SolarCity Announces Fourth Quarter and Full Fiscal Year 2012 Financial Results

SolarCity Announces Fourth Quarter and Full Fiscal Year 2012 Financial Results

Customer base increased 243% in 2012, company surpassed $1 billion in solar energy systems deployed

SAN MATEO, Calif.--(BUSINESS WIRE)-- SolarCity (NAS: SCTY) , a leading provider of clean energy, today announced financial results for its fourth quarter and full year ended December 31, 2012.


"SolarCity grew its customer base more than 243% in 2012 and surpassed $1 billion in solar energy systems deployed. Customers consistently choose SolarCity over alternatives, whether they are solar providers or utility companies. We sign up a new customer every five minutes," said Lyndon Rive, CEO.

"SolarCity's growth is proof that the company's vertically-integrated model—to provide cleaner energy directly to customers at a discount to utility rates—is the key to attracting homeowners and businesses to solar," continued Rive. "Furthermore, despite our triple-digit growth rate, we've scarcely begun to tap the potential of the distributed solar market. Less than half of one percent of energy consumers in the U.S. have adopted solar, and a massive growth opportunity remains."

Operating Activities

SolarCity's operating activities include collecting energy contract payments, acquiring new customers, operating and maintaining solar energy systems, technology development and additional activities that enable selling energy to customers.

Q4 2012 Operating Activity Highlights

  • 48 MW Deployed, an increase of 129% from the prior year period

  • 8,557 Total Customers, an increase of 192% from the prior year period

  • 6,810 Energy Contracts, an increase of 190% from the prior year period

  • 4,992 Transactions from other energy products and services, an increase of 350% from the prior year period

Full Year 2012 Operating Activity Highlights

  • 157 MW Deployed, an increase of 118% from the prior year

  • 30,950 Total Customers, an increase of 243% from the prior year

  • 26,327 Energy Contracts, an increase of 269% from the prior year

  • 15,425 Transactions from other energy products and services, an increase of 315% from the prior year

  • $1,091 Million Nominal Contracted Payments Remaining, an increase of 124% from the prior year

Investing Activities

SolarCity's investing activities are primarily comprised of the Company's investments in distributed generation solar energy systems under energy contracts.

Q4 2012 Investing Activity Highlights

  • Investments in Solar Energy Systems of $151.3 million

Full Year 2012 Investing Activity Highlights

  • Investments in Solar Energy Systems of $449.1 million

Financing Activities

SolarCity's financing activities are primarily comprised of the financing funds we raise with partners to finance our investments in solar energy systems.

Financing Activity Highlights

  • Recently completed first restructuring of three financing funds, which lowered the cost of financing the contracted payments from more than 8% to 3.45%

  • Available financing funds for 115 MW as of February 28, 2013

GAAP Cash Flow Statement

With each new Energy Contract, we create a recurring, predictable cash flow stream. Our financial strategy is to maximize retained value for shareholders by covering Investing activities with cash generated from Financing and Operating activities. By this definition, the Company achieved positive net cash flow in Q4 2012.

For the year ended December 31, 2012, net cash provided by Operating activities was $60.3 million, net cash used in Investing activities was $449.1 million and net cash provided by Financing activities was $498.3 million. Net cash provided by Financing activities before equity issuances was $323.1 million and the net cash provided by the equity issuances was $175.2 million. The net increase in cash and cash equivalents for the year ended December 31, 2012 was $109.6 million.

Condensed GAAP Statements of Cash Flows

(in Thousands)

Three months
ended
December 31,

Three months
ended
December 31,

Year Ended December 31,

2011

2012

2011

2012

Net cash provided by (used in):

Operating activities

$82,263

$64,723

$18,082

$60,333

Investing activities

($95,270

)

($151,288

)

($304,252

)

($449,059

)

Financing activities

($13,231

)

$104,548

$256,284

$323,129

Total net cash provided (used) prior to equity issuance

($26,238

)

$17,983

($29,886

)

($65,597

)

Net cash provided by equity issuance

$112

$92,779

$22,087

$175,206

Net increase (decrease) in cash and cash equivalents

($26,126

)

$110,762

($7,799

)

$109,609

2012 Fourth Quarter GAAP Results

Recurring Operating Leases Revenue grew 100%, to $14.0 million from $7.0 million in the fourth quarter of 2011, and total revenues grew to $25.3 million from $20.7 million over the same period. Gross Profit grew to $14.0 million from $8.3 million in the fourth quarter of 2011. Gross profit margin increased to 56% compared to 40% in the fourth quarter of 2011. Total Operating Expenses were $37.9 million compared to $22.3 million in the fourth quarter of 2011. Loss from Operations was $23.8 million compared to $14.0 million in the fourth quarter of 2011.

2012 Full Year GAAP Results

Recurring Operating Leases Revenue grew 106% to $47.6 million from $23.1 million in 2011, and total revenue grew to $128.7 million from $59.6 million over the same period. Gross Profit grew to $50.9 million from $12.4 million in 2011. Gross profit margin increased to 40% from 21% in 2011. Total Operating Expenses were $119.7 million compared to $73.7 million in 2011. Loss from Operations was $68.9 million compared to $61.3 million in 2011.

Earnings Conference Call

The Company will hold a conference call today to discuss its fourth quarter and full year results and its outlook for 2013 at 5:00 pm Eastern. A live webcast of the call may be accessed over the Internet from the Company's Investor Relations website at http://investors.solarcity.com.

Participants should follow the instructions provided on the website to download and install the necessary audio applications. In addition, an earnings related presentation will be available on the Company's Investor Relations site at 5:00 pm Eastern. The conference call can be accessed live over the phone by dialing 1-877-407-4018, or for international callers, 1-201-689-8471. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176, or for international callers, 1-858-384-5517. The passcode for the live call and the replay is 408735. The replay will be available until March 13, 2013.

About SolarCity

SolarCity® (NAS: SCTY) provides clean energy. The company has disrupted the century-old energy industry by providing renewable electricity directly to homeowners, businesses and government organizations for less than they spend on utility bills. SolarCity gives customers control of their energy costs to protect them from rising rates. The company offers solar power, energy efficiency and electric vehicle services, and makes clean energy easy by taking care of everything from design and permitting to monitoring and maintenance. SolarCity currently serves 14 states and signs a new customer every five minutes. Visit the company online at www.solarcity.com and follow the company on Facebook & Twitter.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties, including statements regarding SolarCity's customer and market growth opportunities, financial strategies for cash generation and increasing shareholder value, the deployment of megawatts currently included in backlog, the amount of megawatts that can be deployed based on committed available financing, additional financial and operational forecasts to be discussed during the conference call referenced in this release, and assumptions relating to the foregoing.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements, including the effect of electric utility industry regulations, net metering and related policies, the availability and amount of rebates, tax credits and other financial incentives, the availability and amount of financing from fund investors, the retail price of utility-generated electricity or the availability of alternative energy sources, risks associated with SolarCity's rapid growth, risks that consumers who have executed energy contracts included in reported nominal contracted payments remaining and backlog may seek to cancel those contracts, SolarCity's limited operating history, particularly as a new public company, changes in strategic planning decisions by management or reallocation of internal resources, and general market, political, economic and business conditions. You should read the section entitled "Risk Factors" in our registration statement on Form S-1, which has been filed with the Securities and Exchange Commission and identifies certain of these and additional risks and uncertainties. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

SolarCity Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

December 31,

December 31,

2012

2011

Assets

Current assets:

Cash and cash equivalents

$

160,080

$

50,471

Restricted cash

7,516

1,796

Accounts receivable - net

25,145

10,651

Rebates receivable

17,501

13,684

Inventories

87,903

142,742

Deferred income tax asset

5,770

4,306

Prepaid expenses and other current assets

11,502

17,872

Total current assets

315,417

241,522

Restricted cash

2,810

3,764

Solar energy systems, leased and to be leased - net

1,002,184

535,609

Property and equipment - net

18,635

14,421

Other assets

22,796

17,857

Total assets

$

1,361,842

$

813,173

Liabilities and equity

Current liabilities:

Accounts payable

$

62,986

$

162,586

Distributions payable to noncontrolling interests

12,028

6,216

Current portion of deferred U.S. Treasury grants income

11,376

5,430

Accrued and other current liabilities

52,334

30,574

Customer deposits

8,753

13,933

Current portion of deferred revenue

31,516

13,504

Borrowings under bank line of credit

-

5,582

Current portion of long-term debt

20,613

2,640

Current portion of lease pass-through financing obligation

13,622

6,060

Current portion of sale leaseback financing obligation

389

361

Total current liabilities

213,617

246,886

Deferred revenue, net of current portion

204,396

101,359

Long-term debt, net of current portion

83,533

14,581

Long-term deferred tax liability

5,790

4,313

Lease passthrough financing obligation, net of current portion

125,884

46,541

Sale leaseback financing obligation, net of current portion

14,755

15,144

Deferred U.S. Treasury grants income, net of current portion

286,884

132,004

Convertible redeemable preferred stock warrant liabilities

-

5,325

Other liabilities

112,056

36,314

Total liabilities

1,046,915

602,467

Convertible redeemable preferred stock

-

125,722

Total stockholders' equity (deficit)

214,320

(37,662

)

Noncontrolling interests in subsidiaries

100,607

122,646

Total equity

314,927

210,706

Total liabilities, convertible redeemable preferred stock and equity

$

1,361,842

$

813,173

SolarCity Corporation

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Amounts)

Three Months Ended

December 31,

2012

2011

Revenue:

Operating leases

$

14,032

$

7,042

Solar energy systems sales

11,241

13,700

Total revenues

25,273

20,742

Cost of revenue:

Operating leases

4,731

2,429

Solar energy systems

6,505

10,003

Total cost of revenues

11,236

12,432

Gross profit

14,037

8,310

Operating expenses:

Sales and marketing

19,416

14,758

General and administrative

18,451

7,538

Total operating expenses

37,867

22,296

Loss from operations

(23,830

)

(13,986

)

Interest expense

5,220

1,756

Other expense (income), net

(15,376

)

1,213

Loss before income taxes

(13,674

)

(16,955

)

Income tax provision

53

(30

)

Net loss

(13,621

)

(16,985

)

Net loss attributable to noncontrolling interests

(10,578

)

(31,058

)

Net income (loss) attributable to stockholders

$

(3,043

)

$

14,073

Net income (loss) attributable to common stockholders

Basic

$

(13,134

)

$

2,710

Diluted

$

(27,950

)

$

3,673

Net income (loss) per share attributable to common stockholders

Basic

$

(0.54

)

$

0.26

Diluted

$

(1.10

)

$

0.24

Weighted average shares used to compute net income (loss) per

share attributable to common stockholders

Basic

24,283,731

10,374,820

Diluted

25,310,651

15,413,884

SolarCity Corporation

Consolidated Statements of Operations

(In Thousands, Except Share and Per Share Amounts)

Year Ended December 31,

2012

2011

2010

Revenue:

Operating leases

$

47,616

$

23,145

$

9,684

Solar energy systems sales

81,046

36,406

22,744

Total revenues

128,662

59,551

32,428

Cost of revenue:

Operating leases

13,346

5,718

3,191

Solar energy systems

64,429

41,418

26,953

Total cost of revenues

77,775

47,136

30,144

Gross profit