Press Release Details

Vivint Solar Reports Second Quarter 2019 Results

Aug, 08 2019

LEHI, Utah, Aug. 8, 2019 /PRNewswire/ -- Vivint Solar, Inc. (NYSE: VSLR), today announced financial results for the second quarter ended June 30, 2019.

Vivint Solar (PRNewsfoto/Vivint Solar)

Second Quarter 2019 Operating Highlights 

Key operating and development highlights include:

  • MW Installed of approximately 56 MWs for the quarter. Total cumulative MWs installed were approximately 1,163 MWs.
  • Installations were 8,163 for the quarter. Cumulative installations were 169,275.
  • Estimated Gross Retained Value increased by approximately $68 million during the quarter to approximately $2.1 billion. Estimated Gross Retained Value per Watt at quarter end was $2.02.
  • Cost per Watt was $3.56, an increase from $3.46 in the first quarter of 2019 and an increase from $3.23 in the second quarter of 2018.
  • Margin created was $49 million, a 21% increase from the second quarter of 2018. Unlevered NPV per Watt was $0.88.

Financing Activity

As of June 30, 2019, the company had approximately $153 million in undrawn capacity in the forward flow loan facilities and approximately 186 MWs of undeployed tax equity financing capacity. Subsequent to quarter end, the company entered into a $325 million credit facility that replaces its existing aggregation facility. The new credit facility reduces the cost of debt by 87.5 basis points and significantly increases the amount of upfront proceeds on a per system basis.

Summary Second Quarter 2019 Financial Results


$ amounts in millions, except per share data













Three Months Ended Jun. 30,



2019



2018



YoY


Revenue:











     Customer agreements and incentives

$

63.4



$

54.8



up 16%


     Solar energy system and product sales


27.4




26.0



up 5%


Total Revenue


90.8




80.8



up 12%


Cost of revenue:











     Operating leases and incentives


43.1




41.4



up 4%


     Solar energy system and product sales


15.8




19.0



down 17%


Total cost of revenue


58.9




60.4



down 2%


Gross profit


31.9




20.4



up 56%


Loss from operations


(36.9)




(16.1)



down 129%


Net (loss attributable) income available to common stockholders

$

(28.6)



$

18.1



down 258%


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

$

(0.24)



$

0.15



down 260%


Non-GAAP net loss per share

$

(0.73)



$

(0.50)



down 46%



Note: Totals may not sum due to rounding.

Guidance for the Third Quarter 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 third quarter of 2019, Vivint Solar expects:

  • MW Installed: 62 - 65 MWs
  • Cost per Watt: $3.36 - $3.44

Earnings Conference Call

Vivint Solar will host an investor conference call and live webcast today, Thursday, August 8, 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 294 6607. A listen-only webcast will be accessible on the investor relations page of the company's website at investors.vivintsolar.com/. 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 the help of Vivint Solar, homeowners can power their homes with clean, renewable energy, typically achieving significant financial savings over time. Vivint Solar designs and installs solar energy systems for homeowners and offers monitoring and maintenance services. In addition to being able to purchase a solar energy system outright, homeowners 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 Chem home batteries and electric vehicle chargers with ChargePoint Home. 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, but not limited to, Vivint Solar's guidance for Megawatts Installed and Cost per Watt, undeployed tax equity financing capacity, growth prospects, and operating and financial results, such as estimates of nominal contracted payments remaining, estimated retained value, estimated retained value per watt, margin created and unlevered NPV per Watt and 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 potential inaccuracy of the assumptions employed in calculating our operating metrics; 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 Investors section of the company's website at investors.vivintsolar.com/.

Vivint Solar, Inc.


Condensed Consolidated Unaudited Balance Sheets


(In thousands)











June   30,



December   31,



2019



2018


ASSETS








Current assets:








Cash and cash equivalents

$

198,951



$

219,591


Accounts receivable, net


28,186




14,207


Inventories


13,071




13,257


Prepaid expenses and other current assets


30,783




31,201


Total current assets


270,991




278,256


Restricted cash and cash equivalents


78,567




71,305


Solar energy systems, net


1,637,905




1,938,874


Property and equipment, net


12,650




10,730


Other non-current assets, net


510,537




28,090


TOTAL ASSETS

$

2,510,650



$

2,327,255


LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY








Current liabilities:








Accounts payable

$

40,175



$

45,929


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


11,221




7,846


Accrued compensation


24,545




25,520


Current portion of long-term debt


144,243




12,155


Current portion of deferred revenue


28,911




30,199


Current portion of finance lease obligation


1,089




1,921


Accrued and other current liabilities


53,557




42,860


Total current liabilities


303,741




166,430


Long-term debt, net of current portion


1,181,797




1,203,282


Deferred revenue, net of current portion


15,529




13,524


Finance lease obligation, net of current portion


2,807




505


Deferred tax liability, net


490,496




437,120


Other non-current liabilities


76,994




24,610


Total liabilities


2,071,364




1,845,471


Commitments and contingencies








Redeemable non-controlling interests


118,900




119,572


Stockholders' equity:








Common stock


1,216




1,201


Additional paid-in capital


582,338




574,248


Accumulated other comprehensive loss


(18,988)




(7,223)


Accumulated deficit


(334,595)




(279,631)


Total stockholders' equity


229,971




288,595


Non-controlling interests


90,415




73,617


Total equity


320,386




362,212


TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND EQUITY

$

2,510,650



$

2,327,255


 

Vivint Solar, Inc.


Condensed Consolidated Unaudited Statements of Operations


(In thousands, except per share data)



















Three Months Ended



Six Months Ended



June   30,



June   30,



2019



2018



2019



2018


Revenue:
















Customer agreements and incentives

$

63,355



$

54,765



$

102,958



$

85,879


Solar energy system and product sales


27,402




26,033




57,170




63,169


Total revenue


90,757




80,798




160,128




149,048


Cost of revenue:
















Cost of revenue—customer agreements and incentives


43,074




41,366




83,265




80,053


Cost of revenue—solar energy system and product sales


15,791




18,990




33,054




45,035


Total cost of revenue


58,865




60,356




116,319




125,088


Gross profit


31,892




20,442




43,809




23,960


Operating expenses:
















Sales and marketing


37,037




14,033




66,671




25,158


Research and development


524




511




993




997


General and administrative


31,205




22,009




54,254




41,996


Total operating expenses


68,766




36,553




121,918




68,151


Loss from operations


(36,874)




(16,111)




(78,109)




(44,191)


Interest expense, net


19,472




11,336




38,599




28,258


Other expense (income), net


1,365




(4,109)




2,750




(6,370)


Loss before income taxes


(57,711)




(23,338)




(119,458)




(66,079)


Income tax expense


29,950




35,352




57,437




53,995


Net loss


(87,661)




(58,690)




(176,895)




(120,074)


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


(59,094)




(76,806)




(122,086)




(125,214)


Net (loss attributable) income available to common stockholders

$

(28,567)



$

18,116



$

(54,809)



$

5,140


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
















Basic

$

(0.24)



$

0.16



$

(0.45)



$

0.04


Diluted

$

(0.24)



$

0.15



$

(0.45)



$

0.04


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
















Basic


120,869




116,650




120,589




115,907


Diluted


120,869




121,753




120,589




120,969


 

Vivint Solar, Inc.


Condensed Consolidated Unaudited Statements of Cash Flows


(In thousands)



















Three Months Ended



Six Months Ended



June   30,



June   30,



2019



2018



2019



2018


CASH FLOWS FROM OPERATING ACTIVITIES:
















Net loss

$

(87,661)



$

(58,690)



$

(176,895)



$

(120,074)


Adjustments to reconcile net loss to net cash used in operating activities:
















Depreciation and amortization


21,658




16,997




39,317




33,440


Deferred income taxes


29,951




35,204




57,678




54,173


Stock-based compensation


4,156




3,812




7,835




6,781


Loss on solar energy systems and property and equipment


2,924




2,455




4,157




3,025


Non-cash interest and other expense


1,657




11,649




3,302




13,656


Reduction in lease pass-through financing obligation


(1,337)




(1,477)




(2,032)




(2,164)


Losses (gains) on interest rate swaps


1,366




983




2,750




(1,279)


Changes in operating assets and liabilities:
















Accounts receivable, net


(8,194)




(6,118)




(13,979)




(4,689)


Inventories


(1,539)




2,655




186




9,462


Prepaid expenses and other current assets


(1,930)




(3,470)




816




8,276


Other non-current assets, net


(38,093)




(6,998)




(64,632)




(6,613)


Accounts payable


(1,360)




1,524




516




1,898


Accrued compensation


3,069




22




(999)




(2,329)


Deferred revenue


3,448




(1,431)




717




(10,514)


Accrued and other liabilities


794




(1,812)




179




(1,915)


Net cash used in operating activities


(71,091)




(4,695)




(141,084)




(18,866)


CASH FLOWS FROM INVESTING ACTIVITIES:
















Payments for the cost of solar energy systems


(59,874)




(74,039)




(124,400)




(146,247)


Payments for property and equipment


(703)




(25)




(994)




(65)


Proceeds from disposals of solar energy systems and property and equipment


479




1,068




1,128




1,843


Purchase of intangible assets


(115)







(115)





Net cash used in investing activities


(60,213)




(72,996)




(124,381)




(144,469)


CASH FLOWS FROM FINANCING ACTIVITIES:
















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


75,270




65,516




159,638




108,287


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


(9,038)




(10,436)




(18,051)




(28,558)


Proceeds from long-term debt


71,809




836,000




133,164




876,000


Payments on long-term debt


(15,320)




(681,572)




(20,913)




(689,320)


Payments for debt issuance and deferred offering costs


(2,962)




(17,715)




(2,962)




(17,715)


Proceeds from lease pass-through financing obligation


654




645




1,518




1,497


Principal payments on finance lease obligations


(306)




(916)




(577)




(1,931)


Proceeds from issuance of common stock


231




630




270




837


Net cash provided by financing activities


120,338




192,152




252,087




249,097


NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS, INCLUDING RESTRICTED AMOUNTS


(10,966)




114,461




(13,378)




85,762


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


288,484




126,239




290,896




154,938


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

$

277,518



$

240,700



$

277,518



$

240,700


 

Vivint Solar, Inc.


Key Operating Metrics















Three Months Ended



June   30,



March   31,



June   30,



2019



2019



2018


 Installations


8,163




6,514




6,678


 Megawatts installed


56.0




45.6




47.0















As of



June   30,



March   31,



June   30,



2019



2019



2018


 Cumulative installations


169,275




161,112




139,321


 Cumulative megawatts installed


1,162.5




1,106.5




952.3


 Estimated nominal contracted payments remaining (in millions)

$

3,976.2



$

3,795.8



$

3,267.3


      Estimated retained value under energy contracts (in millions)

$

1,587.0



$

1,549.7



$

1,440.7


      Estimated retained value of renewal (in millions)

$

531.6



$

501.0



$

424.7


 Estimated gross retained value (in millions)

$

2,118.6



$

2,050.7



$

1,865.4


 Estimated gross retained value per watt

$

2.02



$

2.04



$

2.13


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 June 30, 2019, including both the contracted and estimated renewal portion, at a range of discount rates (retained value amounts in millions):


4%



6%



8%


 Estimated retained value under energy contracts

$

1,864.2



$

1,587.0



$

1,367.0


 Estimated retained value of renewal


818.0




531.6




349.4


 Total estimated gross retained value

$

2,682.2



$

2,118.6



$

1,716.4


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

We report GAAP EPS, which is based upon net (loss attributable) 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, which excludes net loss attributable to non-controlling interests and redeemable non-controlling interests. As we are in a 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 ($1.47) for the three and six months ended June 30, 2019.

Vivint Solar, Inc.


Reconciliation from GAAP EPS to Non-GAAP EPS


(In thousands, except per share data)



































Three Months Ended



June   30, 2019



June   30, 2018



Net Loss



EPS



Net Loss



EPS


Net (loss attributable) income available to common stockholders

$

(28,567)



$

(0.24)



$

18,116



$

0.16


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


(59,094)




(0.49)




(76,806)




(0.66)


Non-GAAP net loss

$

(87,661)



$

(0.73)



$

(58,690)



$

(0.50)


Weighted-average shares used in computing net loss per share






120,869








116,650




Six Months Ended



June   30, 2019



June   30, 2018



Net Loss



EPS



Net Loss



EPS


Net (loss attributable) income available to common stockholders

$

(54,809)



$

(0.45)



$

5,140



$

0.04


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


(122,086)



$

(1.02)




(125,214)



$

(1.08)


Non-GAAP net loss

$

(176,895)



$

(1.47)



$

(120,074)



$

(1.04)


Weighted-average shares used in computing net loss per share:






120,589








115,907


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 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.

"EstimatedNominal 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, or PPA, 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.

"EstimatedGrossRetained 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.

"EstimatedGrossRetained 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.

"Project Value" represents the net cash flows, discounted at 6% that Vivint Solar expects to receive from customers net of estimated distributions to fund investors and operating expenses, estimated utility and state incentives, and estimated finance proceeds from fund investors.

"NPV per watt" represents the estimated weighted average unit margin of Vivint Solar's PPA and customer lease business and its system sales business. It is calculated by dividing Margin Created during the period by the total MWs Installed during the period.

"Margin Created" represents the estimated margin created during the period. It is the estimated value of Vivint Solar's PPA and customer lease agreements and the value of the system sales less the costs required to create the value. Specifically, it is the sum of the project value per watt multiplied by "MWs Installed – PPA/Lease" and "Revenue – solar energy system and product sales" less total creation costs.

"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:

Heather Hurst
Director of Communications
385-202-6577
pr@vivintsolar.com

 

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SOURCE Vivint Solar, Inc.

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Contact

Investors

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

Press

Heather Hurst
Director, Public Relations
385-202-6577
pr@vivintsolar.com

Government Affairs

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