Home Quarter Results Vivint Solar Reports First Quarter 2018 Results
Vivint Solar Reports First Quarter 2018 Results

Vivint Solar Reports First Quarter 2018 Results

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LEHI, today announced financial results for the first quarter ended March 31, 2018.

First Quarter 2018 Operating Highlights

Key operating and development highlights include:

MW Booked of approximately 52 MWs for the quarter.
MW Installed of approximately 40 MWs for the quarter. Total cumulative MWs installed were approximately 905 MWs.
Installations were 5,813 for the quarter. Cumulative installations were 132,643.
Estimated Retained Value increased by approximately $77 million during the quarter to approximately $1.7 billion. Estimated Retained Value per Watt at quarter end was $2.02.
Cost per Watt was $3.15, an increase from $2.95 in the fourth quarter of 2017 and an increase from $2.98 in the first quarter of 2017.
Financing Activity

As of March 31, 2018, the company had $200 million in undrawn capacity in the aggregation facility and approximately 29 MWs of available installation capacity remaining in its tax equity funds. Subsequent to quarter end, the company closed a new tax equity partnership with a $101 million commitment that will fund the installation of approximately 64 MWs with a new tax equity investor.

Summary First Quarter 2018 Financial Results

$ amounts in millions, except per share data

Three Months Ended March 31,

2018

2017

YoY

Revenue:

     Operating leases and incentives

$

31.1

$

30.4

up 2%

     Solar energy system and product sales

37.1

22.7

up 63%

Total Revenue

68.3

53.1

up 28%

Cost of revenue:

     Operating leases and incentives

38.7

35.1

up 10%

     Solar energy system and product sales

26.0

18.7

up 40%

Total cost of revenue

64.7

53.7

up 20%

Gross profit (loss)

3.5

(0.6)

up 667%

Loss from Operations

(28.1)

(31.1)

up 10%

Net (loss) income

$

(13.0)

$

13.3

down 198%

Net (loss) income per diluted share

$

(0.11)

$

0.11

down 200%

Non-GAAP net loss per share

$

(0.53)

$

(0.50)

down 6%

Guidance for the Second Quarter 2018

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 2018 financial results.

For the second quarter of 2018, Vivint Solar expects:

MW Installed: 45 to 48 MWs
Cost per Watt: $3.05 – $3.13
Earnings Conference Call

Vivint Solar will host an investor conference call and live webcast today, Tuesday, May 8, 2018, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.866.393.4306 or 1.734.385.2616 for international callers. The conference ID is 233 7889. A listen-only webcast will be accessible on the investor relations page of the company’s website at investors.vivintsolar.com/ and will be archived and available on this site until May 31, 2018. 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 Vivint Solar, customers can power their homes with clean, renewable energy and typically achieve significant financial savings over time. Offering integrated residential solar solutions for the entire customer lifecycle, Vivint Solar designs and installs the solar energy systems for its customers, and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, customers may benefit from Vivint Solar’s affordable, flexible financing options, power purchase agreements, or lease agreements, where available. 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 Vivint Solar’s guidance for Megawatts Installed and Cost per Watt, installation capacity remaining in tax equity funds, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, and estimated retained value per watt, including 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 growth, product offering mix, and costs 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; 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.

Vivint Solar, Inc.

Condensed Consolidated Unaudited Balance Sheets

(In thousands)

March 31,

December 31,

2018

2017

ASSETS

Current assets:

Cash and cash equivalents

$

78,466

$

108,452

Accounts receivable, net

18,236

19,665

Inventories

15,790

22,597

Prepaid expenses and other current assets

22,234

34,049

Total current assets

134,726

184,763

Restricted cash and cash equivalents

47,773

46,486

Solar energy systems, net

1,727,479

1,673,532

Property and equipment, net

13,315

15,078

Intangible assets, net

725

862

Prepaid tax asset, net

505,883

Other non-current assets, net

41,763

37,325

TOTAL ASSETS

$

1,965,781

$

2,463,929

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

Current liabilities:

Accounts payable

$

40,751

$

40,736

Accounts payable—related party

529

163

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

7,501

16,437

Accrued compensation

19,890

20,992

Current portion of long-term debt

13,566

13,585

Current portion of deferred revenue

24,255

41,846

Current portion of capital lease obligation

3,439

4,166

Accrued and other current liabilities

25,989

29,675

Total current liabilities

135,920

167,600

Long-term debt, net of current portion

959,187

925,964

Deferred revenue, net of current portion

11,311

29,200

Capital lease obligation, net of current portion

1,226

1,599

Deferred tax liability, net

356,984

342,382

Other non-current liabilities

12,623

13,674

Total liabilities

1,477,251

1,480,419

Commitments and contingencies

Redeemable non-controlling interests

130,107

122,444

Stockholders’ equity:

Common stock

1,153

1,151

Additional paid-in capital

562,962

559,788

Accumulated other comprehensive income

13,694

6,905

(Accumulated deficit) retained earnings

(277,015)

213,107

Total stockholders’ equity

300,794

780,951

Non-controlling interests

57,629

80,115

Total equity

358,423

861,066

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

1,965,781

$

2,463,929

Vivint Solar, Inc.

Condensed Consolidated Unaudited Statements of Operations

(In thousands, except per share data)

Three Months Ended

March 31,

2018

2017

Revenue:

Operating leases and incentives

$

31,114

$

30,389

Solar energy system and product sales

37,136

22,725

Total revenue

68,250

53,114

Cost of revenue:

Cost of revenue—operating leases and incentives

38,687

35,070

Cost of revenue—solar energy system and product sales

26,045

18,665

Total cost of revenue

64,732

53,735

Gross profit (loss)

3,518

(621)

Operating expenses:

Sales and marketing

11,125

8,818

Research and development

486

896

General and administrative

19,851

20,579

Amortization of intangible assets

136

140

Total operating expenses

31,598

30,433

Loss from operations

(28,080)

(31,054)

Interest expense

16,922

14,721

Other (income) expense, net

(2,261)

276

Loss before income taxes

(42,741)

(46,051)

Income tax expense

18,643

9,401

Net loss

(61,384)

(55,452)

Net loss attributable to non-controlling interests and redeemable non-controlling interests

(48,408)

(68,744)

Net (loss attributable) income available to common stockholders

$

(12,976)

$

13,292

Net (loss attributable) income available per share to common stockholders:

Basic

$

(0.11)

$

0.12

Diluted

$

(0.11)

$

0.11

Weighted-average shares used in computing net (loss attributable) income available per share to common stockholders:

Basic

115,155

110,765

Diluted

115,155

116,398

Vivint Solar, Inc.

Condensed Consolidated Unaudited Statements of Cash Flows

(In thousands)

Three Months Ended

March 31,

2018

2017

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$

(61,384)

$

(55,452)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization

16,307

14,162

Amortization of intangible assets

136

140

Deferred income taxes

18,969

36,125

Stock-based compensation

2,969

3,922

Loss on solar energy systems and property and equipment

570

2,025

Non-cash interest and other expense

2,007

2,126

Reduction in lease pass-through financing obligation

(687)

(649)

(Gains) losses on interest rate swaps

(2,262)

276

Changes in operating assets and liabilities:

Accounts receivable, net

1,429

(4,481)

Inventories

6,807

(2,115)

Prepaid expenses and other current assets

11,746

27,901

Prepaid tax asset, net

(24,181)

Other non-current assets, net

385

(3,861)

Accounts payable

374

641

Accrued compensation

(2,351)

(1,763)

Deferred revenue

(9,083)

2,109

Accrued and other liabilities

(103)

6,473

Net cash (used in) provided by operating activities

(14,171)

3,398

CASH FLOWS FROM INVESTING ACTIVITIES:

Payments for the cost of solar energy systems

(72,208)

(75,140)

Payments for property and equipment

(40)

(278)

Proceeds from disposals of solar energy systems and property and equipment

775

171

Net cash used in investing activities

(71,473)

(75,247)

CASH FLOWS FROM FINANCING ACTIVITIES:

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

42,771

58,560

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

(18,122)

(15,027)

Proceeds from long-term debt

40,000

253,750

Payments on long-term debt

(7,748)

(141,159)

Payments for debt issuance and deferred offering costs

(10,430)

Proceeds from lease pass-through financing obligation

852

852

Principal payments on capital lease obligations

(1,015)

(1,196)

Proceeds from issuance of common stock

207

147

Net cash provided by financing activities

56,945

145,497

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS

(28,699)

73,648

CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—Beginning of period

154,938

123,439

CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—End of period

$

126,239

$

197,087

Vivint Solar, Inc.

Key Operating Metrics

Three Months Ended

March 31,

December 31,

March 31,

2018

2017

2017

 Installations

5,813

6,467

6,581

 Megawatts installed

40.4

44.6

45.8

 Cumulative installations

132,643

126,830

106,179

 Cumulative megawatts installed

905.3

864.9

726.9

 Estimated nominal contracted payments remaining (in millions)

$

3,128.2

$

3,021.6

$

2,691.9

      Estimated retained value under energy contracts (in millions)

$

1,295.7

$

1,238.0

$

1,068.3

      Estimated retained value of renewal (in millions)

$

396.6

$

377.1

$

317.4

 Estimated retained value (in millions)

$

1,692.3

$

1,615.1

$

1,385.7

 Estimated retained value per watt

$

2.02

$

2.00

$

1.97

 

 

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 March 31, 2018, 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

$

1,541.0

 

$

1,295.7

 

$

1,102.6

 

 Estimated retained value of renewal

 

617.0

 

396.6

 

257.8

 

 Total estimated retained value

$

2,158.0

 

$

1,692.3

 

$

1,360.4

Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests

We report GAAP EPS, which is based upon net (loss attributable) income available 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 ($0.53) for the three months ended March 31, 2018.

Vivint Solar, Inc.

Reconciliation from GAAP EPS to Non-GAAP EPS

(In thousands, except per share data)

Three Months Ended

March 31, 2018

March 31, 2017

Net Loss

EPS

Net Loss

EPS

Net (loss attributable) income available to common stockholders

$

(12,976)

$

(0.11)

$

13,292

$

0.12

Net loss attributable to non-controlling interests and redeemable non-controlling interests

(48,408)

(0.42)

(68,744)

(0.62)

Non-GAAP net loss

$

(61,384)

$

(0.53)

$

(55,452)

$

(0.50)

Weighted-average shares used in computing net loss per share

115,155

110,765

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.

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Anand Gupta Editor - EQ Int'l Media Network

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