Sunworks reports Q2 EPS (34c) vs. (23c) last year

Reports Q2 revenue $34.6M vs. $36.4M last year. “The long-term economics of residential and commercial solar remain highly attractive, particularly as the demands of a growing population weigh on our nation’s aging electricity infrastructure, a dynamic that is expected to result in structurally higher utility rates for customers, over time,” stated Gaylon Morris, Chief Executive Officer of Sunworks. “At Sunworks, our team remains committed to empowering customers by delivering on-demand access to clean, reliable and cost-effective solar solutions that reduce reliance on traditional, third-party energy sources.” “While longer-term solar demand fundamentals remain intact, our residential solar business faced a series of challenges in the second quarter,” continued Morris. “The combination of higher interest rates, less favorable residential solar economics in California following the NEM 3.0 transition, together with utility permitting delays resulted in lower new installation activity and reduced fixed cost absorption in the period.” “During a transitional period for our residential business, we’ve maintained an opportunistic pricing strategy in accordance with current demand conditions,” continued Morris. “At the same time, we’ve taken decisive action to further right-size our cost structure, including a reduction in force in early Q3. We intend to stay the course on our strategic growth priorities, building market-leading positions in regional centers, while driving programmatic cost reductions that reduce our cash burn and put us closer toward achieving positive EBITDA, consistent with our long-term objectives.” “Within our commercial solar business, we’re seeing a strong pipeline of potential new opportunities with larger commercial organizations, including independent power producers,” continued Morris. “While project timing can vary from quarter-to-quarter, we remain constructive around our growing addressable market. Execution within our commercial business was strong in the second quarter, as revenue nearly doubled on a year-over-year basis, while gross profit margin rate increased more than 1000 basis points to 26.5% in the period.” “During the second quarter, we took action to further bolster our liquidity to support the long-term growth of our business, while working to improve our working capital efficiency,” continued Morris. As of August 14, 2023, we had total cash and liquidity of approximately $5.5 million, pro-forma for the recent completion of an equity offering in August 2023, which resulted in net proceeds of $3.1 million earmarked for general corporate purposes.” “As before, the market opportunity for solar remains significant across our geographic footprint, positioning Sunworks to play a leading role in the transition toward affordable, clean, and independent energy production” concluded Morris. “Given the strength in our backlog, together with ongoing development activities, we anticipate our financial performance in the second half of 2023 will be stronger than the first half of the year, positioning us to rebuild momentum in our business entering 2024.”