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Thursday, November 17, 2022

Headwinds rocked iSun Q3 results as it looks to better days under the IRA

Wall Street’s charging bull. Credit: Flickr/Sam Validi

Solar supply chain constraints, long permitting cycles for commercial projects, and continued delays in finalizing major utility contracts are clouding the near-term outlook for solar EPC company iSun.

The company reported a third quarter net loss of -$4.9 million, or -$0.36 per share. That compared with a net loss of -$0.7 million, or -$0.08 per share a year earlier. 

Through the first nine months of 2022, the company reported a net loss of -$13.5 million or -$0.98 per share. That compared to a net loss of -$5.1 million or -$0.60 per share in the same period in 2021.

The company said that recent investments position it to “respond effectively” to growing demand for solar energy and automotive electrification. It said it expects the Inflation Reduction Act of 2022 to provide a “more favorable environment” for solar development and EV infrastructure over the next 10 years.

In a statement, Jeffrey Peck, iSun CEO, said “we believe that the support and stability provided in the recent climate change legislation removes uncertainty and impediments to financing and constructing” projects that align with the company’s business plan.

Even so, the Vermont-based company said it would extend revenue recognition of anticipated 2022 projects into 2023. And it said it now anticipates total revenue for full-year 2022 to fall in the range of $70-75 million, up 60-65% from full-year 2021.

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In early November, iSun finalized a new debt facility of $25 million, which will be used to refinance its current debt and provide growth capital. The company said it was focused on strengthening its balance sheet to improve its cash position and liquidity ratios. And it said its collections effort “remain strong” enabling it to invest in inventory to meet customer backlog and ease ongoing supply chain risks.

Under terms of the debt agreement, an initial $12.5 million was immediately available to the company. The remaining $12.5 million (less an original issue discount of 6% and transaction expenses) would be available in a subsequent funding, subject to funding conditions. The funding was provided by a single institutional investor.

As of September 30, iSun had cash on hand of around $3.8 million and a working capital deficit of some $5.3 million. In addition, it used roughly $7.6 million in cash to support operations during the first nine months of the year, and said it has relied “predominantly” on operating cash flow, borrowings from its credit facilities, and sales of common stock.

It said that the combination of existing cash and cash equivalents plus common stock sales would be enough to meet its operating cash requirements “for at least 12 months.”

The earnings statement reported that iSun’s residential division had customer orders of around $25.8 million expected to be completed within three to five months. Its commercial division, meanwhile, had a contracted backlog of some $12.6 million expected to be completed within eight to nine months, and its industrial division had a contracted backlog of around $140.7 million expected to be completed within 12-18 months. iSun said its utility division had 1,300 MW of projects currently under development with an estimated commencement date in the second quarter of 2023.

James Mackreides
James Mackreides
'Mac' is a short tempered former helicopter pilot , now a writer based in Sofia, Bulgaria. Loves dogs, the outdoors and staying far away from the ocean.

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