Akeena Solar, Inc. (Nasdaq:AKNS), a leading installer of solar
power systems and designer of AC solar panels, today announced
results for the fourth quarter and year ended December 31, 2009.
"2009 was a turning point for Akeena Solar as we diversified our
revenue streams by launching the distribution sales of Andalay AC
solar panels. Our patented Andalay technology, new distribution
channels, and growing brand awareness provide the foundations for
rapid growth in the rooftop solar market," said Barry Cinnamon,
CEO. "The traction we are gaining with our new distribution
partners -- including our growing network of Andalay dealers,
Lowe's home improvement stores, Morgan Stanley Solar Solutions and
Highland Solar -- is a strong validation of our technology. Andalay
AC panel's built-in monitoring, ease of installation, superior
aesthetics and better safety characteristics make it a natural
choice for new distribution partners in 2010, including new home
builders, as well as HVAC and electrical contractors, seeking
opportunities to tap into the solar energy marketplace."
"It was a challenging year from a top line revenue standpoint;
nevertheless, our other financial metrics showed strong improvement
from 2008 to 2009: net cash position (cash and cash equivalents net
of credit facility) improved from a negative $1.1 million to a
positive $5.8 million, our gross margins improved from 14.6% to
23.3%, and total operating expenses declined from $27.7 million to
$19.9 million."
"In the fourth quarter, we met a number of important operational
objectives," said Gary Effren, president of Akeena Solar. "First,
we made good progress developing new distribution
channels. Since launching our distribution strategy in the
second quarter, we have shipped to 54 Andalay dealers in 23 states,
and our dealer network continues to grow steadily. The distribution
partnership with Highland Solar marks our first distribution
arrangement outside of the United States. Our partnership with
Lowe's marks our first foray into retail outlets. Andalay AC panels
are a key part of Lowe's new in-store Energy Center, which was
introduced in December to 21 stores in California. For the
year, we accomplished our strategic goal of concentrating our
installation business in California and expanding our geographic
reach through distribution, which more than offset the decline from
last year's non-California installation revenues."
"Fourth quarter revenue reflected residential installations that
were softer than we would have liked, and as we expected,
commercial installations continued to lag. However, we had
good bookings momentum throughout the quarter, without the usual
fourth quarter dip. As a result, we ended the year with a
backlog of $9.4 million. Offsetting the weakness in our
installation business was the tripling of distribution revenue
which contributed $1.4 million in the quarter, a level that
included a few large orders with key new customers as well as
repeat orders from existing customers," concluded Effren.
Fourth Quarter Financial Results
Net sales for the fourth quarter of 2009 were $7.0 million, a
decrease of 35.2% compared to $10.9 million in net sales in the
fourth quarter of 2008, and a decrease of 8.3% from the third
quarter sales of $7.7 million. The decline in the fourth quarter
over the same quarter last year reflects the absence of East coast
and Colorado installations and lower commercial revenue due to the
tight credit market partially offset by an increase in distribution
revenue. Residential installations in the fourth quarter of 2009
were $5.3 million compared to $8.4 million in the fourth quarter
last year and $6.8 million in the third quarter of 2009. The
decline from the prior quarter reflects lower average selling
prices and a slowdown in permitting and inspections in certain
jurisdictions in California as state budget cuts resulted in office
closures and reduced staffing. Commercial installations in the
fourth quarter of 2009 were $386,000, compared to $2.4 million in
the fourth quarter last year, and $484,000 in the third quarter of
2009.
Gross profit for the fourth quarter 2009 was $1.3 million, or
18.0% of sales, compared to a negative $1.5 million in the fourth
quarter of 2008, and $1.9 million, or 24.7% of sales in the third
quarter of 2009. Gross profit before the revaluation of inventory
in the fourth quarter of 2008 was $1.2 million, or 10.7% of sales.
The year-over-year increase in gross margin primarily reflects
lower panel prices, lower direct labor costs due to efficiencies
gained with Andalay panels and lower Andalay component costs,
offset somewhat by lower average system prices. On a sequential
basis, fourth quarter 2009 gross margin decreased reflecting the
higher mix of lower margin distribution sales. Average selling
price in the quarter was $6.60 per watt compared to $7.08 in the
third quarter and $7.67 a year ago.
Total operating expenses for the fourth quarter of 2009 were
$4.8 million, compared to $7.5 million for the same period last
year, and $5.1 million in the third quarter of 2009. The
year-over-year improvement of $2.8 million consisted of lower
general and administrative costs of $2.3 million and lower sales
and marketing expenses of $451,000. The decline in general and
administrative expenses reflect the full impact of cost cuts made
in the fourth quarter of 2008 and the first quarter of 2009, and
the absence of prior year charges including a $1.0 million reserve
for past due accounts and a $200,000 reserve for future lease
payments related to two vacated offices in California. Stock-based
compensation expense was $429,000 in the fourth quarter of 2009,
compared to $578,000 for the same period last year and $862,000 in
the third quarter. Cash operating expenses (adjusted for
stock-based compensation expense and depreciation and amortization
expense) were $4.2 million in the fourth quarter of 2009 compared
to $5.6 million for the same period last year (also adjusting for
the $1.0 million increase in reserve for past due accounts and the
$200,000 reserve for future lease payments) and $4.0 million in the
third quarter of 2009.
Net loss for the fourth quarter of 2009 was $3.7 million, or
$0.11 per share, compared to a net loss of $9.2 million, or $0.31
per share, in the fourth quarter of 2008, and a net loss of $2.4
million or $0.07 per share in the third quarter of 2009. The third
quarter of 2009 net loss included a favorable $758,000 non-cash
adjustment to reflect the fair value of common stock warrants
accounted for as a liability in accordance with provisions of the
warrant agreements. The fourth quarter of 2009 net loss included an
unfavorable $168,000 non-cash charge to reflect the fair value of
common stock warrants. Excluding the adjustments to the fair
value of warrants, net loss for the fourth quarter of 2009 was $3.5
million, or $0.10 per share, as compared to $3.2 million or $0.09
per share in the third quarter of 2009.
Installations for the quarter amounted to approximately 856
kilowatts, compared to approximately 1,410 kilowatts in the same
quarter last year and approximately 1,027 kilowatts in the third
quarter of 2009. Backlog as of December 31, 2009 was $9.4
million.
Full Year 2009 Financial Results
For the year ended December 31, 2009, the company reported net
sales of $28.2 million, a decrease of 30.8% from net sales of $40.8
million in 2008, primarily due to a decline in commercial
installations. Gross profit was $6.6 million, or 23.3% of sales,
compared to $3.3 million, or 8.1% of sales. Gross profit
before the revaluation of inventory in 2008 was $6.0 million, or
14.6% of sales. The year-over-year increase in gross margin
reflects lower panel prices, lower direct labor costs due to
efficiencies gained with Andalay panels and lower Andalay component
costs, offset somewhat by lower average system prices.
Operating expenses were $19.9 million compared to $27.7 million
in 2008. Stock-based compensation was $2.3 million in 2009 compared
to $3.3 million in 2008. Cash operating expenses in 2009 (adjusted
for stock-based compensation expense and depreciation and
amortization expense) were $16.9 million in 2009 compared to $22.5
million in 2008 (also adjusting for the $1.0 million increase in
reserve for past due accounts and the $200,000 reserve for future
lease payments). The decline in cash operating expenses reflect the
full impact of cost cuts made in the fourth quarter of 2008 and the
first quarter of 2009. Net loss for 2009 was $15.8 million, or
$0.48 per share, compared to a net loss of $24.3 million, or $0.84
per share in 2008. The net loss in 2009 includes a $2.5 million
non-cash charge to reflect the fair value of common stock warrants
accounted for as a liability in accordance with provisions of the
warrant agreements. Excluding the impact of the non-cash charge,
net loss per share in 2009 would have been $0.40.
Cash and cash equivalents at December 31, 2009 were $5.8
million. The $1.0 million cash-backed line had no balance drawn as
of quarter end. Common shares outstanding as of December 31, 2009
were 36.4 million.
The number of employees at year end was 157 full time
equivalents, an increase from 137 at the end of the third quarter
of 2009 and a decrease from 185 at year end 2008.
Outlook
Management anticipates revenue levels in the first quarter of
2010 slightly above the fourth quarter of 2009 due to the negative
impact of inclement weather on installations and seasonality of
distribution sales, especially on the East Coast. Management
projects achieving quarterly EBITDA (excluding non-cash stock-based
compensation) breakeven in the fourth quarter of 2010 at a revenue
level of approximately $18 million with about a quarter of the
revenue from distribution.
Conference Call Information
Akeena Solar will host an earnings conference call at 11:00 a.m.
PT (2:00 p.m. ET) today to discuss its fourth quarter 2009 earnings
results. Management will discuss strategy, review quarterly
activity, provide industry commentary, and answer questions.
To access the call in the U.S., please dial 877-225-1676 and for
international callers dial 706-643-9669 approximately 10 minutes
prior to the start of the conference call. The pass code is
51046737. The conference call will also be broadcast live over the
Internet and available for replay for 90 days at
www.akeena.com.
In addition, a replay of the call will be available via
telephone for one week, beginning two hours after the call. To
listen to the telephone replay in the U.S., please dial
800-642-1687 and for international callers, dial 706-645-9291. The
pass code is the same as above.
About Akeena Solar, Inc. (Nasdaq:AKNS)
Founded in 2001, Akeena Solar's philosophy is simple: We believe
producing clean electricity directly from the sun is the right
thing to do for our environment and economy. Akeena Solar has grown
to become one of the nation's leading installers of solar power
systems. Akeena Solar's revolutionary Andalay AC solar panels
produce safe household AC power and have built-in racking, wiring,
grounding and inverters. With 80% fewer parts and 5-25% better
performance than ordinary DC panels, Andalay panels are an ideal
solution for solar installers, trades workers and
do-it-yourselfers. For more information on the company, visit
www.akeena.com. Installers can also visit www.andalaysolar.com to
learn more about the Andalay panels.
The Akeena Solar, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5143
AKNS-E
Safe Harbor
Statements made in this release that are not historical in
nature, including those related to revenue and profitability and
product offerings in future periods, constitute forward-looking
statements within the meaning of the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by the use of words such as "expects,"
"projects," "plans," "will," "may," "anticipates," "believes,"
"should," "intends," "estimates," and other words of similar
meaning. These statements are subject to risks and uncertainties
that cannot be predicted or quantified, and our actual results may
differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include,
without limitation, risks associated with the uncertainty of future
financial results, additional financing requirements, development
of new products, the effectiveness, profitability, and
marketability of such products, the ability to protect proprietary
information, the impact of current, pending, or future legislation
and regulation on the industry, the impact of competitive products
or pricing, technological changes, the ability to identify and
successfully acquire, integrate and manage client accounts and
locations and deliver our services to customers of businesses and
accounts acquired from third parties, and the effect of general
economic and business conditions. All forward-looking statements
included in this release are made as of the date of this press
release, and Akeena Solar assumes no obligation to update any such
forward-looking statements.
Akeena Solar, Inc.
|
Condensed Consolidated Statements of
Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
Year Ended December 31,
|
|
2009
|
2008
|
2009
|
2008
|
|
|
|
|
|
Net sales
|
$ 7,034,460
|
$ 10,855,599
|
$ 28,205,830
|
$ 40,761,302
|
Cost of sales
|
5,766,928
|
9,694,819
|
21,625,163
|
34,796,546
|
Gross profit before revaluation of inventory
|
1,267,532
|
1,160,780
|
6,580,667
|
5,964,756
|
Revaluation of inventory
|
--
|
2,646,292
|
--
|
2,646,292
|
Gross profit
|
1,267,532
|
(1,485,512)
|
6,580,667
|
3,318,464
|
Operating Expenses
|
|
|
|
|
Sales and marketing
|
1,609,725
|
2,060,910
|
6,183,933
|
8,618,139
|
General and administrative
|
3,177,502
|
5,487,372
|
13,719,041
|
19,052,489
|
Total operating expenses
|
4,787,227
|
7,548,282
|
19,902,974
|
27,670,628
|
Loss from operations
|
(3,519,695)
|
(9,033,794)
|
(13,322,307)
|
(24,352,164)
|
Other income (expense)
|
|
|
|
|
Interest income (expense), net
|
12,005
|
(143,386)
|
(34,351)
|
4,786
|
Adjustment to the Fair Value of Common Stock Warrants
|
(168,037)
|
--
|
(2,488,204)
|
--
|
Total other income (expense)
|
(156,032)
|
(143,386)
|
(2,522,555)
|
4,786
|
Loss before provision for income taxes
|
(3,675,727)
|
(9,177,180)
|
(15,844,862)
|
(24,347,378)
|
Provision for income taxes
|
--
|
--
|
--
|
--
|
Net loss
|
(3,675,727)
|
(9,177,180)
|
(15,844,862)
|
(24,347,378)
|
|
|
|
|
|
|
|
|
|
|
Loss per share attributable to common shareholders:
(1)
|
|
|
|
|
Basic
|
$ (0.11)
|
$ (0.31)
|
$ (0.48)
|
$ (0.84)
|
|
|
|
|
|
Diluted
|
$ (0.11)
|
$ (0.31)
|
$ (0.48)
|
$ (0.84)
|
|
|
|
|
|
Weighted average shares used in computing net
loss
|
$ (0.11)
|
$ (0.32)
|
$ (0.49)
|
$ (0.87)
|
per common share:
|
|
|
|
|
Basic
|
34,217,016
|
28,376,774
|
32,154,674
|
28,121,278
|
|
|
|
|
|
Diluted
|
34,217,016
|
28,376,774
|
32,154,674
|
28,121,278
|
|
|
|
|
|
(1) Calculated in accordance with ASC 260-10-45 to 65. Prior
year amounts have been adjusted accordingly.
|
|
Akeena Solar, Inc.
|
Condensed Consolidated Balance Sheet
|
|
|
|
|
(Unaudited)
|
|
|
December 31, 2009
|
December 31, 2008 (1)
|
Assets
|
|
|
Current assets
|
|
|
Cash and cash equivalents
|
$ 5,804,458
|
$ 148,230
|
Restricted cash
|
--
|
17,500,000
|
Accounts receivable, net
|
4,118,358
|
7,660,039
|
Other receivables
|
274,169
|
331,057
|
Inventory, net
|
4,869,934
|
10,495,572
|
Prepaid expenses and other current assets, net
|
1,818,570
|
3,704,375
|
Total current assets
|
16,885,489
|
39,839,273
|
Property and equipment, net
|
1,248,994
|
1,806,269
|
Goodwill
|
298,500
|
298,500
|
Other assets
|
151,338
|
194,346
|
Total assets
|
$ 18,584,321
|
$ 42,138,388
|
Liabilities and Stockholders' Equity
|
|
|
Current liabilities
|
|
|
Accounts payable
|
$ 4,277,599
|
$ 1,922,480
|
Customer rebate payable
|
60,106
|
271,121
|
Accrued liabilities
|
1,174,979
|
2,410,332
|
Accrued warranty
|
1,187,999
|
1,056,655
|
Common stock warrant liability
|
2,536,402
|
--
|
Deferred revenue
|
619,242
|
1,057,941
|
Credit facility
|
--
|
18,746,439
|
Current portion of capital lease obligations
|
18,086
|
23,292
|
Current portion of long-term debt
|
222,583
|
219,876
|
Total current liabilities
|
10,096,996
|
25,708,136
|
|
|
|
Capital lease obligations, less current portion
|
2,728
|
20,617
|
Long-term debt, less current portion
|
352,847
|
535,302
|
Other long-term liabilities
|
19,440
|
--
|
Total liabilities
|
10,472,011
|
26,264,055
|
|
|
|
Commitments, contingencies and subsequent events
|
|
|
|
|
|
Stockholders' equity:
|
|
|
Common stock $0.001 par value; 50,000,000 shares authorized;
36,406,944 and 29,340,418 shares issued and outstanding at December
31, 2009 and December 31, 2008
|
36,407
|
29,340
|
Additional paid-in capital
|
59,897,553
|
52,820,224
|
Accumulated deficit
|
(51,821,650)
|
(36,975,231)
|
Total stockholders' equity
|
8,112,310
|
15,874,333
|
Total liabilities and stockholders' equity
|
$ 18,584,321
|
$ 42,138,388
|
|
|
|
(1) Derived from our audited financial statements as of December
31, 2008.
|
|
CONTACT: Lippert / Heilshorn & Associates
Investor Relations:
Jody Burfening
Amy Gibbons
agibbons@lhai.com
(212) 838-3777
Akeena Solar, Inc.
Barry Cinnamon, CEO
(408) 402-9400
bcinnamon@akeena.com
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