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FTC Solar Announces Third Quarter 2021 Financial Results
来源: Nasdaq GlobeNewswire / 10 11月 2021 05:30:00 America/Chicago
- Third quarter revenue of $53.0 million, up 5.8% q/q; nine-month revenue up 18% y/y;
- Added to executed contracts and awarded orders, now totaling $752 million YTD through Nov. 9*;
- Announced 1.7GW transaction to supply trackers to multiple projects in development by a leading project developer;
- Awarded three new projects in Australia, including largest to-date, and first two projects in Africa;
- Sean Hunkler named CEO; and
- Continue to expect strong sequential revenue growth in Q4, despite project delays/push-outs.
AUSTIN, Texas, Nov. 10, 2021 (GLOBE NEWSWIRE) -- FTC Solar, Inc. (Nasdaq: FTCI), a fast-growing global provider of solar tracker systems, software and engineering services, today announced financial results for the third quarter ended September 30, 2021.
“Adjusted EBITDA for the third quarter came in toward the high-end of the company’s guidance range”, said Sean Hunkler, FTC Solar President and Chief Executive Officer, “with lower logistics and operating expenses offsetting lower than target revenue, as some production/revenue recognition shifted between periods.”
“As I cross the six-week mark as CEO, I’m excited by what I have seen so far and by the promising long-term prospects ahead for FTC Solar. We have strong and expanding customer relationships, underscored by our multi-year transaction with a leading project developer for a significant portion of the pipeline being developed by them – a first of its kind transaction for FTC Solar. As part of the transaction, FTC intends to make a limited amount of development capital available to some of these projects. We also have numerous opportunities to add new customers both domestically and around the world. We are pleased to report that we’ve recently seen additional growth on this front, including our first two projects in Africa as well as three more projects awards in Australia, including our largest there to-date.
“These wins have supported our contracted and awarded order growth, which was up about 580% on a year-to-date basis to today, with another $267 million added since our most recent update as of August 1. Excluding the amount included in reported first-nine months revenue, executed contracts and awarded orders as of November 9 were $692 million, with expected delivery dates in 2021 and beyond. At this point, we’ve now added more revenue to our backlog in the last five months than we’ve reported in the history of the company to date.”
Summary Financial Performance: Q3 2021 and Q3 2020 (in thousands, except per share data and percentages)
GAAP Non-GAAP Three Months Ended September 30, 2021 2020 2021 2020 Revenue $ 52,989 $ 59,640 $ 52,989 $ 59,640 Gross margin -15.2 % 4.8 % -14.5 % 4.9 % Operating expense $ 14,732 $ 5,391 $ 8,377 $ 5,020 Operating loss $ (22,771 ) $ (2,525 ) $ (16,090 ) $ (2,074 ) Net loss $ (22,915 ) $ (2,840 ) $ (16,313 ) $ (2,172 ) Diluted EPS $ (0.24 ) $ (0.04 ) $ (0.17 ) $ (0.03 ) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.
*Includes amounts included in first nine months reported revenue. We define executed contracts and awarded orders as orders that have been documented and signed through a contract, where we are in the process of documenting a contract but for which a contract has not yet been signed, or that are subject to multi-project transactions, included as described herein. In the case of certain projects, including those that are scheduled for delivery on later dates, we have not locked in binding pricing with customers and we instead use estimated average selling price to calculate the revenue included in our executed contracts and awarded orders for such projects. Actual revenue for these projects could differ once contracts with binding pricing are executed. See press release text for current balance of executed contracts and awarded orders.
Hunkler continued, “As we continue to win business and grow, our ability to maximize value for customers and stakeholders is of critical importance. Our sharp focus will be on operational excellence as we navigate the current commodity and logistics environment(s) and position ourselves for long-term growth and profitability. This includes our design-to-value initiative, which is sharply focused on improving project margin by reducing manufacturing and materials costs. Initial results from this initiative became evident in Q3, and these improvements are expected to be an increasing contributor to improved profitability in future quarters. The design-to-value initiative is also expected to leverage our emerging R&D pipeline where I see the potential to accelerate certain opportunities.”
Third Quarter 2021 Results
Total third quarter revenue was $53.0 million, an increase of 5.8% compared to the prior quarter, on slightly higher product volume and higher ASP, and a decrease of approximately 11% compared with the third quarter of 2020, on lower product volume.GAAP Gross loss was $8.0 million compared to $16.1 million in the prior quarter, driven primarily by lower stock-based compensation relative to our first quarter as a public company, and lower logistics expense on fewer deliveries, and compared to a gross profit of $2.9 million in the prior year period, with the difference driven primarily by approximately $6 million in increased logistics expense that was not passed along to customers and a strong ramp up in employee count and other overhead expenses to support the company’s growth trajectory. The logistics impact of $6 million in the third quarter was lower than the $12-$15 million indicated in the company’s guidance, with a portion shifting to the fourth quarter corresponding with the shift in production.
GAAP operating expenses were $14.7 million. On a non-GAAP basis, excluding stock-based compensation and certain other expenses, operating expenses were $8.4 million, better than the company’s guidance range due to cost controls and timing between quarters, which compares to $5.0 million in the year-ago quarter. The year-over-year increase was driven primarily by necessary growth in staffing and operating as a public company.
GAAP net loss was $22.9 million or $0.24 per share, compared to a loss of $52.4 million(a), or $0.61 per share in the prior quarter, and compared to a net loss of $2.8 million, or $0.04 per share in the year-ago quarter. Adjusted EBITDA loss, which excludes a $5.4 million impact of stock-based compensation, certain consulting and legal fees and other non-cash items, was $16.1 million. This was also better than the midpoint of the company’s guidance range, due to lower operating and shipping expenses. This result compares to an Adjusted EBITDA loss of $16.7 million in the prior quarter and $2.1 million in the year-ago quarter.
Fourth Quarter 2021 Outlook
Looking ahead, the company continues to expect strong sequential revenue growth in the fourth quarter. However, due to an abrupt delay of customer purchase order decisions from the fourth quarter into 2022, driven primarily by module pricing and availability uncertainty, on top of already elevated commodity and logistics pricing in the marketplace, our revenue expectations for the fourth quarter are now lower than our prior target, as anticipated revenue pushes to subsequent periods. Importantly, the company views this as merely a delay, not a loss, of this business. Overall, we continue to see strong demand for our products with our contracted and awarded orders growing at a healthy clip and our overall project pipeline at record levels.For the fourth quarter, the company currently expects continued improvement, including:
($ in millions) 3Q’21 Guidance 3Q’21 Actual 4Q’21 Guidance Revenue $56.0-$62.0 $53.0 $70.0-$80.0 Non-GAAP Operating Expenses $8.7-$9.7 $8.4 $9.0-$10.0 Adjusted EBITDA $(19.7)-$(14.7) $(16.1) $(12.5)-$(16.5) Assumptions:
- Utilization of break-bulk shipping beginning in the fourth quarter should help to mitigate margin impacts;
- Anticipated logistics impact to the fourth quarter is approximately $3-$5 million;
- This outlook would result in full year revenue between $239-$249 million, representing growth of 27%-33%.
Third 2021 Earnings Conference Call
FTC Solar’s senior management will host a conference call for members of the investment community that will be held at 8:30 a.m. E.T. today, during which the company will discuss its third quarter results, its outlook and other business items. This call will be webcast and can be accessed within the Investor Relations section of the FTC Solar website at investor.ftcsolar.com. A replay of the conference call will also be available on the website for 30 days following the webcast.About FTC Solar Inc.
Founded in 2017 by a group of renewable energy industry veterans, FTC Solar is a fast-growing, global provider of solar tracker systems, technology, software, and engineering services. Solar trackers significantly increase energy production at solar power installations by dynamically optimizing solar panel orientation to the sun. FTC Solar’s innovative tracker designs provide compelling performance and reliability, with an industry-leading installation cost-per-watt advantage.Forward-Looking Statements
This press release contains forward looking statements. These statements are not historical facts but rather are based on our current expectations and projections regarding our business, operations and other factors relating thereto. Words such as “may,” “will,” “could,” “would,” “should,” “anticipate,” “predict,” “potential,” “continue,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates” and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. You should not rely on our forward-looking statements as predictions of future events, as actual results may differ materially from those in the forward-looking statements because of several factors, including those described in more detail in our filings with the U.S. Securities and Exchange Commission, including the section entitled “Risk Factors” contained therein. FTC Solar 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.FTC Solar Investor Contact:
Bill Michalek
Vice President, Investor Relations
FTC Solar
T: (737) 241-8618
E: IR@FTCSolar.comFTC Solar Media Contact:
Scott Deitz
On behalf of FTC Solar
T: (336) 908-7759FTC Solar, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(in thousands, except share and per share data)
(unaudited)Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenue: Product $ 45,582 $ 48,879 $ 137,799 $ 122,197 Service 7,407 10,761 31,005 20,976 Total revenue 52,989 59,640 168,804 143,173 Cost of revenue: Product 48,090 46,513 146,964 114,883 Service 12,938 10,261 45,810 19,826 Total cost of revenue 61,028 56,774 192,774 134,709 Gross profit (loss) (8,039 ) 2,866 (23,970 ) 8,464 Operating expenses Research and development 2,116 1,438 9,653 4,047 Selling and marketing 2,224 1,041 6,421 2,374 General and administrative (Note. 9) 10,392 2,912 63,217 7,630 Total operating expenses 14,732 5,391 79,291 14,051 Loss from operations (22,771 ) (2,525 ) (103,262 ) (5,587 ) Interest expense (301 ) (70 ) (515 ) (303 ) Gain from disposal in equity investment 210 - 20,829 - Gain (loss) on extinguishment of debt - (34 ) 790 (75 ) Other expense (12 ) (1 ) (58 ) (1 ) Loss before income taxes (22,874 ) (2,630 ) (82,216 ) (5,966 ) (Expense) benefit from income taxes (41 ) (24 ) (137 ) 115 Loss from unconsolidated subsidiary - (186 ) (354 ) (345 ) Net loss $ (22,915 ) $ (2,840 ) $ (82,707 ) $ (6,196 ) Other comprehensive income (loss): Foreign currency translation adjustments 3 (12 ) 9 (20 ) Comprehensive loss $ (22,912 ) $ (2,852 ) $ (82,698 ) $ (6,216 ) Net loss per share: Basic $ (0.24 ) $ (0.04 ) $ (0.99 ) $ (0.09 ) Diluted $ (0.24 ) $ (0.04 ) $ (0.99 ) $ (0.09 ) Weighted-average common shares outstanding: Basic 94,596,519 67,567,724 83,860,250 69,857,468 Diluted 94,596,519 67,567,724 83,860,250 69,857,468 FTC Solar, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share data)
(unaudited)September 30,
2021December 31,
2020ASSETS Current assets Cash $ 140,662 $ 32,359 Restricted cash — 1,014 Accounts receivable, net 53,668 23,734 Inventories 11,276 1,686 Prepaid and other current assets 23,558 6,924 Total current assets 229,164 65,717 Investments in unconsolidated subsidiary — 1,857 Other assets 6,265 3,819 Total assets $ 235,429 $ 71,393 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 16,556 $ 17,127 Line of credit — 1,000 Accrued expenses and other liabilities 40,246 18,495 Accrued interest – related party — 207 Deferred revenue 9,606 22,980 Total current liabilities 66,408 59,809 Long-term debt and other borrowings — 784 Other non-current liabilities 5,661 3,349 Total liabilities 72,069 63,942 Commitments and contingencies (Note 8) Stockholders’ equity Preferred stock par value of $0.0001 per share, 10,000,000 shares authorized; none issued as of December 31, 2020 and September 30, 2021 — — Common stock par value of $0.0001 per share, 850,000,000 shares authorized; 66,155,340 and 84,944,145 shares issued and outstanding as of December 31, 2020 and September 30, 2021 8 1 Treasury stock, at cost; 9,896,666 and 10,762,566 shares as of December 31, 2020 and September 30, 2021 — — Additional paid-in capital 288,696 50,096 Accumulated other comprehensive income (loss) 6 (3 ) Accumulated deficit (125,350 ) (42,643 ) Total stockholders’ equity 163,360 7,451 Total liabilities and stockholders’ equity $ 235,429 $ 71,393 FTC Solar, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)Nine Months Ended September 30, 2021 2020 Cash flows from operating activities Net loss $ (82,707 ) $ (6,196 ) Adjustments to reconcile net loss to cash used in operating activities: — Stock-based compensation 58,532 1,381 Depreciation and amortization 383 43 (Income) loss from unconsolidated subsidiary 354 345 Gain from disposal of equity investment (20,829 ) — (Gain) loss on extinguishment of debt (790 ) 76 Warranty provision 2,118 5,195 Warranty asset (484 ) (726 ) Bad debt expense 83 — Deferred income taxes — (3 ) Other non-cash items — 43 Changes in operating assets and liabilities: Accounts receivable, net (30,017 ) (12,219 ) Inventories (9,590 ) (1,523 ) Prepaid and other current assets (16,609 ) (4,351 ) Other assets 180 (365 ) Accounts payable (535 ) 4,009 Accruals and other current liabilities 21,243 13,825 Accrued interest – related party debt (207 ) (112 ) Deferred revenue (13,374 ) (14,108 ) Other non-current liabilities 904 386 Other, net (1,068 ) (338 ) Net cash used in operating activities (92,413 ) (14,638 ) Cash flows from investing activities: Purchases of property and equipment (779 ) — Proceeds from disposal of equity method investment 22,332 — Net cash provided by investing activities: 21,553 — Cash flows from financing activities: Proceeds from borrowings — 784 Repayments of borrowings (1,000 ) (4,000 ) Repurchase and retirement of common stock (54,155 ) — Offering costs paid (5,942 ) — Deferred financing costs for revolving credit facility (2,077 ) — Proceeds from stock issuance 241,314 30,000 Net cash provided by financing activities 178,140 26,784 Effect of exchange rate changes on cash and restricted cash 9 (20 ) Net increase in cash and restricted cash 107,289 12,126 Cash and restricted cash at beginning of period 33,373 8,235 Cash and restricted cash at end of period 140,662 20,361 Supplemental disclosures of cash flow information: Purchase of property and equipment included in accounts payable $ 40 $ — Non-cash gain on extinguishment of debt from PPP loan forgiveness $ (790 ) $ — Cash paid during the period for interest $ 332 $ 350 Reconciliation of cash and restricted cash at period end September 30, 2021 December 31, 2020 Cash 140,662 32,359 Restricted cash — 1,014 Total cash and restricted cash $ 140,662 $ 33,373 Because of these limitations, Non-GAAP Gross Margin, Non-GAAP Operating Expense, Non-GAAP Net Loss and Adjusted Non-GAAP Net Loss Per Share (Adjusted EPS) should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP and you should not rely on any single financial measure to evaluate our business. These Non-GAAP financial measures, when presented, are reconciled to the most closely applicable GAAP measure as disclosed below.
The following table reconciles Non-GAAP Gross Margin for the three and nine months ended September 30, 2021 and 2020, respectively:
Three Months Ended
September 30,Nine Months Ended
September 30,2021 2020 2021 2020 GAAP gross profit (loss) $ (8,039 ) $ 2,866 (23,970 ) $ 8,464 Stock-based compensation 342 80 7,571 244 Other costs - - 460 - Non-GAAP gross profit (loss) (7,697 ) 2,946 (15,939 ) 8,708 Non-GAAP revenue $ 52,989 $ 59,640 168,804 $ 143,173 Non-GAAP gross margin -14.5 % 4.9 % -9.4 % 6.1 % The following table reconciles GAAP Operating Expense to Non-GAAP Operating Expense for the three and nine months ended September 30, 2021 and 2020, respectively:
Three Months Ended
September 30,Nine Months Ended
September 30,2021 2020 2021 2020 GAAP Operating expense $ 14,732 $ 5,391 $ 79,291 $ 14,051 Depreciation expense (20 ) (3 ) (48 ) (10 ) Amortization of intangibles - - - (33 ) Stock-based compensation (5,039 ) (369 ) (50,960 ) (1,138 ) Other costs (1,296 ) $ - (4,733 ) $ - Non-GAAP Operating expense $ 8,377 $ 5,019 $ 23,550 $ 12,870 The following table reconciles GAAP Operating Loss to Non-GAAP Operating Loss for the three and nine months ended September 30, 2021 and 2020, respectively:
Three Months Ended
September 30,Nine Months Ended
September 30,2021 2020 2021 2020 GAAP Operating loss $ (22,771 ) $ (2,525 ) $ (103,262 ) $ (5,587 ) Depreciation expense 53 3 95 10 Amortization of intangibles - - - 33 Stock-based compensation 5,381 449 58,531 1,382 Other costs 1,247 $ - 5,136 $ - Non-GAAP Operating loss $ (16,090 ) $ (2,073 ) $ (39,500 ) $ (4,162 ) The following table reconciles Net Loss to Adjusted EBITDA for the three and nine months ended September 30, 2020 and 2021, respectively:
Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Net loss $ (22,915 ) $ (2,840 ) $ (82,707 ) $ (6,196 ) Income tax (benefit) 41 24 137 (115 ) Interest expense, net 128 70 227 303 Depreciation expense 53 3 95 10 Amortization of intangibles — — — 33 Amortization of debt issuance costs 173 — 288 — Stock-based compensation 5,381 449 58,531 1,382 (Gain) loss on extinguishment of debt(a) — 34 (790 ) 75 (Gain) from disposal of equity investment (210 ) — (20,829 ) — Non-routine legal fees (b) 988 — 1,763 — Severance(c) — — 295 — Other costs(d) 270 — 3,135 — Loss from unconsolidated subsidiary(e) — 186 354 345 Adjusted EBITDA $ (16,091 ) $ (2,074 ) $ (39,500 ) $ (4,163 ) (a) The gain on extinguishment of debt for the nine months ended September 30, 2021 resulted from forgiveness of a loan under SBA’s Paycheck Protection Program. See “Note -7 Debt and Other Borrowings”.
(b) Represents legal fees incurred that were not ordinary or routine to the operations of the business.
(c) Represents severance accrued related to an agreement with an employee due to restructuring changes.
(d) Represents consulting fees in connection with operations and finance and other costs associated with our IPO and one-time CEO transition cost.
(e) Represents results of an entity that we do not consolidate, as our management excludes these results when evaluating our operating performance.The following table reconciles Net Loss to Adjusted Non-GAAP Net Loss and Adjusted EPS for the three and nine months ended September 30, 2021 and 2020, respectively. All shares and per share amounts have been adjusted for a 8.25-for-1 share forward stock split which took effect on April 27, 2021:
Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands, except per share data) Net loss $ (22,915 ) $ (2,840 ) $ (82,707 ) $ (6,196 ) Amortization of intangibles — — — 33 Amortization of debt issuance costs 173 — 288 — Stock-based compensation 5,381 449 58,531 1,382 (Gain) loss on extinguishment of debt — 34 (790 ) 75 (Gain) from disposal of equity investment (210 ) — (20,829 ) — Non-routine legal fees 988 — 1,763 — Severance — — 295 — Other costs 270 — 3,135 — Loss from unconsolidated subsidiary — 186 354 345 Income tax expense of adjustments (a) — — — (3 ) Adjusted Non-GAAP net loss $ (16,313 ) $ (2,171 ) $ (39,960 ) $ (4,364 ) Adjusted Non-GAAP net loss per share (Adjusted EPS) Basic $ (0.17 ) $ (0.03 ) $ (0.48 ) $ (0.06 ) Diluted $ (0.17 ) $ (0.03 ) $ (0.48 ) $ (0.06 ) Weighted-average Non-GAAP common shares outstanding: Basic 94,596,519 67,567,724 83,860,250 69,857,468 Diluted 94,596,519 67,567,724 83,860,250 69,857,468 (a) Represents incremental tax expense of adjustments made to reconcile Net Loss to Adjusted Non-GAAP Net Loss driven from loss from unconsolidated subsidiary.
Notes to Reconciliations of Non-GAAP Financial Measures to Nearest Comparable GAAP Measures
We present Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS as supplemental measures of our performance. We define Adjusted EBITDA as net loss plus (i) income tax (benefit) or expense, (ii) interest expense, (iii) depreciation expense, (iv) amortization of intangibles, (v) amortization of debt issuance costs, (vi) stock-based compensation (vii) gain on extinguishment of debt, (viii) gain from disposal in equity investment, (ix) non-routine legal fees, (x) severance, (xi) other costs and (xii) loss from unconsolidated subsidiary. We define Adjusted Net Loss as net loss plus (i) amortization of intangibles, (ii) amortization of debt issuance costs (iii) stock-based compensation, (iv) gain on extinguishment of debt, (v) gain from disposal in equity investment, (vi) non-routine legal fees, (vii) severance, (viii) other costs, (ix) loss from unconsolidated subsidiary and (x) income tax expense of adjustments. Adjusted EPS is defined as Adjusted Non-GAAP Net Loss Per Share using the weighted average basic and diluted shares outstanding.
Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS are intended as supplemental measures of performance that are neither required by, nor presented in accordance with, U.S. generally accepted accounting principles (“GAAP”). We present Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS because we believe they assist investors and analysts in comparing our performance across reporting periods on an ongoing basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Adjusted EBITDA, Adjusted Non-GAAP Net Loss and Adjusted EPS to evaluate the effectiveness of our business strategies.
(a) During the third quarter, the Company identified prior quarter errors related to basic and diluted earnings per share (EPS) calculation and overstated stock-based compensation. Although Management concluded these errors were not material to the prior quarter interim financial statements, the Company is correcting these errors by revising the previously issued unaudited consolidated financial statements as of June 30, 2021 and presenting the effect of the revision adjustment for the three and six months ended June 30, 2021. References herein to prior quarter net loss has been revised to reflect the decrease of $3.4 million in stock-based compensation and the increase of $0.09 in earnings per share. (See Footnote 2 to our unaudited consolidated financial statements included in our filing of our Q3 Quarterly Report on Form 10-Q.)
