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Enphase Energy Reports First Quarter 2013 Financial Results

Enphase Energy Reports First Quarter 2013 Financial Results

PETALUMA, Calif., May 7, 2013 (GLOBE NEWSWIRE) -- Enphase Energy, Inc.
(Nasdaq:ENPH) announced today financial results for the first quarter ended
March 31, 2013.

First Quarter 2013 Highlights

  *Revenue of $45.6 million
  *Non-GAAP gross margin of 27%, up 510 basis points year-over-year
  *Non-GAAP operating expenses flat sequentially at $20.4 million

Enphase Energy reported total revenue for the first quarter of $45.6 million.
This is an increase of 7 percent compared to revenue of $42.6 million for the
first quarter of 2012, which included approximately $9 million of revenue
associated with shipments related to the expiring 1603 grant program.
Excluding these 1603 related units, revenue increased 36 percent
year-over-year. Units sold in the first quarter of 2013 totaled 315,000.

GAAP gross margin for the first quarter of 2013 was 26.8 percent and non-GAAP
gross margin was 27 percent, an increase of 510 basis points when compared to
21.9 percent in the first quarter of 2012.

GAAP operating expenses for the first quarter were $21.9 million and non-GAAP
operating expenses were $20.4 million, which is flat compared to the fourth
quarter of 2012.

First quarter of 2013 GAAP net loss was $10.4 million, or a loss of $0.25 per
share. On a non-GAAP basis, the net loss was $8.7 million, or a loss of $0.21
per share.

The Company exited the quarter with a total cash balance of $36.4 million.

"We are pleased with our first quarter results and are off to a strong start
for 2013. During a seasonally softer portion of the year, revenue came in at
the high end of our guidance and continues to demonstrate healthy top line
growth on a year-over-year basis," commented Paul Nahi, CEO of Enphase.
"Additionally, we improved our gross margins year-over-year, while maintaining
tight control on our operating expenses, keeping them flat on a sequential
basis."

Mr. Nahi added, "We continue to make progress with execution on our key
initiatives, which include improving operating performance, expanding gross
margin, broadening our market opportunity, developing new products and
services and charting a path to profitability and sustainable positive cash
flows. We remain excited about the solar industry and believe its long term
global prospects continue to be tremendous and represent a great opportunity
for growth and profitability for those companies with vision and a unique
value proposition."

Business Highlights

  *Renewal of inverter solution agreement with Vivint Solar to be their
    inverter supplier for 2013.
  *New European leadership established with the appointment of a single
    Managing Director for Enphase Europe, Middle East and Africa (EMEA) to
    oversee the execution and future expansion of the business.
  *Product availability announced in Switzerland and Greece through existing
    distribution partnerships, bringing the number of countries served in the
    European region to eight.
  *First installation featuring Enphase Microinverters and Phono Solar AC
    Modules by San Diego Solar Install following the Enphase and Phono Solar
    partnership announcement in the fall of 2012.
  *Announced 2013 philanthropic partnership with non-profit GRID
    Alternatives, a collaboration bringing over $14 million in expected
    lifetime energy savings to low-income families since 2010.

Business Outlook

"Looking forward we expect a strong sequential increase in our top line, with
revenues for the second quarter of 2013 to be within a range of $56 million to
$60 million, and for gross margin to be within a range of 26 percent to 28
percent," said Kris Sennesael, CFO of Enphase. "We also expect non-GAAP
operating expenses for the second quarter of 2013 to be roughly flat compared
to the first quarter of 2013."

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 excludes or
includes 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 results and second quarter 2013 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
50273387. A live webcast of the conference call 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
passcode 50273387 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 financial performance,
market demands for its microinverters, advantages of its technology, market
trends and future financial performance. 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 broad 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 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 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, 2012, 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, 2013, which will be filed with the SEC in the
second quarter of 2013. All information set forth in this press release and
its attachments is as of May 7, 2013. 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 delivers microinverter technology for the solar industry that
increases energy production, simplifies design and installation, improves
system uptime and reliability, reduces fire safety risk and provides a
platform for intelligent energy management. Our semiconductor-based
microinverter system converts energy at the individual module level and brings
a system-based, high technology approach to solar energy generation.
www.enphase.com

ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                                                 
                                                      Three Months Ended
                                                      March 31,
                                                      2013        2012
Net revenues                                           $45,577   $42,600
Cost of revenues                                       33,376      33,293
Gross profit                                           12,201      9,307
Operating expenses:                                               
Research and development                               9,026       7,842
Sales and marketing                                    6,850       5,049
General and administrative                             6,036       5,696
Total operating expenses                               21,912      18,587
Loss from operations                                   (9,711)     (9,280)
Other income (expense), net:                                      
Interest expense                                       (464)       (1,479)
Other income (expense)                                 (49)        640
Total other expense, net                               (513)       (839)
Loss before income taxes                               (10,224)    (10,119)
Provision for income taxes                             (182)       (65)
Net loss attributable to common stockholders           $(10,406) $(10,184)
Net loss per share attributable to common              $(0.25)   $(5.97)
stockholders, basic and diluted
Shares used in computing net loss per share            41,149      1,706
attributable to common stockholders, basic and diluted


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                                       
                                                       
                                             March31,  December31,
                                             2013       2012
ASSETS                                                  
Current assets:                                         
Cash and cash equivalents                     $36,434  $45,294
Accounts receivable, net                      24,908     27,743
Inventory                                     22,309     19,843
Prepaid expenses and other                    2,492      2,118
Total current assets                          86,143     94,998
Property and equipment, net                   25,281     25,541
Other assets                                  1,641      1,752
Total assets                                  $113,065 $122,291
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Current liabilities:                                    
Accounts payable                              $9,057   $11,272
Accrued liabilities                           18,521     19,266
Deferred revenues                             1,068      933
Current portion of term loans                 2,440      2,384
Total current liabilities                     31,086     33,855
Long-term liabilities:                                  
Deferred revenues                             8,378      7,537
Warranty obligations                          17,094     15,260
Other liabilities                             352        307
Term loans                                    8,046      8,677
Total liabilities                             64,956     65,636
Commitments and contingencies                           
Stockholders' equity:                                   
Preferred stock                               —          —
Common stock                                  —          —
Additional paid-in capital                    185,667    183,629
Accumulated deficit                           (137,432)  (127,026)
Accumulated other comprehensive income (loss) (126)      52
Total stockholders' equity                    48,109     56,655
Total liabilities and stockholders' equity    $113,065 $122,291


ENPHASE ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                 
                                                      Three Months Ended
                                                      March 31,
                                                      2013        2012
Cash flows from operating activities:                             
Net loss                                               $(10,406) $(10,184)
Adjustments to reconcile net loss to net cash used in             
operating activities:
Depreciation and amortization                          1,660       1,085
Non-cash interest expense                              108         937
Stock-based compensation                               1,435       706
Change in fair value of convertible preferred stock    —           (623)
warrants
Changes in operating assets and liabilities:                      
Accounts receivable                                    2,835       4,324
Inventory                                              (2,466)     (14,433)
Prepaid expenses and other assets                      (355)       (913)
Accounts payable, accrued and other liabilities        (759)       11,222
Deferred revenues                                      976         (6,192)
Net cash used in operating activities                  (6,972)     (14,071)
Cash flows from investing activities:                             
Purchases of property and equipment                    (1,682)     (4,605)
Net cash used in investing activities                  (1,682)     (4,605)
Cash flows from financing activities:                             
Proceeds from term loans and debt                      —           2,600
Repayments of term loans                               (591)       (3,287)
Principal payments under capital leases                (40)        (31)
Proceeds from the exercise of stock options            603         24
Payment of offering costs                              —           (279)
Net cash used in financing activities                  (28)        (973)
Effect of exchange rate changes on cash                (178)       28
Net decrease in cash and cash equivalents              (8,860)     (19,621)
Cash and cash equivalents—Beginning of period          45,294      51,524
Cash and cash equivalents—End of period                $36,434   $31,903


ENPHASE ENERGY, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
                                                                 
                                                      Three Months Ended
                                                      March 31,
                                                      2013        2012
Reconciliation of Gross Profit and Gross Margin on a
GAAP Basis to Gross Profit and Gross Margin on a                  
Non-GAAP Basis:
Gross profit on a GAAP basis                           $12,201   $9,307
Stock-based compensation                               108         20
Gross profit on a non-GAAP basis                       $12,309   $9,327
Gross margin on a GAAP basis                           26.8%       21.8%
Gross margin on a non-GAAP basis                       27.0%       21.9%
Reconciliation of Operating Expenses on a GAAP Basis              
to Operating Expenses on a Non-GAAP Basis:
Operating expenses on a GAAP basis                     $21,912   $18,587
Stock-based compensation(1)                            (1,327)     (686)
Severance costs                                        (156)       —
Operating expenses on a non-GAAP basis                 $20,429   $17,901
(1) Includes stock-based compensation as follows:                 
Research and development                               $478      $273
Sales and marketing                                    378         195
General and administrative                             471         218
Total                                                  $1,327    $686
Reconciliation of Loss from Operations on a GAAP Basis            
to Loss from Operations on a Non-GAAP Basis:
Loss from operations on a GAAP basis                   $(9,711)  $(9,280)
Stock-based compensation                               1,435       706
Severance costs                                        156         —
Loss from operations on a non-GAAP basis               $(8,120)  $(8,574)
Reconciliation of Net Loss on a GAAP Basis to Net Loss            
on a Non-GAAP Basis:
Net loss on a GAAP basis                               $(10,406) $(10,184)
Stock-based compensation                               1,435       706
Severance costs                                        156         —
Non-cash interest expense                              108         937
(Gains) losses from convertible preferred stock        —           (623)
warrant liability revaluation
Net loss on a non-GAAP basis                           $(8,707)  $(9,164)
Reconciliation of Basic and Diluted Net Loss per Share
on a GAAP Basis to Basic and Diluted Net Loss per                 
Share on a Non-GAAP Basis:
Basic and diluted net loss per share on a GAAP basis   $(0.25)   $(5.97)
Stock-based compensation                               0.04        0.41
Severance costs                                        —           —
Non-cash interest expense                              —           0.55
(Gains) losses from convertible preferred stock        —           (0.37)
warrant liability revaluation
Basic and diluted net loss per share on a non-GAAP     $(0.21)   $(5.37)
basis


ENPHASE ENERGY, INC.
SUPPLEMENTAL OPERATING DATA
(Unaudited)
                                                                
                            Quarterly Period
                            1Q13      4Q12      3Q12      2Q12      1Q12
Net revenues (in thousands)  $45,577 $57,568 $60,813 $55,697 $42,600
Gross profit (in thousands)  12,201    16,056    16,324    13,601    9,307
Gross margin                 26.8%     27.9%     26.8%     24.4%     21.8%
Microinverter units shipped  315       384       431       403       292
(in thousands)
Megawatts shipped(1)         67.7      82.6      92.4      86.0      62.5
(1) Represents the productive capacity of microinverters shipped.

CONTACT: Christine Bennett, Enphase Energy
         Global Corporate Communications Manager
         pr@enphaseenergy.com
         +1-707-763-4784

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