My take on Q2 EARNINGS for SUNWorks division of Solar3D
What we know about the SUNWorks division:
1. SUNworks was profitable in 2013 before SLTD acquired SUNworks
2. Q1 is their slowest Quarter
3. Residential revenue is "approaching" $1m/month in the early part of Q2
4. Residential is the new part of business compared to commercial
5. Year-over-year revenue grew 110% and Gross Profit grew 146% from Q1 2013 to Q1 2014
6. Revenue from Q1 2014 that normally would have been booked in Q1 will be booked in Q2
With this information that we know, I have made a, what I feel is, a fairly conservative estimate of Q2 EARNINGS. Gross Profit should be fairly straight forward. The only thing that could blow the estimate big time would be a rapid expansion in Operating Expenses due to ramp up of growth, which we won't know a trend until the Q1 earnings. I also estimate break even at about $2.8m in revenue, so operationally I don't see how we can lose money in Q2.
Pro Forma Guestimate for Q2
QE 6/30/14 Margin % '14
Revenue $5,700,000 100.00% See Note 1
Cost of Goods Sold $4,167,270 73.11% ***used Q1 ratio - this should actually decrease with volume increase
Gross Profit $1,532,730 26.89% ***used Q1 ratio - this should actually increase with volume increase
Operating Expenses $750,000 13.16% ****extrapolated quarterly growth rate in Op Ex of 16% plus a small padding for the hiring of new crews for residential
Other Exp $0 0.00%
Net Income $782,730 13.73% Very rough estimate, but SunWorks should be in the black in Q2 and going forward
Note 1 Assumes, based on company statements that residential install is approaching $1million/month as follows and commercial is larger:
April May June Q2
Residential $800,000 $900,000 $1,000,000
Commercial $1,000,000 $1,000,000 $1,000,000
Total Sales $1,800,000 $1,900,000 $2,000,000 $5,700,000
