SAN MATEO, Calif., May 13, 2013 (GLOBE NEWSWIRE) -- SolarCity (Nasdaq:SCTY), a leading provider of clean energy, today announced financial results for the first quarter ended March 31, 2013.
"Extending its leadership as the nation's premier clean energy provider, SolarCity not only grew its customer base 106% year-over-year to over 57,400 and increased its long-term contracted cash flows to $1.22 billion but also exceeded guidance of MW deployed of 41 MW with 46 MW in the first quarter of 2013," said Lyndon Rive, CEO. "Through our unique, vertically-integrated platform of financing and installing solar systems, we offer customers a compelling value proposition of clean energy for lower than their local utility rate," continued Mr. Rive. "And our growing economies of scale and falling cost of capital are leading us to retain greater value for our shareholders."
Q1 2013 Operating Highlights
In its first full quarter as a publicly-traded company following its December 12, 2012 IPO, SolarCity continued to make progress in building out its distributed energy platform. Key operating and development highlights in the quarter include:
- MWs Deployed were 46 MW, up 12% from the first quarter of 2012, and bringing cumulative MWs deployed to 333 MW. Residential MWs deployed increased 137% year-over-year
- Customer Base reached a cumulative 57,416, growing 106% year-over-year (and 14% from the fourth quarter of 2012)
- Energy Contracts signed and outstanding rose 16% from the fourth quarter of 2012 to 46,843
Estimated Nominal Contracted Payments and Retained Value
Due to the long-term nature of operating lease contracts—of up to 20 years—the Company believes GAAP income statement accounting does not accurately reflect new sales activity. It views the following operating metrics as a better representation of its business outlook (amounts as of December 31, 2012 are presented as corrected from amounts previously reported):
- Estimated Nominal Contracted Payments Remaining of $1,222 million at March 31, 2013, up 10% from $1,109 million at December 31, 2012
- Retained Value of $569 million at March 31, 2013, equating to retained value per watt of $1.25/W at March 31, 2013
"Retained Value" represents the forecasted net present value of estimated Nominal Contracted Payments Remaining and estimated performance-based incentives allocated to us, net of amounts we are obligated to distribute to our fund investors, upfront rebates, depreciation, renewable energy certificates, solar renewable energy certificates and estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog. Our calculation of retained value assumes a discount rate of 6%.
Investing and Financing Activities
With each new Energy Contract, SolarCity creates a recurring, predictable cash flow stream. Its financial strategy is to maximize retained value for shareholders by covering Investing Activities with cash generated from Operating and Financing Activities. Its Investing Activities are primarily comprised of the capital investment in distributed generation solar energy systems under long-term energy contracts with customers, while its Financing Activities represent the funding of its solar energy systems investments through its investor partners and lenders. Key highlights of its Investing and Financing Activities include:
- Investments in Solar Energy Systems of $138.2 million bringing the cumulative gross total to date to over $1.14 billion
- Available Tax Equity Financing of 158 MW as of May 10, 2013
Q1 2013 GAAP Cash Flows
For the first quarter ended March 31, 2013, net cash provided by Operating Activities was $8.9 million, while net cash used in Investing Activities was $140.6 million and net cash provided by Financing Activities was $98.9 million. The net decrease in cash and cash equivalents for the quarter ended March 31, 2013 was $32.8 million.
Condensed GAAP Statements of Cash Flows
| $ in thousands | Three Months Ended: | ||
| Net Cash Provided By (Used In): | Mar. 2012 | Dec. 2012 | Mar. 2013 |
| Operating Activities | (76,885) | 64,723 | 8,898 |
| Investing Activitites | (86,831) | (151,288) | (140,576) |
| Financing Activities (Before Equity Issuance) | 122,658 | 104,548 | 98,378 |
| Net Cash Provided (Used) before Equity Issuance | (41,058) | 17,983 | (33,300) |
| Net Cash Provided by Equity Issuance | 81,255 | 92,779 | 514 |
| Net Increase (Decrease) in Cash and Cash Equivalents | 40,197 | 110,762 | (32,786) |
Q1 2013 GAAP Income Statement
For the first quarter of 2013, core Operating Lease Revenue was $15.1 million, rising 85% from $8.1 million in the first quarter of 2012. Total revenue grew 21% year-over-year to $30.0 million.
Gross Profit was $12.7 million, growing 25% year-over-year from $10.1 million in the first quarter of 2012 and yielding Gross Profit Margin of 42%. Total Operating Expenses were $34.5 million, rising from $24.7 million in the first quarter of 2012, as the Company continued to invest in its development capabilities. Loss from Operations was $21.8 million as compared to $14.6 million in the year-ago period.
Q2 2013 Guidance and Update to 2013 Outlook
For Q2 2013, the Company expects to deploy between 48 MW and 53 MW.
For its Q2 2013 GAAP income statement, the Company also expects:
- GAAP Operating Lease Revenue: $16 million - $18 million
- GAAP Solar Energy Systems Sale Revenue: $5 million - $10 million
- GAAP Gross Margin: 40%-55%
- GAAP Operating Expenses: $38 million - $42 million
For 2013, we continue to expect MWs deployed of 250 MW. In addition, we not only continue to expect to turn consistently net cash flow positive by Q4 2013 but we also now expect positive net cash flow in Q2 2013.
Earnings Conference Call
The Company will hold a conference call today to discuss its first quarter results and its outlook for the remainder of 2013 at 5:00 pm Eastern. A live webcast of the call may be accessed over the Internet from the Company's Investor Relations website at http://investors.solarcity.com.
Participants should follow the instructions provided on the website to download and install the necessary audio applications. In addition, an earnings related presentation will be available on the Company's Investor Relations site at 5:00 pm Eastern. The conference call can be accessed live over the phone by dialing 1-877-407-4018, or for international callers, 1-201-689-8471. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176, or for international callers, 1-858-384-5517. The passcode for the live call and the replay is 412030. The replay will be available until May 20, 2013.
About SolarCity
SolarCity® (Nasdaq:SCTY) provides clean energy. The company has disrupted the century-old energy industry by providing renewable electricity directly to homeowners, businesses and government organizations for less than they spend on utility bills. SolarCity gives customers control of their energy costs to protect them from rising rates. The company offers solar power, energy efficiency and electric vehicle services, and makes clean energy easy by taking care of everything from design and permitting to monitoring and maintenance. SolarCity currently serves 14 states and signs a new customer every five minutes. Visit the company online at www.solarcity.com and follow the company on Facebook & Twitter.
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding SolarCity's customer and market growth opportunities, financial strategies for cash generation and increasing shareholder value, the deployment of megawatts (including megawatts currently in backlog), the amount of megawatts that can be deployed based on committed available financing, expected future GAAP income statement results, the timing of the Company becoming net cash flow positive, additional financial and operational forecasts to be discussed during the conference call referenced in this release, and assumptions relating to the foregoing.
Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements 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 the effect of electric utility industry regulations, net metering and related policies, the availability and amount of rebates, tax credits and other financial incentives, the availability and amount of financing from fund investors, the retail price of utility-generated electricity or the availability of alternative energy sources, risks associated with SolarCity's rapid growth, risks that consumers who have executed energy contracts included in reported nominal contracted payments remaining and backlog may seek to cancel those contracts, SolarCity's limited operating history, particularly as a new public company, changes in strategic planning decisions by management or reallocation of internal resources, and general market, political, economic and business conditions. You should read the section entitled "Risk Factors" in our annual report on our Form 10-K, which has been filed with the Securities and Exchange Commission and identifies certain of these and additional risks and uncertainties. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.
| SolarCity Corporation | ||
| Condensed Consolidated Balance Sheets | ||
| In Thousands | December 31, | March 31, |
| 2012 | 2013 | |
| (audited) | (unaudited) | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $ 160,080 | $ 127,294 |
| Restricted cash | 7,516 | 3,154 |
| Accounts receivable, net | 25,145 | 19,041 |
| Rebates receivable | 17,501 | 16,294 |
| Inventories | 87,903 | 77,681 |
| Deferred income tax asset | 5,770 | 5,377 |
| Prepaid expenses and other current assets | 11,502 | 26,304 |
| Total current assets | 315,417 | 275,145 |
| Restricted cash | 2,810 | 2,513 |
| Solar energy systems - net | 1,002,184 | 1,131,119 |
| Property, plant and equipment – net | 18,635 | 19,793 |
| Other assets | 22,796 | 23,420 |
| Total assets | $ 1,361,842 | $ 1,451,990 |
| Liabilities and equity | ||
| Current liabilities: | ||
| Accounts payable | $ 62,986 | $ 57,525 |
| Distributions payable to noncontrolling interests | 12,028 | 19,435 |
| Current portion of deferred U.S. Treasury grants income | 11,376 | 13,684 |
| Accrued and other current liabilities | 52,334 | 36,395 |
| Customer deposits | 8,753 | 8,349 |
| Current portion of deferred revenue | 31,516 | 35,109 |
| Current portion of long-term debt | 20,613 | 14,211 |
| Current portion of lease pass-through financing obligation | 13,622 | 27,165 |
| Current portion of sale leaseback financing obligation | 389 | 491 |
| Total current liabilities | 213,617 | 212,364 |
| Deferred revenue, net of current portion | 204,396 | 234,907 |
| Long-term debt, net of current portion | 83,533 | 96,224 |
| Long-term deferred tax liability | 5,790 | 5,400 |
| Lease passthrough financing obligation, net of current portion | 125,884 | 101,168 |
| Sale leaseback financing obligation, net of current portion | 14,755 | 14,653 |
| Deferred U.S. Treasury grants income, net of current portion | 286,884 | 354,321 |
| Other liabilities and deferred credits | 112,056 | 118,560 |
| Total liabilities | 1,046,915 | 1,137,597 |
| Stockholders' equity: | ||
| Common stock | 7 | 7 |
| Additional paid-in capital | 325,705 | 329,941 |
| Accumulated deficit | (111,392) | (142,386) |
| Total stockholders' equity | 214,320 | 187,562 |
| Noncontrolling interests in subsidiaries | 100,607 | 126,831 |
| Total equity | 314,927 | 314,393 |
| Total liabilities and equity | $ 1,361,842 | $ 1,451,990 |
| SolarCity Corporation | ||
| Condensed Consolidated Statements of Operations | ||
| In Thousands, Except Share Par Values | Three months ended | |
| March 31, | March 31, | |
| 2012 | 2013 | |
| (unaudited) | (unaudited) | |
| Revenue: | ||
| Operating leases | $ 8,139 | $ 15,089 |
| Solar energy systems sales | 16,702 | 14,899 |
| Total revenues | 24,841 | 29,988 |
| Cost of revenue: | ||
| Operating leases | 2,582 | 5,503 |
| Solar energy systems | 12,125 | 11,789 |
| Total cost of revenues | 14,707 | 17,292 |
| Gross profit | 10,134 | 12,696 |
| Operating expenses: | ||
| Sales and marketing | 16,131 | 17,879 |
| General and administrative | 8,562 | 16,618 |
| Total operating expenses | 24,693 | 34,497 |
| Loss from operations | (14,559) | (21,801) |
| Interest expense, net | 3,494 | 6,319 |
| Other expense, net | 8,974 | 140 |
| Loss before income taxes | (27,027) | (28,260) |
| Income tax (provision) benefit | (35) | 105 |
| Net loss | (27,062) | (28,155) |
| Net (loss) income attributable to noncontrolling interests | (29,818) | 2,839 |
| Net income (loss) attributable to stockholders | $ 2,756 | $ (30,994) |
| Net Income (Loss) Attributable to Common Stockholders | ||
| Basic | $ 453 | $ (30,994) |
| Diluted | $ 656 | $ (30,994) |
| Net Income (Loss) per Share Attributable to Common Stockholders | ||
| Basic | $ 0.04 | $ (0.41) |
| Diluted | $ 0.04 | $ (0.41) |
| Weighted average shares used to compute net income (loss) per share attributable to common stockholders | ||
| Basic | 10,503,931 | 75,186,430 |
| Diluted | 17,076,717 | 75,186,430 |
| SolarCity Corporation | ||
| Condensed Consolidated Statements of Cash Flows | ||
| Three months ended | ||
| In Thousands | March 31, | March 31, |
| 2012 | 2013 | |
| (Unaudited) | (Unaudited) | |
| Operating activities: | ||
| Net loss | $ (27,062) | $ (28,155) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
| Depreciation and amortization net of amortization of deferred U.S. Treasury grant income | 3,961 | 7,482 |
| Interest on lease pass-thorough financing obligation | 1,899 | 3,871 |
| Stock-based compensation | 2,091 | 3,722 |
| Revaluation of convertible redeemable preferred stock warrants | 8,588 | – |
| Revaluation of preferred stock forward contract | 350 | – |
| Deferred income taxes | 3 | 3 |
| Reduction in lease pass-through financing obligation | (3,865) | (5,482) |
| Changes in operating assets and liabilities: | ||
| Restricted cash | 92 | 757 |
| Accounts receivable | (25,150) | 6,104 |
| Rebates receivable | (2,941) | 1,207 |
| Inventories | (7,446) | 10,222 |
| Prepaid expenses and other current assets | 2,223 | (10,785) |
| Other assets | (2,374) | (624) |
| Accounts payable | (68,772) | (5,461) |
| Accrued and other liabilities | 7,872 | (7,663) |
| Customer deposits | (253) | (404) |
| Deferred revenue | 33,899 | 34,104 |
| Net cash provided by (used in) operating activities | (76,885) | 8,898 |
| Investing activities: | ||
| Payments for the cost of solar energy systems, leased and to be leased | (83,465) | (138,221) |
| Purchase of property and equipment | (3,366) | (2,355) |
| Net cash used in investing activities | (86,831) | (140,576) |
| Financing activities: | ||
| Investment fund financings and bank borrowings: | ||
| Borrowings under long-term debt | 57,570 | 15,435 |
| Repayments of long-term debt | (427) | (9,729) |
| Borrowings under bank line of credit | 19,418 | – |
| Repayments of sale-leaseback financing obligation | (88) | – |
| Proceeds from lease pass-through financing obligation | 59,155 | 4,631 |
| Repayment of capital lease obligations | (5,481) | (833) |
| Proceeds from investment by noncontrolling interests in subsidiaries | 3,469 | 74,578 |
| Distributions paid to noncontrolling interest in a subsidiary | (37,829) | (43,786) |
| Proceeds from U.S. Treasury grants | 26,871 | 58,082 |
| Net cash provided by financing activites before equity issuances | 122,658 | 98,378 |
| Equity issuances: | ||
| Proceeds from exercise of stock options | 387 | 514 |
| Proceeds from issuance of convertible redeemable preferred stock | 80,868 | – |
| Net cash provided by equity issuances | 81,255 | 514 |
| Net cash provided by financing activities | 203,913 | 98,892 |
| Net increase (decrease) in cash and cash equivalents | 40,197 | (32,786) |
| Cash and cash equivalents, beginning of period | 50,471 | 160,080 |
| Cash and cash equivalents, end of period | $ 90,668 | $ 127,294 |
| Operating Activity Metrics | 2011 | 2012 | Q1 2012 | Q1 2013 | Cumulative |
| MW Deployed (1) | 72 | 157 | 41 | 46 | 333 |
| MW Backlog as of May 8, 2013 (2) | 195 | ||||
| New Customers (3) | 9,034 | 30,950 | 8,299 | 6,884 | 57,416 |
| New Energy Contracts Outstanding (4) | 7,132 | 26,327 | 7,746 | 6,387 | 46,843 |
| Estimated Nominal Contracted Payments Remaining -- $m (5) | 486 | 1,109 | 1,222 | ||
"MW" or "megawatts" represents the DC nameplate megawatt production capacity.
(1) "MW Deployed" represents the megawatt production capacity of solar energy systems that have had all required building department inspections completed during the applicable period. This metric includes solar energy systems deployed under Energy Contracts as well as solar energy system direct sales.
(2) "Backlog" represents the aggregate megawatt capacity of solar energy systems not yet deployed as of the date specified pursuant to Energy Contracts and contracts for solar energy system direct sales executed as of such date.
(3) "Customers" includes all residential, commercial and government buildings where we have installed or contracted to install a solar energy system, or performed or contracted to perform an energy efficiency evaluation or other energy efficiency services.
(4) "Energy Contracts" includes all residential, commercial and government leases and power purchase agreements pursuant to which consumers use or will use energy generated by a solar energy system that we have installed or contracted to install. For landlord-tenant structures in which we contract with the landlord or development company, we include each residence as an individual contract. For commercial customers with multiple locations, each location is deemed a contract if we maintain a separate contract for that location.
(5) "Nominal Contracted Payments Remaining" equals the sum of cash payments obligated to be paid to us under our Energy Contracts over the remaining term of such contracts. This metric includes Energy Contracts for solar energy systems already deployed and in Backlog. As an example, if a customer is 2 years into her 20 year contract, then 18 years of contract payments remain. As an additional example, if a customer chose to pre-pay her Energy Contract, then it is included in Nominal Contracted Payments Remaining only while it is in Backlog as the pre-payment has not been received. Payments for direct sales are not included. The estimated nominal contracted payment remaining as of December 31, 2012 of $1.109 billion is presented as corrected from the $1.091 billion previously reported and included in our annual report on Form 10-K.