EX-99.1 2 enph063020158-kexx991press.htm EXHIBIT 99.1 ENPH 06.30.2015 8-K EX-99.1 Press Release


Exhibit 99.1
 
Enphase Energy Reports Financial Results for the Second Quarter of 2015
Megawatt shipments increased 48% year-over-year
PETALUMA, Calif., August 4, 2015—Enphase Energy, Inc. (NASDAQ:ENPH), a leading global energy technology company, today announced financial results for the second quarter ended June 30, 2015.
Second Quarter 2015 Financial Highlights
•
Revenue of $102.1 million, up 25 percent year-over-year
•
Shipped a record 195MW (AC) of microinverter systems, up 48 percent year-over-year
•
Non-GAAP gross margin of 32.7 percent
•
Non-GAAP operating income of $3.0 million
•
Non-GAAP net income of $2.8 million
•
Non-GAAP diluted earnings per share of $0.06
Enphase Energy reported total revenue for the second quarter of 2015 of $102.1 million, an increase of 25 percent, compared to $82.0 million in the second quarter of 2014. During the second quarter of 2015, Enphase sold a record 195MW (AC) or 859,000 microinverters, an increase in MW of 48 percent compared to the second quarter of 2014 and 21 percent compared to the first quarter of 2015.
GAAP gross margin for the second quarter of 2015 was 32.3 percent and non-GAAP gross margin was 32.7 percent, an increase of 10 basis points compared to the first quarter of 2015.
GAAP operating expenses for the second quarter of 2015 were $33.4 million and non-GAAP operating expenses were $30.3 million, a decrease of 1 percent compared to the first quarter of 2015.
GAAP operating loss for the second quarter of 2015 was $0.4 million compared to a loss of $2.5 million in the second quarter of 2014. Non-GAAP operating income for the second quarter of 2015 was $3.0 million compared to breakeven in the second quarter of 2014.
GAAP net loss for the second quarter of 2015 was $0.6 million, or $0.01 per share, compared to a GAAP net loss of $3.0 million, or a net loss of $0.07 per share in the second quarter of 2014. On a non-GAAP basis, net income was $2.8 million, or $0.06 per diluted share, compared to a non-GAAP net loss of $0.4 million, or a net loss of $0.01 per share in the second quarter of 2014.
“We delivered solid financial results for the second quarter of 2015,” said Paul Nahi, president and CEO of Enphase. “Demand for our solar energy systems was strong in our core U.S. residential markets, as well as in Europe and Australia, resulting in a new quarterly shipment record of 195MW. We continue to expand our customer base, including our recently announced partnership with Sunrun, and remain committed to developing the highest quality and most innovative solar energy system in the world.”
“I am pleased with our financial performance in the second quarter,” said Kris Sennesael, CFO of Enphase. “The combination of strong top line growth, solid gross margin and flat operating expenses drove significant improvement to our bottom line and profitability.”
Business Outlook
“We expect revenue for the third quarter of 2015 to be within a range of $100 million to $105 million,” stated Kris Sennesael. “We expect gross margin to be within a range of 30 percent to 32 percent. We also expect non-GAAP operating expenses for the third quarter of 2015 to be flat to up 3 percent, compared to the second quarter of 2015.”



Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.
Conference Call Information
Enphase Energy will host a conference call for analysts and investors to discuss its second quarter 2015 results and third quarter 2015 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Open to the public, investors may access the call by dialing 877-644-1284; participant passcode 85143863. A live webcast of the conference call, together with accompanying presentation slides, will also be accessible from the “Investor Relations” section of the Company's website at investor.enphase.com. Following the webcast, an archived version will be available on the website for 30 days. In addition, an audio replay of the conference call will be available by calling 855-859-2056; participant pass code 85143863 beginning approximately one hour after the call.
Forward-Looking Statements
This press release contains forward-looking statements, including, but not limited to, statements related to Enphase Energy's financial performance, market demands for its microinverters, advantages of its technology, market trends, future products, and future financial performance. These forward-looking statements are based on the Company's current expectations and inherently involve significant risks and uncertainties. Enphase Energy's actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties, which include, without limitation, risks related to: the future demands for solar energy solutions; the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications; the Company's ability to achieve broader market acceptance of its microinverter systems and to develop new and enhanced products in response to customer demands and rapid market and technological changes in the solar industry; the success of competing solar solutions that are or become available; the Company's ability to effectively manage the growth of its organization and expansion into new markets and to maintain or achieve anticipated product quality, product performance and cost metrics; competition and other factors that may cause potential future price reductions for its products; the Company's ability to optimally match production with demand and dependence on a limited number of outside contract manufacturers and lack of supply contracts with these manufacturers; general economic conditions in domestic and international markets and other risks included under the captions “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, which is on file with the SEC and available on the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Enphase Energy's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, which will be filed with the SEC in the third quarter of 2015. All information set forth in this press release and its attachments is as of August 4, 2015. Enphase Energy undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.
A copy of this press release can be found on the investor relations page of Enphase Energy's website at investor.enphase.com.




About Enphase Energy, Inc.

Enphase Energy delivers energy management technology for the solar industry that increases energy production, simplifies design and installation, improves system uptime and reliability, reduces fire safety risk and provides a platform for intelligent energy management. Its semiconductor-based microinverter system converts energy at the individual solar module level and brings a system-based high-technology approach to solar energy generation, storage, control and management. For more information, visit www.enphase.com
###
Contact
Christina Carrabino
Enphase Energy
Investor Relations
pr@enphaseenergy.com
+1-707-763-4784 x7294




ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2015
 
2014
 
2015
 
2014
Net revenues
$
102,093

 
$
82,004

 
$
188,746

 
$
139,584

Cost of revenues
69,066

 
55,172

 
127,695

 
94,097

Gross profit
33,027

 
26,832

 
61,051

 
45,487

Operating expenses:
 
 
 
 
 
 
 
Research and development
12,786

 
11,148

 
26,216

 
20,234

Sales and marketing
12,508

 
10,493

 
24,445

 
19,321

General and administrative
8,102

 
7,679

 
16,307

 
14,205

Total operating expenses
33,396

 
29,320

 
66,968

 
53,760

Loss from operations
(369
)
 
(2,488
)
 
(5,917
)
 
(8,273
)
Other income (expense), net:
 
 
 
 
 
 
 
Interest expense
(87
)
 
(486
)
 
(165
)
 
(935
)
Other income (expense)
79

 
58

 
(448
)
 
165

Total other expense, net
(8
)
 
(428
)
 
(613
)
 
(770
)
Loss before income taxes
(377
)
 
(2,916
)
 
(6,530
)
 
(9,043
)
Provision for income taxes
(226
)
 
(115
)
 
(393
)
 
(224
)
Net loss
$
(603
)
 
$
(3,031
)
 
$
(6,923
)
 
$
(9,267
)
Net loss per share, basic and diluted
$
(0.01
)
 
$
(0.07
)
 
$
(0.16
)
 
$
(0.22
)
Shares used in computing net loss per share, basic and diluted
44,319

 
42,648

 
44,136

 
42,428





1


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 
June 30,
2015
 
December 31,
2014
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
31,887

 
$
42,032

Accounts receivable, net
67,315

 
45,119

Inventory
34,054

 
21,590

Prepaid expenses and other assets
8,076

 
6,155

Total current assets
141,332

 
114,896

Property and equipment, net
31,633

 
30,824

Goodwill
3,745

 
3,745

Intangibles, net
1,596

 
1,811

Other assets
2,992

 
916

Total assets
$
181,298

 
$
152,192

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
34,467

 
$
22,316

Accrued liabilities
28,278

 
33,643

Deferred revenues
3,943

 
2,747

Borrowings under revolving credit facility
17,000

 
—

Total current liabilities
83,688

 
58,706

Long-term liabilities:
 
 
 
Deferred revenues, noncurrent
20,465

 
16,612

Warranty obligations, noncurrent
26,512

 
26,333

Other liabilities
1,885

 
3,589

Total liabilities
132,550

 
105,240

Commitments and contingencies
 
 
 
Stockholders’ equity:
 
 
 
Preferred stock
—

 
—

Common stock
—

 
—

Additional paid-in capital
217,062

 
208,022

Accumulated deficit
(167,914
)
 
(160,991
)
Accumulated other comprehensive loss
(400
)
 
(79
)
Total stockholders’ equity
48,748

 
46,952

Total liabilities and stockholders’ equity
$
181,298

 
$
152,192





2


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Six Months Ended
June 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net loss
$
(6,923
)
 
$
(9,267
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
Depreciation and amortization
5,054

 
3,902

Provision for doubtful accounts
99

 
711

Net loss on disposal of assets
275

 
28

Non-cash interest expense
80

 
191

Stock-based compensation
6,296

 
4,507

Revaluation of contingent consideration liability
(900
)
 
—

Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(22,295
)
 
(15,164
)
Inventory
(12,464
)
 
856

Prepaid expenses and other assets
(4,077
)
 
(2,272
)
Accounts payable, accrued and other liabilities
6,535

 
19,119

Deferred revenues
5,049

 
1,523

Net cash (used in) provided by operating activities
(23,271
)
 
4,134

Cash flows from investing activities:
 
 
 
Purchases of property and equipment
(6,260
)
 
(4,333
)
Net cash used in investing activities
(6,260
)
 
(4,333
)
Cash flows from financing activities:
 
 
 
Borrowings under revolving credit facility
17,000

 
—

Repayments of term loans
—

 
(2,177
)
Proceeds from issuance of common stock under employee stock plans
2,744

 
1,701

Net cash provided by (used in) financing activities
19,744

 
(476
)
Effect of exchange rate changes on cash
(358
)
 
106

Net decrease in cash and cash equivalents
(10,145
)
 
(569
)
Cash and cash equivalents—Beginning of period
42,032

 
38,190

Cash and cash equivalents—End of period
$
31,887

 
$
37,621




3


ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
 
2015
 
2014
 
2015
 
2014
Gross profit (GAAP)
 
$
33,027

 
$
26,832

 
$
61,051

 
$
45,487

Stock-based compensation
 
318

 
194

 
582

 
343

Gross profit (Non-GAAP)
 
$
33,345

 
$
27,026

 
$
61,633

 
$
45,830

 
 
 
 
 
 
 
 
 
Gross margin (GAAP)
 
32.3
%
 
32.7
%
 
32.3
%
 
32.6
%
Stock-based compensation
 
0.4
%

0.3
%

0.4
%
 
0.2
%
Gross margin (Non-GAAP)
 
32.7
%
 
33.0
%
 
32.7
%
 
32.8
%
 
 
 
 
 
 
 
 
 
Operating expenses (GAAP)
 
$
33,396

 
$
29,320

 
$
66,968

 
$
53,760

Stock-based compensation(1)
 
(2,989
)
 
(2,300
)
 
(5,714
)
 
(4,164
)
Amortization of acquisition-related intangibles
 
(90
)
 
—

 
(90
)
 
—

Revaluation of contingent consideration liability
 
1,004

 
—

 
900

 
—

Severance costs
 
(1,008
)
 
—

 
(1,008
)
 
—

Operating expenses (Non-GAAP)
 
$
30,313

 
$
27,020

 
$
61,056

 
$
49,596

 
 
 
 
 
 
 
 
 
(1) Includes stock-based compensation as follows:
 
 
 
 
 
 
 
 
Research and development
 
$
1,158

 
$
778

 
$
2,238

 
$
1,391

Sales and marketing
 
942

 
649

 
1,707

 
1,181

General and administrative
 
889

 
873

 
1,769

 
1,592

Total
 
$
2,989

 
$
2,300

 
$
5,714

 
$
4,164

 
 
 
 
 
 
 
 
 
Income (loss) from operations (GAAP)
 
$
(369
)
 
$
(2,488
)
 
$
(5,917
)
 
$
(8,273
)
Stock-based compensation
 
3,307

 
2,494

 
6,296

 
4,507

Amortization of acquisition-related intangibles
 
90

 
—

 
90

 
—

Revaluation of contingent consideration liability
 
(1,004
)
 
—

 
(900
)
 
—

Severance costs
 
1,008

 
—

 
1,008

 
—

Income (loss) from operations (Non-GAAP)
 
$
3,032

 
$
6

 
$
577

 
$
(3,766
)
 
 
 
 
 
 
 
 
 
Net income (loss) (GAAP)
 
$
(603
)
 
$
(3,031
)
 
$
(6,923
)
 
$
(9,267
)
Stock-based compensation
 
3,307

 
2,494

 
6,296

 
4,507

Amortization of acquisition-related intangibles
 
90

 
—

 
90

 
—

Revaluation of contingent consideration liability
 
(1,004
)
 
—

 
(900
)
 
—

Severance costs
 
1,008

 
—

 
1,008

 
—

Non-cash interest expense
 
41

 
89

 
80

 
191

Net income (loss) (Non-GAAP)
 
$
2,839

 
$
(448
)
 
$
(349
)
 
$
(4,569
)
 
 
 
 
 
 
 
 
 
Net income (loss) per share, diluted (GAAP)
 
$
(0.01
)
 
$
(0.07
)
 
$
(0.16
)
 
$
(0.22
)
Stock-based compensation
 
0.07

 
0.06

 
0.15

 
0.11

Amortization of acquisition-related intangibles
 
—

 
—

 
—

 
—

Revaluation of contingent consideration liability
 
(0.02
)
 
—

 
(0.02
)
 
—

Severance costs
 
0.02

 
—

 
0.02

 
—

Non-cash interest expense
 
—

 
—

 
—

 
—

Net income (loss) per share, diluted (Non-GAAP)
 
$
0.06

 
$
(0.01
)
 
$
(0.01
)
 
$
(0.11
)
 
 
 
 
 
 
 
 
 
Shares used in per share calculation, diluted (Non-GAAP)
 
49,102

 
42,648

 
44,136

 
42,428


4