Real Goods Solar Reports Third Quarter 2012 Results

Real Goods Solar Reports Third Quarter 2012 Results

LOUISVILLE, Colo., Nov. 5, 2012 (GLOBE NEWSWIRE) -- Real Goods Solar, Inc.
(Nasdaq:RSOL), a leading provider of turnkey solar energy solutions, reported
results for its third quarter ended September 30, 2012.

Q3 2012 Highlights

  *Partnered with Gestamp Solar to expand Vermont's solar footprint with
    4.8MW of solar projects.
  *Partnered with Eastman Companies to design and to install a 500 kW solar
    power system.Eastman Companies is a recognized leader in high quality
    real-estate developments with properties throughout New Jersey.
  *Led the design and installation of a 343kW solar power system at Big Y
    Foods, one of the largest independently owned supermarket chains in New
    England and Massachusetts. The solar power system offsets approximately
    15% of the building's annual electricity needs.
  *Partnered with the Southeastern Environmental Education Alliance and the
    Connecticut Clean Energy Finance & Investment Authority to drive
    residential adoption of solar power systems in Massachusetts and
  *Appointed Angy Chin as interim CFO, bringing nearly a decade of executive
    management experience at public and private companies, including solar,
    e-commerce and retail.

Q3 2012 Financial Results as Compared to the Same Year-Ago Quarter

Net revenue for the third quarter of 2012 decreased 16.5% to $26.4 million
from $31.6 million recorded in the same period last year. The revenue decline
was primarily attributable to the direct supplying to customers by financing
companies of certain components used on residential projects in order for the
financiers to take advantage of expiring tax benefits (safe harbor). This
unusual sourcing activity during the third quarter of 2012 reduced net
revenues, but had no material impact on the company's gross profit.

Gross profit decreased by $2.1 million to $5.7 million, or 21.8% of net
revenue, for the third quarter of 2012 from $7.9 million, or 24.9% of net
revenue, in the same period last year. The 310 basis point decrease in gross
margin primarily reflects the reduction in the mix of residential projects
which produce higher gross margins over commercial projects. The company
expects a higher mix of commercial projects in 2012 over 2011.

Operating expenses were approximately 42.2% of net revenue for the third
quarter of 2012 compared to 25.7% in the same period last year.The increase
in operating expense is due to the unusual revenue sourcing activity, the
transitional cost of centralizing resources at the company's Colorado
headquarters in preparation for the next phase of growth.

Operating loss for the third quarter of 2012 was $27.5 million compared to
$0.7 million for the same quarter last year. The operating loss for the third
quarter of 2012 included goodwill and other asset impairments of $22.0
million, which were evaluated based on the company's stock trading price,
recent operating losses, and financial forecast.

Net loss for the third quarter of 2012 was $39.0 million, or $1.46 per share
compared to a loss of $0.5 million, or $0.02 per share, for the same quarter
last year. Income tax expense was $11.5 million for the third quarter of 2012
and included a provision to establish a valuation allowance of $14.5 million
to offset the company's net deferred tax assets. Net loss for the third
quarter was largely due to the aforementioned goodwill and other asset
impairments charges, and the valuation allowance for our net deferred tax
assets, which together amounted to $36.5 million.

Real Goods Solar has maintained its good standing with Silicon Valley Bank
(SVB) and has signed a commitment letter with SVB to extend the relationship
through March 2013.

First Nine Months of 2012 Financial Results

For the first nine months of 2012, net revenue decreased 4.2% to $66.1 million
from $69.0million for the same period last year.The net loss of $43.4
million for the first nine months of 2012 over the same period in the prior
year is largely due to goodwill and asset impairments charges of $22.0
million, establishment of a valuation allowance for the company's net deferred
tax assets of $14.5 million, integration and reorganization costs associated
with the Alteris acquisition, and the centralization of support services to

Management Commentary

"I am excited to support the company as the interim CFO and work with Kam to
deliver improved results," said Angy Chin, Real Goods Solar interim CFO.
"During the third quarter of 2012, we focused on operational excellence and
greater fiscal responsibility, which included evaluating key end-to-end
business processes that drove shorter lead times and cash-to-cash cycle.
Furthermore, we improved controls over financial reporting which included an
in-depth review of our balance sheet.We also developed matrixes for
monitoring key performance indicators to drive accountability. We believe
these efforts set the stage for the company to move forward with greater
tenacity in delivering results."

Kam Mofid, Real Goods Solar CEO commented, "Although the third quarter of 2012
included a number of unusual expenses and large non-cash items like goodwill
impairment and deferred tax assets, it was also a quarter where we made
substantial process and organizational improvements. These improvements will
help us rebuild the company's historical positive momentum in growth and
profitabilitythat we began to lose last year. We believe our momentum in the
fourth quarter will pick up and will have meaningful impact on our results
going forward.As an industry, the solar sector is going through a challenging
time. However, the downstream business remains robust and a great part of the
value chain. As one of the largest players in the downstream sector, Real
Goods Solar is in a favorable position for double-digit revenue growth next
year and significantimprovements in financial performance."

Conference Call and Webcast

Real Goods Solar will hold a conference call to discuss its third quarter 2012
financial results tomorrow, Tuesday, November 6, 2012 at 11:00a.m. Eastern
time. Management will host the presentation, followed by a question and answer

Date: Tuesday, November 6, 2012
Time: 11:00 a.m. Eastern time (9:00 a.m. Mountain time)
Dial-In Number: 1-877-941-2068
International: 1-480-629-9712
Conference ID#: 4568314

The conference call will be webcast live and available for replay via the
investor relations section of the company's website at

Please call the conference telephone number 5-10 minutes prior to the start
time. An operator will register your name and organization. If you have any
difficulty connecting with the conference call, please contact Liolios Group
at 1-949-574-3860.

A replay of the call will be available after 2:00 p.m. Eastern time on the
same day and until November 13, 2012.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay pin number: 4568314

About Real Goods Solar, Inc.

Real Goods Solar, Inc. (Nasdaq:RSOL) is the nation's pioneer in delivering
commercial, residential and utility turn-key solar energy solutions. Beginning
with the very first photovoltaic panel sold in the U.S. in 1978, the company
has installed more than 13,000 solar power systems representing 75 megawatts
of clean energy. As one of the nation's largest and most experienced solar
power installers, the company has 15 offices across the West and the
Northeast. Real Goods Solar makes it easy for customers to save on their
energy bill by providing a comprehensive solar solution, from design,
financing, permitting and installation to ongoing monitoring, maintenance and
support. For more information about Real Goods Solar, go to
or call (888) 507-2561.

The Real Goods Solar, Inc. logo is available at

This press release includes forward-looking statements relating to matters
that are not historical facts. Forward-looking statements may be identified by
the use of words such as "expect," "intend," "believe," "will," "should" or
comparable terminology or by discussions of strategy. While Real Goods Solar
believes its assumptions and expectations underlying forward-looking
statements are reasonable, there can be no assurance that actual results will
not be materially different. Risks and uncertainties that could cause
materially different results include, among others, introduction of new
products and services, completion and integration of acquisitions, the
possibility of negative economic conditions, and other risks and uncertainties
included in Real Goods Solar's filings with the Securities and Exchange
Commission. Real Goods Solar assumes no duty to update any forward-looking


(Unaudited)                             ThreeMonthsEnded  ThreeMonthsEnded
(In thousands, except per share data)   September 30, 2012  September30, 2011
Net revenue                            $ 26,358   100.0 % $ 31,586  100.0 %
Cost of goods sold                     20,621    78.2 %  23,733   75.1 %
Gross profit                           5,737     21.8 %  7,853    24.9 %
Operating expenses                     11,138    42.3%   8,105    25.7 %
Acquisition-related costs               —        — %     383      1.2 %
Goodwill and other asset impairments   22,012    83.5 %  —        — %
Loss from operations                   (27,413)   -104.0% (635 )   -2.0 %
Interest expense                        (136 )    -0.5 %  (104 )   -0.3 %
Loss before income taxes               (27,549 )  -104.5% (739 )   -2.3 %
Income tax expense (benefit)           11,468    43.5 %  (261 )   -0.8 %
Net loss                                $ (39,017) -148.0% $(478 )  -1.5 %
Weighted-average shares outstanding:                               
Basic                                  26,677            26,655   
Diluted                                26,677            26,655   
Net loss per share:                                                
Basic                                  $(1.46 )          $(0.02 ) 
Diluted                                $ (1.46)          $(0.02 ) 

(Unaudited)                            NineMonthsEnded    NineMonthsEnded
(In thousands, except per share data)  September 30, 2012   September30, 2011
Net revenue                           $ 66,061   100.0%  $ 68,965  100.0%
Cost of goods sold                    48,578     73.5%  50,723    73.5%
Gross profit                          17,483     26.5%  18,242    26.5%
Operating expenses                    29,847     45.2%  18,292    26.5%
Acquisition-related costs              —         —%    2,393     3.5%
Goodwill and other asset impairments  22,012     33.3%  —         —%
Loss from operations                  (34,376)    -52.0% (2,443 )  -3.5%
Interest expense                       (295 )     -0.5%  (111 )    -0.2%
Loss before income taxes              (34,671 )   -52.5% (2,554 )  -3.7%
Income tax expense (benefit)           8,720      13.2%  (538 )    -0.8%
Net loss                               $ (43,391) -65.7%  $ (2,016 ) -2.9%
Weighted-average shares outstanding:                                
Basic                                 26,672             22,534    
Diluted                               26,672             22,534    
Net loss per share:                                                 
Basic                                 $ (1.63)            $(0.09 )  
Diluted                               $(1.63 )           $(0.09 )  

REAL GOODS SOLAR, INC.                                           
(Unaudited)                                         September30, December 31,
(In thousands)                                      2012          2011
Current assets:                                                  
Cash                                               $3,827       $ 11,813
Restricted cash                                    —           172
Accounts receivable, net                           15,411       21,539
Costs in excess of billings on uncompleted          8,156        5,411
Inventory, net                                     6,430        12,264
Deferred costs on uncompleted contracts            723          1,313
Receivable and deferred tax assets                 228          3,333
Other current assets                               1,306        1,014
Total current assets                               36,081       56,859
Property and equipment, net                        4,517        6,930
Deferred tax assets                                —            5,444
Goodwill                                           —            19,885
Other intangibles, net                             —            390
Other assets                                       80           41
Total assets                                       $40,678      $ 89,549
Liabilities and shareholders' equity                             
Current liabilities:                                             
Line of Credit                                     $6,500       $—
Accounts payable                                   15,220       27,785
Accrued liabilities                                2,978        3,292
Billings in excess of costs on uncompleted          1,890        2,144
Payable to Gaiam                                   83           476
Debt                                               144          197
Capital lease obligations                          161          126
Deferred revenue and other current liabilities     621          2,388
Total current liabilities                          27,597       36,408
Related party debt                                 4,850        1,700
Debt, net of current portion                       95           202
Capital lease obligations, net of current portion  462          433
Total liabilities                                  33,004       38,743
Total shareholders' equity                         7,674        50,806
Total liabilities and shareholders' equity         $ 40,678     $ 89,549

CONTACT: Investor Relations:
         Ron Both
         Liolios Group, Inc.
         Tel (949) 574-3860

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