Pineapple Energy Reports First Quarter 2024 Financial Results
Pineapple Energy Inc. (NASDAQ: PEGY) reported a challenging first quarter in 2024, with revenue and gross profit down 40% from Q1 2023. Operating expenses decreased by 31%, but the operating loss increased by 2%. The company experienced a net income of $1.2M but a net loss attributable to common shareholders of $10.1M. Adjusted EBITDA showed a loss of $1.5M. CEO Kyle Udseth highlighted stable sales performance in core markets and efforts to improve profitability in Q2. CFO Eric Ingvaldson discussed challenges in Q1 2023 impacting comparisons. Business highlights included declines in residential installations and battery attachment rates. Total revenue decreased to $13.2M, gross profit to $4.8M, and operating expenses to $7M. Other income increased to $3.4M. The company reported a net loss of $10.1M. Adjusted EBITDA decreased by 505% in Q1 2024. Cash and investments stood at $3.3M. The status of Contingent Value Rights was also addressed.
- None.
Revenue and gross profit down 40% from Q1 2023.
Operating loss increased by 2% from Q1 2023.
Net loss attributable to common shareholders of $10.1M.
Adjusted EBITDA loss of $1.5M.
Residential kWh installed down 18%, residential battery attachment rate down to 29%.
Backlog declined to $30M.
Net loss increased to $10.1M from $2.6M in Q1 2023.
Adjusted EBITDA decreased by 505% in Q1 2024.
Insights
First Quarter 2024:
- Revenue down
40% from Q1 2023 - Gross profit down
40% from Q1 2023 - Operating Expenses down
31% from Q1 2023 - Operating Loss increased
2% from Q1 2023 - Net Income of
$1.2M , Net Loss attributable to common shareholders of$10.1M - Adjusted EBITDA loss of
$1.5M
MINNETONKA, Minn., May 09, 2024 (GLOBE NEWSWIRE) -- Pineapple Energy Inc. (NASDAQ: PEGY), a leading provider of sustainable solar energy and back-up power to households and small businesses, today announced financial results for the first quarter ended March 31, 2024.
Pineapple CEO Kyle Udseth commented, “The first quarter of 2024 presented the toughest operating conditions we’ve faced in our time as a public company. Negative Q1 EBITDA is not uncommon in the rooftop solar industry due to seasonality and timing, but we did unfortunately break our prior streak of four consecutive quarters with positive adjusted EBITDA. We’ve been hard at work in our efforts to get profitability back on-track in Q2, and one positive data point I can share is that kilowatts sold across the residential businesses in Q1 of 2024 were essentially flat year-over-year vs. Q1 of 2023, which shows strong performance from our sales teams, especially relative to broader market and industry trends. As we continue to optimize our lead-generation and conversion funnel and accelerate the sales engine, we believe we can continue pushing healthy volumes through our installation pipelines while simultaneously right-sizing our overhead expenses. We currently expect that our core markets of Long Island in New York and Oahu in Hawaii should be stable and strong for the remainder of the year and into 2025. We continue to evaluate opportunities to acquire new businesses and add new markets to further build off this strong foundation."
Pineapple CFO Eric Ingvaldson commented, “In addition to unfavorable market conditions in the first quarter of 2024, the first quarter of 2023 was a tough comparison for Pineapple. In late 2022, permitting issues in Hawaii and delayed equipment deliveries in New York led to a significant number of projects originally scheduled for the fourth quarter of 2022 being installed in the first quarter of 2023. These timing issues led to a robust first quarter in the prior year during the period which is normally a seasonal low point for the business. Despite the year-over-year decline in revenue and gross profit, we were able to minimize the operating loss in the quarter by achieving a
First Quarter Business Highlights
- Pro forma operating metrics
- Residential kW installed down
18% (Q1 2024 vs Q4 2023) - Residential kW sold down
7% (Q1 2024 vs Q4 2023) - Residential battery attachment rate down to
29% in Q1 2024, from36% in Q4 2023 - Backlog declined to
$30M as of May 1, 2024, down from$36M as of December 31, 2023
- Residential kW installed down
First Quarter 2024 Results from Continuing Operations1
| 1st Quarter 2024 | 1st Quarter 2023 | |||
| Revenue | ||||
| Gross Profit | ||||
| Operating Expense | ||||
| Operating Loss | ( | |||
| Other Income (Expense) | ( | |||
| Net Income (Loss) | ||||
| Net Loss Attributable to Common Shareholders 2 | ($10,119,988) | ($2,554,989) | ||
| Cash, restricted cash & investments3 | ||||
| Diluted Loss per Share 2 | ( | ( | ||
| Adjusted EBITDA4 | ||||
1 Includes continuing operations and excludes discontinued operations.
2 Includes
3 Includes restricted cash and liquid investments of
4 Adjusted EBITDA is a non-GAAP financial measure. See “Non-GAAP Financial Measures” and the reconciliations in this release for further information.
Total revenue was
Total gross profit was
Total operating expenses were
Other income (expense) was
Net loss from continuing operations attributable to common shareholders was
First quarter 2024 adjusted EBITDA decreased
As of March 31, 2024, cash, cash equivalents, and restricted cash were
Status of Contingent Value Rights
The CVR (Contingent Value Rights) liability as of March 31, 2024, was estimated at
First Fiscal Quarter 2024 Conference Call Details
As announced on May 6, 2024, Pineapple will discuss its first fiscal quarter results via a webcast and conference call on Friday, May 10, 2024 at 08:30 a.m. ET. The call will be hosted by Kyle Udseth, Chief Executive Officer and Eric Ingvaldson, Chief Financial Officer.
| When: | Friday, May 10 |
| Time: | 8:30am ET |
| Dial-In: | (646) 307-1963 or toll free (800) 715-9871 Conference ID: 6873571 |
| Webcast: | https://edge.media-server.com/mmc/p/pfj2geyk |
An archived webcast will be accessible from the “Recent Events” section of Pineapple’s Investor Relations website for on-demand viewing at https://ir.pineappleenergy.com/news-events.
About Pineapple Energy
Pineapple is focused on growing leading local and regional solar, storage, and energy services companies nationwide. Our vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage. Our portfolio of brands (SUNation, Hawaii Energy Connection, E-Gear, Sungevity, and Horizon Solar Power) provide homeowners and small businesses with an end-to-end product offering spanning solar, battery storage, and grid services.
Forward Looking Statements
This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding future financial performance, future growth or growth opportunities, future opportunities, future cost reductions, future flexibility to pursue acquisitions, future cash flows and future earnings. These statements are based on the Company’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements here due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties, including those set forth in the Company’s filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this press release. The Company does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law.
Contacts:
Pineapple Energy
Kyle Udseth
Chief Executive Officer
+1 (952) 996-1674
Kyle.Udseth@pineappleenergy.com
Eric Ingvaldson
Chief Financial Officer
+1 (952) 996-1674
Eric.Ingvaldson@pineappleenergy.com
| PINEAPPLE ENERGY INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| March 31 | December 31 | ||||||
| 2024 | 2023 | ||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 1,789,956 | $ | 3,575,283 | |||
| Restricted cash and cash equivalents | 1,502,495 | 1,821,060 | |||||
| Trade accounts receivable, less allowance for | |||||||
| credit losses of | 4,976,483 | 5,010,818 | |||||
| Inventories, net | 2,919,861 | 3,578,668 | |||||
| Related party receivables | 27,387 | 46,448 | |||||
| Prepaid expenses | 1,630,106 | 1,313,082 | |||||
| Costs and estimated earnings in excess of billings | 6,570 | 57,241 | |||||
| Other current assets | 293,923 | 376,048 | |||||
| TOTAL CURRENT ASSETS | 13,146,781 | 15,778,648 | |||||
| PROPERTY, PLANT AND EQUIPMENT, net | 1,442,561 | 1,511,878 | |||||
| OTHER ASSETS: | |||||||
| Goodwill | 20,545,850 | 20,545,850 | |||||
| Operating lease right of use asset | 4,408,207 | 4,516,102 | |||||
| Intangible assets, net | 15,098,958 | 15,808,333 | |||||
| Other assets, net | 12,000 | 12,000 | |||||
| TOTAL OTHER ASSETS | 40,065,015 | 40,882,285 | |||||
| TOTAL ASSETS | $ | 54,654,357 | $ | 58,172,811 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 6,993,067 | $ | 7,677,261 | |||
| Accrued compensation and benefits | 1,311,762 | 1,360,148 | |||||
| Operating lease liability | 404,744 | 394,042 | |||||
| Accrued warranty | 253,176 | 268,004 | |||||
| Other accrued liabilities | 915,975 | 867,727 | |||||
| Income taxes payable | 11,535 | 5,373 | |||||
| Refundable customer deposits | 1,818,487 | 2,112,363 | |||||
| Billings in excess of costs and estimated earnings | 202,867 | 440,089 | |||||
| Contingent value rights | 1,314,987 | 1,691,072 | |||||
| Earnout consideration | 2,500,000 | 2,500,000 | |||||
| Current portion of loans payable | 1,762,300 | 1,654,881 | |||||
| Current portion of loans payable - related party | 3,456,631 | 3,402,522 | |||||
| TOTAL CURRENT LIABILITIES | 20,945,531 | 22,373,482 | |||||
| LONG-TERM LIABILITIES: | |||||||
| Loans payable and related interest | 7,708,979 | 8,030,562 | |||||
| Loans payable and related interest - related party | 2,195,940 | 2,097,194 | |||||
| Deferred income taxes | 41,579 | 41,579 | |||||
| Operating lease liability | 4,087,012 | 4,193,205 | |||||
| Earnout consideration | 650,000 | 1,000,000 | |||||
| Warrant liability | 6,863,627 | - | |||||
| TOTAL LONG-TERM LIABILITIES | 21,547,137 | 15,362,540 | |||||
| COMMITMENTS AND CONTINGENCIES | |||||||
| MEZZANINE EQUITY: | |||||||
| Redeemable convertible preferred stock, par value 3,000,000 shares authorized; 20,597 and no shares issued and outstanding, respectively | 23,333,613 | — | |||||
| STOCKHOLDERS' EQUITY (DEFICIT) | |||||||
| Convertible preferred stock, par value 3,000,000 shares authorized; no and 28,000 shares issued and outstanding, respectively | — | 28,000 | |||||
| Common stock, par value | |||||||
| 64,154,286 and 10,246,605 shares issued and outstanding, respectively | 3,207,714 | 512,330 | |||||
| Additional paid-in capital | 11,470,950 | 46,977,870 | |||||
| Accumulated deficit | (25,850,588 | ) | (27,081,411 | ) | |||
| TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | (11,171,924 | ) | 20,436,789 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 54,654,357 | $ | 58,172,811 | |||
| PINEAPPLE ENERGY INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||
| (Unaudited) | |||||||
| Three Months Ended March 31 | |||||||
| 2024 | 2023 | ||||||
| Sales | $ | 13,219,197 | $ | 22,065,424 | |||
| Cost of sales | 8,413,749 | 14,059,109 | |||||
| Gross profit | 4,805,448 | 8,006,315 | |||||
| Operating expenses: | |||||||
| Selling, general and administrative expenses | 6,629,027 | 8,062,123 | |||||
| Amortization expense | 709,375 | 1,266,698 | |||||
| Transaction costs | — | 2,020 | |||||
| Fair value remeasurement of SUNation earnout consideration | (350,000 | ) | 825,000 | ||||
| Total operating expenses | 6,988,402 | 10,155,841 | |||||
| Operating loss | (2,182,954 | ) | (2,149,526 | ) | |||
| Other income (expense): | |||||||
| Investment and other income | 45,841 | 19,533 | |||||
| Gain on sale of assets | 6,118 | 244,271 | |||||
| Fair value remeasurement of warrant liability | 3,728,593 | — | |||||
| Fair value remeasurement of contingent value rights | 376,085 | (250,000 | ) | ||||
| Interest and other expense | (764,870 | ) | (458,218 | ) | |||
| Other income (expense), net | 3,391,767 | (444,414 | ) | ||||
| Net income (loss) before income taxes | 1,208,813 | (2,593,940 | ) | ||||
| Income tax expense | 6,162 | 5,732 | |||||
| Net income (loss) from continuing operations | 1,202,651 | (2,599,672 | ) | ||||
| Net income from discontinued operations, net of tax | — | 44,683 | |||||
| Net income (loss) | 1,202,651 | (2,554,989 | ) | ||||
| Other comprehensive income (loss), net of tax: | |||||||
| Unrealized gain on available-for-sale securities | — | 24,405 | |||||
| Total other comprehensive income | — | 24,405 | |||||
| Comprehensive income (loss) | $ | 1,202,651 | $ | (2,530,584 | ) | ||
| Less: Deemed dividend on extinguishment of Convertible Preferred Stock | (751,125 | ) | — | ||||
| Less: Deemed dividend on modification of PIPE Warrants | (10,571,514 | ) | — | ||||
| Net loss attributable to common shareholders | $ | (10,119,988 | ) | $ | (2,554,989 | ) | |
| Basic net loss per share: | |||||||
| Continuing operations | $ | (0.26 | ) | $ | (0.26 | ) | |
| Discontinued operations | — | — | |||||
| $ | (0.26 | ) | $ | (0.26 | ) | ||
| Diluted net loss per share: | |||||||
| Continuing operations | $ | (0.26 | ) | $ | (0.26 | ) | |
| Discontinued operations | — | — | |||||
| $ | (0.26 | ) | $ | (0.26 | ) | ||
| Weighted Average Basic Shares Outstanding | 39,410,206 | 9,919,650 | |||||
| Weighted Average Dilutive Shares Outstanding | 39,410,206 | 9,919,650 | |||||
Non-GAAP Financial Measures
This press release also includes non-GAAP financial measures that differ from financial measures calculated in accordance with United States generally accepted accounting principles (“GAAP”). Adjusted EBITDA is a non-GAAP financial measure provided in this release, and is net income (loss) calculated in accordance with GAAP, adjusted for interest, income taxes, depreciation, amortization, transaction costs, stock compensation, gain on sale of assets, and non-cash fair value remeasurement adjustments as detailed in the reconciliations presented below in this press release.
These non-GAAP financial measures are presented because the Company believes they are useful indicators of its operating performance. Management uses these measures principally as measures of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating plan and financial projections. The Company believes these measures are useful to investors as supplemental information and because they are frequently used by analysts, investors, and other interested parties to evaluate companies in its industry. The Company also believes these non-GAAP financial measures are useful to its management and investors as a measure of comparative operating performance from period to period.
The non-GAAP financial measures presented in this release should not be considered as an alternative to, or superior to, their respective GAAP financial measures, as measures of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and they should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, these measures do not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating non-GAAP financial measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in this presentation. The Company’s presentation of non-GAAP financial measures should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using non-GAAP financial measures on a supplemental basis. The Company’s definition of these non-GAAP financial measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
Reconciliation of Non-GAAP to GAAP Financial Information
Reconciliation of Net Income (Loss) to Adjusted EBITDA:
| Three Months Ended March 31 | |||||||
| 2024 | 2023 | ||||||
| Net Income (Loss) | $ | 1,202,651 | $ | (2,599,672 | ) | ||
| Interest expense | 764,870 | 458,218 | |||||
| Interest income | (21,555 | ) | (13,693 | ) | |||
| Income taxes | 6,162 | 5,732 | |||||
| Depreciation | 92,417 | 110,325 | |||||
| Amortization | 709,375 | 1,266,698 | |||||
| Transaction costs | - | 2,020 | |||||
| Stock compensation | 197,306 | 312,445 | |||||
| Gain on sale of assets | (6,118 | ) | (244,271 | ) | |||
| FV remeasurement of contingent value rights | (376,085 | ) | 250,000 | ||||
| FV remeasurement of earnout consideration | (350,000 | ) | 825,000 | ||||
| FV remeasure of warrant liability | (3,728,593 | ) | - | ||||
| Adjusted EBITDA | $ | (1,509,570 | ) | $ | 372,802 | ||
FAQ
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