Vivint Solar Reports Third Quarter 2018 Results
LEHI, Utah, Nov. 6, 2018 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Operating Highlights
Key operating and development highlights include:
-- MWs Booked of approximately 74 MWs for the quarter.
-- MWs Installed of approximately 54 MWs for the quarter. Total cumulative
MWs installed were approximately 1,007 MWs.
-- Installations were 7,547 for the quarter. Cumulative installations were
146,868.
-- Estimated Gross Retained Value increased by approximately $74 million
during the quarter to approximately $1.9 billion. Estimated Retained
Value per Watt at quarter end was $2.03.
-- Cost per Watt was $3.21, an increase from $3.11 in the second quarter of
2018 and an increase from $2.94 in the third quarter of 2017. Adjusting
for closing fees associated with the forward flow financing agreement,
Vivint Solar's cost per Watt would have been $3.06.
Financing Activity
As of September 30, 2018, the company had $345 million in undrawn capacity in the aggregation facility, $118 million in undrawn capacity in the forward flow loan facility, and approximately 139 MWs of available installation capacity remaining in its tax equity funds.
Summary Third Quarter 2018 Financial Results
$ amounts in millions, except per share data
Three Months Ended Sept. 30,
---
2018 2017 YoY
Revenue:
Operating
leases and
incentives $
53.5 $
45.9 up 16%
Solar energy down
system and 17%
product sales 24.3 29.2
Total Revenue 77.8 75.1 up 4%
Cost of
revenue:
Operating
leases and
incentives 42.1 34.7 up 21%
Solar energy down
system and 20%
product sales 17.7 22.2
Total cost of
revenue 59.8 56.9 up 5%
Gross profit 18.0 18.2 down 1%
Loss from (28.3) (12.0) down
Operations 136%
Net (loss) $
(7.9) $
6.9 down
income 214%
Net (loss) down
income per 217%
share $
(0.07) $
0.06
Non-GAAP net down
loss per 85%
share $
(0.61) $
(0.33)
Guidance for the Fourth 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 fourth quarter of 2018, Vivint Solar expects:
-- MW Installed: 53 to 57 MWs
-- Cost per Watt: $3.00 - $3.07
Earnings Conference Call
Vivint Solar will host an investor conference call and live webcast today, Tuesday, November 6, 2018, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.833.286.5799 or 1.647.689.4443 for international callers. The conference ID is 357 9119. 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 February 28, 2019. 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)
September December
30, 31,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $
188,627 $
108,452
Accounts receivable, net 19,910 19,665
Inventories 15,780 22,597
Prepaid expenses and other current
assets 24,662 34,049
Total current assets 248,979 184,763
Restricted cash and cash equivalents 68,341 46,486
Solar energy systems, net 1,858,743 1,673,532
Property and equipment, net 11,082 15,078
Intangible assets, net 676 862
Prepaid tax asset, net 505,883
Other non-current assets, net 28,696 37,325
TOTAL ASSETS $
2,216,517 $
2,463,929
LIABILITIES, REDEEMABLE NON-CONTROLLING
INTERESTS AND EQUITY
Current liabilities:
Accounts payable $
44,909 $
40,736
Accounts payable-related party 83 163
Distributions payable to non-
controlling interests and redeemable
non-controlling interests 11,236 16,437
Accrued compensation 25,789 20,992
Current portion of long-term debt 10,515 13,585
Current portion of deferred revenue 25,480 41,846
Current portion of capital lease
obligation 2,305 4,166
Accrued and other current liabilities 37,328 29,675
Total current liabilities 157,645 167,600
Long-term debt, net of current portion 1,143,957 925,964
Deferred revenue, net of current portion 12,728 29,200
Capital lease obligation, net of current
portion 648 1,599
Deferred tax liability, net 413,076 342,382
Other non-current liabilities 12,522 13,674
Total liabilities 1,740,576 1,480,419
Commitments and contingencies
Redeemable non-controlling interests 121,820 122,444
Stockholders' equity:
Common stock 1,193 1,151
Additional paid-in capital 570,506 559,788
Accumulated other comprehensive income 95 6,905
(Accumulated deficit) retained earnings (266,767) 213,107
Total stockholders' equity 305,027 780,951
Non-controlling interests 49,094 80,115
Total equity 354,121 861,066
TOTAL LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS
AND EQUITY $
2,216,517 $
2,463,929
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Operations
(In thousands, except per share data)
Three Months Ended Nine Months Ended
September September
30, 30,
2018 2017 2018 2017
Revenue:
Operating leases and
incentives $
53,470 $
45,909 $
139,349 $
119,711
Solar energy system and product sales 24,346 29,230 87,515 81,537
Total revenue 77,816 75,139 226,864 201,248
Cost of revenue:
Cost of revenue-operating leases and
incentives 42,135 34,731 122,188 103,564
Cost of revenue-solar energy system
and product sales 17,700 22,168 62,735 63,664
Total cost of revenue 59,835 56,899 184,923 167,228
Gross profit 17,981 18,240 41,941 34,020
Operating expenses:
Sales and marketing 15,841 9,808 40,999 28,037
Research and development 475 896 1,472 2,687
General and administrative 29,803 19,379 71,533 60,259
Amortization of intangible assets 142 139 408 418
Total operating expenses 46,261 30,222 114,412 91,401
Loss from operations (28,280) (11,982) (72,471) (57,381)
Interest expense, net 18,715 16,148 46,973 47,707
Other (income) expense, net (1) 195 (6,371) 1,186
Loss before income taxes (46,994) (28,325) (113,073) (106,274)
Income tax expense 25,698 9,375 79,693 23,932
Net loss (72,692) (37,700) (192,766) (130,206)
Net loss attributable to non-
controlling interests and redeemable
non-controlling
interests (64,824) (44,605) (190,038) (155,383)
Net (loss attributable)
income available to common
stockholders $
(7,868) $
6,905 $
(2,728) $
25,177
Net (loss attributable) income
available per share to common
stockholders:
Basic $
(0.07) $
0.06 $
(0.02) $
0.22
Diluted $
(0.07) $
0.06 $
(0.02) $
0.21
Weighted-average shares used in
computing net (loss
attributable) income available per
share to common
stockholders:
Basic 118,767 114,505 116,871 112,554
Diluted 118,767 119,465 116,871 117,825
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
Three Months Ended Nine Months Ended
September September
30, 30,
2018 2017 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $
(72,692) $
(37,700) $
(192,766) $
(130,206)
Adjustments to reconcile net loss to net cash used in
operating
activities:
Depreciation and amortization 17,665 15,632 50,839 44,671
Amortization of intangible assets 142 139 408 418
Deferred income taxes 25,948 33,238 80,121 98,493
Stock-based compensation 3,103 2,249 9,884 9,501
Loss on solar energy systems and property and
equipment 1,414 1,258 4,439 5,024
Non-cash interest and other expense 1,661 2,044 15,317 7,355
Reduction in lease pass-through financing obligation (1,385) (1,550) (3,549) (3,545)
Losses (gains) on interest rate swaps 200 (1,279) 1,193
Changes in operating assets and liabilities:
Accounts receivable, net 4,444 (7,844) (245) (16,859)
Inventories (2,645) (3,661) 6,817 (8,517)
Prepaid expenses and other current assets 655 (5,084) 8,931 16,289
Prepaid tax asset, net (19,866) (62,972)
Other non-current assets, net (1,429) 104 (8,042) (5,921)
Accounts payable (957) 1,109 941 994
Accrued compensation 6,719 3,522 4,390 1,500
Deferred revenue 4,073 5,004 (6,441) 11,673
Accrued and other liabilities 9,092 (44) 7,177 6,235
Net cash used in operating activities (4,192) (11,250) (23,058) (24,674)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems (87,301) (66,192) (233,548) (211,225)
Payments for property and equipment (64) (39) (129) (672)
Proceeds from disposals of solar energy systems and
property and
equipment 492 852 2,335 1,952
Purchase of intangible assets (223) (223)
Proceeds from state tax credits 2,216 2,216
Net cash used in investing activities (87,096) (63,163) (231,565) (207,729)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling
interests and
redeemable non-controlling
interests 86,634 46,777 194,921 162,291
Distributions paid to non-controlling interests and
redeemable
non-controlling interests (13,171) (11,294) (41,729) (33,774)
Proceeds from long-term debt 41,748 33,000 917,748 306,750
Payments on long-term debt (4,462) (5,631) (693,782) (164,935)
Payments for debt issuance and deferred offering
costs (3,494) (267) (21,209) (13,677)
Proceeds from lease pass-through financing
obligation 994 980 2,491 2,467
Principal payments on capital lease obligations (732) (1,070) (2,663) (3,413)
Proceeds from issuance of common stock 39 370 876 603
Net cash provided by financing activities 107,556 62,865 356,653 256,312
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS 16,268 (11,548) 102,030 23,909
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
AMOUNTS-Beginning of period 240,700 158,896 154,938 123,439
CASH AND CASH EQUIVALENTS, INCLUDING
RESTRICTED
AMOUNTS-End of
period $
256,968 $
147,348 $
256,968 $
147,348
Vivint Solar, Inc.
Key Operating Metrics
Three Months Ended
September June September
30, 30, 30,
2018 2018 2017
Installations 7,547 6,678 7,076
Megawatts installed 54.3 47.0 46.5
As of
September June September
30, 30, 30,
2018 2018 2017
Cumulative installations 146,868 139,321 120,363
Cumulative megawatts
installed 1,006.6 952.3 820.3
Estimated nominal
contracted
payments
remaining (in
millions) $
3,444.4 $
3,267.3 $
2,913.2
Estimated
retained value
under energy
contracts (in
millions) $
1,427.2 $
1,379.8 $
1,175.5
Estimated
retained value
of renewal (in
millions) $
451.8 $
424.7 $
359.7
Estimated gross
retained value
(in millions) $
1,879.0 $
1,804.5 $
1,535.2
Estimated gross
retained value
per watt $
2.03 $
2.06 $
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 September 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 $
1,691.3 $
1,427.2 $
1,218.8
Estimated retained value of
renewal 699.1 451.8 295.2
Total estimated gross
retained value $
2,390.4 $
1,879.0 $
1,514.0
Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests
We report GAAP EPS, which is based upon net (loss attributable) 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 ($0.61) and ($1.65) for the three and nine months ended September 30, 2018.
Vivint Solar, Inc.
Reconciliation from GAAP EPS to Non-GAAP EPS
(In thousands, except per share data)
Three Months Ended
September September
30, 2018 30, 2017
Net Loss EPS Net Loss EPS
Net (loss attributable)
income available to
common stockholders $
(7,868) $
(0.07) $
6,905 $
0.06
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (64,824) (0.54) (44,605) (0.39)
Non-GAAP net loss $
(72,692) $
(0.61) $
(37,700) $
(0.33)
Weighted-average shares used in
computing net loss per share 118,767 114,505
Nine Months Ended
September September
30, 2018 30, 2017
Net Loss EPS Net Loss EPS
Net (loss attributable)
income available to
common stockholders $
(2,728) $
(0.02) $
25,177 $
0.22
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (190,038) $
(1.63) (155,383) $
(1.38)
Non-GAAP net loss $
(192,766) $
(1.65) $
(130,206) $
(1.16)
Weighted-average shares used in
computing net loss per share: 116,871 112,554
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.
"Gross 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, debt associated with forward flow facilities, 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.
"Gross 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
