Vivint Solar Reports Third Quarter 2019 Results
LEHI, Utah, Nov. 6, 2019 /PRNewswire/ -- Vivint Solar, Inc. (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2019.
Third Quarter 2019 Operating Highlights
Key operating and development highlights include:
-- MW Installed of approximately 65 MWs for the quarter, up 20%
year-over-year. Total cumulative MWs installed were approximately 1,228
MWs.
-- Installations were 9,458 for the quarter, up 25% year-over-year.
Cumulative installations were 178,733.
-- Revenue was $104 million, up 33% over the third quarter of 2018.
-- Estimated Gross Retained Value increased by approximately $74 million
during the quarter to approximately $2.2 billion. Estimated Gross
Retained Value per Watt at quarter end was $1.98.
-- Cost per Watt was $3.48, a decrease from $3.56 in the second quarter of
2019 and an increase from $3.16 in the third quarter of 2018.
-- Margin created was $69 million, a 23% increase from the third quarter of
2018. Unlevered NPV per Watt was $1.06.
Financing Activity
As of September 30, 2019, the company had approximately $100 million in undrawn capacity in the forward flow loan facilities, $155 million in undrawn capacity in the warehouse facility, and approximately 126 MWs of undeployed tax equity financing capacity.
Summary Third Quarter 2019 Financial Results
$ amounts in millions, except per share data
Three Months Ended Sept. 30,
2019 2018 YoY
Revenue:
Customer
agreements and
incentives $
70.8 $
53.5 up 32%
Solar energy system and
product sales 33.0 24.3 up 36%
Total Revenue 103.8 77.8 up 33%
Cost of revenue:
Customer agreements and
incentives 49.0 42.1 up 16%
Solar energy system and
product sales 19.4 17.7 up 10%
Total cost of revenue 68.4 59.8 up 14%
Gross profit 35.4 18.0 up 97%
Loss from operations (44.0) (28.3) down
56%
Net loss down
attributable to 76%
common
stockholders $
(13.8) $
(7.9)
Net loss down
attributable per 57%
share to common
stockholders $
(0.11) $
(0.07)
Non-GAAP net $
(0.99) $
(0.61) down
loss per share 62%
Note: Totals may not sum
due to rounding.
Guidance for the Fourth 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 fourth quarter of 2019, Vivint Solar expects:
-- MW Installed: 64 - 67 MWs
-- Cost per Watt: $3.46 - $3.54
-- NPV/W: $1.04 - $1.08
Earnings Conference Call
Vivint Solar will host an investor conference call and live webcast today, Wednesday, November 6, 2019, 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 817 9606. 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 the help of Vivint Solar, homeowners can power their homes with clean, renewable energy, typically achieving significant financial savings over time. Vivint Solar designs and installs solar energy systems for homeowners and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, homeowners 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 Chem home batteries and electric vehicle chargers with ChargePoint Home. 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, but not limited to, 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, estimated retained value per watt, margin created and unlevered NPV per Watt and 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 professionals and solar energy system installers; the availability and price of solar panels and other system components; the potential inaccuracy of the assumptions employed in calculating our operating metrics; the course and outcome of litigation, regulatory investigations and other disputes; 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 Investors section of the company's website at investors.vivintsolar.com/.
Vivint Solar, Inc.
Condensed Consolidated Unaudited Balance Sheets
(In thousands)
September December
30, 31,
2019 2018
ASSETS
Current assets:
Cash and cash equivalents $
260,753 $
219,591
Accounts receivable, net 27,203 14,207
Inventories 13,727 13,257
Prepaid expenses and other current assets 31,895 31,201
Total current assets 333,578 278,256
Restricted cash and cash equivalents 83,743 71,305
Solar energy systems, net 1,696,129 1,938,874
Property and equipment, net 14,332 10,730
Other non-current assets, net 567,872 28,090
TOTAL ASSETS $
2,695,654 $
2,327,255
LIABILITIES, REDEEMABLE NON-CONTROLLING
INTERESTS AND EQUITY
Current liabilities:
Accounts payable $
48,118 $
45,929
Distributions payable to non-controlling
interests and redeemable non-controlling
interests 17,328 7,846
Accrued compensation 40,647 25,520
Current portion of long-term debt 144,532 12,155
Current portion of deferred revenue 28,684 30,199
Current portion of finance lease obligation 1,529 1,921
Accrued and other current liabilities 70,238 42,860
Total current liabilities 351,076 166,430
Long-term debt, net of current portion 1,282,868 1,203,282
Deferred revenue, net of current portion 16,450 13,524
Finance lease obligation, net of current
portion 4,308 505
Deferred tax liability, net 539,190 437,120
Other non-current liabilities 81,740 24,610
Total liabilities 2,275,632 1,845,471
Commitments and contingencies
Redeemable non-controlling interests 118,251 119,572
Stockholders' equity:
Common stock 1,221 1,201
Additional paid-in capital 586,517 574,248
Accumulated other comprehensive loss (24,388) (7,223)
Accumulated deficit (348,430) (279,631)
Total stockholders' equity 214,920 288,595
Non-controlling interests 86,851 73,617
Total equity 301,771 362,212
TOTAL LIABILITIES, REDEEMABLE
NON-CONTROLLING INTERESTS AND
EQUITY $
2,695,654 $
2,327,255
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,
2019 2018 2019 2018
Revenue:
Customer agreements and
incentives $
70,819 $
53,470 $
173,777 $
139,349
Solar energy system and product sales 33,030 24,346 90,200 87,515
Total revenue 103,849 77,816 263,977 226,864
Cost of revenue:
Cost of revenue-customer agreements
and incentives 48,993 42,135 132,258 122,188
Cost of revenue-solar energy system
and product sales 19,444 17,700 52,498 62,735
Total cost of revenue 68,437 59,835 184,756 184,923
Gross profit 35,412 17,981 79,221 41,941
Operating expenses:
Sales and marketing 46,121 15,841 112,792 40,999
Research and development 510 475 1,503 1,472
General and administrative 32,760 29,945 87,014 71,941
Total operating expenses 79,391 46,261 201,309 114,412
Loss from operations (43,979) (28,280) (122,088) (72,471)
Interest expense, net 22,804 18,715 61,403 46,973
Other expense (income), net 3,907 (1) 6,657 (6,371)
Loss before income taxes (70,690) (46,994) (190,148) (113,073)
Income tax expense 50,410 25,698 107,847 79,693
Net loss (121,100) (72,692) (297,995) (192,766)
Net loss attributable to non-
controlling interests and redeemable
non-controlling
interests (107,265) (64,824) (229,351) (190,038)
Net loss attributable to
common stockholders $
(13,835) $
(7,868) $
(68,644) $
(2,728)
Net loss attributable per share to
common stockholders:
Basic and diluted $
(0.11) $
(0.07) $
(0.57) $
(0.02)
Weighted-average shares used in
computing net loss attributable
per share to common
stockholders:
Basic and diluted 121,730 118,767 120,974 116,871
Vivint Solar, Inc.
Condensed Consolidated Unaudited Statements of Cash Flows
(In thousands)
Three Months Ended Nine Months Ended
September September
30, 30,
2019 2018 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $
(121,100) $
(72,692) $
(297,995) $
(192,766)
Adjustments to reconcile net loss to net cash used in
operating
activities:
Depreciation and amortization 21,926 17,807 61,243 51,247
Deferred income taxes 50,666 25,948 108,344 80,121
Stock-based compensation 4,150 3,103 11,985 9,884
Loss on solar energy systems and property and
equipment 5,097 1,414 9,254 4,439
Noncash interest and other expense 3,986 1,661 7,288 15,317
Reduction in lease pass-through financing obligation (1,630) (1,385) (3,662) (3,549)
(Gains) losses on interest rate swaps (1,904) 846 (1,279)
Changes in operating assets and liabilities:
Accounts receivable, net 983 4,444 (12,996) (245)
Inventories (656) (2,645) (470) 6,817
Prepaid expenses and other current assets (75) 655 741 8,931
Other non-current assets, net (61,770) (1,429) (126,402) (8,042)
Accounts payable 1,516 (957) 2,032 941
Accrued compensation 15,408 6,719 14,409 4,390
Deferred revenue 694 4,073 1,411 (6,441)
Accrued and other liabilities 8,871 9,092 9,050 7,177
Net cash used in operating activities (73,838) (4,192) (214,922) (23,058)
CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for the cost of solar energy systems (62,928) (87,301) (187,328) (233,548)
Payments for property and equipment (225) (64) (1,219) (129)
Proceeds from disposals of solar energy systems and
property and
equipment 897 492 2,025 2,335
Purchase of intangible assets (974) (223) (1,089) (223)
Net cash used in investing activities (63,230) (87,096) (187,611) (231,565)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from investment by non-controlling
interests and
redeemable non-controlling
interests 124,417 86,634 284,055 194,921
Distributions paid to non-controlling interests and
redeemable
non-controlling interests (15,258) (13,171) (33,309) (41,729)
Proceeds from long-term debt 218,808 41,748 351,972 917,748
Payments on long-term debt (118,167) (4,462) (139,080) (693,782)
Payments for debt issuance and deferred offering
costs (6,420) (3,494) (9,382) (21,209)
Proceeds from lease pass-through financing
obligation 1,009 994 2,527 2,491
Principal payments on finance lease obligations (377) (732) (954) (2,663)
Proceeds from issuance of common stock 34 39 304 876
Net cash provided by financing activities 204,046 107,556 456,133 356,653
NET INCREASE IN CASH AND CASH EQUIVALENTS,
INCLUDING RESTRICTED AMOUNTS 66,978 16,268 53,600 102,030
CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED
AMOUNTS-Beginning of period 277,518 240,700 290,896 154,938
CASH AND CASH EQUIVALENTS, INCLUDING
RESTRICTED
AMOUNTS-End of
period $
344,496 $
256,968 $
344,496 $
256,968
Vivint Solar, Inc.
Key Operating Metrics
Three Months Ended
September June September
30, 30, 30,
2019 2019 2018
Installations 9,458 8,163 7,547
Megawatts installed 65.1 56.0 54.3
As of
September June September
30, 30, 30,
2019 2019 2018
Cumulative installations 178,733 169,275 146,868
Cumulative megawatts
installed 1,227.6 1,162.5 1,006.6
Estimated nominal
contracted
payments
remaining (in
millions) $
4,200.3 $
3,976.2 $
3,444.4
Estimated
retained value
under energy
contracts (in
millions) $
1,626.3 $
1,587.0 $
1,482.7
Estimated
retained value
of renewal (in
millions) $
566.5 $
531.6 $
451.8
Estimated gross
retained value
(in millions) $
2,192.8 $
2,118.6 $
1,934.5
Estimated gross
retained value
per watt $
1.98 $
2.02 $
2.09
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, 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 $
1,909.4 $
1,626.3 $
1,401.3
Estimated retained value of
renewal 870.1 566.5 373.0
Total estimated gross
retained value $
2,779.5 $
2,192.8 $
1,774.3
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 ($0.99) and ($2.46) for the three and nine months ended September 30, 2019.
Vivint Solar, Inc.
Reconciliation from GAAP EPS to Non-GAAP EPS
(In thousands, except per share data)
Three Months Ended
September September
30, 2019 30, 2018
Net Loss EPS Net Loss EPS
Net loss attributable
to common stockholders $
(13,835) $
(0.11) $
(7,868) $
(0.07)
Net loss attributable to non-
controlling interests and
redeemable non-controlling
interests (107,265) (0.88) (64,824) (0.54)
Non-GAAP net loss $
(121,100) $
(0.99) $
(72,692) $
(0.61)
Weighted-average shares used in
computing net loss per share 121,730 118,767
Nine Months Ended
September September
30, 2019 30, 2018
Net Loss EPS Net Loss EPS
Net loss attributable
to common stockholders $
(68,644) $
(0.57) $
(2,728) $
(0.02)
Net loss attributable
to non-controlling
interests and
redeemable non-
controlling interests (229,351) $
(1.89) (190,038) $
(1.63)
Non-GAAP net loss $
(297,995) $
(2.46) $
(192,766) $
(1.65)
Weighted-average
shares used in
computing net loss per
share: 120,974 116,871
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, or PPA, 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 per watt" represents the estimated weighted average unit margin of Vivint Solar's PPA and customer 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 value of Vivint Solar's PPA and customer 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:
Heather Hurst
Senior Director of Communications
385-202-6577
pr@vivintsolar.com
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SOURCE Vivint Solar, Inc.
