United States solar provider, Real Goods Solar (RGS) has reported higher revenue and gross profit, lower operational costs, residential order backlog and lower net loss for the third quarter of 2013.
RGS’s CEO Kam Mofid said that “continued focus on growth, productivity, and cost management resulted in dramatic top and bottom line improvements”.
Mofid also said the recent backlog has resulted in “short-term capacity constraints, particularly in engineering and construction” which may affect growth in the final quarter of 2013, but leaves RGS “strongly positioned” for 2014.
The results for the third quarter, 2013, ending 30 September report net revenue increased by 64%, or to US$34 million. This is up from US$20.7 million last quarter, and up from US$26.4 million, last year.
Earnings before tax loss were cut to US$0.6 million, from US$5.1 million last year.
Gross profit was US$7.3 million (21.4% of net revenue for Q3), compared to US$5.7 million (21.8% of net revenue) last year.
For the first nine months of 2013 gross profit was US$16.6 million (23.3% of net revenue), compared to US$17.5 million last year (26.5% of net revenue).
Decreases in gross profit are due to a falling average sale price compared to last year.
In Q3 losses decreased from US$27.4 million last year, to US$1.4 million this quarter. Operating costs have been cut by improved productivity and management; operating expenses decreased by 24% of revenue, or US$11.1 million
RGS deployed 10.7MW this quarter, and also acquired Syndicator Solar, expanding residential sales with a record residential backlog by the end of third quarter with a subsequent increase in deployment. The higher cost of residential solar, compared to commercial also boosted revenue.
RGS also signed an agreement for the acquisition of Mercury Energy. The transaction is awaiting shareholder approval.
There are no outstanding borrowings under RGS’ US$6.5 million revolving line credit with Silicon Valley Bank (SVB), the total credit line capacity with SVB increased by US$2 million, to a total of US$8.5 million.
Tony Dipaolo, CFO of RGS said a US$2.6 million debt had been paid off and legacy agreements terminated with sustainable goods company, Gaiam, using additional financing from SVB. Dipaolo said the payment represented a “major milestone”, receiving a US$300,000 discount for early payment, simplifying structure and reducing shareholder risk.
Expected revenue for the last quarter of 2013 is US$34-39 million, or US$105-US$110 million for the year (not including Mercury, with US$17-20 million expected revenue for the year), and earnings after tax are predicted to be positive for the end of 2013.
RGS reported a small drop in revenue from second quarter of 2013.