Sunworks Reports 2017 Fourth Quarter and Full-Year Results

Published on 30 Mar 2018
SUNworks 
Sunworks, Inc. announced financial results for the fourth quarter and full year ended December 31, 2017.

Chuck Cargile, Sunworks Chief Executive Officer, said, "Our 2017 final results were consistent with the update we provided on March 8, 2018. Certainly, 2017 was a challenging year for the solar industry as a whole, and a year of transition for Sunworks. For the last several years Sunworks, along with the overall solar industry, experienced significant top-line growth. In 2017, this trend reversed as industry-wide photovoltaic installed capacity declined as did Sunworks revenue. In response to the challenges in 2017, we significantly decreased our cost structure, improved our internal controls and processes, and positioned the company for profitability and enhanced cash generation in 2018."

Full Year 2017 Summary

- Revenue for the full year of 2017 of $77.4 million versus $86.4 million in the full year of 2016.

- Gross margin of 17.6% for the full year of 2017 versus 25.6% for the full year of 2016.

- Selling, general and administrative expenses of $20.0 million for the full year of 2017 versus $30.1 million for the full year of 2016.

- Net loss of $7.2 million for the full year of 2017 versus $9.4 million for the full year of 2016.

2018 Expectations

- New projects booked in the first quarter are expected to exceed $30 million, with the majority of these bookings expected to convert into installation revenue in 2018. 

- Based on backlog and the momentum of new sales, the company expects full year revenue to increase in the range of 10 percent to 20 percent year-over-year. 

- Management expects the company to be profitable for the full year of 2018.

Commenting on the outlook for 2018, Mr. Cargile stated, "We are optimistic about our position for 2018 even as we navigate through the seasonal weakness resulting from the wet weather that we experienced during the first quarter of the year in Central and Northern California. New projects bookings have been strong to start the year and our pipeline of projects scheduled for installation is robust. In addition, the new projects we have booked into backlog are estimated to deliver higher gross margins than the projects we completed in 2017. We expect the higher expected gross margins compounded by lower overall operating expenses to result in operating profits and cash generation beginning in the second quarter of the year."

Fourth Quarter Financial Summary

Revenue for the quarter ended December 31, 2017 increased 4.6% to $19.3 million versus $18.4 million during the same period last year. The increase was primarily driven by an increase in revenue from public works projects, offset by a decline in ACI and residential revenue.

Revenue from ACI and public works customers represented approximately 71% of total revenue and revenue from residential customers represented 29% for the fourth quarter of 2017.

Gross profit for the fourth quarter of 2017 was $1.0 million, or 5.4% of total revenue, compared to $2.7 million, or 14.9% of total revenues, for the corresponding period last year. The decline in gross margin was primarily the result of revisions to the cost estimates of many older projects and construction cost overruns during the quarter.

Net loss for the quarter ended December 31, 2017 was $3.4 million, or $0.15 per basic and diluted share, compared to $3.7 million, or $0.16 per basic and diluted share, in the fourth quarter of 2016.

Full-Year 2017 Financial Summary

Revenue for the full year 2017 was to $77.4 million, a decline of 10.4% from $86.4 million for the full year of 2016. The year-over-year decline was primarily driven by the overall decline the solar industry experienced in 2017. 

Revenue from ACI and public works customers represented approximately 68% of total revenue and revenue from residential customers represented 32% for full-year 2017.

Gross profit for the year was $13.7 million, or 17.6% of total revenue, compared to $22.1 million, or 25.6% of total revenues, for the corresponding period last year. The decline in gross margin was primarily the result of revisions to the cost estimates of many older projects and construction cost overruns during the second half of 2017.

Net loss for the year ended December 31, 2017 was $7.2 million, or $0.32 per basic and diluted share, compared to $9.4 million, or $0.46 per basic and diluted share, in the same period last year. 

Balance Sheet Summary

The company had $6.4 million in cash and cash equivalents as of December 31, 2017 compared to $11.1 million as of December 31, 2016.

As of December 31, 2017, the company had $2.0 million of debt outstanding, inclusive of convertible debt, compared to $2.3 million as of December 31, 2016.


Source: SUNworks
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