SunWorks Inc (SUNWQ)

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Sunworks Reports Over 100% Organic Revenue Growth in First Quarter 2016
ROSEVILLE, Calif. May 11, 2016 - Sunworks, Inc. (Nasdaq: SUNW), a provider of solar power solutions for commercial and residential markets, today announced financial results for the quarter ended March 31, 2016.
Q1 2016 Highlights:
· Total revenue of $19.6 million, up approximately 246% year-over-year and 13% sequentially despite the impact of 20 days of inclement weather which impacted volume
· Organic revenue growth of 100% year-over-year
· Net loss narrowed by over $1 million to ($378,000) compared to $(1.4) million in the first quarter of 2015
· Operating income of $152,000 compared to an operating loss of $(1.0) million in the first quarter of 2015
· Gross Margins of 29.9% compared to 34.3% in the first quarter 2015, reflecting a higher mix of commercial projects vs. residential projects
· Strong backlog of $39.8million as of March 31, 2016
“Strong operational execution and market demand from both residential and commercial customers continue to drive solid financial results,” said Jim Nelson, Chief Executive Officer of Sunworks. “We delivered significant growth despite the loss of nearly 20 installation days due to inclement weather and seasonal trends which typically impact our first quarter. With our backlog now at $39.8 million, and more than twice as large as it was a year ago, we believe we are well positioned to achieve and potentially exceed our 2016 guidance.”
"Our focus on profitable growth and putting our customers first by delivering cost effective solutions in a reliable and dependable manner remains at the center of everything we do,” Mr. Nelson added. “In anticipation of continued and accelerating growth, we began increasing certain operational functions during the first quarter. We also began building inventories for new projects that were awarded late in the first quarter that we expect to deliver on in the second quarter. The investments to expand capacity and scale the business resulted in higher operating expenses for the quarter, while increased inventory reduced our quarterly cash position. We do not expect our long-term operating margin profile to change materially as a result of these investments and saw a meaningful increase in accounts receivables to start the second quarter.”
2016 Guidance
The company reiterates its revenue guidance of exceeding $100 million and continued profitability for the year ended December 31, 2016. The expected 100% year-over-year increase from 2015 revenue is due to continued organic growth of the company’s existing business plus the full year impact from the Elite Solar acquisition and a strong sales backlog.
Mr. Nelson added, “We expect organic growth initiatives to continue to be the primary driver of our growth for 2016. In parallel, we continue to evaluate potential accretive acquisitions, using a disciplined set of acceptance criteria, which could potentially further increase our near- and long-term outlooks.”
First Quarter 2016 Summary
For the first time, three months of Sunworks United (f/k/a Solar United Network), MD Energy and Elite solar were consolidated into the company’s financial statements for the quarter ended March 31, 2016.
Revenue for the three months ended March 31, 2016 increased to $19.6 million compared to $5.7 million in the three months ended March 31, 2015. The increase was due primarily to strong organic growth in Sunworks United, supplemented by the consolidation of a full three months from Elite Solar. Sales to the commercial market, including the agricultural market, and to the residential market represented approximately 67% and 33% of total revenue, respectively.
Gross profit was $5.8 million, or 29.9% of revenue, for the three months ended March 31, 2016 compared to $1.9 million, or 34.3% of revenue, for the three months ended March 31, 2015. The decrease in gross profit margin was primarily due to a larger percentage of commercial/agricultural projects compared to the first quarter of 2015. Net loss of $(378,000), or $(0.02) per basic and diluted shares for the three months ended March 31, 2016 as compared to a net loss of $(1.4) million, or $(0.10) per basic and diluted shares, for the corresponding period in 2015.
Balance Sheet
The company had $6.4 million in cash and cash equivalents as of March 31, 2016 a decrease of $5.6 million from December 31, 2015 which is offset by an increase of $4.9 million in accounts receivable and an increase in inventory of $1.4 million.
As of March 31, 2016, the company’s debt outstanding was essentially flat at $3.4 million and stockholders’ equity increased by $400,000 to $23.8 million as of March 31 2016 from December 31, 2015.
Backlog
Order backlog on March 31, 2016 was $39.8 million, up 271% from the year ago period and down 19.6 % sequentially. Backlog is based on signed orders.
Conference Call Details
Management will host a conference call to discuss these results today, Wednesday, May 11 at 10:00 a.m. ET. To access the call, please dial 1-866-635-0172 (toll free) or 1-785-424-1629 (international). The conference call will also be broadcast live over the Internet, which can be accessed via the Investor Relations section of Sunworks' web site at http://www.sunworksusa.com. All participants should call or access the website approximately 5 minutes before the conference begins.
The webcast will be available for replay for at least 90 days. A telephonic replay of this conference call will also be available by dialing 1-877-481-4010 (toll free) or 1-919-882-2331 (International) using Replay ID 10027, until 11:59 p.m. ET on June 11, 2016