Discloses Results of Combined Companies; Expects 15%-Plus Residential Revenue Growth
ROSEVILLE, CA / ACCESSWIRE / June 7, 2021 / Sunworks, Inc. (NASDAQ:SUNW), a provider of solar power and battery storage solutions for residential, agriculture, commercial, industrial, and public works markets, today announced that the company has filed a Form 8-K/A with the Securities and Exchange Commission, disclosing pro forma results for Sunworks and Solcius, as if they had been combined January 1, 2020. The disclosure therefore provides combined financial results for the two companies for the 2020 fiscal year and the first quarter of 2021.
On April 8, 2021, Sunworks acquired Solcius, LLC ("Solcius"), a privately held, rapidly growing residential solar company for $51.8 million in an all-cash transaction, creating a national solar power provider with a presence in 12 states. The financial results for the second quarter will include the operating results of Solcius from April 8 through June 30, 2021.
On a pro-forma basis, assuming the two companies had merged on January 1, 2020, the combined company would have generated revenue of approximately $30.8 million, an operating loss of approximately $4.2 million and a net loss of approximately $4.1 million in the first quarter of 2021 (the period ended March 31, 2021).
Management Commentary:
"Since closing the acquisition, we have consolidated the Sunworks residential team into Solcius, embracing their systems and practices," commented Gaylon Morris, Chief Executive Officer of Sunworks. "By the end of Q3, we expect to have completed all legacy Sunworks residential projects and all future business will benefit from the expertise and systems designed and proven by Solcius. Our team projects at least 15% growth in residential revenue for 2021, when compared to the same annual period in 2020, excluding the contribution of any new partners or the entry into any new geographies."
"Simultaneously, we are actively evaluating additional geographies, and plan to enter new residential markets in 2021," added Mr. Morris. "We have processes in place that enable us to quickly ramp initiatives in new sales territories, which we believe will bolster our growth in the fourth quarter of 2021 and into 2022."
"Additionally, we are on track to combine corporate-wide support services, including accounting, finance, HR, purchasing, IT and marketing, by the end of Q3," added Mr. Morris. "We anticipate this consolidation will drive efficiencies and strengthen our positions, especially within our supply chain."
First Quarter Financial Detail:
- Combined cash balance at March 31, 2021 was $32.0 million, reflecting the $51.8 million Sunworks paid to acquire Solcius.
- Total backlog of projects as of March 31, 2021 was $70 million.
- Combined, pro forma operating loss was $4.2 million for the quarter ended March 31, 2021.
- Combined, pro forma net loss for the quarter ended March 31, 2021 was $4.1 million, or $0.16 per basic and diluted share.
"The expected acceleration in growth will put us on a path to profitability, and we believe we have the necessary resources to reach profitability without the need for additional equity capital," added Mr. Morris. "As part of the combination with Solcius, we have identified at least $15.6 million in intangible assets that will be written off over the next 10 years, with the majority written off in the first three years. We are expecting a non-cash, non-operational charge of $1.7 million related to this adjustment, and we expect approximately $1.1 million in additional non-cash charges related to stock-based compensation and retention bonus accruals in the second quarter of 2021."
Full-Year Financial Detail:
For the full-year calendar year of 2020, on a pro-forma basis, assuming the two companies had merged on January 1, 2020, the combined company would have generated:
- Revenue of approximately $131.4 million
- Operating loss of approximately $22.9 million
- A net loss of approximately $20.3 million.
About Sunworks, Inc.
Sunworks, Inc. (NASDAQ:SUNW) is a premier provider of high performance solar power systems. Sunworks is committed to quality business practices that exceed industry standards and uphold its ideals of ethics and safety. Sunworks continues to grow its presence, expanding nationally with regional and local offices. The company strives to consistently deliver high quality, performance-oriented solutions for customers in a wide range of industries including residential, agricultural, commercial and industrial, federal, and public works. Sunworks' diverse, seasoned workforce includes distinguished veterans who bring a sense of pride, discipline, and professionalism to their interaction with customers. All Sunworks' employees uphold its guiding principles each day. Sunworks is a member of the Solar Energy Industries Association (SEIA) and is a proud advocate for the advancement of solar power. For more information, visit www.sunworksusa.com and www.solcius.com
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements about (i) the expectation that all legacy Sunworks residential projects will be completed by the end of the third quarter and that all future business will benefit from the expertise and systems designed by Solcius; (ii) 15% projected growth in the residential business for 2021, excluding the contribution of any new partners or the entry into any new geographies; (iii) the expected entry by Sunworks into new residential markets in 2021; (iv) the expectation that corporate-wide support services, including accounting, finance, HR, purchasing, IT and marketing, will be combined by the end of the third quarter, and the anticipation that this consolidation will drive efficiencies and strengthen Sunworks' positions, especially within its supply chain; (v) Sunworks' path to profitability and the belief that Sunworks has sufficient resources to reach profitability without the need for additional equity capital; (vi) expected write-offs of intangible assets and non-cash charges related to the combination with Solcius; and (vii) other statements identified by words such as "expects" "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "projects," or words of similar meaning generally intended to identify forward-looking statements. These forward-looking statements are based upon the current beliefs and expectations of management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the control of Sunworks. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed in these forward-looking statements because of possible uncertainties.
In addition, the following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (i) the businesses of Sunworks and Solcius may not be combined successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; (ii) the expected growth opportunities or cost savings from the transaction may not be fully realized or may take longer to realize than expected; (iii) risks that the business combination disrupts current plans and operations that may harm ongoing business operations; (iv) the amount of any costs, fees, expenses, impairments and charges related to the transaction; (v) operating costs, loss of customers and business disruption following the transaction, including adverse effects on relationships with employees and customers, may be greater than expected; (vi) economic, competitive, regulatory, environmental and other factors may adversely affect the business in which Sunworks is engaged; and (vii) the continued impact of COVID-19 and the related federal, state and local restrictions on business operations and the workforce, the impact of COVID-19 and such restrictions on customers, and the impact of COVID-19 on the supply chain and availability of shipping and distribution channels. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in Sunworks' reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the SEC and available on the SEC's Internet site (http://www.sec.gov).
Investor Relations Contact:
Rob Fink
FNK IR
646.809.4048
rob@fnkir.com
SOURCE: Sunworks, Inc.
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