Vivint Solar Reports Second Quarter 2018 Results
LEHI, Utah, Aug. 7, 2018 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the second quarter ended June 30, 2018.
Second Quarter 2018 Operating Highlights
Key operating and development highlights include:
-- MWs Booked of approximately 64 MWs for the quarter.
-- MWs Installed of approximately 47 MWs for the quarter. Total cumulative
MWs installed were approximately 952 MWs.
-- Installations were 6,678 for the quarter. Cumulative installations were
139,321.
-- Estimated Retained Value increased by approximately $112 million during
the quarter to approximately $1.8 billion. Estimated Retained Value per
Watt at quarter end was $2.06.
-- Cost per Watt was $3.11, a decrease from $3.15 in the first quarter of
2018 and an increase from $2.88 in the second quarter of 2017.
Financing Activity
As of June 30, 2018, the company had $375 million in undrawn capacity in the aggregation facility and approximately 62 MWs of available installation capacity remaining in its tax equity funds. Subsequent to quarter end, the company closed a new tax equity partnership with a $50 million commitment that will fund the installation of approximately 32 MWs with a new tax equity investor. In addition, the company entered into a project financing transaction with a total commitment of up to $327 million for 95 MWs of new residential installations.
Summary Second Quarter 2018 Financial Results
$ amounts in millions, except per share data
Three Months Ended June 30,
---------------------------
2018 2017 YoY
---- ---- ---
Revenue:
Operating
leases
and
incentives $54.8 $43.4 up 26%
Solar down
energy 12%
system
and
product
sales 26.0 29.6
---- ----
Total
Revenue 80.8 73.0 up 11%
Cost
of
revenue:
Operating
leases
and
incentives 41.4 33.8 up 23%
Solar down
energy 17%
system
and
product
sales 19.0 22.8
---- ----
Total
cost
of
revenue 60.4 56.6 up 7%
Gross
profit 20.4 16.4 up 25%
Loss down
from 12%
Operations (16.1) (14.3)
Net
income $18.1 $5.0 up 264%
Net
income
per
diluted
share $0.15 $0.04 up 275%
Non- down
GAAP 52%
net
loss
per
share $(0.50) $(0.33)
Note: Totals may not sum
due to rounding.
Guidance for the Third Quarter 2018
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 projected 2018 financial results.
For the third quarter of 2018, Vivint Solar expects:
-- MW Installed: 51 to 54 MWs
-- Cost per Watt: $3.15 - $3.23
Earnings Conference Call
Vivint Solar will host an investor conference call and live webcast today, Tuesday, August 7, 2018, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.866.393.4306 or 1.734.385.2616 for international callers. The conference ID is 118 1885. 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 October 31, 2018. 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. 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, and 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 growth, product offering mix, and costs 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 and expressly disclaims 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)
June 30, December 31,
2018 2017
---- ----
ASSETS
Current assets:
Cash and cash equivalents $174,006 $108,452
Accounts receivable, net 24,354 19,665
Inventories 13,135 22,597
Prepaid expenses and other current
assets 25,620 34,049
------ ------
Total current assets 237,115 184,763
Restricted cash and cash equivalents 66,694 46,486
Solar energy systems, net 1,784,800 1,673,532
Property and equipment, net 12,018 15,078
Intangible assets, net 595 862
Prepaid tax asset, net - 505,883
Other non-current assets, net 28,064 37,325
------ ------
TOTAL ASSETS $2,129,286 $2,463,929
========== ==========
LIABILITIES, REDEEMABLE NON-CONTROLLING
INTERESTS AND EQUITY
Current liabilities:
Accounts payable $44,435 $40,736
Accounts payable-related party 73 163
Distributions payable to non-
controlling interests and redeemable
non-controlling interests 10,114 16,437
Accrued compensation 18,015 20,992
Current portion of long-term debt 10,018 13,585
Current portion of deferred revenue 22,108 41,846
Current portion of capital lease
obligation 2,758 4,166
Accrued and other current liabilities 26,090 29,675
------ ------
Total current liabilities 133,611 167,600
Long-term debt, net of current portion 1,110,044 925,964
Deferred revenue, net of current portion 12,027 29,200
Capital lease obligation, net of current
portion 957 1,599
Deferred tax liability, net 385,907 342,382
Other non-current liabilities 16,870 13,674
------ ------
Total liabilities 1,659,416 1,480,419
Commitments and contingencies
Redeemable non-controlling interests 122,647 122,444
Stockholders' equity:
Common stock 1,185 1,151
Additional paid-in capital 567,372 559,788
Accumulated other comprehensive (loss)
income (3,185) 6,905
(Accumulated deficit) retained earnings (258,899) 213,107
-------- -------
Total stockholders' equity 306,473 780,951
Non-controlling interests 40,750 80,115
------ ------
Total equity 347,223 861,066
------- -------
TOTAL LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS
AND EQUITY $2,129,286 $2,463,929
========== ==========
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2018 2017 2018 2017
---- ---- ---- ----
Revenue:
Operating leases and
incentives $54,765 $43,413 $85,879 $73,802
Solar energy system and product sales 26,033 29,582 63,169 52,307
------ ------ ------ ------
Total revenue 80,798 72,995 149,048 126,109
Cost of revenue:
Cost of revenue-operating leases and
incentives 41,366 33,763 80,053 68,833
Cost of revenue-solar energy system
and product sales 18,990 22,831 45,035 41,496
------ ------ ------ ------
Total cost of revenue 60,356 56,594 125,088 110,329
------ ------ ------- -------
Gross profit 20,442 16,401 23,960 15,780
Operating expenses:
Sales and marketing 14,033 9,411 25,158 18,229
Research and development 511 895 997 1,791
General and administrative 21,879 20,301 41,730 40,880
Amortization of intangible assets 130 139 266 279
--- --- --- ---
Total operating expenses 36,553 30,746 68,151 61,179
------ ------ ------ ------
Loss from operations (16,111) (14,345) (44,191) (45,399)
Interest expense 11,336 16,838 28,258 31,559
Other (income) expense, net (4,109) 715 (6,370) 991
------ --- ------ ---
Loss before income taxes (23,338) (31,898) (66,079) (77,949)
Income tax expense 35,352 5,156 53,995 14,557
------ ----- ------ ------
Net loss (58,690) (37,054) (120,074) (92,506)
Net loss attributable to non-
controlling interests and redeemable
non-controlling interests (76,806) (42,034) (125,214) (110,778)
------- ------- -------- --------
Net income available to
common stockholders $18,116 $4,980 $5,140 $18,272
======= ====== ====== =======
Net income available per share to
common stockholders:
Basic $0.16 $0.04 $0.04 $0.16
===== ===== ===== =====
Diluted $0.15 $0.04 $0.04 $0.16
===== ===== ===== =====
Weighted-average shares used in
computing net income available per
share to common stockholders:
Basic 116,650 112,351 115,907 111,562
======= ======= ======= =======
Diluted 121,753 117,570 120,969 116,988
======= ======= ======= =======
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
2018 2017 2018 2017
---- ---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(58,690) $(37,054) $(120,074) $(92,506)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 16,867 14,877 33,174 29,039
Amortization of intangible assets 130 139 266 279
Deferred income taxes 35,204 29,130 54,173 65,255
Stock-based compensation 3,812 3,330 6,781 7,252
Loss on solar energy systems and property and
equipment 2,455 1,741 3,025 3,766
Non-cash interest and other expense 11,649 3,185 13,656 5,311
Reduction in lease pass-through financing obligation (1,477) (1,346) (2,164) (1,995)
Losses (gains) on interest rate swaps 983 717 (1,279) 993
Changes in operating assets and liabilities:
Accounts receivable, net (6,118) (4,534) (4,689) (9,015)
Inventories 2,655 (2,741) 9,462 (4,856)
Prepaid expenses and other current assets (3,470) (6,528) 8,276 21,373
Prepaid tax asset, net - (18,925) - (43,106)
Other non-current assets, net (6,998) (2,164) (6,613) (6,025)
Accounts payable 1,524 (756) 1,898 (115)
Accrued compensation 22 (259) (2,329) (2,022)
Deferred revenue (1,431) 4,560 (10,514) 6,669
Accrued and other liabilities (1,812) (194) (1,915) 6,279
------ ---- ------ -----
Net cash used in operating activities (4,695) (16,822) (18,866) (13,424)
------ ------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems (74,039) (69,893) (146,247) (145,033)
Payments for property and equipment (25) (355) (65) (633)
Proceeds from disposals of solar energy systems and
property and equipment 1,068 929 1,843 1,100
----- --- ----- -----
Net cash used in investing activities (72,996) (69,319) (144,469) (144,566)
------- ------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling
interests and redeemable non-controlling interests 65,516 56,954 108,287 115,514
Distributions paid to non-controlling interests and
redeemable non-controlling interests (10,436) (7,453) (28,558) (22,480)
Proceeds from long-term debt 836,000 20,000 876,000 273,750
Payments on long-term debt (681,572) (18,145) (689,320) (159,304)
Payments for debt issuance and deferred offering
costs (17,715) (2,980) (17,715) (13,410)
Proceeds from lease pass-through financing
obligation 645 635 1,497 1,487
Principal payments on capital lease obligations (916) (1,147) (1,931) (2,343)
Proceeds from issuance of common stock 630 86 837 233
--- --- --- ---
Net cash provided by financing activities 192,152 47,950 249,097 193,447
------- ------ ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS 114,461 (38,191) 85,762 35,457
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
AMOUNTS-Beginning of period 126,239 197,087 154,938 123,439
------- ------- ------- -------
CASH AND CASH EQUIVALENTS, INCLUDING
RESTRICTED AMOUNTS-End of period $240,700 $158,896 $240,700 $158,896
======== ======== ======== ========
Vivint Solar, Inc.
Key Operating Metrics
Three Months Ended
June 30, March 31, June 30,
2018 2018 2017
---- ---- ----
Installations 6,678 5,813 7,108
Megawatts
installed 47.0 40.4 46.9
Cumulative
installations 139,321 132,643 113,287
Cumulative
megawatts
installed 952.3 905.3 773.8
Estimated nominal
contracted
payments
remaining (in
millions) $3,267.3 $3,128.2 $2,802.4
Estimated
retained value
under energy
contracts (in
millions) $1,379.8 $1,295.7 $1,121.6
Estimated
retained value
of renewal (in
millions) $424.7 $396.6 $339.0
Estimated
retained value
(in millions) $1,804.5 $1,692.3 $1,460.6
Estimated
retained value
per watt $2.06 $2.02 $1.98
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 June 30, 2018, 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 $1,636.5 $1,379.8 $1,177.5
Estimated retained value of
renewal 658.4 424.7 277.0
----- ----- -----
Total estimated retained
value $2,294.9 $1,804.5 $1,454.5
======== ======== ========
Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests
We report GAAP EPS, which is based upon net income available 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. 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 ($0.50) and ($1.04) for the three and six months ended June 30, 2018.
Vivint Solar, Inc.
Reconciliation from GAAP EPS to Non-GAAP EPS
(In thousands, except per share data)
Three Months Ended
June 30, 2018 June 30, 2017
------------- -------------
Net Loss EPS Net Loss EPS
-------- --- -------- ---
Net income available to
common stockholders $18,116 $0.16 $4,980 $0.04
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (76,806) (0.66) (42,034) (0.37)
------- ----- ------- -----
Non-GAAP net loss $(58,690) $(0.50) $(37,054) $(0.33)
======== ====== ======== ======
Weighted-average shares used in
computing net loss per share 116,650 112,351
======= =======
Six Months Ended
June 30, 2018 June 30, 2017
------------- -------------
Net Loss EPS Net Loss EPS
-------- --- -------- ---
Net income available to
common stockholders $5,140 $0.04 $18,272 $0.16
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (125,214) $(1.08) (110,778) $(0.99)
-------- ------ -------- ------
Non-GAAP net loss $(120,074) $(1.04) $(92,506) $(0.83)
========= ====== ======== ======
Weighted-average shares used in
computing net loss per share: 115,907 111,562
======= =======
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
855-842-1844
ir@vivintsolar.com
Press Contact:
Helen Langan
385-202-6577
pr@vivintsolar.com
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SOURCE Vivint Solar
