Westinghouse Solar Announces Second Quarter 2012 Results
CAMPBELL, California, August 2012.
Westinghouse Solar, Inc. (Nasdaq:WEST), a designer and manufacturer of solar power systems, today announced its second quarter 2012 financial results.
Westinghouse Solar CEO Margaret Randazzo commented, “The focus this quarter has been on our work toward completing the merger with CBD Energy Limited, and setting the framework for future growth. We managed our costs tightly, reducing our total operating expenses to $2.1 million in the second quarter, compared to $2.7 million in the first quarter of 2012. Settling the patent litigation with ZEP was also a priority. Our collaborative efforts with CBD brought a key international distribution opportunity for Westinghouse Solar during the quarter – a 5 MW order of solar panels from Harvey Norman in Australia. Domestically, these efforts resulted in a win for a design, engineering, procurement and construct (EPC) contract to build a solar system for a school in New Jersey. We are also leveraging our sales channels by partnering with distributors like Comtec, who have embraced the plug-and-play simplicity of the Westinghouse Solar Instant Connect(TM) AC panels. Recognizing the economic headwinds in our industry, particularly in the U.S., we are focusing our efforts on locations without tariffs, and looking for ways to diversify to sustain growth and mitigate volatility in the future.”
Second Quarter Financial Results
Revenue for the quarter ended June 30, 2012 was $1.2 million, compared to $2.8 million in the second quarter of 2011, and $2.4 million in the first quarter of 2012. The year-over-year and sequential declines in revenue were due to decreases in sales to strategic partners and the overall soft solar market conditions following punitive tariff announcements in the U.S. related to solar modules manufactured in China. The year-over-year decline in revenue was also attributable to lower average selling prices. For the first two quarters of 2012, revenue was $3.6 million compared to $4.8 million in the comparable 2011 period, a decrease of 23.6%.
Gross loss for the second quarter of 2012 was $34,000 or 2.8% of revenue, compared to gross profit of $194,000 or 7.0% of revenue for the second quarter of 2011, and $242,000 or 10.0% of revenue for the first quarter of 2012. The year-over-year decline in gross margin was driven by year-to-date impact of imposed tariffs on solar modules manufactured in China and lower average selling prices, partially offset by a decline in panel and component costs. Excluding the tariff expense of $86,000, gross profit would have been $52,000 or 4.3% of revenue.
Total operating expenses in the second quarter of 2012 were $2.1 million, compared to $2.2 million for the same period last year and $2.7 million for the first quarter of 2012. The year-over-year decrease is due to lower sales and marketing costs of $233,000 partially offset by higher general and administrative expenses of $200,000. The year-over-year decrease in sales and marketing costs reflects decreased expenditures for advertising and trade shows, travel costs and payroll and commission expense. The year-over-year increase in general and administrative expenses was due to higher legal and professional fees related to the pending CBD merger transaction and recently settled patent litigation, partially offset by lower payroll costs. Compared to the first quarter of 2012, total operating expenses decreased $555,000 due to declines in general and administrative expense of $400,000 and sales and marketing expense of $156,000. The sequential decrease in general and administrative expenses was due to lower payroll costs and a decline in research and development expenditures, partially offset by higher professional fees related to the CBD merger. The sequential decrease in sales and marketing costs is due to lower payroll and commission costs and decreased expenditures for advertising, trade shows and travel costs. Stock-based compensation expense included in total operating expenses was $145,000 for the second quarter of 2012, compared to $189,000 for the same period of 2011 and $296,000 in the first quarter of 2012. Cash operating expenses (adjusted to exclude stock-based compensation expense and depreciation and amortization expense) were $1.9 million for the second quarters of both 2012 and 2011, and $2.3 million for the first quarter of 2012.
Net loss from continuing operations was $2.2 million in the second quarter of 2012, or $0.12 per share, compared to a net loss of $1.3 million, or $0.11 per share in the same period last year, and a net loss of $2.9 million in the first quarter of 2012, or $0.17 per share. The net loss included favorable non-cash adjustments to the fair value of common stock warrants of $10,000 and $668,000 for the second quarters of 2012 and 2011, respectively, and an unfavorable non-cash adjustment to the fair value of common stock warrants of $437,000 for the first quarter of 2012. Excluding the impact of the common stock warrant fair value adjustments in all periods, net loss from continuing operations for the second quarter of 2012 was $2.2 million or $0.12 per share, compared to a net loss of $2.0 million or $0.17 per share, for the second quarter of 2011, and a net loss of $2.4 million or $0.15 per share, for the first quarter of 2012.
The loss from discontinued operations was $3,000 in the second quarter of 2012, compared to a gain of $10,000 in the same period last year, and a gain of $26,000 in the first quarter of 2012. For the first and second quarters of 2012, the net loss attributable to common stockholders also included non-cash preferred stock dividends of $21,000.
Net loss including discontinued operations and the preferred stock dividend was $2.2 million or $0.12 per share in the second quarter of 2012, compared $2.9 million or $0.17 per share in the first quarter of 2012. Net loss including discontinued operations was $1.3 million or $0.11 per share in the second quarter last year.
Cash and cash equivalents at June 30, 2012 were $193,000. There was a $94,000 balance drawn on the Company’s $750,000 line of credit at the end of the quarter. Common shares outstanding as of June 30, 2012 were 19.2 million compared to 16.0 million at December 31, 2011, and 18.8 million at March 31, 2012.
The number of employees at the end of the second quarter of 2012 was 20 full time equivalents, compared to 31 at June 30, 2011 and 23 at March 31, 2012.
About Westinghouse Solar: (Nasdaq:WEST)
Westinghouse Solar is a designer and manufacturer of solar power systems. In 2007, Westinghouse Solar pioneered the concept of integrating the racking, wiring and grounding directly into the solar panel. This revolutionary solar panel, originally branded “Andalay”, quickly won industry acclaim. In 2009, the company again broke new ground with the first integrated AC solar panel, reducing the number of components for a rooftop solar installation by approximately 80 percent and lowering labor costs by approximately 50 percent. This first AC panel, which won the 2009 Popular Mechanics Breakthrough Award, has become the industry’s most widely installed AC solar panel. Award-winning Westinghouse Solar Power Systems provide the best combination of safety, performance and reliability, while backed by the proven quality of the Westinghouse name. For more information on Westinghouse Solar, visit www.westinghousesolar.com.campbell california, harvey norman, solar panels, solar power systems
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