Vivint Solar Announces Third Quarter 2015 Financial Results

Megawatts Installed Increased 24% Year-over-Year

Retained Value Increased 99% Year-over-Year

Revenue Increased 170% Year-over-Year

Nov 16, 2015, 17:45 ET from Vivint Solar

LEHI, Utah, Nov. 16, 2015 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Operating Highlights

Key operating and development highlights for the quarter ended September 30, 2015 include:

  • MW Booked of approximately 71 MWs for the quarter, up 15% year-over-year.
  • MW Installed of approximately 61 MWs, up 24% year-over-year. Total cumulative MWs installed were approximately 400 MWs.
  • Installations were 8,658 for the quarter, up 25% year-over-year. Cumulative installations were 60,116.
  • Estimated Nominal Contracted Payments Remaining increased by approximately $214 million during the quarter and was approximately $1.7 billion, up 97% year-over-year.
  • Estimated Retained Value increased by approximately $113 million during the quarter to approximately $793 million, up 99% year-over-year.
  • Estimated Retained Value per Watt was $1.98.
  • Cost per Watt was $3.12, up from $3.00 in the second quarter of 2015 and flat compared to the third quarter of 2014.

Third Quarter 2015 GAAP Financial Results

Summary GAAP financial results for the quarter ended September 30, 2015 include:

  • Operating Leases and Incentives Revenue was $21.8 million, up 205% from $7.1 million in the third quarter of the prior year. Total revenue for the quarter was $22.5 million, up 170% from $8.3 million in the third quarter of the prior year.
  • Cost of Revenue – Operating Leases and Incentives was $37.6 million, up from $19.5 million in the same period of 2014.
  • Total Operating Expenses, including cost of revenue, were $76.9 million, compared to $66.7 million in the third quarter of 2014. Operating expenses included non-cash stock-based compensation expense of $2.6 million and amortization of intangibles of $3.7 million.
  • Loss from Operations was $54.4 million compared to $58.4 million in the same period of 2014.
  • GAAP Net Income Available to Stockholders per Diluted Share was $0.00, up from ($0.45) in the third quarter of 2014.
  • Non-GAAP Loss Before Non-Controlling Interests and Redeemable Non-Controlling Interests per Share was ($0.47), up from ($0.66) in the same period of 2014. See below for a further discussion of Non-GAAP Loss per Share.
  • Cash and Cash Equivalents as of September 30, 2015 were $81.8 million.

Financing Activity

As of September 30, 2015, the Company had $77 million in undrawn capacity in the working capital facility, $192 million in undrawn capacity in the aggregation facility, and 167 MWs of installation capacity remaining in our tax equity funds.

About Vivint Solar

Vivint Solar is a leading provider of distributed solar energy systems – electricity generated by a solar energy system installed at a customer's location – to residential customers in the United States. Vivint Solar's customers pay little to no money upfront, receive significant savings relative to utility generated electricity rates and continue to benefit from guaranteed energy prices over the 20-year term of their contracts.  Vivint Solar finances, designs, installs, monitors and services the solar energy systems to make things easy for its customers. For more information, visit www.vivintsolar.com or follow @VivintSolar.

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 growth prospects, and operating and financial results such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, estimated shares outstanding, the capacity of solar energy systems expected to be installed, estimated total revenue, and estimated total operating expenses 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 state incentives, that affect the pricing of our offering; 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; Vivint Solar's limited operating history, particularly as a new public company; 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 www.vivintsolar.com

 

Vivint Solar, Inc.

Condensed Consolidated Unaudited Balance Sheets

(In thousands)

September 30,

December 31,

2015

2014

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

81,755

$

261,649

Accounts receivable, net

5,464

1,837

Inventories

472

774

Prepaid expenses and other current assets

20,861

16,806

Total current assets

108,552

281,066

Restricted cash and cash equivalents

13,172

6,516

Solar energy systems, net

986,908

588,167

Property and equipment, net

34,048

13,024

Intangible assets, net

4,462

18,487

Goodwill

36,601

36,601

Prepaid tax asset, net

247,861

111,910

Other non-current assets, net

9,409

8,553

TOTAL ASSETS

$

1,441,013

$

1,064,324

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

Current liabilities:

Accounts payable

$

87,890

$

51,354

Accounts payable—related party

1,544

2,132

Distributions payable to non-controlling interests and redeemable non-controlling interests

8,316

6,780

Accrued compensation

21,102

16,794

Current portion of deferred revenue

423

314

Current portion of capital lease obligation

5,147

3,502

Accrued and other current liabilities

34,286

14,016

Total current liabilities

158,708

94,892

Capital lease obligation, net of current portion

9,801

6,176

Long-term debt

253,000

105,000

Deferred tax liability, net

193,692

112,227

Deferred revenue, net of current portion

30,118

4,466

Other non-current liabilities

15,255

Total liabilities

660,574

322,761

Commitments and contingencies

Redeemable non-controlling interests

171,179

128,427

Stockholders' equity:

Common stock

1,065

1,053

Additional paid-in capital

528,252

502,785

Retained earnings (accumulated deficit)

421

(25,849)

Total stockholders' equity

529,738

477,989

Non-controlling interests

79,522

135,147

Total equity

609,260

613,136

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

1,441,013

$

1,064,324

 

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,

2015

2014

2015

2014

Revenue:

Operating leases and incentives

$

21,781

$

7,131

$

45,662

$

15,798

Solar energy system and product sales

693

1,202

2,492

2,600

Total revenue

22,474

8,333

48,154

18,398

Operating expenses:

Cost of revenue—operating leases and incentives

37,624

19,515

94,799

47,161

Cost of revenue—solar energy system and product sales

470

627

1,384

1,510

Sales and marketing

12,051

5,220

37,181

16,229

Research and development

1,047

431

2,549

1,403

General and administrative

21,954

37,170

71,948

63,276

Amortization of intangible assets

3,711

3,727

11,195

11,155

Impairment of intangible assets

4,506

Total operating expenses

76,857

66,690

223,562

140,734

Loss from operations

(54,383)

(58,357)

(175,408)

(122,336)

Interest expense

3,351

3,261

8,208

7,335

Other expense

26

297

399

1,462

Loss before income taxes

(57,760)

(61,915)

(184,015)

(131,133)

Income tax (benefit) expense

(7,448)

(10,222)

15,977

(3,286)

Net loss

(50,312)

(51,693)

(199,992)

(127,847)

Net loss attributable to non-controlling interests and redeemable

   non-controlling interests

(50,780)

(16,415)

(226,262)

(105,103)

Net income available (loss attributable) to common stockholders

$

468

$

(35,278)

$

26,270

$

(22,744)

Net income available (loss attributable) per share to common

   stockholders:

Basic

$

0.00

$

(0.45)

$

0.25

$

(0.30)

Diluted

$

0.00

$

(0.45)

$

0.24

$

(0.30)

Weighted-average shares used in computing net income

   available (loss attributable) per share to common stockholders:

Basic

106,492

78,428

105,932

76,160

Diluted

110,223

78,428

109,694

76,160

 

Vivint Solar, Inc.

Condensed Consolidated Unaudited Statements of Cash Flows

(In thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(50,312)

$

(51,693)

$

(199,992)

$

(127,847)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

7,018

2,426

16,771

5,435

Amortization of intangible assets

3,711

3,769

11,195

11,270

Impairment of intangible assets

4,506

Loss on removal of solar energy systems

1,169

1,169

Stock-based compensation

2,596

20,030

23,206

20,846

Amortization of deferred financing costs

885

855

2,557

1,522

Noncash contributions for services

62

181

Noncash interest expense

1,403

4,280

Deferred income taxes

23,277

9,702

77,480

45,567

Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable, net

(41)

(192)

(3,627)

(1,893)

Inventories

(130)

5

302

21

Prepaid expenses and other current assets

1,246

(2,682)

1,498

(11,610)

Prepaid tax asset, net

(48,758)

(22,017)

(135,951)

(45,817)

Other non-current assets, net

(762)

(5,079)

(990)

(11,350)

Accounts payable

5,519

(3,848)

6,570

1,243

Accounts payable—related party

(434)

(2,300)

(588)

(3,061)

Accrued compensation

102

565

3,713

(2,786)

Deferred revenue

23,010

660

25,761

1,340

Accrued and other current liabilities

10,858

1,680

21,785

7,788

Net cash used in operating activities

(21,046)

(46,654)

(144,635)

(104,871)

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for the cost of solar energy systems

(149,624)

(99,163)

(383,674)

(249,612)

Payment in connection with business acquisition, net of cash acquired

(12,040)

Payments for property and equipment

(1,880)

(2,908)

(5,282)

(3,056)

Change in restricted cash and cash equivalents

(524)

84

(6,656)

(1,516)

Purchase of intangible assets

(1,346)

(269)

(1,675)

(269)

Proceeds from U.S. Treasury grants

190

Net cash used in investing activities

(153,374)

(102,256)

(397,287)

(266,303)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from investment by non-controlling interests and redeemable non-controlling interests

63,288

83,417

232,071

240,863

Distributions paid to non-controlling interests and redeemable non- controlling interests

(6,457)

(3,552)

(17,146)

(5,484)

Proceeds from long-term debt

44,500

87,000

148,000

87,000

Proceeds from short-term debt

75,500

Payments on short-term debt

(75,500)

(75,500)

Payments for debt issuance costs

(3,078)

Proceeds from lease pass-through financing obligation

4,005

4,005

Proceeds from revolving lines of credit—related party

40,500

154,500

Payments on revolving lines of credit—related party

(40,500)

(141,500)

Principal payments on capital lease obligations

(1,530)

(695)

(3,600)

(1,810)

Proceeds from issuance of common stock

60

103,500

648

103,500

Payments for deferred offering costs

(4,341)

(589)

(5,784)

Excess tax effects from stock-based compensation

85

1,717

Net cash provided by financing activities

103,951

189,829

362,028

431,285

NET (DECREASE) INCREASE IN CASH AND CASH

   EQUIVALENTS

(70,469)

40,919

(179,894)

60,111

CASH AND CASH EQUIVALENTS—Beginning of period

152,224

25,230

261,649

6,038

CASH AND CASH EQUIVALENTS—End of period

$

81,755

$

66,149

$

81,755

$

66,149

 

Vivint Solar, Inc.

Key Operating Metrics

Three Months Ended

September 30,

June 30,

March 31,

2015

2015

2015

 Installations

8,658

9,312

6,426

 Megawatts installed

60.5

65.5

46.2

 Cumulative installations

60,116

51,458

42,146

 Cumulative megawatts installed

400.4

339.9

274.4

 Estimated nominal contracted payments remaining (in millions)

$

1,656.5

$

1,442.5

$

1,204.8

      Estimated retained value under energy contract (in millions)

$

616.6

$

531.3

$

442.8

      Estimated retained value of renewal (in millions)

$

176.0

$

148.7

$

117.2

 Estimated retained value (in millions)

$

792.6

$

680.0

$

560.0

 Estimated retained value per watt

$

1.98

$

2.00

$

2.05

 

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. 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 ($0.47) and ($1.89) for the three and nine months ended September 30, 2015.

Vivint Solar, Inc.

Non-GAAP Net Loss per Share

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Net loss

$

(50,312)

$

(51,693)

$

(199,992)

$

(127,847)

Net loss per share:

Basic and diluted

$

(0.47)

$

(0.66)

$

(1.89)

$

(1.68)

Weighted-average shares used in computing net loss per share:

Basic and diluted

106,492

78,428

105,932

76,160

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:

Vivint Solar Rob Kain Vice President of Investor Relations 801-234-7066 ir@vivintsolar.com

Media Contact:

Vivint Solar Casey Briggs Public Relations 801-229-6443 pr@vivintsolar.com

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SOURCE Vivint Solar



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