Press Release Details

Vivint Solar Reports Fourth Quarter and Full Year 2018 Results

Mar, 05 2019

LEHI, Utah, March 5, 2019 /PRNewswire/ -- Vivint Solar (NYSE: VSLR), today announced financial results for the fourth quarter and full year ended December 31, 2018.

Vivint Solar (PRNewsfoto/Vivint Solar)

Fourth Quarter 2018 Operating Highlights 

Key operating and development highlights include:

  • MW Booked of approximately 63 MWs for the quarter.
  • MW Installed of approximately 54 MWs for the quarter. Total cumulative MWs installed were approximately 1,061 MWs.
  • Installations were 7,730 for the quarter. Cumulative installations were 154,598.
  • Estimated Gross Retained Value increased by approximately $62 million during the quarter to approximately $2.0 billion. Estimated Gross Retained Value per Watt at quarter end was $2.06.
  • Cost per Watt was $3.12, a decrease from $3.21 in the third quarter of 2018 and an increase from $2.95 in the fourth quarter of 2017.

Financing Activity

As of December 31, 2018, the company had $325 million in undrawn capacity in the aggregation facility, $72 million in undrawn capacity in the forward flow loan facility, and approximately 84 MWs of available installation capacity remaining in its tax equity funds.

Summary Fourth Quarter 2018 Financial Results

 $ amounts in millions, except per share data











Three Months Ended Dec. 31,


2018



2017



YoY

Revenue:










     Operating leases and incentives

$

34.7



$

31.2



up 11%

     Solar energy system and product sales


28.7




35.6



down 19%

Total Revenue


63.5




66.8



down 5%

Cost of revenue:










     Operating leases and incentives


42.7




37.7



up 13%

     Solar energy system and product sales


20.6




25.3



down 18%

Total cost of revenue


63.4




63.1



up 1%

Gross profit


0.1




3.7



down 98%

Loss from Operations


(40.0)




(26.9)



down 49%

Net (loss) income attributable to common stockholders

$

(12.9)



$

183.9



down 107%

Net (loss) income per share attributable to common stockholders

$

(0.11)



$

1.60



down 107%

Non-GAAP net loss per share

$

(0.73)



$

(0.43)



down 71%


Note: Totals may not sum due to rounding.

Summary Full Year 2018 Financial Results

 $ amounts in millions, except per share data












Year Ended Dec. 31,


2018



2017



YoY

Revenue:











     Operating leases and incentives

$

174.1



$

150.9



up 15%

     Solar energy system and product sales


116.3




117.2



down 1%

Total Revenue


290.3




268.0



up 8%

Cost of revenue:











     Operating leases and incentives


164.9




141.3



up 17%

     Solar energy system and product sales


83.4




89.0



down 6%

Total cost of revenue


248.3




230.3



up 8%

Gross profit


42.0




37.7



up 11%

Loss from Operations


(112.5)




(84.2)



down 34%

Net (loss) income attributable to common stockholders

$

(15.6)



$

209.1



down 107%

Net (loss) income per share attributable to common stockholders

$

(0.13)



$

1.85



down 107%

Non-GAAP net loss per share

$

(2.38)



$

(1.58)



down 50%


Note: Totals may not sum due to rounding.

Guidance for the First Quarter 2019 and Full Year 2019

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements supersede all prior statements regarding projected 2019 financial results.

For the first quarter of 2019, Vivint Solar expects:

  • MW Installed: 43 - 45 MWs
  • Cost per Watt: $3.45 - $3.52

For the full year 2019, Vivint Solar expects 15% growth for MWs Installed.

Note: Cost per Watt guidance uses our new methodology as described in the investor presentation on the Investor Relations portion of the Vivint Solar website.

Earnings Conference Call

Vivint Solar will host an investor conference call and live webcast today, Tuesday, March 5, 2019, at 5:00 p.m. ET to discuss these financial results. To access the conference call, dial 1.833.235.7641 or 1.647.689.4162 for international callers. The conference ID is 509 3962. A listen-only webcast will be accessible on the investor relations page of the company's website at investors.vivintsolar.com/ and will be archived and available on this site until March 31, 2019. Participants should follow the instructions provided on the website to download and install the necessary audio applications in advance of the call. In addition, the earnings presentation slides will be available on the investor relations page of the site by 5:00 p.m. ET along with this press release and the financial information discussed on today's conference call at investors.vivintsolar.com/.

About Vivint Solar

Vivint Solar is a leading full-service residential solar provider in the United States. With Vivint Solar, customers can power their homes with clean, renewable energy and typically achieve significant financial savings over time. Offering integrated residential solar solutions, Vivint Solar designs and installs solar energy systems for its customers, and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, customers may benefit from Vivint Solar's affordable, flexible financing options, including power purchase agreements, or lease agreements, where available. Vivint Solar also offers solar plus storage systems with LG home batteries. For more information, visit www.vivintsolar.com or follow @VivintSolar on Twitter.

Note on Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, including statements regarding Vivint Solar's guidance for Megawatts Installed and Cost per Watt, installation capacity remaining in tax equity funds, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, and estimated retained value per watt, including the assumptions related to the calculation of the foregoing metrics.

Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. Forward-looking statements should not be read as a guarantee of future performance or results, and they will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. These statements are based on current expectations and assumptions regarding future events and business performance as of the date of this press release, and they are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including but not limited to: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including solar renewable energy certificates, or SRECs, and other federal and state incentives; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth, product offering mix, and costs effectively, including attracting, training and retaining sales personnel and solar energy system installers; the availability and price of solar panels and other system components, the assumptions employed in calculating our operating metrics may be inaccurate; and such other risks identified in the registration statements and reports that Vivint Solar files with the U.S. Securities and Exchange Commission, or SEC, from time to time. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in those statements will be achieved or will occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Except as required by law, Vivint Solar does not undertake and expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise. You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC's website at www.sec.gov and the Investor Relations section of the company's website at investors.vivintsolar.com/.


Vivint Solar, Inc.

Consolidated Unaudited Balance Sheets

(In thousands)









December   31,



December   31,


2018



2017

ASSETS







Current assets:







Cash and cash equivalents

$

219,591



$

108,452

Accounts receivable, net


14,207




19,665

Inventories


13,257




22,597

Prepaid expenses and other current assets


31,201




34,049

Total current assets


278,256




184,763

Restricted cash and cash equivalents


71,305




46,486

Solar energy systems, net


1,938,874




1,673,532

Property and equipment, net


10,730




15,078

Prepaid tax asset, net





505,883

Other non-current assets, net


28,090




38,187

TOTAL ASSETS

$

2,327,255



$

2,463,929

LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY







Current liabilities:







Accounts payable

$

45,929



$

40,899

Distributions payable to non-controlling interests and redeemable non-controlling interests


7,846




16,437

Accrued compensation


25,520




20,992

Current portion of long-term debt


12,155




13,585

Current portion of deferred revenue


30,199




41,846

Current portion of capital lease obligation


1,921




4,166

Accrued and other current liabilities


42,860




29,675

Total current liabilities


166,430




167,600

Long-term debt, net of current portion


1,203,282




925,964

Deferred revenue, net of current portion


13,524




29,200

Capital lease obligation, net of current portion


505




1,599

Deferred tax liability, net


437,120




342,382

Other non-current liabilities


24,610




13,674

Total liabilities


1,845,471




1,480,419

Commitments and contingencies







Redeemable non-controlling interests


119,572




122,444

Stockholders' equity:







Common stock


1,201




1,151

Additional paid-in capital


574,248




559,788

Accumulated other comprehensive (loss) income


(7,223)




6,905

(Accumulated deficit) retained earnings


(279,631)




213,107

Total stockholders' equity


288,595




780,951

Non-controlling interests


73,617




80,115

Total equity


362,212




861,066

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

2,327,255



$

2,463,929

 


Vivint Solar, Inc.

Consolidated Unaudited Statements of Operations

(In thousands, except per share data)

















Three Months Ended



Year Ended


December   31,



December   31,


2018



2017



2018



2017

Revenue:















Operating leases and incentives

$

34,717



$

31,151



$

174,066



$

150,862

Solar energy system and product sales


28,740




35,629




116,255




117,166

Total revenue


63,457




66,780




290,321




268,028

Cost of revenue:















Cost of revenue—operating leases and incentives


42,732




37,741




164,920




141,305

Cost of revenue—solar energy system and product sales


20,640




25,313




83,375




88,977

Total cost of revenue


63,372




63,054




248,295




230,282

Gross profit


85




3,726




42,026




37,746

Operating expenses:















Sales and marketing


17,951




10,659




58,950




38,696

Research and development


395




653




1,867




3,340

General and administrative


21,762




19,280




93,703




79,957

Total operating expenses


40,108




30,592




154,520




121,993

Loss from operations


(40,023)




(26,866)




(112,494)




(84,247)

Interest expense, net


18,335




16,557




65,308




64,264

Other expense (income), net


1,833




(834)




(4,538)




352

Loss before income taxes


(60,191)




(42,589)




(173,264)




(148,863)

Income tax expense (benefit)


26,606




(181,265)




106,299




(157,333)

Net (loss) income


(86,797)




138,676




(279,563)




8,470

Net loss attributable to non-controlling interests and redeemable non-controlling interests


(73,933)




(45,245)




(263,971)




(200,628)

Net (loss attributable) income available to common stockholders

$

(12,864)



$

183,921



$

(15,592)



$

209,098

Net (loss attributable) income available per share to common stockholders:















Basic

$

(0.11)



$

1.60



$

(0.13)



$

1.85

Diluted

$

(0.11)



$

1.54



$

(0.13)



$

1.77

Weighted-average shares used in computing net (loss attributable) income available per share to common stockholders:















Basic


119,626




114,847




117,565




113,132

Diluted


119,626




119,578




117,565




118,268

 


Vivint Solar, Inc.

Consolidated Unaudited Statements of Cash Flows

(In thousands)

















Three Months Ended



Year Ended


December   31,



December   31,


2018



2017



2018



2017

CASH FLOWS FROM OPERATING ACTIVITIES:















Net (loss) income

$

(86,797)



$

138,676



$

(279,563)



$

8,470

Adjustments to reconcile net (loss) income to net cash used in operating activities:















Depreciation and amortization


18,387




16,075




69,634




61,164

Deferred income taxes


26,741




(151,321)




106,862




(52,828)

Stock-based compensation


3,279




3,416




13,163




12,917

Loss on solar energy systems and property and equipment


2,961




1,834




7,400




6,858

Non-cash interest and other expense


1,689




2,067




17,006




9,422

Reduction in lease pass-through financing obligation


(884)




(970)




(4,433)




(4,515)

Losses (gains) on interest rate swaps


1,131




(834)




(148)




359

Changes in operating assets and liabilities:















Accounts receivable, net


5,703




9,852




5,458




(7,007)

Inventories


2,523




(2,795)




9,340




(11,312)

Prepaid expenses and other current assets


(6,126)




(5,425)




2,805




10,864

Prepaid tax asset, net





(23,437)







(86,409)

Other non-current assets, net


214




419




(7,828)




(5,502)

Accounts payable


957




(1,279)




1,898




(285)

Accrued compensation


372




(1,005)




4,762




495

Deferred revenue


5,515




5,083




(926)




16,756

Accrued and other liabilities


1,738




464




8,915




6,699

Net cash used in operating activities


(22,597)




(9,180)




(45,655)




(33,854)

CASH FLOWS FROM INVESTING ACTIVITIES:















Payments for the cost of solar energy systems


(98,168)




(65,426)




(331,716)




(276,651)

Payments for property and equipment


(414)







(766)




(672)

Proceeds from disposals of solar energy systems and property and equipment


1,044




476




3,379




2,428

Proceeds from state tax credits





1,504







3,720

Net cash used in investing activities


(97,538)




(63,446)




(329,103)




(271,175)

CASH FLOWS FROM FINANCING ACTIVITIES:















Proceeds from investment by non-controlling interests and redeemable non-controlling interests


105,821




51,437




300,742




213,728

Distributions paid to non-controlling interests and redeemable non-controlling interests


(13,003)




(13,515)




(54,732)




(47,289)

Proceeds from long-term debt


66,677




50,000




984,425




356,750

Payments on long-term debt


(6,361)




(7,560)




(700,143)




(172,495)

Payments for offering costs





(240)




(21,209)




(13,917)

Proceeds from lease pass-through financing obligation


1,118




1,114




3,609




3,581

Principal payments on capital lease obligations


(660)




(1,054)




(3,323)




(4,467)

Proceeds from issuance of common stock


471




34




1,347




637

Net cash provided by financing activities


154,063




80,216




510,716




336,528

NET INCREASE IN CASH AND CASH EQUIVALENTS,  INCLUDING RESTRICTED AMOUNTS


33,928




7,590




135,958




31,499

CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—Beginning of period


256,968




147,348




154,938




123,439

CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS—End of period

$

290,896



$

154,938



$

290,896



$

154,938

 

Vivint Solar, Inc.

Key Operating Metrics













Three Months Ended


December   31,



September   30,



December   31,


2018



2018



2017

 Installations


7,730




7,547




6,467

 Megawatts installed


54.3




54.3




44.6













As of


December   31,



September   30,



December   31,


2018



2018



2017

 Cumulative installations


154,598




146,868




126,830

 Cumulative megawatts installed


1,060.9




1,006.6




864.9

 Estimated nominal contracted payments remaining (in millions)

$

3,638.1



$

3,444.4



$

3,021.6

      Estimated gross retained value under energy contract (in millions)

$

1,517.0



$

1,482.7



$

1,283.9

      Estimated gross retained value of renewal (in millions)

$

479.7



$

451.8



$

377.1

 Estimated gross retained value (in millions)

$

1,996.7



$

1,934.5



$

1,661.0

 Estimated gross retained value per watt

$

2.06



$

2.09



$

2.06

Sensitivity Analysis for Retained Value

The following table provides quantitative sensitivity analysis of our estimate of retained value of solar energy systems under contracts as of December 31, 2018, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in millions):



4%



6%



8%

 Estimated gross retained value under energy contract

$

1,785.2



$

1,517.0



$

1,304.6

 Estimated gross retained value of renewal


740.7




479.7




314.2

 Total estimated gross retained value

$

2,525.9



$

1,996.7



$

1,618.8

Non-GAAP Earnings per Share (EPS) Before Non-controlling Interests

We report GAAP EPS, which is based upon net (loss) income available to common stockholders. We also report non-GAAP EPS. The difference between GAAP EPS and non-GAAP EPS is that non-GAAP EPS is based on net (loss) income, which excludes net loss attributable to non-controlling interests and redeemable non-controlling interests. Additionally, we have excluded the effects of the federal tax rate reduction from 35% to 21% from the quarter and year ended December 31, 2017 as it is a non-cash, non-recurring event that is not representative of our ongoing business. We believe that presenting non-GAAP EPS provides a meaningful supplemental measure of operating performance. As we are in a non-GAAP net loss position for all periods reported, potentially issuable shares are excluded from the diluted EPS calculation since the effect would be antidilutive. Therefore, basic and diluted non-GAAP EPS are the same in each period presented.

Under GAAP accounting, we report net loss attributable to non-controlling interests and redeemable non-controlling interests to reflect our joint venture fund investors' allocable share in the results of these joint venture investment funds. Net loss attributable to non-controlling interests and redeemable non-controlling interests is calculated based primarily on the hypothetical liquidation at book value, or HLBV, method, which assumes that the joint venture funds are liquidated at the reporting date, even though liquidation may or may not ever occur. Additionally, the returns that will be allocated to the investors over the expected terms of the investment funds may differ significantly from the amounts calculated under the HLBV method. Accordingly, we also report non-GAAP EPS based on our losses before net loss attributable to non-controlling interests and redeemable non-controlling interests per share, which we view as a better measure of our operating performance.  Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

According to this definition, the non-GAAP loss before the allocation of loss attributable to non-controlling interests and redeemable non-controlling interests per share was ($0.73) and ($2.38) for the three months and year ended December 31, 2018.

Vivint Solar, Inc.

Reconciliation from GAAP EPS to Non-GAAP EPS

(In thousands, except per share data)


















Three Months Ended


December   31, 2018


December   31, 2017


Net Loss



EPS




Net Loss



EPS

Net (loss attributable) income available to common stockholders

$

(12,864)



$

(0.11)




$

183,921



$

1.60

Net loss attributable to non-controlling interests and redeemable non-controlling interests


(73,933)




(0.62)





(45,245)




(0.40)

Effect of federal tax rate reduction from 35% to 21%









(187,501)




(1.63)

Non-GAAP net loss

$

(86,797)



$

(0.73)




$

(48,825)



$

(0.43)

Weighted-average shares used in computing net loss per share






119,626









114,847






Year Ended


December   31, 2018


December   31, 2017


Net Loss



EPS




Net Loss



EPS

Net (loss attributable) income available to common stockholders

$

(15,592)



$

(0.13)




$

209,098



$

1.85

Net loss attributable to non-controlling interests and redeemable non-controlling interests


(263,971)




(2.25)





(200,628)




(1.77)

Effect of federal tax rate reduction from 35% to 21%









(187,501)




(1.66)

Non-GAAP net loss

$

(279,563)



$

(2.38)




$

(179,031)



$

(1.58)

Weighted-average shares used in computing net loss per share






117,565









113,132

Glossary of Definitions

"Installations" represents the number of solar energy systems installed on customers' premises.

"MWs or megawatts" represents the DC nameplate megawatt production capacity.

"MW Booked" represents the aggregate megawatt nameplate capacity of solar energy systems that were permitted during the period net of cancellations in the period.

"MW Installed" represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.

"Nominal Contracted Payments Remaining" equals the sum of the remaining cash payments that Vivint Solar's customers are expected to pay over the term of their agreements for systems installed as of the measurement date. For a power purchase agreement, Vivint Solar multiplies the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, Vivint Solar includes the monthly fees and upfront fee, if any, as set forth in the lease.

"GrossRetained Value" represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts plus the value of contracted SRECs net of estimated cash distributions to fund investors, debt associated with our forward flow facilities, and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar's contracts plus the value of contracted SRECs, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.

"Retained Value per Watt" is calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems under long-term customer contracts that have been installed as of such date, and is subject to the same assumptions and uncertainties as estimated retained value.

"Undeployed Tax Equity Financing Capacity" represents a forecast of the amount of megawatts that can be deployed based on committed available tax equity financing for energy contracts.

Investor Contact:

Rob Kain
Vice President of Investor Relations
855-842-1844
ir@vivintsolar.com

Press Contact:

Helen Langan
Senior Director of Communications
385-202-6577
pr@vivintsolar.com

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/vivint-solar-reports-fourth-quarter-and-full-year-2018-results-300807069.html

SOURCE Vivint Solar

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Contact

Investors

Rob Kain
Vice President, Investor Relations
855-842-1844
ir@vivintsolar.com

Press

Helen Langan
Director, Public Relations
385-202-6577
pr@vivintsolar.com

Government Affairs

Erica Dahl
Vice President, Government Affairs
385-455-5501
erica.dahl@vivintsolar.com