SUNW - Earnings call transcript Q1 2020

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Operator

Good day, ladies and gentlemen, and welcome to the Sunworks' First Quarter 2020 Earnings Call. All lines have been placed on a listen-only mode and the floor will be open for questions and comments following the presentation [Operator Instructions].

At this time, it is my pleasure to turn the floor over to your host, Rob Fink of FNK IR. Sir, the floor is yours.

Rob Fink

Thank you, operator. thank conference for call. and quarter Sunworks' everyone, earnings XXXX morning you joining all first Good Officer. Participating Cargile, and Financial Chief the Executive in call Officer, Paul today McDonald, are Chuck Chief

remind for company Before statements question-and-answer everyone Harbor remarks we the during statements contain which uncertainties the risks statements, plans session. is of contained subject forward-looking would Safe make and start, like management will that this may the call, that I protection during forward-looking the Reform management's to and the Securities Private are Therefore Act to additional forward-looking XXXX. of in Litigation

business results of or ability The attract from certain Actual economic regulatory development those and because limited to personnel and retain not and forward-looking in to, legal general statements competitive materially changes strategy, differ factors, requirements. conditions, in and plans. contemplated could business qualified by changes factors,

management's today, no addition, projections market performance as to the future the conditions update Sunworks and assumes future company's XXXX. as business of may estimates represents obligation projections in X, change. In as these to any May

a the company the provided this you press morning. on review call. encourage with release and commentary. financial issued augment They XX-K also We the Today to press the report XX-K information to filed and their release this information

like With yours. is call turn all Chuck the said, CEO. I'd Chuck, the to Cargile, that now call Sunworks' over to

Charles Cargile

the We Good Rob. quarter entered call. you, morning XXXX Thank first our with you everyone thank joining of and optimism. for

And the operations cash reducing raised out had organized in and through our bookings seven We in Our and offering. of adjusted greater teams million our XXXX for $X.X highest our by structure straight backlog QX at efficiency. field was flush market after we’ve coming experiencing cost quarters. overhead

Then attention we've presented. confident early start challenges sales. focused spring by also of wind our on early adjusting the or that would were have normal unpredictable was the we to and in have by been mid-March, our COVID-XX of became in the epicenter the the we Although seasonality, Coronavirus marked year the been that

call challenges impact in we're on having only employees this all the experiencing, is faced this on not alike. As are and the but impact stakeholders personal organization with macroeconomic

first-quarter our to Paul situation spend of I'll as mid-term. expected our it the current specifics moment COVID-XX and it's discussing results, relates a financial in to execution actions our Before near the to discusses how and impact

As ecosystem. families, employees, health primary relates the our goal to to greatest of and and our to COVID-XX, is our ensure their the we extent safety our in customers it others can,

positive are to steps we've to with of employees health our to for tested mitigate and themselves public directives Fortunately, those for precautions. risks continue they the reminding taken necessary encounter. none and virus have the follow employees complying our and the and take all We're necessary

include Control for social wearing and personal safety Center vehicles distancing and following Disease keeping sanitized. We're guidelines hands and by protocols, protection the common and face-covering, which clean Prevention and workspaces regularly all washing

by essential operating. to the by as have slowed, allowing as shelter-in-place directives. identified energy industry county to we're serving The agencies our federal business an us operations as customers Although defined continue is continue fortunate government critical

some capacity commitments. of suppliers time and disrupted business caused cases, and essential, are our Therefore, essential as similar despite are to deemed away Some our we has who designation. are operating as some are. taking customers, have be this not not from essential subcontractors, been a at categorized our as this work they In

responsible These and all and known and have furloughs as The operational for AHJ, The projects. of have are utility Authority individual final key counties permitting and bottlenecks layoffs which the areas are Having entities where many we cities AHJs Jurisdictions, are themselves. identified companies. of through approval experienced

the at been have or permission of to not grant in same normal capacity the PTO operating, as approval, and they utilities although it operate business. been The course has

As soon dynamic in and to reacted this as our risk quickly COVID-XX prevalent evolving we situation. mitigate concern, a became

onset the approximately of to our XX%. we salary orders, facing we transition and needed analyzed XX determined put took to volume first the then were shelter-in-place adjust leave working a absence, uncertainty had At that need temporary employees, immediately At part-time. of time, the significant in our a we we as XX we on and and headcount reduced or by XXX

support In $XXX,XXX customer In been non-essential travel cost-reduction spending. negotiated of other to These relief have all per maintain savings rent revenue capacity generation. and functions all at very our careful we've other resulted needs measures, our we decisions, limited cost-reduction we full for discretionary actions month. cut and from almost landlords, that in

As operating of these to reversed. cost whereby a return conditions some stabilize, be will new normal reductions we will

However, we carefully we to monitor are more our intend forward. to as a leaner, going agile operate determined costs business

within our April securing Program, on the the and Economic Aid, announced virus that million We a under by position cash XXth, provision Paycheck Protection have we Corona strengthened loan Relief, a $X.X rent, CARES or May Small the on guaranteed Act, will and means during Administration. the payroll, And interest June, and forgiven. spend be Security, we utilities, benefits, Business that and that amounts by

will paid is months criteria until from date, XXXX, a funding and in their fixed, X% being confident deferred determined still we although large are for portion back interest relief. six us principal will November XXXX. be months that will isn't providing starting that amount at forgiveness specific The be May of continuing added the and forgiven qualify The XX

in to be we've approximately continue COVID-XX, we $XX that backlog, jobs Due deferrals, our XXXX. are million. on near-term, although which to execute confident some is customer we still experienced will the installed In these

impactful most sign What customers' is contracts. new hesitancy to the is

appear greater degree be opportunities, customers in normalcy. of pipeline business with flush waiting the remains to for HTI particularly some Our

economic including solar tougher the attractive. incentive be customers to costs. will invest believe operating risk Therefore, of We driver own more in expectation conditions, that recession, their reconsidering of a the becomes for a the

that this balance. the remains structure contracts. allowing and the very because our Once new bookings there is point lower customers cash interest economic our break-even our will ensure of us anticipate cost In more meantime, lean, predictability, and conserve low greater perhaps in will we to we a signing grow have year,

current are strong to storm. our eight flow conditions prepared the for to macroeconomic balance profitability we expect market quickly the evolving weather revenue, positive we and we to generate from normalized largest quarters. reacted had Once backlog we summary, and cash cash stabilize to In operations. and return we return the in had operations near-term, conditions, more We've to and

With our that, I'll quarter. results Paul? provide in more ask to specifics to related financial the Paul

Paul McDonnel

and Thank everyone. you, Chuck, hello

installation the first year. the first the XXXX, from revenue For was million of quarter reported million, $X.X for the XX% prior increase quarter a $XX.X of

ACI, public works revenue first-quarter total XX% total were industrial, versus or or prior-year Our or XX% $X.X installation of revenue, million in and quarter. and agriculture, the commercial, million, of $X.X revenue

$X.X XX% XX% $X.X of were revenues of Residential revenue in quarterly or quarterly versus installation million, year. revenue, total the million, or prior

million revenue. profit months XX, % XXXX, Gross $X was or the of X.X March ended three for

Our gross was margin key drivers. by several negatively impacted

First, in normal Central first agriculture seasonality and lower XXXX. the quarter California, in in projects of impacted were by revenue falling resulting from rain Northern

utility primarily operate respective be mentioned jobs the challenges without utility were the and profit. the earned and AHJs ACI inspection from respective final Second, Within Chuck delayed incur approximately in permission as to from receive revenue AHJ COVID-XX, earlier, once This utility. we respected $XXX,XXX these revenue profit costs to and to unprecedented projects, delayed will holds. we caused due us issues and impacted caused and AHJ by by receive

negative operations, margin approximately as to a due residential delays. earned revenue residential delays, and In be business expected, QX sales also revenue than lower Difficulty] ACI coupled $XXX,XXX, a to caused [Technical less more experienced we be to percentage utility our quarters. in The lower similar resulting of installations, prior residential These than than AHJ with miss business. total residential revenue and our of in

than are higher margins ACI gross margins. residential gross Traditionally,

also this pressure gross mix change the margin. on put So overall in revenue downward

expenses, driver customer. The third lower for from and and quarter a was dispute the first was the profit the projects $XXX,XXX started to customer significant for projects XXXX, gross federal unrecoverable $XXX,XXX expense overrun which non-recurring expense of for in two

have as which in the reasonable have of AHJ Without level and been utility our margin mid-teens, the expenses, the and at estimated percentage would revenue. holds revenue a gross of would this non-recurring been

second return As could of quarters organizational forward result as enhanced earned to changes. gross efficiency, from combined range XX% and our savings we a we that higher the anticipate revenue XX% and into the operational margin third resulting with cost XXXX, to look of our

X.X% for operating compared of year. million, Total the expenses period XXXX, goodwill $X.X to normal first the at same of in expenses impairment quarter first prior operating excluding the reduction were million, This the deflux the quarter of reflects in $X.X of XXXX. from million $X

including million. Total goodwill operating $X.X of was expenses, $X million, impairment the

the goodwill auditors XXXX. momentum balance XXXX, external valuation As heading and our had impaired, that especially we not at of million XX, determined $X.X was our of our December that into independent expert

as the conference our As significant March conditions, repeated changes in valuation on described quarterly macroeconomic in process XX, we of last XXXX. based call, the

the March by guidance, to of the instructed of evaluated goodwill, date, company's the the carrying future assets, As accounting must business XX. cash value as this expected capitalization of market be valuation comparing including the flows in the case

our earnings cash our COVID-XX, profit, project valuation, which by delays near-term current the For reduced caused revenue, periods. account expected we flow, first future each and into XXXX pushing adjusted to possible for

market the approximately our declined December XX, our value QX, below price drop share at in to XX% causing Secondly, significantly capitalization XXXX.

be accounting market flow, rules XX, March reasonable. determine impairment and a that of lower cash valuation with require has case specific as in and in reduced near-term expectation to Our goodwill XXXX. market coupled an of the time, rebound rebounded in capitalization, of us The since XX. to March capitalization this charge caused a was the profit capitalization, point Despite

of measures March to year, April operating significantly compensation, As this expenses, drop and expect reduce compared to a stock-based the including to result in costs XXXX. of we taken aggressive

projected reducing to uncertain overhead to as performance will are our by operate our and continue has compromising without the needs, effectively, ability which determined decisions costs become be will fluid, We still immediate our these permanent operating be data and will by reductions emphasis. and of our

non-cash prior of to period $XX,XXX primarily $XXX,XXX stock-based due expense, During ended is months stock XX, compensation employees. compared per former year. expense the The same the total the for the we XXXX, reduction compensation March incurred discontinuance to three in in

XXXX, same and compared the was XXXX. quarter for for year. same $XX,XXX in Interest other of for three increased ended $XXX,XXX the $XX,XXX, XXXX, months amortization the prior first expense Depreciation period in the three March months $XXX,XXX compared to $XX,XXX, the in XX, expenses to and to

this with fees for our million the pay-down pay in in to debt capitalized portion down. recognize on March the $X.X accelerating write-off expense quarterly approximately mentioned XXXX of us required last of the $XX,XXX extension and CrowdOut January early non-cash the call associated XXth the the costs conference issuance As of of additional of of year, an

expense result, term remaining quarterly As will of future the a the over the lower load. amortization be

from now quarter The declined the XX-day benefiting X%. To is LIBOR now XX-day also rate XXXX upon degree, LIBOR lower a points small payments in of interest the basis one XXX approximately calculated. rate are we are which and has approximately

$X.X The a or company per net months the of XXXX. incurred XX, three million, share, loss March ended $X.XX for

of write-off million, of per accelerated Excluding been and million, the impairment, charge the CrowdOut March would to XXXX. $X.X three the for non-cash net $X the per loss $X.X approximately the compared months non-cash have million ended share, of XX, share, goodwill or the or fees, $X.XX for $X.XX a $XX,XXX loss capitalized

balance million XX December was million, as to XXXX. XX, our equivalents March cash our to Turning and $X.X compared of sheet, cash of balance as $X.X

the $X.X activities. our million cash approximately canceled since fully recent we the two have offering, quarter from of XX, benefited of as first key fees, XXXX. XXXX have and through market at of position which been March After and utilized Our raised during liquidity cash broker

the loan. million Additionally, secured PPP in $X.X we April

our XXXX of capital At the of quarter million, of at capital working surplus year-end. compared was $X.X million to XXXX, end December working surplus a the first $X.X

pay-down compared three loss million During used The $X.XX million operating March during of cash activities for operating result cash of the and our operating activities we activities, in to operating the accounts same of in and the payable liabilities period used XXXX, the in XX, ended $X.X quarter. the XXXX. of cash in using accrued months was

the of and receivable, a accounts offset impact received collection cash loss of by was the partially from the and in inventories. net expense cash The cash reduction from

XXXX. XXXX of Our March the at of together financing. year-end. due the million with end December at primarily consists total January a million XX, of the minor compared million, non-trade promissory is was The amount XXXX, notes at $X.X to equipment All debt CrowdOut $X.X debt $X.X CrowdOut $X.X of million

With that, we are now any happy you questions answer have. to may

Operator

first question comes your Please Instructions] [Operator ROTH question. Shen, Capital Philip from Our state with Partners.

Philip Shen

for and back troughed, business when then explore do Resi you Hey troughed, your or expect the for the it But you wondering think trough? guys, do for if when you the And get Wanted your sales residential see Resi explore first next. sales Thanks or February your we to think do specifically questions. when sales ACI either was segment, to expect could the solar to when you has do to volumes? I

Charles Cargile

probably Well, had have that's I Phil. do. a companies than be all visibility the better million asking to you should because dollar you question, that I

with First, I actually February resi. get to know didn't our were I that levels talked, at revenue the would good. think start years. January I you that residential able say I matched was I and told be And business, pleased had ago, when just six to weeks we'd about in pretty that last time we we

of three the and quarter. was at that very, million, $X.X weeks But or slow a worth we very two last the did,

of come or last seen a it say, going a and in a data, been amounts little and troughed well. start trend a hard predict to but such bit nearly it's to, So two, have good hasn't trend to small get bit we but back on of It's as off extrapolate now are then extrapolate not better. we enough to a of or the week they

prediction, I to of we're field managing down bones don't have and not We've it now crews. basis the of streamed bare right terms in business that a So the on prediction.

temporary crews The changes working have are on We office day to furloughed or furloughed. and also on staff either time less projects is specifically that part and our day.

back day, to field. customer the either assigning need bring to or we project relations, in new support we entry, And to or to again, people if see day crews manage

don't but if start better move a answer ball, had prepared to wish long think we're I we going how I see -- I to had an nimbly last. than it's be So it's long to I it, I I you. how crystal move, for react this and positioned but very to to going to know wish

Philip Shen

virtual like you Okay. Have ZOOM sales the are still? like doing just consultations you things sales and focused to guys transitioned on or that, in-person

Charles Cargile

I this sales. first, Yes, call know and you but And question. are good by represented exclusively we almost reminder, won't, two-third-party the of way some on know

So request phone through two-third and of the worked we've able get third the are come do with have or we We inside lot more parties virtual those, some again we're it's party, sales. to web them, absolutely they to and don't our but a support over and doing sales.

weeks, or channel the specifically We've last month that because added even on. ones they new six we that's selected distributors in and focus partners what

of So we, side, on et like much sea be business permitting, for everyone not else, only sales virtual, believe on that back-end one of change the more the cetera. the this aftermath will in also

and to how takes traction. yes, that So, see for that gain we're doing it long we'll

Philip Shen

XX%? maybe February? weekly now So the doing the what's the volume versus down volume -- that percentage a for on seeing of week XX%, you're basis now it in down average the you're volume Is

Paul McDonnel

forward that. could out and June we in that now, of is see So it at traditionally And predict we the or that's levels, what I XX% we interesting Yes, levels, is I stay we to keeping going acceleration, what think XX%. again, I'm stay bottoming probably so April, at going compared eye of even at because level? wish but acceleration, I'm see I will XX% be XX% a world, move just when capable it's close the as lower new February is at will on, And of to this not or historical February, levels? is, is down are to this May, better

Philip Shen

historically, an with like the typically, with when clock that XX the perhaps complete? that with couple Is markers XX, that is, XX is what the challenges have typically if installations there, can example? were time or much the time us PTO when the at us, how give of given and versus So between great. you install, to days worse shifting could whatever say starting now? you a working you utilities, gotten? AHJs then get for share And friction then at And be are let's there, So you would you you

Charles Cargile

Yes. Sure.

XX not to now days, and number would but it's, historical I'd say, be closer XX to almost. doubled, Our

I to is, now So it it's looking months. about at to think two And and to easier an be now used months. guess it probably about that's And a two closer way on we're month of average.

have, number can of the we With installs by vary that it the a quite bit different AHJs.

Philip Shen

or just do that handful And Are have two sense handfuls. or saying things a that modest given a for you improve not improving with? I maybe might mean, when sense yet? AHJs deal that you are there you getting a the it's

Charles Cargile

we It's the some, see AHJs, very and improvement. dependent upon individual

the lot a it's the a and But and area does not local Bay of improvement hope where provide tell. is balance, we've being we that and to we the it's of office, I've dictated in that will term and long but I'd lot do future. are that we new, one more so will particularly electronic processing the AHJs much yet. relatively hope of there something and time rules have The improvement Jose had have That's utilities or seen but shelter-in-place glimmer still be that's that by in and I'd remote presence San seen forced could allowing a an thing now benefit, spotty. We say success processing Area, and pretty that that of some have on accelerate say, heard

Philip Shen

Okay.

from with compare Let's are the the of know monthly a but and ACI you for can average maybe of frame. series -- ACI. frames an versus time it can't this week shift kind week February, same I Almost what look questions of we'll start to maybe volumes so at time longer, you

would ACI? How perhaps and little business or February, actually slower month for even of month the are is for versus the impacted because longer of ACI the been Has have might be the month farmers much take activity have you completely, or expected away maybe and let's you farms other and less Resi. of owners timeframes April what bit it seen a So than go just from worse April.

on So just ACI. curious is where head your

Charles Cargile

has business non-residential you been less Our impacted to. as alluded

seen been saw that on haven't back follow-up one --there's we've about February, think can top working We from we but I it head, anywhere working that XX% my to been major we've not compare project that the been we're if of you stopped only like the off near on.

it And we it. had the on on. prison are had that they actually about so pull be works were they the the prisons out large rather us working because was They to a public around state site one asked someone to due concerned tested the for virus in

had that June. the think able we or And that's only but in start But pull we one. one. to in there back So continue on project, the hope We been get generating there. we've that to off or will be hold put

pretty we have people once else been field of to impacted at the as we've and is be people two ones, thought as at consistent in the though to it we have on we and would and fortunately, furlough many percentage project the on. have months the again we that, still residential, in field same we than not manage capacity the where field so in had following be residential. a We're week a know full strategy we And our that day. even We other it's ago teams every more managers don't who The as day, the but manage leadership certainly And not still higher we field. look there superintendents we're going some. team there, and day

along the to have sales I well. slow. very our that the been continue on non-residential I will has The think same that business side concerns in however, So click do, front-end. pretty

industrial by a So has agriculture customers, customers, a our delay been large reluctance public there there is our work partners, even now.

were better and the March would week what last we May, seen week, we than this little actually, it a in but break seeing that not April. and anywhere near expect have We certainly in bit, levels

bit. a So little to thaw hopefully, that start will

great tough And or also of spending. a have having lower they can conditions, as spend opposed you operating looking companies to side, other discretionary talk that more cut to they how economic on can how barrel so targets are operating recession their when about to people costs, the lower or terminate the some to non-residential costs, are cash money down

save become we again, this a start we So on those the in firmer they're can once recession, want they new think should or before of new the see able second pitch solar like before get to feel firmer dialog to month us. or something another probably sales a and ITC, to next step good buy in so the about maybe because of customers that year, that non-residential footing, be for normal that's start a the in have But why we'll down worthwhile et cetera. costs, to have footing half

Philip Shen

you non-res as Okay. AHJ friction way? time Was think utilities, standpoint XX% or extended friction? there with that Do be may Thanks, and a something in by there for interconnection Chuck. as installation from a is result well typical of your

Paul McDonnel

as still the AHJs. similar a answer different Yes, there friction. it's is case case by or residential, With

AHJ that help side know bit expedite then are reaction, fewer of at maybe and relationship ag the side you they it that is for you built, there better someone can the more little and commercial so get projects because be and a they the larger you. Some projects, and on

of We of working they're not some and everybody are in just people and still doing is they that like animosity have It's But people a friction is have them. fewer benefit part just certainly not impacted or that there job. else's. good

days probably yes, bit [Technical is terms XX the side, to XX little average. of the maybe shorter In residential Difficulty] on than a on timing so that

Philip Shen

how and maybe Good. and to Okay. you questions, then QX shifting to trend margins your modeling this in QX? And lower over margins do expect had you quarter some

Charles Cargile

remarks, start in we end far months, because we and can't where both perhaps have were can that delayed to to residential next and yet. see get can the non-residential, that QX, things that the for and highlighted in The in the referenced pity of across profit coming QX. can profit product QX we the the we going our normalized of QX, environment can AHJ the and projects issues in the two revenue for kind well $XXX,XXX those about we're or count get costs up pure for had we some and release that If or we company, press incurred through at that bode prepared

So we the I the in the timing think perspective AHJ quarters PTO because now just benefit utility that QX. and pain perspective in that's we QX in we took that will a future and missed QX from get back it

alone, a So that can if coming just And profit somewhat that $XXX,XXX a ones, the or quarters. on of as basis we our it of as other should way of we so couple in next the soon quick then get get doubling clears. be effect can return

that on gross margin So the see that I we'll benefit think side.

QX our quarter. QX for if what in at like this we're were internal own to even revenue So expecting we're back going and forecasting mid-teens for we be levels to

in mid-teens range be million can to $XX terms then we be of the in $XX in probably revenue, we if in can the So margin.

it's had on or also [Technical $X side, of And We months first had you QX, an note then actually were And we months two first our that to than okay million two QX. two start. either normally off first we we Difficulty] higher QX, were slightly the had months. to QX of equal know, the in the in as revenue I a but to slow said interesting

would would really for to then and have So have been QX, in of seen us. kind million, $XX that we this close if been have quarter, for that we strong activity would

that get would get if QX, can I just So backlog to can this impact. we storm, we have the in there think that like if is start through it didn't still COVID-XX convert

Philip Shen

Okay.

-- are you do expect you guys things $X to be a there rate. think you quarterly could $X do maintain at impairments Do you run QX OpEx, could that million or that QX? some impact or million you or for As typically think

Paul McDonnel

in said of this see I QX, take completely don't QX the but in our be, terms with going end and is that's for the probably we impairment of supported impairment impairment with an reviewing experts how to We a tail long of with. Yes, valuation what auditors, of this our or from ahead uncertainty could Committee to with have lower be it the high be transparent. in the is back Audit going range the and came the discussions Chairman to go the let's runway at

some even QX. headroom if QX give should that protracted things in are and us So

So quarters see couple of that the we of in non-cash the a a I reasons I the expenses impairment do for in don't see next XXXX. operating said. reduction

We of four-month there a or furloughed in continue not brought so part-time, many of that have the people we have to went and already that savings back will we now May.

back start said there really quarter, be I costs come or of said to yet. in some if to -- I it can't I back it, come those remember As Paul said will this but they haven't started

$X been closer to you rate, million our to run that So where maybe mentioned million. to recent $X million having that's $X.X I going be think

bring down that And so will it little bit. a

seven to keep operations not that in if said we're we've balance that well we to we we to that because as use sure to in slow And we revenue, continue call, the see monitor we'll going the anymore. quarters, that that in environment. cash had now a do then intent cash in this have make now higher I And than strained want continue determined are balance is as to even

Philip Shen

Okay. questions all pass and I will Thanks. the on. appreciate it I

Operator

question comes question. Wills. your next McGarry, state from with Our Please Bradley Ken

Ken McGarry

good thanks, morning. Yes,

those is with can what forgiven, restrictions an with with I funds? funds? them any are outright restrictions on As much what that but impact goes, any do there there the what as know do has you is can PPP on you do far the you loan on how

Paul McDonnel

salaries audit. the they benefits, is imagine loan an benefits, lot will been can The term loan documents be I'd rent, there broadly to on interpreted be be can and of utilities, and There term utilities, that specifics, and the interest you has not and state there the debt. and specifically pretty a -- for mentioned is used so that say

the over to finalize seven work we our I what SBA next So the well believe with is and what to that that. they going what is as through they going think forgiven is or as believe we'll have bank formalize with on weeks be

as I'm two years that, ours especially have was will worried about two that are use The spent we'll cash I at much we operating are that like -- I those rules same that justifying million period, think to spent salaries benefits, fungible and by after as then those theoretically, prove we've be year a I our all over like those XX% for I where then we be at of $X.X so all. such about said, the expenses on mean, becomes that long items. And and mean, won't inhibited But can -- company items. those that not

the As of is thing much you how main be to forgiven. is going it say,

Ken McGarry

after achieve let's you order all going revenue that the in to need And and the assume it is mix on And do cash of reductions, of margins, current you revenue what call and to flow need? expense expense structure? margins. I now have you're But mix breakeven kind what to Okay. level assuming, your know targeted current

Paul McDonnel

Yes.

we think earlier had result of carried didn't and maybe $X.X now done the get the the probably done a Sunworks to operating the back expenses forward, and target range. of if we've down With could that skinny not what version any some you'll only reductions of million We COVID-XX, bring than of we'd cost them as but as with cost well. are recall, we where as we

we And in revenue million be and $XX teens in even so would then it there. high able the have can have break back to if margin, then we

have and expenses. At $XX million margin we as operating million, XX% would be mentioned, of million, $X.X $X.X I

to include identified be. hundred of So the still And high EBITDA, we've of stock depreciation. level thousand of the that's breakeven income not non-cash that's a because would dollars that couple kind breakeven, comp where operating and of

So a couple of you're hundred to thousand different at as EBITDA looking if operating opposed income.

Ken McGarry

bounce opening think And any resumption is bit, [Indiscernible]. a a is least not looks back it right. little but first? are say pent-up let's is a, at there most to loosening segments any waiting for All economy do a there of what is -- that demand sector even you there up, that like likely the

Charles Cargile

answers you side a currently different backlog A two our non-residential. that residential residential is will, $X on healthy glimmer bit and hope, backlog, residential business. So for of of is have of if million number the we for which little

backlog think a you past that about I've business quarter. we the generate I covers for that said in the

we backlog, if million look in at that, a revenue. annualizing business. in the be $XX of good year, $X well, that's really AHJ's that million to would would keeping delays normal So $X a the I that's situation, were that our And million it's residential converting for then from and and

breakout, as that million to a and and could revenue for So if said, to real $X more quickly, us. starts quickly you becomes would that convert turn benefit there be that

keeping eye that's So that on. something we're our

see ACI we're side, I most on demand other on projects. And I the working where still said, side, of on those the the as because, pent-up

see much So it's a of not and projects. some on hope the because the I Ag still just is, do the turn. I I same us revenue working one, those and commercial in opportunity. the as for number pipeline don't still what that's is mean -- gives ACI then We're it's the midterm as gestation on flush see side so industrial But of quick long that

so start XXXX. the and this we of coffers more start into if comfortable, those feel quickly, the for end fill rolling momentum And to side year of some on customers could pretty which would sales believe really to some get I the then

delayed but our then of fourth we of And for of $XX been of customer, quarter on scheduling, ACI either that side already delay, million the now second is in amount backlog. that more scheduled or are signed currently the we outside that area have a we've than financing have projects the projects terms large have the for

aggressively three we've we're to out. those get if and working try going this the non-residential also to are four on quarters because in that now to them of in, pulled and seen revenue new so convert sales of things And low terms side,

of will those that vacuum too fill that We pick or in out, by is convoluted? then in pulled hope we'll to normal in able that the pulling on and started and we've up then need working that sense be to and XXXX. sales after aggressive make them, backfill Ken, quarters are those Does them time be to kind pulling more five the things in that

Ken McGarry

appreciate you. Thank I perfect. that's No, it.

Charles Cargile

welcome. You're

Ken McGarry

Okay.

with I think lot there. I'll stop everything. luck good a and Thanks

Charles Cargile

Ken. Thanks,

Operator

like to I'd back turn over to Okay. the call Chuck.

Charles Cargile

today Thank your for Rob you to and or reach you for you. our or if FNK hesitate and further to interest you Please of myself, joining very and Paul, all IR thank questions, continued time much, call don't support thank Sunworks. the have Operator, and out Fink at team any

Sunworks (SUNWQ) 9 May 202020 Q1 Earnings call transcript