Real Goods Solar Reports Third Quarter 2013 Results

Real Goods Solar Reports Third Quarter 2013 Results

LOUISVILLE, Colo., Nov. 6, 2013 (GLOBE NEWSWIRE) -- Real Goods Solar, Inc.
(Nasdaq:RSOL), a nationwide leader of turnkey solar energy solutions for
residential, commercial, and utility customers, reported results for the third
quarter ended September 30, 2013.

Q3 2013 Highlights

  *Achieved substantial improvements in top and bottom line performance: Net
    revenue increased 64% to $34 million from $20.7 million in the previous
    quarter and up 29% from $26.4 million in the same year-ago quarter.
    Adjusted EBITDA loss narrowed to $0.6 million from $5.1 million in the
    year-ago quarter (see discussion about adjusted EBITDA, a non-GAAP term,
    below).
    
  *Deployed solar energy systems totaling 10.7 megawatts (MW) bringing the
    cumulative total deployed in the first nine months of 2013 to 21 MWs. The
    company has now installed more than 16,000 solar power systems to-date.
    
  *Improved productivity and reduced costs: Operating expenses decreased from
    $11.1 million or 42% of revenues in the third quarter of 2012 to $8.1
    million or 24% of revenues in the current quarter. 
    
  *Acquired and initiated the integration of Syndicated Solar, a
    rapidly-growing residential solar company, with regional offices in Grand
    Junction, Colorado, and in the St. Louis, Missouri, and San Jose,
    California metro areas. The acquisition, effective August 9, 2013,
    expanded Real Goods Solar's residential sales capabilities, adding more
    than 40 employees and highly-capable senior management. The company
    achieved record residential backlog at the end of the third quarter.
    
  *Signed a definitive agreement to acquire Mercury Energy in a merger
    transaction, one of the leading installers of solar energy solutions on
    the East Coast. Mercury's assets include approximately $10 million of
    cash, and has no debt. Upon closing, Mercury will bring nearly 50
    employees to Real Goods Solar. The transaction is subject to Real Goods
    Solar and Mercury shareholder approval.

Q3 2013 and First Nine Months 2013 Financial Results

Net revenue for the third quarter of 2013 was $34.0 million, up 29% from $26.4
million in the same year-ago quarter. For the first nine months of 2013, net
revenue was $71.4 million, up 8% compared to $66.1 million in the same
year-ago period. The improvement in both periods reflects an increase in the
number of solar systems deployed as well as a greater proportion of revenue
attributable to residential system deployments. Residential systems typically
have a higher sales price per watt than commercial systems.

Gross profit was $7.3 million or 21.4% of net revenue in the third quarter of
2013, compared to $5.7 million or 21.8% of net revenue in the quarter last
year. The increase in gross profit for the third quarter reflects the increase
in revenue. For the first nine months of 2013, gross profit was $16.6 million
or 23.3% of net revenue, compared to $17.5 million or 26.5% of net revenue in
the same year-ago period. The decrease in gross profit for the nine month
period is primarily attributable to lower average sales prices compared to the
same year-ago period.

Total expenses were $8.7 million for the third quarter of 2013, including
one-time charges of $0.6 million for acquisition related costs incurred in
conjunction with the completed acquisition of Syndicated and the pending
acquisition of Mercury. This compares to total expenses in the third quarter
of 2012 of $33.2 million, including a one-time charge of $22 million related
to the impairment of goodwill. For the first nine months of 2013, total
expenses were $24.6 million, including the one-time charges of $0.6 million,
which compares to $51.9 million in the same year-ago period (which included a
one-time charge of $22 million related to the impairment of goodwill). The
decrease in operating expenses in both periods is primarily attributable to
improved productivity, cost management and cost control.

Loss from operations in the third quarter of 2013 declined to $1.4 million
from $27.4 million in the same year-ago quarter. For the first nine months of
2013, loss from operations declined to $8.0 million from $34.4 million in the
same year-ago period.

Net loss for the third quarter of 2013 was $2.1 million or $(0.07) per share,
improving from a net loss of $39.0 million or $(1.46) per share in the same
quarter last year. The decrease in net loss reflects higher revenue and gross
profit as well as lower operating expenses. The net loss for third quarter
2012 also included the charge related to the impairment of goodwill as well as
income tax expense of $11.5 million. For the first nine months of 2013, net
loss was $8.8 million or $(0.31) per share, improving from $43.4 million or
$(1.63) in the same year-ago period.

Adjusted EBITDA was a loss of $0.6 million in the third quarter of 2013 versus
a loss of $5.1 million in the third quarter of 2012. For the first nine months
of 2013, adjusted EBITDA was a loss of $6.4 million versus a loss of $11.1
million in the same year-ago period. The company defines adjusted EBITDA as
income or loss from operations before interest, depreciation, taxes, non-cash
stock-based compensation and the one-time charges described above. See "About
Presentation of Adjusted EBITDA" below for the definition of adjusted EBITDA,
a non-GAAP financial metric, and an important discussion about the use of this
metric and its reconciliation to GAAP net income, the most directly comparable
GAAP financial measure.

Cash totaled $2.3 million at September 30, 2013, as compared to $6.9 million
at June 30, 2013. The company had no outstanding borrowings under its $6.5
million revolving line of credit with Silicon Valley Bank (SVB) at September
30, 2013. Subsequent to the end of the quarter, total credit line capacity
with SVB increased by $2 million to total $8.5 million to fund the early
payoff ofloans from the company's former largest shareholder, Gaiam. As of
today, there is approximately $2 million borrowed under the SVB line of
credit. The anticipated closing of the Mercury acquisition is expected to add
approximately $10 million in cash.

Management Commentary

"In the third quarter of 2013, our continued focus on growth, productivity,
and cost management resulted in dramatic top and bottom line improvements
sequentially and year-over-year," said Real Goods Solar CEO Kam Mofid. "The
integration of Syndicated has substantially increased our capabilities,
resulting in record backlog of residential projects as we began the final
quarter of the year. The strong continued growth in sales and installation
backlog has created some short-term capacity constraints, particularly in
engineering and construction. While this is expected to affect revenue growth
in the fourth quarter, it leaves us strongly positioned as we enter 2014."

Tony Dipaolo, CFO of Real Goods Solar, commented: "We have made substantial
improvements in all facets of the business in the past 12 months and
especially in the third quarter, as demonstrated by our strong top and bottom
line results. Yesterday we also reported the payoff of $2.6 million owed to
Gaiam, which represents amajor milestone for us. To fund the repayment, we
obtained additional financing from Silicon Valley Bank under better terms,
which we believe represents a strong vote of confidence in our management and
the progress we have made. In conjunction with the repayment, we also
terminated legacy agreements which provided certain special rights to Gaiam.
Altogether, these changes vastly simplify our ownership structure and reduces
risk for our shareholders, and we realize a $300,000 discount by repaying the
debt early."

Outlook

The company expects fourth quarter 2013 revenue to be between $34 million and
$39 million or between $105 million and $110 million for the year excluding
Mercury.The company believes that it will be adjusted EBITDA positive in the
fourth quarter of 2013.Revenue for Mercury is expected to be $17 million to
$20 million for the year ended 2013.

Conference Call and Webcast

Real Goods Solar will hold a conference call to discuss its third quarter 2013
financial results on Wednesday, November 6, 2013 at 4:30p.m. Eastern time.
Management will host the presentation, followed by a question and answer
period.

Date: Wednesday, November 6, 2013
Time: 4:30 p.m. Eastern time (2:30 p.m. Mountain time)
Dial-In number: 1-888-846-5003
International: 1-480-629-9856
Conference ID: 4646171
Webcast: http://public.viavid.com/index.php?id=106478

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

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 7:30 p.m. Eastern time on the
same day through November 13, 2013.

Toll-free replay number: 1-877-870-5176
International replay number: 1-858-384-5517
Replay ID: 4646171

About Real Goods Solar and RGS Energy
Real Goods Solar, Inc. (Nasdaq:RSOL) is one of the nation's pioneering solar
energy companies serving commercial, residential, and utility customers.
Beginning with one of the very first photovoltaic panels sold to the public in
the U.S. in 1978, the company has installed more than 16,000 solar power
systems representing well over 110 megawatts of 100% clean renewable energy.
Real Goods Solar makes it very convenient 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. As one of the nation's largest and most experienced solar power
players, the company has 17 offices across the West and the Northeast. It
services the commercial and utility markets through its RGS Energy division.
For more information, visit RealGoodsSolar.com or RGSEnergy.com, on Facebook
at http://facebook.com/realgoodssolar and on Twitter at
http://twitter.com/realgoodssolar.

Forward-looking Statements

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 failure
to close the Mercury acquisition, 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 statements.

Reconciliation of Adjusted EBITDA to Operating Loss
                                    
                                    Three Months Ended   Nine Months Ended
                                     September 30,        September 30,
                                    2013      2012       2013      2012
Loss from operations                 $ (1,440) $ (27,413) $ (7,977) $ (34,376)
                                                                
Depreciation and amortization        205       269        762       1,044
Non-cash share-based compensation    91        —          284       259
Acquisition costs and other one-time                             
charges
Acquisition and integration costs    555       —          555       —
Impairment of goodwill and other     —         22,012     —         22,012
intangible assets
                                                                
Adjusted EBITDA                      $ (589)   $ (5,132)  $ (6,376) $ (11,061)

About Presentation of Adjusted EBITDA

Beginning with the reporting of results for the third quarter of 2013, the
company began to report the measures of adjusted EBITDA. Adjusted EBITDA is
not a financial measure calculated and presented in accordance with U.S.
generally accepted accounting principles (GAAP) and should not be considered
as an alternative to net income, operating income or any other financial
measures so calculated and presented, nor as an alternative to cash flow from
operating activities as a measure of liquidity. The company defines adjusted
EBITDA as income or loss from operations before interest, depreciation, taxes,
non-cash stock-based compensation and the one-time charges described above.
Other companies (including competitors) may define adjusted EBITDA
differently. The company presents adjusted EBITDA because management believes
it is an important supplemental measure of performance that is commonly used
by securities analysts, investors and other interested parties in the
evaluation of companies in our industry. Management also uses this information
internally for forecasting and budgeting. It may not be indicative of the
historical operating results of Real Goods Solar Inc. nor is it intended to be
predictive of potential future results. Investors should not consider adjusted
EBITDA in isolation or as a substitute for analysis of the company's results
as reported under GAAP.

REAL GOODS SOLAR, INC.
Condensed Consolidated Balance Sheets
                                                                
(in thousands, except share and per share data)     September 30, December31,
                                                    2013          2012
                                                   (Unaudited)   
ASSETS                                                           
Current assets:                                                  
Cash                                                $2,285       $10,390
Restricted cash                                     17           —
Accounts receivable, net                            17,119       13,902
Costs in excess of billings on uncompleted          753          5,288
contracts
Inventory, net                                      6,934        5,711
Other current assets                                2,603        3,026
Total current assets                                29,711       38,317
Property and equipment, net                         3,638        3,991
Goodwill                                            1,194        —
Total assets                                        $34,543      $42,308
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY                             
Current liabilities:                                             
Line of credit                                      $—           $6,498
Accounts payable                                    17,730       15,951
Accrued liabilities                                 2,998        4,943
Billings in excess of costs on uncompleted          1,345        2,975
contracts
Related party debt                                  6,600        6,850
Other current liabilities                           1,438        723
Total current liabilities                           30,111       37,940
Related party debt                                  150          —
Common stock warrant liability                      4,037        —
Other liabilities                                   356          443
Total liabilities                                   34,654       38,383
                                                                
Commitments and contingencies                                    
Shareholders' equity:                                            
ClassA common stock, $.0001 par value, 150,000,000
shares authorized, 30,232,946 and 26,693,696 shares 3            3
issued and outstanding at September 30, 2013 and
December31, 2012, respectively
Additional paid-in capital                          86,944       82,185
Accumulated deficit                                 (87,058)     (78,263 )
Total shareholders' equity                          (111)        3,925
Total liabilities and shareholders' equity          $34,543      $42,308

                                      

                                      

REAL GOODS SOLAR, INC.
Condensed Consolidated Statements of Operations

                         FortheThreeMonthsEnded FortheNineMonthsEnded
                          September 30,              September 30,
(in thousands, except per 2013         2012          2013         2012
share data)
                         (unaudited)                (unaudited)
Net revenue               $33,983     $26,358      $71,441     $66,061
Cost of goods sold        26,722      20,621       54,821      48,578
Gross profit              7,261       5,737        16,620      17,483
                                                              
Expenses:                                                      
Selling and operating     6,599       7,924        18,916      23,439
General and               1,547       3,214        5,126       6,408
administrative
Acquisition and other     555         —            555         —
costs
Goodwill and other asset  —           22,012       —           22,012
impairments
Total expenses            8,701       33,150       24,597      51,859
                                                              
Loss from operations      (1,440)     (27,413)     (7,977)     (34,376)
Interest and other        (646)       (136)        (802)       (295)
expense
Loss before income taxes  (2,086)     (27,549)     (8,779)     (34,671)
Income tax expense        8           11,468       17          8,720
(benefit)
Net loss                  $(2,094)    $ (39,017)    $(8,796)    $ (43,391)
Net loss per share:                                            
Basic                     $(0.07)     $(1.46)      $(0.31)     $(1.63)
Diluted                   $(0.07)     $(1.46)      $(0.31)     $(1.63)
                                                              
Weighted-average shares                                        
outstanding:
Basic                     30,044      26,677       28,276      26,672
Diluted                   30,044      26,677       28,276      26,672
                                                              

CONTACT: Media and Investor Relations Contact:
         Ron Both
         Liolios Group, Inc.
         Tel 1-949-574-3860
         RSOL@liolios.com

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