Enphase Energy
Feb 23, 2016
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Enphase Energy Reports Financial Results for the Fourth Quarter and Fiscal Year 2015

PETALUMA, Calif., Feb. 23, 2016 (GLOBE NEWSWIRE) -- Enphase Energy, Inc. (NASDAQ:ENPH), a global energy technology company, announced today financial results for the fourth quarter and year ended December 31, 2015.

Enphase Energy reported total revenue for the fourth quarter of 2015 of $65.6 million. During the fourth quarter of 2015, Enphase sold 129MW (AC) or 547,000 microinverters. GAAP gross margin for the fourth quarter of 2015 was 23.9 percent and non-GAAP gross margin was 24.5 percent.

GAAP operating expenses for the fourth quarter of 2015 were $30.9 million and non-GAAP operating expenses were $27.8 million. GAAP operating loss for the fourth quarter of 2015 was $15.2 million and non-GAAP operating loss was $11.7 million. GAAP net loss for the fourth quarter of 2015 was $15.8 million, or a net loss of $0.35 per share. On a non-GAAP basis, net loss was $11.5 million, or a net loss of $0.25 per share.

The Company generated $8.1 million of cash from operations in the fourth quarter of 2015 and exited the quarter with a total cash balance of $28.5 million.

"During the fourth quarter of 2015, we shipped our 10 millionth microinverter, representing more than 2.5GW of Enphase systems," said Paul Nahi, president and CEO of Enphase Energy. "In addition, we started shipping our 5th generation microinverter. We are making great progress with the development of our Enphase Home Energy Solution, including the AC Battery storage system, the AC module and the AC combiner box. These products will help drive further long-term growth with new and existing partners worldwide."

"Revenue for the fourth quarter of 2015 was impacted by the reduction of inventory levels in our channel, which have now returned to normalized levels," said Kris Sennesael, CFO of Enphase Energy. "We also reduced our operating expenses in the second half of 2015 to accommodate our lower gross margin profile."

For the fiscal year 2015, total revenue was $357.2 million. During 2015, Enphase shipped a record 706MW (AC) or 3.1 million microinverters. GAAP gross margin for 2015 was 30.3 percent and non-GAAP gross margin was 30.6 percent. GAAP net loss for 2015 totaled $22.1 million, or a net loss of $0.49 per share. Non-GAAP net loss was $8.1 million, or a net loss of $0.18 per share in 2015.

"2015 was a challenging year for Enphase," said Paul Nahi. "However, we continued to grow our revenue and MW shipped on a year-over-year basis, further driving the global adoption of the microinverter technology in our key markets. As we move into 2016, we continue to aggressively drive down the overall cost of our microinverter system, and are pleased with several recent customer wins that will contribute to market share growth. We are excited about our vision to realize the global potential of solar energy through our technology innovation and remain committed to providing our customers with the features, quality, ease, and simplicity of an Enphase energy solution."

Business Outlook

"We expect revenue for the first quarter of 2016 to be within a range of $63 million to $69 million," stated Kris Sennesael. "We expect gross margin to be within a range of 18 percent to 21 percent. We also expect non-GAAP operating expenses for the first quarter of 2016 to be within a range of $27 million to $29 million."

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 fourth quarter and full year 2015 results and first 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 36190567. 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 36190567 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 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 Annual Report on Form 10-K for the year ended December 31, 2015, which will be filed with the SEC in the first quarter of 2016. All information set forth in this press release and its attachments is as of February 23, 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 more than 10.3 million microinverters, and over 430,000 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
December 31,
 Twelve Months Ended
December 31,
 2015 2014 2015 2014
Net revenues$65,629  $105,207  $357,249  $343,904 
Cost of revenues49,929  70,172  249,032  230,861 
Gross profit15,700  35,035  108,217  113,043 
Operating expenses:       
Research and development12,544  13,040  50,819  45,386 
Sales and marketing10,922  11,798  45,877  41,003 
General and administrative7,405  8,246  30,830  31,083 
Total operating expenses30,871  33,084   127,526  117,472 
Income (loss) from operations(15,171) 1,951  (19,309) (4,429)
Other expense, net       
Interest expense(196) (572) (501) (1,863)
Other income (expense), net259  (562) (893) (994)
Total other income (expense), net  63  (1,134) (1,394) (2,857)
Income (loss) before income taxes(15,108) 817  (20,703) (7,286)
Provision for income taxes(675) (415) (1,379) (766)
Net income (loss)$(15,783) $402  $(22,082) $(8,052)
Net income (loss) per share:       
Basic$(0.35) $0.01  $(0.49) $(0.19)
Diluted$(0.35) $0.01  $(0.49) $(0.19)
Shares used in per share calculation:         
Basic45,504  43,612  44,632  42,903 
Diluted45,504  49,004  44,632   42,903 
            



  
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
  
 December 31,
 2015 2014
ASSETS   
Current assets:   
Cash and cash equivalents$28,452  $42,032 
Accounts receivable, net46,099  45,119 
Inventory40,800  21,590 
Prepaid expenses and other6,417   6,155 
Total current assets121,768  114,896 
Property and equipment, net32,118  30,824 
Goodwill3,745  3,745 
Intangibles, net2,220  1,811 
Other assets5,677  916 
Total assets$165,528  $152,192 
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$25,569  $22,316 
Accrued liabilities26,364  33,643 
Deferred revenues3,915  2,747 
Borrowings under revolving credit facility17,000   
Total current liabilities72,848  58,706 
Deferred revenues, non-current25,115  16,612 
Warranty obligations, non-current23,475  26,333 
Other non-current liabilities2,641  3,589 
Long-term debt   
Total liabilities124,079  105,240 
Commitments and contingencies   
Stockholders' equity:   
Common stock and additional paid-in capital224,732  208,022 
Accumulated deficit (183,073) (160,991)
Accumulated other comprehensive income (loss)              (210) (79)
Total stockholders' equity41,449  46,952 
Total liabilities and stockholders' equity$165,528  $152,192 
        



  
ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
  
 December 31,
 2015 2014
Cash flows from operating activities:   
Net loss$(22,082) $(8,052)
Adjustments to reconcile net loss to net cash used in operating activities:     
 Depreciation and amortization10,539  8,259 
 Provision for doubtful accounts1,502  711 
 Net loss on disposal of assets522  249 
 Non-cash interest expense163  483 
 Stock-based compensation12,696  9,740 
 Revaluation of contingent consideration liability(1,827)  
 Deferred income tax expense (benefit)642  (35)
 Changes in operating assets and liabilities (net of acquisition):   
  Accounts receivable(2,482) (13,746)
  Inventory(19,210) (5,010)
  Prepaid expenses and other assets(5,281) (2,512)
  Accounts payable, accrued and other liabilities(6,013 ) 28,833 
  Deferred revenues9,671  5,302 
   Net cash (used in) provided by operating activities(21,160) 24,222 
Cash flows from investing activities:   
Purchases of property and equipment(12,525) (13,249)
Purchases of intangible assets(237) (750)
Acquisition of a business  (2,235)
Change in restricted cash300  (300)
   Net cash used in investing activities(12,462) (16,534)
Cash flows from financing activities:   
Proceeds from borrowings under revolving credit facility46,000   
Payments under revolving credit facility(29,000)  
Payments of deferred financing costs(150)  
Holdback payment related to prior acquisition(300)  
Repayments of term loans  (8,708)
Proceeds from issuance of common stock under employee stock plans4,014  5,366 
   Net cash provided by (used in) financing activities20,564  (3,342)
   Effect of exchange rate changes on cash(522) (504)
Net (decrease) increase in cash and cash equivalents(13,580) 3,842 
Cash and cash equivalents — Beginning of period42,032  38,190 
Cash and cash equivalents — End of period$28,452  $42,032 
        



     
ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
     
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2015 2014 2015 2014
Gross profit (GAAP) $15,700  $35,035   $108,217  $113,043 
Stock-based compensation 304  244  1,217  816 
Severance costs $52  $  $52  $ 
Gross profit (Non-GAAP) $16,056  $35,279  $109,486  $113,859 
         
Gross margin (GAAP) 23.9% 33.3% 30.3% 32.9%
Stock-based compensation 0.6% 0.2% 0.3% 0.2%
Gross margin (Non-GAAP) 24.5% 33.5% 30.6% 33.1%
         
Operating expenses (GAAP) $30,871  $33,084  $127,526  $117,472 
Stock-based compensation(1) (2,813) (2,459) (11,479) (8,924)
Secondary offering expenses       (365)
Acquisition-related costs   (176)   (176)
Amortization of acquisition-related intangibles (45)   (180)  
Revaluation of contingent consideration liability 227    1,827   
Severance costs (472)    (1,952)  
Operating expenses (Non-GAAP) $27,768  $30,449  $115,742  $108,007 
         
(1) Includes stock-based compensation as follows:        
      Research and development $1,180  $912  $4,559  $3,127 
      Sales and marketing 652  671  3,162  2,487 
      General and administrative 981  876  3,758  3,310 
       Total $2,813  $2,459  $11,479  $ 8,924 
         
Income (loss) from operations (GAAP) $(15,171) $1,951  $(19,309) $(4,429)
Stock-based compensation 3,117  2,703  12,696  9,740 
Secondary offering expenses       365 
Acquisition-related costs    176    176 
Amortization of acquisition-related intangibles 45    180   
Revaluation of contingent consideration liability (227)   (1,827)  
Severance costs 524    2,004   
Income (loss) from operations (Non-GAAP) $(11,712) $4,830  $(6,256) $ 5,852 
         
Net income (loss) (GAAP) $(15,783) $402  $(22,082) $(8,052)
Stock-based compensation 3,117  2,703  12,696  9,740 
Secondary offering expenses       365 
Acquisition-related costs    176    176 
Amortization of acquisition-related intangibles 45    180   
Revaluation of contingent consideration liability (227)   (1,827)  
Severance costs 524    2,004   
Non-cash interest expense 43  227  163   483 
Income tax effect on revaluation of contingent consideration 745    745   
Net income (loss) (Non-GAAP) $(11,536) $3,508  $(8,121) $2,712 
         
Net income (loss) per share, diluted (GAAP) $(0.35) $0.01  $(0.49) $(0.19)
Stock-based compensation 0.07  0.06  0.29  0.24 
Secondary offering expenses        
Acquisition-related costs        
Amortization of acquisition-related intangibles        
Revaluation of contingent consideration liability     (0.04)  
Severance costs 0.01    0.04   
Non-cash interest expense       0.01 
Income tax effect on revaluation of contingent consideration 0.02    0.02   
Net income (loss) per share, diluted (Non-GAAP) $(0.25) $0.07  $(0.18) $0.06 
         
Shares used in per share calculation, diluted (Non-GAAP) 45,504  49,004  44,632  47,777 
             

 

Contact



Christina Carrabino

Enphase Energy, Inc.

Investor Relations

ir@enphaseenergy.com

+1-707-763-4784 x7294

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Source: Enphase Energy, Inc.

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