, and they will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. These statements are based on current expectations and assumptions regarding future events and business performance as of the date of this press release, and they 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, including but not limited to: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including solar renewable energy certificates, or SRECs, and other federal and state incentives; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth effectively, including attracting, training and retaining sales personnel and solar energy system installers; the availability and price of solar panels and other system components, the assumptions employed in calculating our operating metrics may be inaccurate; and such other risks identified in the registration statements and reports that Vivint Solar files with the U.S. Securities and Exchange Commission, or SEC, from time to time. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in those statements will be achieved or will occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Except as required by law, Vivint Solar does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC's website at www.sec.gov and the Investor Relations section of the Company's website at investors.vivintsolar.com/.
Vivint Solar, Inc.
Condensed Consolidated Unaudited Balance Sheets
(In thousands)
September 30, December 31,
2017 2016
---- ----
ASSETS
Current assets:
Cash and cash equivalents $101,755 $96,586
Accounts receivable, net 29,517 12,658
Inventories 19,802 11,285
Prepaid expenses and other current
assets 29,519 46,683
------ ------
Total current assets 180,593 167,212
Restricted cash and cash equivalents 45,593 26,853
Solar energy systems, net 1,622,561 1,458,355
Property and equipment, net 17,040 23,199
Intangible assets, net 1,002 1,420
Prepaid tax asset, net 482,446 419,474
Other non-current assets, net 36,889 29,843
------ ------
TOTAL ASSETS $2,386,124 $2,126,356
========== ==========
LIABILITIES, REDEEMABLE NON-
CONTROLLING INTERESTS AND EQUITY
Current liabilities:
Accounts payable $42,315 $46,630
Accounts payable-related party 476 191
Distributions payable to non-
controlling interests and redeemable
non-controlling interests 11,664 16,176
Accrued compensation 23,199 20,003
Current portion of long-term debt 13,454 6,252
Current portion of deferred revenue 32,283 19,911
Current portion of capital lease
obligation 4,571 5,163
Accrued and other current liabilities 25,044 19,364
------ ------
Total current liabilities 153,006 133,690
Long-term debt, net of current portion 882,672 750,728
Deferred revenue, net of current
portion 33,680 34,379
Capital lease obligation, net of
current portion 2,294 5,476
Deferred tax liability, net 491,834 395,218
Other non-current liabilities 13,999 10,355
------ ------
Total liabilities 1,577,485 1,329,846
Commitments and contingencies
Redeemable non-controlling interests 127,833 129,676
Stockholders' equity:
Common stock 1,148 1,102
Additional paid-in capital 554,420 542,348
Accumulated other comprehensive income 6,027 7,631
Retained earnings 29,186 5,217
------ -----
Total stockholders' equity 590,781 556,298
Non-controlling interests 90,025 110,536
------ -------
Total equity 680,806 666,834
------- -------
TOTAL LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS
AND EQUITY $2,386,124 $2,126,356
========== ==========
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Operating leases and
incentives $45,909 $33,394 $119,711 $80,033
Solar energy system and product sales 29,230 7,868 81,537 13,363
------ ----- ------ ------
Total revenue 75,139 41,262 201,248 93,396
Operating expenses:
Cost of revenue-operating leases and
incentives 34,731 39,268 103,564 115,566
Cost of revenue-solar energy system
and product sales 22,168 6,468 63,664 10,606
Sales and marketing 9,808 8,617 28,037 32,078
Research and development 896 842 2,687 2,218
General and administrative 19,379 19,022 60,259 60,006
Amortization of intangible assets 139 342 418 762
Impairment of goodwill - - - 36,601
--- --- --- ------
Total operating expenses 87,121 74,559 258,629 257,837
------ ------ ------- -------
Loss from operations (11,982) (33,297) (57,381) (164,441)
Interest expense 16,148 9,361 47,707 22,539
Other expense (income), net 195 (434) 1,186 (95)
--- ---- ----- ---
Loss before income taxes (28,325) (42,224) (106,274) (186,885)
Income tax expense (benefit) 9,375 (2,959) 23,932 10,245
----- ------ ------ ------
Net loss (37,700) (39,265) (130,206) (197,130)
Net loss attributable to non-
controlling interests and redeemable
non-controlling interests (44,605) (55,961) (155,383) (194,978)
------- ------- -------- --------
Net income available (loss
attributable) to common
stockholders $6,905 $16,696 $25,177 $(2,152)
====== ======= ======= =======
Net income available (loss
attributable) per share to common
stockholders:
Basic $0.06 $0.15 $0.22 $(0.02)
===== ===== ===== ======
Diluted $0.06 $0.15 $0.21 $(0.02)
===== ===== ===== ======
Weighted-average shares used in
computing net income available (loss
attributable) per share to common
stockholders:
Basic 114,505 108,692 112,554 107,516
======= ======= ======= =======
Diluted 119,465 113,344 117,825 107,516
======= ======= ======= =======
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
---- ---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(37,700) $(39,265) $(130,206) $(197,130)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 15,632 12,500 44,671 32,376
Amortization of intangible assets 139 342 418 762
Impairment of goodwill - - - 36,601
Deferred income taxes 33,238 41,075 98,493 124,912
Stock-based compensation 2,249 3,678 9,501 6,145
Loss on solar energy systems and property and
equipment 1,258 4,317 5,024 4,576
Non-cash interest and other expense 2,044 1,966 7,355 4,963
Reduction in lease pass-through financing obligation (1,550) (1,613) (3,545) (3,279)
Losses (gains) on interest rate swaps 200 (258) 1,193 (258)
Excess tax detriment from stock-based compensation - (299) - (1,280)
Changes in operating assets and liabilities:
Accounts receivable, net (7,844) (140) (16,859) (8,444)
Inventories (3,661) (2,655) (8,517) (5,891)
Prepaid expenses and other current assets (5,084) (2,209) 16,289 98
Prepaid tax asset, net (19,866) (35,273) (62,972) (122,313)
Other non-current assets, net 104 (961) (5,921) (4,255)
Accounts payable 936 1,742 874 664
Accounts payable-related party 173 (68) 120 (1,480)
Accrued compensation 3,522 3,696 1,500 8,334
Deferred revenue 5,004 2,222 11,673 3,396
Accrued and other liabilities (44) (3,955) 6,235 (2,377)
--- ------ ----- ------
Net cash used in operating activities (11,250) (15,158) (24,674) (123,880)
------- ------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems (66,192) (106,651) (211,225) (318,273)
Payments for property and equipment (39) (809) (672) (2,697)
Proceeds from disposals of solar energy systems and
property and equipment 852 319 1,952 693
Change in restricted cash and cash equivalents (2,309) (3,917) (18,740) (8,434)
Proceeds from state tax credits 2,216 - 2,216 -
Purchase of intangible assets - - - (291)
--- --- --- ----
Net cash used in investing activities (65,472) (111,058) (226,469) (329,002)
------- -------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling
interests and redeemable non-controlling interests 46,777 53,885 162,291 237,148
Distributions paid to non-controlling interests and
redeemable non-controlling interests (11,294) (10,417) (33,774) (22,230)
Proceeds from long-term debt 33,000 355,551 306,750 500,257
Payments on long-term debt (5,631) (220,250) (164,935) (224,400)
Payments for debt issuance and deferred offering
costs (267) (10,544) (13,677) (16,774)
Proceeds from lease pass-through financing
obligation 980 557 2,467 1,417
Principal payments on capital lease obligations (1,070) (1,298) (3,413) (4,357)
Proceeds from issuance of common stock 370 2,155 603 2,645
--- ----- --- -----
Net cash provided by financing activities 62,865 169,639 256,312 473,706
------ ------- ------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (13,857) 43,423 5,169 20,824
CASH AND CASH EQUIVALENTS-Beginning of period 115,612 69,614 96,586 92,213
------- ------ ------ ------
CASH AND CASH EQUIVALENTS-End of period $101,755 $113,037 $101,755 $113,037
======== ======== ======== ========
Vivint Solar, Inc.
Key Operating Metrics
Three Months Ended
September 30, June 30, September 30,
2017 2017 2016
---- ---- ----
Installations 7,076 7,108 8,266
Megawatts
installed 46.5 46.9 58.8
Cumulative
installations 120,363 113,287 93,138
Cumulative
megawatts
installed 820.3 773.8 634.0
Estimated nominal
contracted
payments
remaining (in
millions) $2,913.2 $2,802.4 $2,432.2
Estimated
retained value
under energy
contracts (in
millions) $1,175.5 $1,121.6 $948.3
Estimated
retained value
of renewal (in
millions) $359.7 $339.0 $280.0
Estimated
retained value
(in millions) $1,535.2 $1,460.6 $1,228.3
Estimated
retained value
per watt $1.98 $1.98 $1.96
Sensitivity Analysis for Retained Value
The following table provides quantitative sensitivity analysis of our estimate of retained value of solar energy systems under contracts as of September 30, 2017, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in millions):
4% 6% 8%
--- --- ---
Estimated retained value
under energy contracts $1,405.6 $1,175.5 $995.1
Estimated retained value of
renewal 562.8 359.7 232.4
----- ----- -----
Total estimated retained
value $1,968.4 $1,535.2 $1,227.5
======== ======== ========
Non-GAAP Earnings per Share (EPS) Before Noncontrolling Interests
We report GAAP EPS, which is based upon net income available (loss attributable) to common stockholders. We also report non-GAAP EPS. The difference between GAAP EPS and non-GAAP EPS is that non-GAAP EPS is based on net loss, which excludes net loss attributable to non-controlling interests and redeemable non-controlling interests. Additionally, we have excluded the effect of the goodwill impairment for the nine months ended September 30, 2016 as it is a non-cash, non-recurring event that is not representative of our ongoing business. As we are in a net loss position for all periods reported, potentially issuable shares are excluded from the diluted EPS calculation since the effect would be antidilutive. Therefore, basic and diluted non-GAAP EPS are the same in each period presented.
Under GAAP accounting, we report net loss attributable to non-controlling interests and redeemable non-controlling interests to reflect our joint venture fund investors' allocable share in the results of these joint venture investment funds. Net loss attributable to non-controlling interests and redeemable non-controlling interests is calculated based primarily on the hypothetical liquidation at book value, or HLBV, method, which assumes that the joint venture funds are liquidated at the reporting date, even though liquidation may or may not ever occur. Additionally, the returns that will be allocated to the investors over the expected terms of the investment funds may differ significantly from the amounts calculated under the HLBV method. Accordingly, we also report non-GAAP EPS based on our losses before net loss attributable to non-controlling interests and redeemable non-controlling interests per share, which we view as a better measure of our operating performance. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
According to this definition, the non-GAAP loss before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.33) and ($1.16) for the three and nine months ended September 30, 2017.
Vivint Solar, Inc.
Reconciliation from GAAP EPS to Non-GAAP EPS
(In thousands, except per share data)
Three Months Ended
September 30, 2017 September 30, 2016
------------------ ------------------
Net Loss EPS Net Loss EPS
-------- --- -------- ---
Net income available to
common stockholders $6,905 $0.06 $16,696 $0.15
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (44,605) (0.39) (55,961) (0.51)
------- ----- ------- -----
Non-GAAP net loss $(37,700) $(0.33) $(39,265) $(0.36)
======== ====== ======== ======
Weighted-average shares used in
computing net loss per share 114,505 108,692
======= =======
Nine Months Ended
September 30, 2017 September 30, 2016
------------------ ------------------
Net Loss EPS Net Loss EPS
-------- --- -------- ---
Net income available
(loss attributable) to
common stockholders $25,177 $0.22 $(2,152) $(0.02)
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (155,383) $(1.38) (194,978) $(1.81)
Impairment of goodwill - $ - 36,601 $0.34
--- --- --- ------ -----
Non-GAAP net loss $(130,206) $(1.16) $(160,529) $(1.49)
========= ====== ========= ======
Weighted-average shares used in
computing net loss per share: 112,554 107,516
======= =======
Glossary of Definitions
"Installations" represents the number of solar energy systems installed on customers' premises.
"MWs or megawatts" represents the DC nameplate megawatt production capacity.
"MW Booked" represents the aggregate megawatt nameplate capacity of solar energy systems that were permitted during the period net of cancellations in the period.
"MW Installed" represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.
"Nominal Contracted Payments Remaining" equals the sum of the remaining cash payments that Vivint Solar's customers are expected to pay over the term of their agreements for systems installed as of the measurement date. For a power purchase agreement, Vivint Solar multiplies the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, Vivint Solar includes the monthly fees and upfront fee, if any, as set forth in the lease.
"Retained Value" represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts net of estimated cash distributions to fund investors and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar's contracts, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.
"Retained Value per Watt" is calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems under long-term customer contracts that have been installed as of such date, and is subject to the same assumptions and uncertainties as estimated retained value.
"Undeployed Tax Equity Financing Capacity" represents a forecast of the amount of megawatts that can be deployed based on committed available tax equity financing for energy contracts.
Investor Contact:
Rob Kain
Vice President of Investor Relations
855-842-1844
ir@vivintsolar.com
Press Contact:
Ashlyn Hewlett
Method Communications
801-461-9772
ashlyn@methodcommunications.com
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SOURCE Vivint Solar
