Vivint Solar Reports First Quarter 2019 Results
LEHI, Utah, May 9, 2019 /PRNewswire/ -- Vivint Solar, Inc. (NYSE: VSLR), today announced financial results for the first quarter ended March 31, 2019.
First Quarter 2019 Operating Highlights
Key operating and development highlights include:
-- MW Installed of approximately 46 MWs for the quarter. Total cumulative
MWs installed were approximately 1,107 MWs.
-- Installations were 6,514 for the quarter. Cumulative installations were
161,112.
-- Estimated Gross Retained Value increased by approximately $54 million
during the quarter and is approximately $2.1 billion. Estimated Gross
Retained Value per Watt at quarter end was $2.04.
-- Cost per Watt was $3.46, an increase from $3.18 in the fourth quarter of
2018 and an increase from $3.22 in the first quarter of 2018.
-- Margin created was $45 million, a 29% increase from the first quarter of
2018. Unlevered NPV per Watt was $0.99.
Financing Activity
As of March 31, 2019, the company had $305 million in undrawn capacity in the aggregation facility, $30 million in undrawn capacity in the forward flow loan facility, and approximately 59 MWs of undeployed tax equity financing capacity.
Summary First Quarter 2019 Financial Results
$ amounts in millions, except per share data
Three Months Ended Mar. 31,
---
2019 2018 YoY
Revenue:
Customer
agreements and
incentives $
39.6 $
31.1 up 27%
Solar energy
system and
product sales 29.8 37.1 down 20%
Total Revenue 69.4 68.3 up 2%
Cost of revenue:
Customer
agreements and
incentives 40.2 38.7 up 4%
Solar energy
system and
product sales 17.3 26.0 down 34%
Total cost of
revenue 57.5 64.7 down 11%
Gross profit 11.9 3.5 up 239%
Loss from
Operations (41.2) (28.1) down 47%
Net loss
attributable to
common
stockholders $
(26.2) $
(13.0) down 102%
Net loss per
share
attributable to
common
stockholders $
(0.22) $
(0.11) down 100%
Non-GAAP net
loss per share $
(0.74) $
(0.53) down 40%
Note: Totals may not sum
due to rounding.
Guidance for the Second Quarter 2019
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 2019 financial results.
For the second quarter of 2019, Vivint Solar expects:
-- MW Installed: 52 - 55 MWs
-- Cost per Watt: $3.32 - $3.40
Earnings Conference Call
Vivint Solar will host an investor conference call and live webcast today, Thursday, May 9, 2019, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.833.235.7641 or 1.647.689.4162 for international callers. The conference ID is 977 3839. A listen-only webcast will be accessible on the investor relations page of the company's website at investors.vivintsolar.com/. 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. Vivint Solar designs and installs 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, including power purchase agreements or lease agreements, where available. Vivint Solar also offers solar plus storage systems with LG home 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, undeployed tax equity financing capacity, 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 our recent and future 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)
March December
31, 31,
2019 2018
---
ASSETS
Current assets:
Cash and cash equivalents $
213,474 $
219,591
Accounts receivable, net 19,992 14,207
Inventories 11,532 13,257
Prepaid expenses and other current assets 29,294 31,201
Total current assets 274,292 278,256
Restricted cash and cash equivalents 75,010 71,305
Solar energy systems, net 1,590,888 1,938,874
Property and equipment, net 10,180 10,730
Other non-current assets, net 478,013 28,090
TOTAL ASSETS $
2,428,383 $
2,327,255
===
LIABILITIES, REDEEMABLE NON-CONTROLLING
INTERESTS AND EQUITY
Current liabilities:
Accounts payable $
38,937 $
45,929
Distributions payable to non-controlling
interests and redeemable non-controlling
interests 6,591 7,846
Accrued compensation 21,121 25,520
Current portion of long-term debt 147,952 12,155
Current portion of deferred revenue 26,246 30,199
Current portion of finance lease obligation 769 1,921
Accrued and other current liabilities 49,658 42,860
Total current liabilities 291,274 166,430
Long-term debt, net of current portion 1,123,888 1,203,282
Deferred revenue, net of current portion 14,746 13,524
Finance lease obligation, net of current
portion 874 505
Deferred tax liability, net 463,156 437,120
Other non-current liabilities 66,369 24,610
Total liabilities 1,960,307 1,845,471
Commitments and contingencies
Redeemable non-controlling interests 118,667 119,572
Stockholders' equity:
Common stock 1,206 1,201
Additional paid-in capital 577,961 574,248
Accumulated other comprehensive loss (11,870) (7,223)
Accumulated deficit (306,028) (279,631)
Total stockholders' equity 261,269 288,595
Non-controlling interests 88,140 73,617
Total equity 349,409 362,212
TOTAL LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS AND
EQUITY $
2,428,383 $
2,327,255
===
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Operations
(In thousands, except per share data)
Three Months Ended
March
31,
2019 2018
---
Revenue:
Customer agreements and
incentives $
39,603 $
31,114
Solar energy system and product sales 29,768 37,136
Total revenue 69,371 68,250
Cost of revenue:
Cost of revenue-customer agreements
and incentives 40,191 38,687
Cost of revenue-solar energy system
and product sales 17,263 26,045
Total cost of revenue 57,454 64,732
Gross profit 11,917 3,518
Operating expenses:
Sales and marketing 29,634 11,125
Research and development 469 486
General and administrative 23,049 19,987
Total operating expenses 53,152 31,598
Loss from operations (41,235) (28,080)
Interest expense, net 19,127 16,922
Other expense (income), net 1,385 (2,261)
Loss before income taxes (61,747) (42,741)
Income tax expense 27,487 18,643
Net loss (89,234) (61,384)
Net loss attributable to non-
controlling interests and redeemable
non-controlling
interests (62,992) (48,408)
Net loss attributable to
common stockholders $
(26,242) $
(12,976)
===
Net loss per share attributable to
common stockholders:
Basic and diluted $
(0.22) $
(0.11)
===
Weighted-average shares used in
computing net loss per share
attributable to common
stockholders:
Basic and diluted 120,307 115,155
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
Three Months Ended
March
31,
2019 2018
---
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $
(89,234) $
(61,384)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization 17,659 16,443
Deferred income taxes 27,727 18,969
Stock-based compensation 3,679 2,969
Loss on solar energy systems and property and
equipment 1,233 570
Non-cash interest and other expense 1,645 2,007
Reduction in lease pass-through financing
obligation (695) (687)
Losses (gains) on interest rate swaps 1,384 (2,262)
Changes in operating assets and liabilities:
Accounts receivable, net (5,785) 1,429
Inventories 1,725 6,807
Prepaid expenses and other current assets 2,746 11,746
Other non-current assets, net (26,539) 385
Accounts payable 1,876 374
Accrued compensation (4,068) (2,351)
Deferred revenue (2,731) (9,083)
Accrued and other liabilities (615) (103)
Net cash used in operating activities (69,993) (14,171)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems (64,526) (72,208)
Payments for property and equipment (291) (40)
Proceeds from disposals of solar energy systems and
property and equipment 649 775
Net cash used in investing activities (64,168) (71,473)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling
interests and redeemable non-controlling
interests 84,368 42,771
Distributions paid to non-controlling interests and
redeemable non-controlling interests (9,013) (18,122)
Proceeds from long-term debt 61,355 40,000
Payments on long-term debt (5,593) (7,748)
Proceeds from lease pass-through financing
obligation 864 852
Principal payments on finance lease obligations (271) (1,015)
Proceeds from issuance of common stock 39 207
Net cash provided by financing activities 131,749 56,945
NET DECREASE IN CASH AND CASH EQUIVALENTS, INCLUDING
RESTRICTED
AMOUNTS (2,412) (28,699)
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
AMOUNTS-Beginning of
period 290,896 154,938
CASH AND CASH EQUIVALENTS, INCLUDING
RESTRICTED AMOUNTS-End of period $
288,484 $
126,239
===
Vivint Solar, Inc.
Key Operating Metrics
Three Months Ended
March December March
31, 31, 31,
2019 2018 2018
---
Installations 6,514 7,730 5,813
Megawatts installed 45.6 54.3 40.4
As of
March December March
31, 31, 31,
2019 2018 2018
---
Cumulative installations 161,112 154,598 132,643
Cumulative megawatts
installed 1,106.5 1,060.9 905.3
Estimated nominal
contracted
payments
remaining (in
millions) $
3,795.8 $
3,638.1 $
3,128.2
Estimated
retained value
under energy
contracts (in
millions) $
1,549.7 $
1,517.0 $
1,347.9
Estimated
retained value
of renewal (in
millions) $
501.0 $
479.7 $
396.6
Estimated gross
retained value
(in millions) $
2,050.7 $
1,996.7 $
1,744.5
Estimated gross
retained value
per watt $
2.04 $
2.06 $
2.08
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 March 31, 2019, 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 $
1,822.0 $
1,549.7 $
1,335.2
Estimated retained value of
renewal 774.4 501.0 329.7
Total estimated gross
retained value $
2,596.4 $
2,050.7 $
1,664.9
Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests
We report GAAP EPS, which is based upon net 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. 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 ($0.74) for the three months ended March 31, 2019.
Vivint Solar, Inc.
Reconciliation from GAAP EPS to Non-GAAP EPS
(In thousands, except per share data)
Three Months Ended
March
31, March
31,
2019 2018
---
Net Loss EPS Net Loss EPS
---
Net loss attributable
to common stockholders $
(26,242) $
(0.22) $
(12,976) $
(0.11)
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (62,992) (0.52) (48,408) (0.42)
Non-GAAP net loss $
(89,234) $
(0.74) $
(61,384) $
(0.53)
===
Weighted-average shares used in
computing net loss per share 120,307 115,155
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 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.
"Estimated 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.
"Estimated 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 plus the value of contracted SRECs net of estimated cash distributions to fund investors, debt associated with our 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 plus the value of contracted SRECs, 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.
"Estimated 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.
"Project Value" represents the net cash flows, discounted at 6% that Vivint Solar expects to receive from customers net of estimated distributions to fund investors and operating expenses, estimated utility and state incentives, and estimated finance proceeds from fund investors.
"NPV / Watt" represents the estimated weighted average unit margin of Vivint Solar's PPA / Lease business and its system sales business. It is calculated by dividing Margin Created during the period by the total MWs Installed during the period.
"Margin Created" represents the estimated margin created during the period. It is the estimated expected value of the PPA / Lease agreements and the value of the system sales less the costs required to create the value. Specifically, it is the sum of the project value per Watt multiplied by MWs Installed - PPA/Lease and Revenue - solar energy system and product sales less total creation costs.
"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:
Helen Langan
Senior Director of Communications
385-202-6577
pr@vivintsolar.com
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SOURCE Vivint Solar, Inc.
