Loading, Please Wait...

CST: 06/12/2019 10:36:52   

Enphase Energy Reports Financial Results for the Second Quarter of 2019

128 Days ago

FREMONT, Calif., July 30, 2019 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ:ENPH), a global energy technology company and the world’s leading supplier of solar microinverters, announced today financial results for the second quarter of 2019, which included the summary below from its President and CEO, Badri Kothandaraman.

Highlights for the second quarter of 2019 included:

  • Revenue of $134.1 million; IQ 7 shipments at 98% of all microinverters
  • Cash flows from operating activities of $14.8 million; ending cash balance of $206.0 million
  • GAAP gross margin of 33.8%; non-GAAP gross margin of 34.1%
  • GAAP operating expenses of $27.9 million; non-GAAP operating expenses of $22.5 million
  • GAAP operating income of $17.4 million; non-GAAP operating income of $23.2 million
  • GAAP net income of $10.6 million; non-GAAP net income of $23.2 million
  • GAAP diluted EPS of $0.08; non-GAAP diluted EPS of $0.18

Our revenue and earnings for the second quarter are given below, compared with those of the prior quarter and the year ago quarter:

(In thousands, except per share data and percentages)

  GAAP   Non-GAAP
  Q2 2019   Q1 2019   Q2 2018   Q2 2019   Q1 2019   Q2 2018
Revenue $ 134,094     $ 100,150     $ 75,896     $ 134,094     $ 100,150     $ 75,896  
Gross margin 33.8 %   33.3 %   29.9 %   34.1 %   33.5 %   30.5 %
Operating income (loss) $ 17,447     $ 7,134     $ (558 )   $ 23,227     $ 11,282     $ 4,133  
Net income (loss) $ 10,618     $ 2,765     $ (3,738 )   $ 23,173     $ 9,528     $ 1,550  
Basic EPS $ 0.09     $ 0.03     $ (0.04 )   $ 0.20     $ 0.09     $ 0.02  
Diluted EPS $ 0.08     $ 0.02     $ (0.04 )   $ 0.18     $ 0.08     $ 0.01  

Our second quarter revenue was $134.1 million, an increase of 34% sequentially and an increase of 77% year-over year. We shipped approximately 416 megawatts DC, or 1,283,680 microinverters. We continued to see strong demand across the board from our customers. While demand continued to outstrip available supply, we were able to increase capacity to better support our customers. As stated before, we are on track to have a supply of approximately two million microinverters in the fourth quarter of 2019.

Our non-GAAP gross margin was 34.1%, an increase of 60 basis points from 33.5% in the first quarter of 2019. The non-GAAP gross margin was negatively impacted by approximately 330 basis points due to expedite fees related to component shortages, compared to approximately 280 basis points in the prior quarter. The expedite fees were in the form of air shipments that we chose to make in order to service our customers. Non-GAAP operating expenses were $22.5 million, compared to $22.3 million in the prior quarter.

We exited the second quarter with $206.0 million in cash and generated $14.8 million in cash flows from operations. The second quarter cash balance included net proceeds of approximately $115.5 million on June 5, 2019 associated with the issuance of $132.0 million aggregate principal amount of convertible senior notes due 2024 and the repurchase of $60.0 million aggregate principal amount of convertible notes due 2023 in exchange for shares of Enphase Energy common stock and separate cash payments. Inventory was $20.1 million in the second quarter, compared to $13.0 million in the first quarter of 2019 and $17.5 million in the second quarter of 2018.

BUSINESS HIGHLIGHTS

On June 10, 2019, Enphase Energy announced that more than 500 solar installation companies in the U.S. have benefitted from significantly reduced solar design complexity and logistics by adopting Enphase Energized™ AC Modules (ACMs). Enphase Energized AC Modules, first released in October 2017, are factory-assembled, tested and sold by Enphase ACM partners, including SunPower, Panasonic and Solaria. Enphase Energized AC Modules are built by strategic module partners who integrate Enphase microinverters with PV modules on the manufacturing line. ACMs are tested for performance, reliability, and quality right on the manufacturing line and allow solar installers to offer premium solutions to homeowners.

On June 17, 2019, Enphase Energy announced that it renewed its low-income solar partnership with GRID Alternatives, a national leader in making renewable energy technology and job training accessible to underserved communities. Through the donation of microinverters, Enphase will help GRID Alternatives meet its goal of installing more than 10 megawatts of solar power in 2019, helping families and affordable housing providers save millions of dollars in energy costs and providing hands-on solar installation training to over 4,000 individuals.

On July 1, 2019, Enphase Energy announced the first shipment of seventh-generation Enphase IQ™ microinverters produced in Mexico as part of its expanded manufacturing agreement with Flex. As previously announced, Enphase plans to sell products produced in Mexico into the U.S. market to mitigate tariffs, increase global capacity and improve customer delivery times.

THIRD QUARTER 2019 FINANCIAL OUTLOOK

For the third quarter of 2019, Enphase Energy estimates both GAAP and non-GAAP financial results as follows:

  • Revenue to be within a range of $170 million to $180 million, including a range of $6 million to $10 million for ITC safe harbor

  • GAAP and non-GAAP gross margin to be within a range of 33% to 36%

  • GAAP operating expenses to be within a range of $28.5 million to $30.5 million, including a total of approximately $5.0 million estimated for stock-based compensation expenses and acquisition related expenses and amortization

  • Non-GAAP operating expenses to be within a range of $23.5 million to $25.5 million, excluding a total of approximately $5.0 million estimated for stock-based compensation expenses and acquisition related expenses and amortization

Follow Enphase Online

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this press release. To view a description of non-GAAP financial measures used and the non-GAAP reconciliation schedule for the periods presented, click here.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its second quarter 2019 results and third quarter 2019 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time).  The call is open to the public by dialing (877) 644-1284; participant passcode 1397564. A live webcast of the conference call 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 one year. In addition, an audio replay of the conference call will be available by calling (855) 859-2056; participant passcode 1397564, beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including statements related to Enphase Energy’s expected future financial performance; the capabilities and performance of our technology and products, including the anticipated market adoption of current and future products; the reduction in design complexity and logistics, and the potential for savings in energy costs; performance in operations, including reducing cycle times, mitigating tariff risks, product availability and component supply management, and product quality and reliability. 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 certain risks and uncertainties including those risks described in more detail in the Company’s most recent Annual Report on Form 10-K and other documents on file with the SEC and available on the SEC’s website at www.sec.gov. 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, except as required by law.

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, a global energy technology company, delivers smart, easy-to-use solutions that connect solar generation, storage and management on one intelligent platform. The Company revolutionized the solar industry with its microinverter technology, and we produce a fully-integrated solar plus storage solution. Enphase has shipped more than 21 million microinverters, and over 940,000 Enphase systems have been deployed in 130 countries. For more information, visit www.enphase.com.

Enphase Energy®, the Enphase logo and other trademarks or service names are the trademarks of Enphase Energy, Inc. Other names are for informational purposes and may be trademarks of their respective owners.

Contact:
Christina Carrabino
Enphase Energy, Inc.
Investor Relations
ir@enphaseenergy.com
+1-707-763-4784 x7354


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,
  2019   2018   2019   2018
Net revenues $ 134,094     $ 75,896     $ 234,244     $ 145,868  
Cost of revenues 88,775     53,195     155,586     104,851  
Gross profit 45,319     22,701     78,658     41,017  
Operating expenses:              
Research and development 9,604     9,462     18,128     17,082  
Sales and marketing 9,054     6,828     16,487     13,055  
General and administrative 8,583     6,969     18,463     13,913  
Restructuring charges 631         999      
Total operating expenses 27,872     23,259     54,077     44,050  
Income (loss) from operations 17,447     (558 )   24,581     (3,033 )
Other expense, net              
Interest income 593     154     804     247  
Interest expense (1,351 )   (2,423 )   (5,102 )   (4,809 )
Other expense, net (5,480 )   (572 )   (5,961 )   (698 )
Total other expense, net (6,238 )   (2,841 )   (10,259 )   (5,260 )
Income (loss) before income taxes 11,209     (3,399 )   14,322     (8,293 )
Provision for income taxes (591 )   (339 )   (939 )   (573 )
Net income (loss) $ 10,618     $ (3,738 )   $ 13,383     $ (8,866 )
Net income (loss) per share:              
Basic $ 0.09     $ (0.04 )   $ 0.12     $ (0.09 )
Diluted $ 0.08     $ (0.04 )   $ 0.11     $ (0.09 )
Shares used in per share calculation:              
Basic 113,677     97,321     110,951     94,026  
Diluted 130,737     97,321     129,400     94,026  


ENPHASE ENERGY, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(In thousands) 
(Unaudited)
       
  June 30,
2019
  December 31,
2018
ASSETS      
Current assets:      
Cash and cash equivalents $ 205,959     $ 106,237  
Accounts receivable, net 97,537     78,938  
Inventory 20,094     16,267  
Prepaid expenses and other assets 26,261     20,860  
Total current assets 349,851     222,302  
Property and equipment, net 21,532     20,998  
Operating lease, right of use asset 12,304      
Intangible assets, net 32,943     35,306  
Goodwill 24,783     24,783  
Other assets 40,105     36,548  
Total assets $ 481,518     $ 339,937  
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 65,989     $ 48,794  
Accrued liabilities 33,536     29,010  
Deferred revenues, current 33,577     33,119  
Warranty obligations, current 7,468     8,083  
Debt, current 3,043     28,155  
Total current liabilities 143,613     147,161  
Long-term liabilities:      
Deferred revenues, noncurrent 82,288     76,911  
Warranty obligations, noncurrent 25,526     23,211  
Other liabilities 12,930     3,250  
Debt, noncurrent 99,890     81,628  
Total liabilities 364,247     332,161  
Total stockholders’ equity 117,271     7,776  
Total liabilities and stockholders’ equity $ 481,518     $ 339,937  


ENPHASE ENERGY, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(In thousands) 
(Unaudited)
   
  Six Months Ended
June 30,
  2019   2018
Cash flows from operating activities:      
Net income (loss) $ 13,383     $ (8,866 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:      
Depreciation and amortization 7,694     4,469  
Provision for doubtful accounts 207     753  
Non-cash interest expense 2,266     1,133  
Financing fees on extinguishment of debt 2,152      
Fees paid for repurchase and exchange of convertible notes due 2023 6,000      
Stock-based compensation 8,224     5,860  
Changes in operating assets and liabilities:      
Accounts receivable (19,104 )   5,897  
Inventory (3,827 )   8,528  
Prepaid expenses and other assets (9,568 )   (1,551 )
Accounts payable, accrued and other liabilities 16,805     (3,817 )
Warranty obligations 1,699     1,826  
Deferred revenues 5,904     (6,791 )
Net cash provided by operating activities 31,835     7,441  
Cash flows from investing activities:      
Purchases of property and equipment (3,176 )   (1,475 )
Net cash used in investing activities (3,176 )   (1,475 )
Cash flows from financing activities:      
Issuance of convertible notes due 2024, net of issuance costs 128,040      
Purchase of convertible note hedges (36,313 )    
Sale of warrants 29,819      
Fees paid for repurchase and exchange of convertible notes due 2023 (6,000 )    
Principal payments and financing fees on debt (45,122 )   (3,129 )
Proceeds from issuance of common stock, net of issuance costs     19,923  
Proceeds from debt, net of issuance costs     5,580  
Proceeds from issuance of common stock under employee stock plans, net 532     1,370  
Net cash provided by financing activities 70,956     23,744  
Effect of exchange rate changes on cash 107     (383 )
Net increase in cash and cash equivalents 99,722     29,327  
Cash and cash equivalents—Beginning of period 106,237     29,144  
Cash and cash equivalents—End of period $ 205,959     $ 58,471  


ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
       
  Three Months Ended   Six Months Ended
  June 30,
2019
  March 31,
2019
  June 30,
2018
  June 30,
2019
  June 30,
2018
Gross profit (GAAP) $ 45,319     $ 33,339     $ 22,701     $ 78,658     $ 41,017  
Stock-based compensation 386     231     417     617     615  
Gross profit (Non-GAAP) $ 45,705     $ 33,570     $ 23,118     $ 79,275     $ 41,632  
                   
Gross margin (GAAP) 33.8 %   33.3 %   29.9 %   33.6 %   28.1 %
Stock-based compensation 0.3 %   0.2 %   0.6 %   0.2 %   0.4 %
Gross margin (Non-GAAP) 34.1 %   33.5 %   30.5 %   33.8 %   28.5 %
                   
Operating expenses (GAAP) $ 27,872     $ 26,205     $ 23,259     $ 54,077     $ 44,050  
Stock-based compensation (1) (4,217 )   (3,003 )   (3,871 )   (7,220 )   (5,245 )
Restructuring (631 )   (368 )       (999 )    
Reserve for non-recurring legal matter                 (1,765 )
Acquisition related expenses and amortization (546 )   (546 )   (403 )   (1,092 )   (403 )
Operating expenses (Non-GAAP) $ 22,478     $ 22,288     $ 18,985     $ 44,766     $ 36,637  
                   
(1) Includes stock-based compensation as follows:                  
Research and development $ 1,128     $ 716     $ 1,149     $ 1,844     $ 1,767  
Sales and marketing 1,360     999     997     2,359     1,358  
General and administrative 1,729     1,288     1,725     3,017     2,120  
Total $ 4,217     $ 3,003     $ 3,871     $ 7,220     $ 5,245  
                   
Income (loss) from operations (GAAP) $ 17,447     $ 7,134     $ (558 )   $ 24,581     $ (3,033 )
Stock-based compensation 4,603     3,234     4,288     7,837     5,860  
Restructuring 631     368         999      
Reserve for non-recurring legal matter                 1,765  
Acquisition related expenses and amortization 546     546     403     1,092     403  
Income from operations (Non-GAAP) $ 23,227     $ 11,282     $ 4,133     $ 34,509     $ 4,995  
                   
Net income (loss) (GAAP) $ 10,618     $ 2,765     $ (3,738 )   $ 13,383     $ (8,866 )
Stock-based compensation 4,603     3,234     4,288     7,837     5,860  
Restructuring 631     368         999      
Reserve for non-recurring legal matter                 1,765  
Acquisition related expenses and amortization 546     546     403     1,092     403  
Non-recurring debt prepayment fees and non-cash interest 6,775     2,615     597     9,390     1,132  
Net income (Non-GAAP) $ 23,173     $ 9,528     $ 1,550     $ 32,701     $ 294  
                   
Net income (loss) per share, basic (GAAP) $ 0.09     $ 0.03     $ (0.04 )   $ 0.12     $ (0.09 )
Stock-based compensation 0.04     0.03     0.04     0.07     0.06  
Restructuring 0.01             0.01      
Reserve for non-recurring legal matter                 0.02  
Acquisition related expenses and amortization     0.01     0.01     0.01      
Non-recurring debt prepayment fees and non-cash interest 0.06     0.02     0.01     0.08     0.01  
Net income per share, basic (Non-GAAP) $ 0.20     $ 0.09     $ 0.02     $ 0.29     $  
                   
Shares used in basic per share calculation GAAP and Non-GAAP 113,677     108,195     97,321     110,951     94,026  
                   
Net income (loss) per share, diluted (GAAP) $ 0.08     $ 0.02     $ (0.04 )   $ 0.11     $ (0.09 )
Stock-based compensation 0.04     0.03     0.04     0.06     0.06  
Restructuring 0.01             0.01      
Reserve for non-recurring legal matter                 0.02  
Acquisition related expenses and amortization     0.01         0.01      
Non-recurring debt prepayment fees and non-cash interest 0.05     0.02     0.01     0.07     0.01  
Net income per share, diluted (Non-GAAP) (2) $ 0.18     $ 0.08     $ 0.01     $ 0.26     $  
                   
Shares used in diluted per share calculation GAAP 130,737     115,863     97,321     129,400     94,026  
Shares used in diluted per share calculation Non-GAAP 130,737     127,564     105,169     129,400     100,766  
                             


(2) Calculation of non-GAAP diluted net income per share for the three months ended June 30, 2019 and March 31, 2019 excludes convertible notes due 2023 interest expense, net of tax of $0.4 million and $0.5 million, respectively, from non-GAAP net income. Calculation of non-GAAP diluted net income per share for the six months ended June 30, 2019 excludes convertible notes due 2023 interest expense, net of tax of $0.8 million from non-GAAP net income.

Is your business listed correctly on America’s largest city directory network of 1,000 portals?