Enphase Energy Reports Financial Results for the First Quarter of 2016

May 3, 2016 at 4:05 PM EDT

PETALUMA, Calif., May 03, 2016 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ:ENPH), a global energy technology company, announced today financial results for the first quarter ended March 31, 2016.

Enphase Energy reported total revenue for the first quarter of 2016 of $64.1 million. During the first quarter of 2016, Enphase sold 143MW (AC) or 611,000 microinverters. GAAP gross margin for the first quarter of 2016 was 18.3 percent and non-GAAP gross margin was 18.8 percent.

GAAP operating expenses for the first quarter of 2016 were $30.8 million and non-GAAP operating expenses were $28.1 million. GAAP operating loss for the first quarter of 2016 was $19.1 million and non-GAAP operating loss was $16.0 million. GAAP net loss for the first quarter of 2016 was $18.8 million, or a net loss of $0.41 per share. On a non-GAAP basis, net loss was $15.7 million, or a net loss of $0.34 per share.

"We are gaining market share with several new and existing customer wins in both the U.S. and international markets," said Paul Nahi, president and CEO of Enphase Energy. "We continue to execute on our cost reduction roadmap that will significantly drive down our product costs. Also, we are making solid progress on the expansion of the Enphase Home Energy Solution with the upcoming launch of the AC Battery storage system. Together, these will drive long-term growth with new and existing partners worldwide."

Business Outlook

"We expect revenue for the second quarter of 2016 to be within a range of 76 to 82 million dollars," said Kris Sennesael, CFO of Enphase Energy. "At the midpoint of the range, revenue is expected to be up 23 percent sequentially and megawatt shipments are expected to be up 32 percent sequentially, demonstrating further market share gains. We expect gross margin to be within a range of 17 to 20 percent. We also expect non-GAAP operating expenses for the second quarter of 2016 to be within a range of 27 to 29 million dollars."

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States of America, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. Enphase believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Conference Call Information

Enphase Energy will host a conference call for analysts and investors to discuss its first quarter 2016 results and second quarter 2016 business outlook today at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time). Open to the public, investors may access the call by dialing 877-644-1284; participant passcode 82977173. A live webcast of the conference call, together with accompanying presentation slides, 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 30 days. In addition, an audio replay of the conference call will be available by calling 855-859-2056; participant pass code 82977173 beginning approximately one hour after the call.

Forward-Looking Statements

This press release contains forward-looking statements, including, but not limited to, statements related to Enphase Energy's future financial performance, ability to drive down costs, market demands for its microinverters and future products, competitive position and advantages of its technology. 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 these risks and uncertainties, which include, without limitation, risks related to: the future demands for solar energy solutions; the reduction, elimination or expiration of government subsidies and economic incentives for on-grid solar electricity applications; the Company's ability to achieve broader market acceptance of its microinverter systems and to develop new and enhanced products in response to customer demands and rapid market and technological changes in the solar industry; the success and pricing of competing solar solutions that are or become available; the Company's ability to effectively manage the growth of its organization and expansion into new markets and to maintain or achieve anticipated product quality, product performance and cost metrics; competition and other factors that may cause potential future price reductions for its products; the Company's ability to optimally match production with demand, including distribution inventory levels, and dependence on a limited number of outside contract manufacturers and lack of supply contracts with these manufacturers; general economic conditions in domestic and international markets and other risks included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K for the year ended December 31, 2015, which is on file with the SEC and available on the SEC's website at www.sec.gov. Additional information will also be set forth in those sections in Enphase Energy's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, which will be filed with the SEC in the second quarter of 2016. All information set forth in this press release and its attachments is as of May 3, 2016. 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.

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, is leading the charge to bring smart, connected solar energy to every home, business and community. The company delivers simple, innovative and reliable energy management solutions that advance the worldwide potential of renewable energy. Enphase has shipped approximately 11 million microinverters, and over 460,000 Enphase residential and commercial systems have been deployed in more than 100 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.

ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

 Three Months Ended
March 31,
 2016 2015
Net revenues$64,121  $86,653 
Cost of revenues52,361  58,629 
Gross profit11,760  28,024 
Operating expenses:    
Research and development13,066  13,430 
Sales and marketing10,215  11,937 
General and administrative7,567  8,205 
Total operating expenses30,848  33,572 
Loss from operations(19,088) (5,548)
Other income (expense), net:    
Interest expense(152) (78)
Other income (expense)681  (527)
Total other income (expense), net529   (605)
Loss before income taxes(18,559) (6,153)
Provision for income taxes(236) (167)
Net loss$(18,795) $(6,320)
Net loss per share, basic and diluted$(0.41) $(0.14)
Shares used in computing net loss per share, basic and diluted46,209  43,950 
      


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 March 31,
 2016
 December 31,
 2015
ASSETS   
Current assets:   
Cash and cash equivalents$13,016  $28,452 
Accounts receivable, net47,056  46,099 
Inventory45,576  40,800 
Prepaid expenses and other assets7,237  6,417 
Total current assets112,885  121,768 
Property and equipment, net32,963  32,118 
Goodwill3,745  3,745 
Intangibles, net2,036  2,220 
Other assets6,891  5,677 
Total assets$158,520  $165,528 
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$24,293  $25,569 
Accrued liabilities30,078  26,364 
Deferred revenues5,575  3,915 
Borrowings under revolving credit facility20,000  17,000 
Total current liabilities79,946  72,848 
Long-term liabilities:   
Deferred revenues, noncurrent27,723  25,115 
Warranty obligations, noncurrent23,008  23,475 
Other liabilities2,283  2,641 
Total liabilities132,960  124,079 
Commitments and contingencies   
Stockholders' equity:   
Preferred stock   
Common stock   
Additional paid-in capital227,832  224,732 
Accumulated deficit(201,868) (183,073)
Accumulated other comprehensive loss(404) (210)
Total stockholders' equity25,560  41,449 
Total liabilities and stockholders' equity$158,520  $165,528 
        


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 Three Months Ended
March 31,
 2016 2015
Cash flows from operating activities:   
Net loss$(18,795) $(6,320)
Adjustments to reconcile net loss to net cash used in operating activities:   
Depreciation and amortization2,680  2,532 
Provision for doubtful accounts537   
Net loss on disposal of assets25  191 
Non-cash interest expense28  39 
Stock-based compensation2,999  2,988 
Revaluation of contingent consideration liability  104 
Changes in operating assets and liabilities:   
Accounts receivable(1,494) (751)
Inventory(4,776) (13,156)
Prepaid expenses and other assets(2,062) (2,069)
Accounts payable, accrued and other liabilities1,341  2,528 
Deferred revenues4,268  2,416 
Net cash used in operating activities(15,249) (11,498)
Cash flows from investing activities:   
Purchases of property and equipment(3,348) (3,611)
Net cash used in investing activities(3,348) (3,611)
Cash flows from financing activities:   
Proceeds from borrowings under revolving credit facility10,000   
Payments under revolving credit facility(7,000)  
Payments for deferred financing costs(55)  
Proceeds from issuance of common stock under employee stock plans101  677 
Net cash provided by financing activities3,046  677 
Effect of exchange rate changes on cash115  (473)
Net decrease in cash and cash equivalents(15,436) (14,905)
Cash and cash equivalents—Beginning of period28,452  42,032 
Cash and cash equivalents—End of period$13,016  $27,127 
        


ENPHASE ENERGY, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)

  Three Months Ended
March 31,
  2016  2015
Gross profit (GAAP) $11,760  $28,024 
Stock-based compensation 307  264 
Gross profit (Non-GAAP) $12,067  $28,288 
     
Gross margin (GAAP) 18.3% 32.3%
Stock-based compensation 0.5% 0.3%
Gross margin (Non-GAAP) 18.8% 32.6%
     
Operating expenses (GAAP) $30,848  $33,572 
Stock-based compensation(1) (2,692) (2,724)
Amortization of acquisition-related intangibles (45)   
Revaluation of contingent consideration liability   (104)
Operating expenses (Non-GAAP) $28,111   $30,744 
     
(1) Includes stock-based compensation as follows:    
Research and development $1,126  $1,079  
Sales and marketing 612  765 
General and administrative 954  880 
Total $2,692  $2,724 
     
Loss from operations (GAAP) $(19,088) $(5,548)
Stock-based compensation  2,999  2,988 
Amortization of acquisition-related intangibles 45   
Revaluation of contingent consideration liability    104 
Loss from operations (Non-GAAP) $(16,044) $(2,456)
     
Net loss (GAAP) $(18,795) $(6,320)
Stock-based compensation 2,999  2,988 
Amortization of acquisition-related intangibles 45   
Revaluation of contingent consideration liability   104 
Non-cash interest expense 28  39 
Net loss (Non-GAAP) $(15,723) $(3,189)
     
Net loss per share, basic and diluted (GAAP) $(0.41) $(0.14)
Stock-based compensation  0.07  0.07 
Net loss per share, basic and diluted (Non-GAAP) $(0.34) $(0.07)
         


Contact

Christina CarrabinoEnphase Energy, Inc.

Investor Relations

ir@enphaseenergy.com

+1-707-763-4784 x7294

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Source: Enphase Energy, Inc.

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