Second Quarter 2009 Operating Expenses of $4.3 Million, $1.8 Million Lower Than Second Quarter 2008 and $1.4 Million Lower Than First Quarter 2009
LOS GATOS, Calif., July 30, 2009 (GLOBE NEWSWIRE) -- Akeena Solar, Inc. (Nasdaq:AKNS), a leading designer and installer of solar power systems, announced results for the second quarter ended June 30, 2009.
"As a result of the cost reduction measures we took over the last few quarters, our operating expenses were down 30% from last year and 24% from the first quarter, reducing our cash burn to approximately $2.5 million for the quarter," said Barry Cinnamon, president and chief executive officer of Akeena Solar. "We managed our working capital effectively, ending the quarter with $7.0 million of cash, an increase of $4.1 million from the end of the first quarter. In addition, our net cash position (cash less our credit facility) improved $8.1 million since year-end. Our increased backlog, lower cash burn and commitment to tight expense control are evidence of the continued progress we are making towards sustainable profitability.
"Residential installations continued to provide the majority of our $5.9 million of total revenue in the second quarter. Bookings picked up throughout the quarter and we ended the quarter with a backlog of $7.5 million as compared to $4.8 million as of the end of the first quarter. Falling panel prices, higher net incentives and higher electricity rates are improving the economics for residential customers. As a result, they are enjoying faster paybacks than ever before. Rooftop solar power, long the province of early adopters, is moving closer to the mainstream in sunny areas of the country with high electric rates," continued Cinnamon.
"We've made the strategic decision to focus our residential and commercial installation work in California, and employ a multi-channel distribution strategy to sell Andalay AC and DC panels in all other markets. The second quarter marked the beginning of this strategy; and we started to generate revenue from sales to Morgan Stanley Solar Solutions and to solar installers in a number of states. We are very encouraged by our progress and believe that the distribution business will become an important contributor to revenue over time," concluded Cinnamon.
Second Quarter Financial Results
Net loss for the second quarter of 2009 was $4.7 million, or $0.14 per share, compared to a net loss of $5.1 million, or $0.18 per share, in the second quarter of 2008, and a net loss of $5.1 million, or $0.17 per share, in the first quarter of 2009. The second quarter net loss includes a $1.5 million non-cash charge that represents mark-to-market adjustments to reflect the fair value of common stock warrants accounted for as a liability in accordance with provisions of the warrant agreements. Excluding the non-cash charge, net loss for the second quarter of 2009 was $3.1 million, or $0.09 per share, an improvement of $0.09 per share compared to the second quarter of 2008 primarily due to operating expense reductions of $1.8 million. The first quarter of 2009 also included a $1.5 million non-cash charge related to the fair value adjustment of common stock warrants. Excluding the non-cash charge, net loss for the first quarter of 2009 was $3.5 million, or $0.12 per share. Comparing the second quarter to the first quarter of 2009 and excluding the non-cash charges in both periods, net loss per share improved $0.03 primarily due to operating expense reductions of $1.4 million partially offset by lower gross profit. Average common and equivalent shares outstanding during the second quarter of 2009 were 33.7 million.
Net loss for the first six months of 2009 was $9.8 million, or $0.32 per share, compared to net loss of $9.7 million, or $0.35 per share, for the same period last year. The non-cash adjustment to the fair value of common stock warrants for the first half of 2009 was $3.1 million. Excluding the non-cash charge, net loss for the first six months of 2009 was $6.7 million, or $0.22 per share, an improvement of $3.0 million or $0.13 per share compared to the same period last year, primarily due to operating expense reductions of $3.3 million.
Net sales for the second quarter of 2009 were $5.9 million compared to $7.1 million in net sales in the second quarter of 2008, and $7.6 million in the first quarter of 2009. The decline in the second quarter over the same quarter last year and the prior quarter reflects our decision to exit the direct installation business on the East coast and lower commercial revenue due to the tight credit market and overall economic conditions. Approximately $424,000 of the decline from last year and $901,000 of the decline from the first quarter were attributable to the absence of East coast installations. Residential installations in the second quarter of 2009 were $4.7 million, compared to $5.5 million in the second quarter last year and $6.7 million in the first quarter of 2009. Commercial sales were $665,000 in the second quarter of 2009 compared to $1.6 million in the second quarter of 2008, and $915,000 in the first quarter. The balance of second quarter 2009 revenue was from the distribution of Andalay solar panels and sales of other solar panels. Net sales for the first six months of 2009 were $13.5 million, compared to $19.3 million in the same period last year reflecting a decline in commercial revenue of $6.8 million.
"Lower panel prices and lower direct labor costs contributed to an improvement in our gross profit margin compared to last year which, at 19.7%, was in the center of our target range of 15% to 25% of revenue. We expect gross margins to increase modestly in the second half of the year as we benefit from falling panel prices," said Gary Effren, chief financial officer of Akeena Solar. Gross profit for the second quarter of 2009 was $1.2 million, or 19.7% of sales, compared to $1.0 million, or 14.8% of sales, in the second quarter of 2008 and $2.3 million, or 29.7% of sales in the first quarter of 2009. The decline in gross margin compared to the first quarter of 2009 reflects higher subcontractor costs associated with our exit from the Colorado direct installation business, lower margin panel sales and a lower residential average selling price.
