Exhibit 99.1
Corporate Headquarters: 16005 Los Gatos Blvd, Los Gatos, CA 95032
Investor Relations Contact: | Company Contact: |
| Chris Witty / Jody Burfening | Barry Cinnamon, President and CEO |
| Lippert / Heilshorn & Associates | Akeena Solar, Inc. |
| (212) 201-6609 | (408) 402-9400 |
| cwitty@lhai.com | bcinnamon@akeena.net |
Akeena Solar Report Third Quarter Revenue of $8.1 Million, Up 125% Over Prior Year
- On Track to Achieve Year-Over-Year Revenue Growth of 135% in 2007 -
- Successfully Introduced Andalay, Company’s Proprietary Solar Installation Technology -
LOS GATOS, CA - November 13, 2007 - Akeena Solar, Inc. (NASDAQ: AKNS), a leading designer and installer of solar power systems, announced results for the third quarter and nine months ended September 30, 2007.
“This quarter, Akeena again posted record revenue growth, with top-line results up 125% over last year’s $3.6 million,” said Barry Cinnamon, chief executive officer of Akeena. “This performance puts us squarely on track to meet our full year goal of increasing revenue 135% over 2006. We are experiencing greater demand for our commercial business owing to favorable government rebates and expect this dynamic will open up more opportunities for us to pursue larger contracts in the future.
“A noteworthy accomplishment of the third quarter was the introduction of Andalay, our proprietary solar installation technology,” Mr. Cinnamon continued. “The Andalay rollout is on track, and the products have been enthusiastically received by the industry, where we’ve proven the ability to significantly cut the cost of residential solar power and accelerate installation time. Our agreement with Suntech reduces our supply risk for 2008 and ensures that we have the necessary production capability to rapidly expand next year and meet anticipated demand for Andalay.”
“Following the close of the quarter, we raised $26.1 million through a private placement of equity with Cowen & Company, which substantially strengthened our financial flexibility. We have nearly $30 million in the bank, no debt and a $7.5 million credit line,” added Gary Effren, chief financial officer of Akeena. “Having the ability to fund increases in working capital gives us a clear strategic advantage toward achieving our growth objectives for Andalay in the residential and commercial markets.”
Recent Corporate Highlights
| | § | In mid August, Akeena developed a relationship with Comerica Bank to offer qualified customers a fast and easy process to finance their solar power needs |
| | § | In late August, Akeena promoted James Curran to chief operating officer from his previous position of vice president of operations, capitalizing on his experience and proven leadership capabilities |
| | § | In mid September, Akeena expanded into the San Diego area, marking the sixth new office opened in 2007. Dirk Hosmer, the former president of DSH Solar Electric, was brought on board to lead the company's San Diego operations |
| | § | And in late September, Akeena made several major announcements |
| | o | Launched Andalay, the company’s proprietary solar installation technology |
| | o | Developed a relationship with Suntech for the supply of 10-14 megawatts of solar panels in 2008 |
| | o | Saw AKNS shares begin trading over NASDAQ |
| | o | Appointed Gary Effren, former vice president of finance at Knight Ridder, as the company’s chief financial officer |
Financial Results
Net sales for the third quarter of 2007 were $8.1 million, compared with $3.6 million of net sales in the third quarter of 2006. Compared to the second quarter, net sales increased 8%, reflecting delays in the completion of some projects and a shift in sales mix toward commercial contracts, which have longer sales and installation timelines.
Gross profit for the third quarter 2007 was $1.7 million, or 21.0% of sales, compared to $0.9 million, or 24.7% of sales, in the third quarter of 2006. The decrease in gross profit margin was primarily due to a lower average selling price in anticipation of reduced solar panel costs, which did not decline as much as expected. Also, we incurred additional overtime during the quarter prior to adding new installation crews.
Sales and marketing expense for the 2007 period was $1.8 million, compared with $0.4 million for the same quarter last year, reflecting increased sales commissions and marketing campaigns promoting the company in new regions. Research and development (R&D) for the third quarter of 2007 was $0.4 million, reflecting higher expenses related to the development of the company’s proprietary installation technology. Total operating expenses for the quarter were $5.4 million, compared with $1.3 million in the prior year quarter. Net loss for the third quarter of 2007 was $3.7 million, or $0.16 per share, compared to net loss of $0.4 million, or $0.04 per share, in the third quarter of 2006.
Installations for the quarter amounted to approximately 1,000 kilowatts, versus approximately 400 kilowatts for the same period last year.
For the nine months ended September 30, 2007, the company reported net sales of $21.9 million and gross profit of $5.0 million, or 22.7% of sales. This compares to net sales of $8.9 million and gross profit of $2.2 million, or 24.4% of sales, for the same period last year. The company reported a net loss of $6.6 million, or $(0.33) per share, for the first nine months of 2007, compared to a net loss of $0.6 million, or $(0.06) per share, in 2006. The company ended the quarter with $11.5 million in cash.
Conference Call Information
Akeena Solar will host an earnings conference call at 11:00 a.m. Pacific Time (2:00 p.m. Eastern Time) today to discuss its third quarter 2007 earnings results. Management will discuss strategy, review quarterly activity, provide industry commentary, and answer questions.
To access the call in the U.S., please dial 866-713-8307, and for international callers dial
617-597-5307 approximately 10 minutes prior to the start of the conference call. The passcode is 61564057. The conference call will also be broadcast live over the Internet and available for replay for 90 days at www.akeena.com. In addition, a replay of the call will be available via telephone for two business days, beginning two hours after the call. To listen to the telephone replay in the U.S., please dial 888-286-8010 and for international callers, dial 617-801-6888. The passcode is 52323718.
About Akeena Solar, Inc.
Founded in 2001, Akeena Solar's philosophy is simple: We believe producing clean electricity directly from the sun is the right thing to do for our environment and economy. Akeena Solar has grown to become one of the largest national integrators of residential and small commercial solar power systems in the United States, serving customers directly in California, New Jersey, New York, Connecticut and Pennsylvania. For more information, visit Akeena Solar's website at www.akeena.com
Safe Harbor
Statements made in this release that are not historical in nature constitute forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as “expects,” “plans” “will,” “may,” “anticipates,” believes,” “should,” “intends,” “estimates,” and other words of similar meaning. These statements are subject to risks and uncertainties that cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, without limitation, risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, the effectiveness, profitability, and marketability of such products, the ability to protect proprietary information, the impact of current, pending, or future legislation and regulation on the industry, the impact of competitive products or pricing, technological changes, the ability to identify and successfully acquire, integrate and manage client accounts and locations and deliver our services to customers of businesses and accounts acquired from third parties, the effect of general economic and business conditions. All forward-looking statements included in this release are made as of the date of this press release, and Akeena Solar assumes no obligation to update any such forward-looking statements.
AKEENA SOLAR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| | | (Unaudited) September 30, 2007 | | December 31, 2006 | |
Assets | | | | | |
| Current assets | | | | | |
| Cash and cash equivalents | | $ | 11,478,394 | | $ | 992,376 | |
| Accounts receivable, net | | | 6,617,036 | | | 3,434,569 | |
| Other receivables | | | 264,834 | | | 5,000 | |
| Inventory | | | 6,636,884 | | | 1,791,816 | |
| Prepaid expenses and other current assets, net | | | 1,613,534 | | | 833,192 | |
| Total current assets | | | 26,610,682 | | | 7,056,953 | |
| Property and equipment, net | | | 1,345,266 | | | 194,867 | |
| Due from related party | | | 22,225 | | | 21,825 | |
| Customer list, net | | | 143,729 | | | 230,988 | |
| Goodwill | | | 318,500 | | | — | |
| Other assets | | | 137,480 | | | 24,751 | |
| Total assets | | $ | 28,577,882 | | $ | 7,529,384 | |
| | | | | | | | |
Liabilities and Stockholders’ Equity | | | | | | | |
| Current liabilities | | | | | | | |
| Accounts payable | | $ | 6,077,400 | | $ | 2,053,567 | |
| Customer rebate payable | | | 609,342 | | | 1,196,363 | |
| Accrued liabilities | | | 1,707,102 | | | 622,184 | |
| Accrued warranty | | | 576,760 | | | 508,655 | |
| Common stock issuable | | | — | | | 175,568 | |
| Deferred purchase price payable | | | 20,000 | | | — | |
| Deferred revenue | | | 973,051 | | | 981,454 | |
| Credit facility | | | 4,748,964 | | | 500,000 | |
| Current portion of capital lease obligations | | | 16,461 | | | 12,205 | |
| Current portion of long-term debt | | | 136,048 | | | 17,307 | |
| Total current liabilities | | | 14,865,128 | | | 6,067,303 | |
| | | | | | | | |
| Capital lease obligations, less current portion | | | 37,023 | | | 42,678 | |
| Long-term debt, less current portion | | | 435,341 | | | 28,673 | |
| Total liabilities | | | 15,337,492 | | | 6,138,654 | |
| | | | | | | | |
| Commitments, contingencies and subsequent events | | | | | | | |
| | | | | | | | |
| Stockholders’ equity: | | | | | | | |
| Preferred stock, $0.001 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2007 and December 31, 2006 | | | — | | | — | |
| Common stock $0.001 par value; 50,000,000 shares authorized; 23,383,104 and 15,877,751 shares issued and outstanding at September 30, 2007 and December 31, 2006, respectively | | | 23,383 | | | 15,878 | |
| Additional paid-in capital | | | 21,378,969 | | | 2,955,926 | |
| Accumulated deficit | | | (8,161,962 | ) | | (1,581,074 | ) |
| Total stockholders’ equity | | | 13,240,390 | | | 1,390,730 | |
| Total liabilities and stockholders’ equity | | $ | 28,577,882 | | $ | 7,529,384 | |
| | | | | | | | |
AKEENA SOLAR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | Three Months Ended September 30, | | Nine Months Ended September 30, | |
| | | 2007 | | 2006 | | 2007 | | 2006 | |
Net sales | | $ | 8,088,320 | | $ | 3,599,957 | | $ | 21,891,611 | | $ | 8,902,554 | |
Cost of sales | | | 6,392,850 | | | 2,709,642 | | | 16,926,811 | | | 6,729,181 | |
| Gross profit | | | 1,695,470 | | | 890,315 | | | 4,964,800 | | | 2,173,373 | |
Operating expenses | | | | | | | | | | | | | |
| Sales and marketing | | | 1,793,616 | | | 386,362 | | | 3,876,032 | | | 827,475 | |
| General and administrative | | | 3,593,406 | | | 882,177 | | | 7,589,641 | | | 1,926,094 | |
| Total operating expenses | | | 5,387,022 | | | 1,268,539 | | | 11,465,673 | | | 2,753,569 | |
| Loss from operations | | | (3,691,552 | ) | | (378,224 | ) | | (6,500,873 | ) | | (580,196 | ) |
Other income (expense) | | | | | | | | | | | | | |
| Interest income (expense), net | | | (31,620 | ) | | (17,348 | ) | | (80,015 | ) | | (43,543 | ) |
| Total other income (expense) | | | (31,620 | ) | | (17,348 | ) | | (80,015 | ) | | (43,543 | ) |
| Loss before provision for income taxes | | | (3,723,172 | ) | | (395,572 | ) | | (6,580,888 | ) | | (623,739 | ) |
| Provision for income taxes | | | — | | | — | | | — | | | — | |
Net loss | | $ | (3,723,172 | ) | $ | (395,572 | ) | $ | (6,580,888 | ) | $ | (623,739 | ) |
| | | | | | | | | | | | | | |
Loss per common and common equivalent share: | | | | | | | | | | | | | |
| Basic | | $ | (0.16 | ) | $ | (0.04 | ) | $ | (0.33 | ) | $ | (0.06 | ) |
| Diluted | | $ | (0.16 | ) | $ | (0.04 | ) | $ | (0.33 | ) | $ | (0.06 | ) |
| Weighted average shares used in computing loss per common and common equivalent share: | | | | | | | | | | | | | |
| Basic | | | 22,995,430 | | | 10,808,781 | | | 19,652,136 | | | 9,614,447 | |
| Diluted | | | 22,995,430 | | | 10,808,781 | | | 19,652,136 | | | 9,614,447 | |
