Backlog Increased to Company Record $56
Million
The Peck Company Holdings, Inc. (NASDAQ: PECK) (the “Company” or
“Peck”), a leading commercial solar engineering, procurement and
construction (EPC) company, today announced the Company’s financial
results for the third quarter ended September 30, 2020 (“Q3
2020”).
Key Highlights for Q3
2020
- Backlog increased to $56 million, from $16 million a year
earlier
- Awarded $7.256 million contract for 5.3MW project in Rhode
Island
- Awarded $2.365 million contract for 6.8MW project in Maine
- Awarded $7.641 million portfolio for 10.5MW of projects in
Vermont
- Announced proposed acquisition of Sunworks
- Recognized as a top solar contractor for 2020, presented by
Solar Power World
Management Commentary The
Peck Company Holdings Chairman of the Board and Chief Executive
Officer, Jeffrey Peck, commented, “While we did resume and commence
all projects previously impacted by the COVID-19 pandemic,
Vermont’s State of Emergency was extended to November 15, 2020
resulting in more unpredictability. We continue to provide service
and maintenance in support of critical infrastructure including
utilities and telecommunications.”
Mr. Peck, continued, “With no projects cancelled, but many
pushed out, our backlog has swelled to $56 million. Our record
demand includes projects in our home state of Vermont as well as
our regional expansion into Maine and Rhode Island. Our first
project in Rhode Island is a milestone we are very excited about in
helping with their renewable energy goals. We look forward to our
continued expansion into Rhode Island, Maine, other states in the
northeast and coast to coast. We expect to realize nearly all of
the backlog within the next 12 months and anticipate that revenue
growth will return and accelerate as we return to some normalcy
post the COVID-19 pandemic.”
Mr. Peck, concluded, “Our previously announced proposed
acquisition of Sunworks remains on track to close by the end of the
year. We are excited for the potential of the two companies
becoming one in creating an industry leading solar EPC with a
national presence.”
Financial Results for the Three Months
Ended September 30, 2020 Revenue for the three months
ended September 30, 2020 was $5.0 million, a decrease of $6.8
million, or 58%, compared to $11.7 million for the three months
ended September 30, 2019. Due to the State of Emergency declared by
the State of Vermont, the Company was unable to complete or begin
several projects due to the current COVID-19 pandemic.
Backlog at September 30, 2020 was $56 million, compared to the
corresponding period in 2019 of $16 million. The Company expects to
realize nearly all of the backlog within the next 12 months.
Gross profit for the three months ended September 30, 2020 was
$0.2 million, a decrease of $1.2 million, or 84%, compared to $1.4
million for the three months ended September 30, 2019. The
resulting gross margin was 4.8% for the three months ended
September 30, 2020, compared to 12.3% for the three months ended
September 30, 2019. Lower gross margin for the three months ended
September 30, 2020 was the result of maintaining our labor force
during the uncertainty of the COVID-19 pandemic. The Company was
able to secure a loan through the CARES Act Payroll Protection
Program to support our workforce.
General and administrative expenses for the three months ended
September 30, 2020 were $0.7 million, a decrease of $0.3 million,
or 27%, compared to $1.0 million for the three months ended
September 30, 2019. G&A expense decreased primarily due to
tighter internal controls implemented over expense management. In
addition, the utilization of remote work capabilities reduced
expenditures related to facility usage, compared to the three
months ended September 30, 2019.
Warehousing and other operating expenses for the three months
ended September 30, 2020 were $0.2 million, a decrease of $0.1
million, or 39%, compared to $0.3 million for the three months
ended September 30, 2019. Warehousing and other operating expenses
include Company-owned solar array depreciation and salaries
associated with Company-owned solar arrays, general warehousing
costs, project-related travel and performance related expenses.
Operating loss for the three months ended September 30, 2020 was
$0.7 million, compared to an operating income of $0.2 million for
the three months ended September 30, 2019. The decrease in
operating income was the result of a lack of revenue generated from
operations due to the uncertainty of the COVID-19 pandemic and the
Stay at Home orders issued in the State of Vermont.
Depreciation expenses for the three months ended September 30,
2020 were $0.1 million, compared to $0.2 million for the three
months ended September 30, 2019. Depreciation expenses were stable
when compared to the three months ended September 30, 2019 as the
Company has not had significant capital expenditures for the three
months ended September 30, 2020.
Income tax benefit for the three months ended September 30, 2020
was $0.2 million compared to the income tax provision for the three
months ended September 30, 2019 of $0.5 million.
Net loss for the three months ended September 30, 2020 was $0.5
million, compared to a net income of $0.8 million for the there
months ended September 30, 2019. The net loss was the result of a
lack of revenue generated from operations due to the uncertainty of
the COVID-19 pandemic and the State of Emergency declared by the
State of Vermont. The resulting earnings per share (EPS) for the
three months ended September 30, 2020 was a loss of ($0.13) per
diluted share, compared to a profit of $0.01 for the three months
ended September 30, 2019.
Adjusted EBITDA for the three months ended September 30, 2020
was a loss of $0.5 million, compared to income of $0.4 million for
the three months ended September 30, 2019.
Adjusted EPS for the three months ended September 30, 2020 was a
loss of ($0.10), compared to a profit of $0.08 for the three months
ended September 30, 2019.
Financial Results for the Nine Months
Ended September 30, 2020 Revenue for the nine months
ended September 30, 2020 was $11.7 million, a decrease of $10.2
million, or 46%, compared to $21.9 million for the nine months
ended September 30, 2019.
Gross profit for the nine months ended September 30, 2020 was
$0.6 million, a decrease of $3.4 million, or 86%, compared to $4.0
million for the nine months ended September 30, 2019. The resulting
gross margin was 4.8% for the six months ended September 30, 2020,
compared to 18.4% for the nine months ended September 30, 2019.
General and administrative expenses for the nine months ended
September 30, 2020 were $2.2 million, an increase of $0.2 million,
or 11%, compared to $2.0 million for the nine months ended
September 30, 2019.
Warehousing and other operating expenses for the nine months
ended September 30, 2020 were $0.6 million, a decrease of $0.4
million, or 46%, compared to $1.0 million for the nine months ended
September 30, 2019.
Operating loss for the nine months ended September 30, 2020 was
$2.2 million, compared to an operating income of $1.0 million for
the nine months ended September 30, 2019.
Depreciation expenses for the nine months ended September 30,
2020 were $0.4 million, compared to $0.5 million for the nine
months ended September 30, 2019.
Income tax benefit for the nine months ended September 30, 2020
was $0.6 million compared to the income tax provision for the nine
months ended September 30, 2019 of $1.6 million.
Net loss for the nine months ended September 30, 2020 was $1.8
million, compared to a net loss of $0.7 million for the nine months
ended September 30, 2019. The resulting earnings per share (EPS)
for the nine months ended September 30, 2020 was a loss of ($0.37)
per diluted share, compared to a loss of ($0.17) for the nine
months ended September 30, 2019.
Adjusted EBITDA for the nine months ended September 30, 2020 was
a loss of $1.7 million, compared to income of $1.7 million for the
nine months ended September 30, 2019.
Adjusted EPS for the nine months ended September 30, 2020 was a
loss of ($0.33), compared to a profit of $0.42 for the nine months
ended September 30, 2019.
The reconciliations of EBITDA, Adjusted EBITDA to net (loss)
income, the most directly comparable financial measure calculated
and presented in accordance with GAAP, are shown in the table
below:
Three months ended September
30,
Nine months ended September
30,
2020
2019
2020
2019
Net income (loss)
$
(515,680
)
$
76,155
$
(1,777,342
)
$
(697,909
)
Depreciation and amortization
138,164
155,169
448,188
466,222
Other expense, net
72,554
54,671
218,730
158,217
Income Tax
(209,000)
48,468
(630,585
)
1,555,330
EBITDA
(513,962
)
334,463
(1,741,009
)
1,481,860
Other costs
-
78,388
-
243,819
Adjusted EBITDA
(513,962
)
412,851
(1,741,009
)
1,725,679
Weighted Average shares outstanding
5,298,159
5,474,695
5,298,159
4,071,497
Adjusted Earnings per share
(0.10
)
0.08
(0.33
)
0.42
Certain Non-GAAP Measures We
periodically review the following key non-GAAP measures to evaluate
our business and trends, measure our performance, prepare financial
projections and make strategic decisions.
EBITDA, Adjusted EBITDA and Earnout Adjusted EBITDA
Included in this presentation are discussions and
reconciliations of earnings before interest, income tax and
depreciation and amortization (“EBITDA”) and EBITDA adjusted for
certain non-cash, non-recurring or non-core expenses (“Adjusted
EBITDA”) to net income in accordance with GAAP. Adjusted EBITDA
excludes certain non-cash and other expenses, certain legal
services costs, professional and consulting fees and expenses, and
one-time business combination expenses and certain adjustments. We
believe that these non-GAAP measures illustrate the underlying
financial and business trends relating to our results of operations
and comparability between current and prior periods. We also use
these non-GAAP measures to establish and monitor operational
goals.
These non-GAAP measures are not in accordance with, or an
alternative to, GAAP and should be considered in addition to, and
not as a substitute or superior to, the other measures of financial
performance prepared in accordance with GAAP. Using only the
non-GAAP financial measures, particularly Adjusted EBITDA, to
analyze our performance would have material limitations because
such calculations are based on a subjective determination regarding
the nature and classification of events and circumstances that
investors may find significant. We compensate for these limitations
by presenting both the GAAP and non-GAAP measures of our operating
results. Although other companies may report measures entitled
“Adjusted EBITDA” or similar in nature, numerous methods may exist
for calculating a company’s Adjusted EBITDA or similar measures. As
a result, the methods that we use to calculate Adjusted EBITDA may
differ from the methods used by other companies to calculate their
non-GAAP measures.
About The Peck Company Holdings,
Inc. Headquartered in South Burlington, VT, The Peck
Company Holdings, Inc. is a 2nd-generation family business founded
in 1972 and rooted in values that align people, purpose, and
profitability. Ranked by Solar Power World as one of the leading
commercial solar contractors in the Northeastern United States, the
Company provides EPC services to solar energy customers for
projects ranging in size from several kilowatts for residential
properties to multi-megawatt systems for large commercial and
utility scale projects. The Company has installed over 125
megawatts worth of solar systems since it started installing solar
in 2012 and continues its focus on profitable growth opportunities.
Please visit www.peckcompany.com for additional information.
Forward Looking Statements
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, which are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, as amended. Words or phrases such as "may,"
"should," "expects," "could," "intends," "plans," "anticipates,"
"estimates," "believes," "forecasts," "predicts" or other similar
expressions are intended to identify forward-looking statements,
which include, without limitation, earnings forecasts, effective
tax rate, statements relating to our business strategy and
statements of expectations, beliefs, future plans and strategies
and anticipated developments concerning our industry, business,
operations and financial performance and condition.
The forward-looking statements included in this press release
are based on our current expectations, projections, estimates and
assumptions. These statements are only predictions, not guarantees.
Such forward-looking statements are subject to numerous risks and
uncertainties that are difficult to predict. These risks and
uncertainties may cause actual results to differ materially from
what is forecast in such forward-looking statements, and include,
without limitation, the risk factors described from time to time in
our filings with the Securities and Exchange Commission, including
our Annual Report on Form 10-K.
All forward-looking statements included in this press release
are based on information currently available to us, and we assume
no obligation to update any forward-looking statement except as may
be required by law.
No Offer or Solicitation
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval with respect to the proposed transaction with
Sunworks or otherwise. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities
Act of 1933, as amended, and no offer to sell or solicitation of an
offer to buy shall be made in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
Additional Information and Where to
Find It
In connection with the proposed transaction with Sunworks, on
October 1, 2020, we filed with the SEC a registration statement on
Form S-4 (Registration No. 333-249183) (the “Registration
Statement”), which included a document that serves as a prospectus
of Peck and a joint proxy statement of Sunworks and Peck (the
“Joint Proxy Statement”). These materials have not yet been
declared effective, are not yet final and may be amended. After the
Registration Statement has been declared effective by the SEC, the
Joint Proxy Statement will be delivered to stockholders of Sunworks
and Peck. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, SECURITY
HOLDERS OF SUNWORKS AND PECK ARE URGED TO READ THE REGISTRATION
STATEMENT, THE JOINT PROXY STATEMENT (INCLUDING ALL AMENDMENTS AND
SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED
TRANSACTION FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION.
Free copies of the Joint Proxy Statement, as well as other
filings containing information about Peck and Sunworks, may be
obtained at the SEC’s website, www.sec.gov, when they are filed.
Stockholders and investors will also be able to obtain these
documents, when they are filed, free of charge, by directing a
request to The Peck Company Holdings, Inc., 4050 Williston Road,
#511 South Burlington, Vermont 05403, Attention: Corporate
Secretary, or by calling (802) 658-3378, or to Sunworks, Inc., 1030
Winding Creek Road, Suite 100, Roseville CA 95678, Attention:
Corporate Secretary, or by calling (916) 409-6900, or by accessing
Peck’s website at www.peckcompany.com under the “Company –
Investors” tab or by accessing the Sunworks’ website at
www.sunworksusa.com under the “Investor Relations” tab.
Participants in the
Solicitation
Peck, and its respective directors, and certain of its executive
officers and employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Peck in connection
with the proposed transaction. Information about Peck’s directors
and executive officers is available in its Annual Report on Form
10-K for the fiscal year ended December 31, 2019, which was filed
with the SEC on April 14, 2020. Information regarding all of the
persons who may, under the rules of the SEC, be deemed participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, are
contained in the Joint Proxy Statement regarding the proposed
transaction and other relevant materials to be filed with the SEC
when they become available. Free copies of these documents may be
obtained as described in the preceding paragraph.
The Peck Company Holdings,
Inc. Condensed Consolidated Balance Sheets (Unaudited)
September 30, 2020 and December 31, 2019
September 30, 2020
December 31, 2019
Assets
Current Assets:
Cash
$
118,450
$
95,930
Accounts receivable, net of allowance
9,998,463
7,294,605
Costs and estimated earnings in excess of
billings
1,241,667
1,272,372
Other current assets
147,431
201,326
Total current assets
11,506,011
8,864,233
Property and equipment:
Building and improvements
672,727
672,727
Vehicles
1,283,364
1,283,364
Tools and equipment
517,602
517,602
Solar arrays
6,386,025
6,386,025
8,859,718
8,859,718
Less accumulated depreciation
(2,641,196
)
(2,193,007
)
6,218,522
6,666,711
Other Assets:
Investment in GreenSeed Investors, LLC
4,824,444
-
Investment in Solar Project Partners,
LLC
96,052
-
Captive insurance investment
198,105
140,875
Total assets
$
22,843,134
$
15,671,819
Liabilities and Stockholders’
Equity
Current Liabilities:
Accounts payable, includes bank overdrafts
of $524,324 and $1,496,695 at September 30, 2020 and December 31,
2019, respectively
$
3,245,792
$
4,274,517
Accrued expenses
74,674
119,211
Billings in excess of costs and estimated
earnings on uncompleted contracts
3,301,903
126,026
Due to stockholders
37,315
342,718
Line of credit
4,907,521
3,185,041
Current portion of deferred
compensation
27,880
27,880
Current portion of long-term debt
352,814
426,254
Total current liabilities
11,947,899
8,501,647
Long-term liabilities:
Deferred compensation, net of current
portion
65,633
88,883
Deferred tax liability
467,146
1,098,481
Long-term debt, net of current portion
3,202,541
1,966,047
Total liabilities
15,683,219
11,655,058
Commitments and Contingencies (Note 9)
Stockholders’ equity:
Preferred stock – 0.0001 par value
1,000,000 shares authorized, 200,000 and 0 issued and outstanding
at September 30, 2020 and December 31, 2019, respectively
(Liquidation Value of $5,000,000)
20
-
Common stock – 0.0001 par value 49,000,000
shares authorized, 5,298,159 issued and outstanding as of September
30, 2020 and December 31, 2019, respectively
529
529
Additional paid-in capital-common
stock
5,508,388
412,356
Retained earnings
1,650,978
3,603,876
Total Stockholders’ equity
7,159,915
4,016,761
Total liabilities and stockholders’
equity
$
22,843,134
$
15,671,819
The Peck Company Holdings,
Inc. Condensed Consolidated Statements of Operations
(Unaudited) For the three and nine months ended September 30, 2020
and 2019
Three Months ended
September 30,
Nine Months ended
September 30,
2020
2019
2020
2019
Earned revenue
$
4,966,026
$
11,749,580
$
11,720,932
$
21,878,170
Cost of earned revenue
4,728,328
10,308,936
11,162,439
17,846,681
Gross profit
237,698
1,440,644
558,493
4,031,489
Warehousing and other operating
expenses
180,471
294,154
556,927
1,034,965
General and administrative expenses
709,353
967,196
2,190,763
1,980,886
Total operating expenses
889,824
1,261,350
2,747,690
3,015,851
Operating income
(652,126
)
179,294
(2,189,197
)
1,015,638
Other expenses
Interest expense
(72,554
)
(54,671
)
(218,730
)
(158,217
)
(Loss) income before income taxes
(724,680
)
124,623
(2,407,927
)
857,421
(Benefit) provision for income taxes
(209,000
)
48,468
(630,585
)
1,555,330
Net (loss) income
(515,680
)
76,155
(1,777,342
)
(697,909
)
Net income applicable to preferred
shareholders
(175,556
)
-
(175,556
)
-
Net (loss) income available to share of
common stockholders
$
(691,236
)
$
76,155
$
(1,952,898
)
$
(697,909
)
Net (loss) income available to common
stockholder:
Weighted average shares of common stock
outstanding
Basic and diluted
5,298,159
5,474,695
5,298,159
4,071,497
Basic and diluted
$
(0.13
)
$
0.01
$
(0.37
)
$
(0.17
)
The Peck Company Holdings,
Inc. Condensed Consolidated Statements of Cash Flows
(Unaudited) For the Nine Months Ended September 30, 2020 and
2019
2020
2019
Cash flows from operating activities
Net loss
$
(1,777,342
)
$
(697,909
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation
448,189
466,222
Deferred finance charge amortization
3,277
-
Bad debt expense
164,292
-
Deferred tax (benefit) provision
(631,335
)
1,527,311
Changes in operating assets and
liabilities:
Accounts receivable
(2,868,150
)
(5,103,347
)
Other current assets
53,895
(210,852
)
Costs and estimated earnings in excess of
billings
30,705
(2,709,006
)
Accounts payable
(1,028,725
)
2,085,197
Accrued expenses
(44,537
)
43,425
Billings in excess of costs and estimated
earnings on uncompleted contracts
3,175,877
645,385
Deferred compensation
(23,250
)
(20,165
)
Net cash used in operating activities
(2,497,104
)
(3,973,739
)
Cash flows from investing activities:
Purchase of solar arrays and equipment
-
(39,243
)
Investment costs
-
(129,100
)
Cash surrender value of life insurance
-
(54,689
)
Investment in captive insurance
(57,230
)
(60,063
)
Net cash used in investing activities
(57,230
)
(283,095
)
Cash flows from financing activities:
Net borrowings on line of credit
2,232,580
4,027,476
Payments of line of credit
(510,100
)
-
Proceeds from long-term debt
1,487,624
-
Payments of long-term debt
(327,847
)
(230,629
)
Payments to stockholders
(305,403
)
-
Due to stockholders
-
395,070
Stockholder distributions paid
-
(219,600
)
Net cash provided by financing
activities
2,576,854
3,972,317
Net increase (decrease) in cash
22,520
(284,517
)
Cash, beginning of period
95,930
313,217
Cash, end of period
$
118,450
$
28,700
Supplemental disclosure of cash flow
information
Cash paid during the year for:
Interest
$
215,453
$
158,217
Income taxes
366
5,859
Supplemental schedule of non-cash
investing and financing activities:
Shares of Preferred Stock issued for
investment
$
5,000,000
$
-
Warrants issued for investment
$
96,052
$
-
Preferred dividends satisfied with
distribution from investment
$
175,556
Vehicle purchased and financed
$
-
$
127,161
Accrued S corporation distributions which
have not been paid
$
-
$
266,814
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201112005348/en/
Michael d’Amato IR@peckcompany.com p802-264-2040
ClearThink nyc@clearthink.capital
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