Solar Power, Inc. today announced its results for the third quarter ended September 30, 2014.
Third-Quarter 2014 Results:
Total net sales increased from $21.3 million for the third quarter of 2013 to $26.7 million for the corresponding period in 2014, primarily as a result of SPI's successful debut in the China market and revenue generated from operations in China. Total net sales for the third quarter of 2014 also represented a significant increase from $6.3 million for the second quarter of 2014.
Total cost of goods sold decreased from $22.2 million for the third quarter of 2013 to $21.2 million for the corresponding period in 2014, primarily as a result of revenue generated from higher-margin projects. Total cost of goods sold for the third quarter of 2014 also represented an increase from $5.8 million for the second quarter of 2014, in line with the significant increase in SPI's revenue over the same periods.
Total operating expenses decreased from $3.4 million for the third quarter of 2013 to $2.8 million for the corresponding period in 2014, primarily due to the cumulative effect of a reserve recorded against SPI's accounts receivable of $5.2 million, relatively dormant operations from July 2013 to July 2014 and fast expansion of operations thereafter. Total operating expenses for the third quarter of 2014 also represented an increase from $1.2 million for the second quarter of 2014.
Net loss for the third quarter of 2014 was $7.7 million, or ($0.02) per basic and diluted share, compared with a net loss of $3.6 million, or ($0.02) per basic and diluted share, for the corresponding period of 2013, and with a net loss of $1.3 million, or ($0.01) per basic and diluted share, for the second quarter of 2014. The increase in net loss for the third quarter of 2014 was primarily due to a one-time conversion of $11.0 million worth of convertible bonds into SPI ordinary shares and, as a result, non-cash interest expense of $0.9 million and a non-cash loss of $8.9 million on extinguishment of convertible bonds were recorded in SPI's Consolidated Statement of Operations for the third quarter of 2014, and a net increase of $0.6 million in SPI stockholders' equity was recorded in SPI's Condensed Consolidated Balance Sheet as of September 30, 2014. But for the foregoing one-time conversion of convertible bond, as a result of expanded operations, debut in the China market and improved sales, SPI would have recorded net income of $2.2 million for the third quarter of 2014.
Cash and cash equivalents at September 30, 2014 were $12.8 million, compared with $1.0 million at December 31, 2013.
"We are pleased with SPI's continued strong business execution and rapid growth during the third quarter," said Xiaofeng Peng, Chairman of SPI. "As evidenced by recent announcements regarding acquisitions of substantial PV project assets, as well as the provision of engineering, procurement and construction (‘EPC') services to numerous PV projects, we have enhanced SPI's reputation as a global leader in developing PV projects, particularly in the China PV installation market."
Third-Quarter 2014 Business Highlights:
- Appointed seasoned financial executive Amy Jing Liu as chief financial officer and senior vice president
- Announced two rounds of private placements during the quarter totalling approximately $73.26 million
- Entered into definitive agreements to acquire 26.57 megawatts ("MW") of operating PV assets in Greece, to be closed shortly after the third quarter
- Announced various strategic agreements to acquire substantial PV project assets and/or provide EPC services to projects across China, the largest and fastest growing PV market globally
- Established a new subsidiary in Japan to acquire SPI's first PV project and debut in Japan market, expanding SPI's worldwide footprint
"Earlier this year, SPI began an ambitious effort to revitalize and grow the Company by taking advantage of a huge and sustainable opportunity in global solar downstream project development. As a result of these moves to strengthen our team, raise additional capital and secure important projects and EPC service agreements, we have laid the foundation for further rapid scaling of SPI's global businesses looking into 2015," continued Chairman Peng. "Particularly in China, we believe that SPI is well-positioned to capitalize on above-average market growth forecasts to become one of the largest PV project development companies there."