Press Release

The Peck Company Holdings Reports 2019 Results

Company Release - 3/30/2020 4:00 PM ET

Revenue Growth of 77% to $28.2 Million

Operating Income of $1.0 Million

Net Loss of $0.4 Million

Adjusted EBITDA of $1.9 Million

Adjusted EPS of $0.42

SOUTH BURLINGTON, Vt.--(BUSINESS WIRE)-- 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 fourth quarter (“Q4 2019”) and year ended December 31, 2019.

Key Financial Highlights for Calendar (Full Year) 2019

  • Revenues increased 77% to $28.2 million, compared to $15.9 million in 2018
  • Gross profit increased 33% to $4.2 million, compared to $3.1 million in 2018
  • Operating income decreased 17% to $1.0 million, compared to $1.2 million in 2018; primarily due to the cost associated with being a public company
  • Adjusted EBITDA increased by 12% to $1.9 million, compared to $1.7 million in 2018
  • $30 Million in backlog, projects currently under contract and anticipated contracts to-date

Key Business Highlights for Calendar (Full Year) 2019

  • Commenced additional growth strategy of acquiring solar arrays to resell or operate with recurring revenue
  • Awarded 95% of the projects it has reviewed for construction
  • Completed 25 projects totaling more than 35 Megawatts (MWs)
  • Executed $17 million agreement for 7 MWs with a customer who has a backlog of several hundred million dollars in new solar projects
  • Appointed renewable energy expert Daniel Dus to Board of Directors
  • Named to Solar Power World’s top solar contractors list
  • Completed business combination with Jensyn Acquisition Corp. in becoming a publicly-traded company on the NASDAQ

Management Commentary
The Peck Company Holdings Chief Executive Officer, Jeffrey Peck, commented, “2019 was a tremendous year for our business as demonstrated by our strong 77% revenue growth and continued operating profitability. It was also a transformational year for our company, as we became publicly-traded with a NASDAQ listing. Our desire to be public was driven by improved access to capital to grow our business and the potential ability to utilize our stock as a currency for acquisitions. After installing more than 125 MWs of solar energy since 2012, we believe that we are well-positioned for what we believe to be the coming revolution to an all renewable energy economy. We recognize that the coronavirus pandemic has disrupted the global economy and created unprecedented uncertainty. While as of yet, we have not had any projects or contracts cancelled due to the global pandemic, cancellations are certainly a possibility. Regardles, we do believe some are likely to have their timing pushed out, due to the wide-ranging impact of the pandemic. Subject to the unknown impacts of the pandemic, we do remain cautiously optimistic for 2020 and beyond, with our multi-pronged growth strategy of (1) organic growth by leveraging existing relationships to expand across the Northeast; (2) accretive M&A of profitable businesses to expand geographic footprint, capabilities, and cash flow; and (3) acquisition of solar arrays to construct and resell at a profit or to hold for recurring revenue. Additionally for 2020, we will be raising our visibility within the investment community by strengthening our relationships and increasing awareness with the goal of ultimately enhancing shareholder value.”

2020 Outlook
The sum of Peck’s backlog, projects currently under contract, and anticipated contracts to date are already near $30 million. Peck is not typically bidding competitively for projects, but instead engages with its customers over a long-term basis to develop project designs and to help customers reduce project costs. Historically, Peck has been awarded over 95% of the project it has reviewed for construction. The upfront assistance and coordination with its clients can be considered Peck’s marketing effort, which is a significant advantage for converting a high percentage of our pipeline projects.

In addition, Peck is engaging existing customers and new partners outside of Vermont as part of its planned 2020 expansion across the Northeast. Peck has already identified over $20 million of potential opportunities in other states. .

Financial Results for the Year Ended December 31, 2019
Revenue for the year ended December 31, 2019 was $28.2 million, an increase of $12.3 million, or 77%, compared to $15.9 million for the year ended December 31, 2018. The increase in revenue was primarily due to an increase in the number of projects and MWs completed. Approximately 77% of revenue in the year ended December 31, 2019 was from solar installations, compared to 62% of revenues in the year ended December 31, 2018.

Gross profit for the year ended December 31, 2019 was $4.2 million, an increase of $1.0 million, or 33%, compared to $3.1 million for the year ended December 31, 2018. The resulting gross margin was 14.8% for the year ended December 31, 2019, compared to 19.8% for the year ended December 31, 2018. Gross margins for the year ended December 31, 2019 were lower as a result of acquiring projects directly from our development partners at the notice to proceed phase. This strategy results in an increase in revenue and gross profit but does deteriorate the gross margin. The Company will continue to deploy this strategy to gain control of projects at an earlier stage and increase the predictability of its revenue stream.

General and administrative expenses for the year ended December 31, 2019 were $2.3 million, an increase of $1.1 million, or 89%, compared to $1.2 million for the year ended December 31, 2018. The increase in general and administration expenses were primarily due to the cost associated with being a public company, as the expenses for accounting, legal and professional services increased significantly in the year ended December 31, 2019 compared to the year ended December 31, 2018.

Operating income for the year ended December 31, 2019 was $1.0 million, a decrease of $0.2 million, or 17%, compared to $1.2 million for the year ended December 31, 2018. The decrease in operating income was primarily due to the cost associated with being a public company, as the expenses for accounting, legal and professional services increased significantly in the year ended December 31, 2019 compared to the year ended December 31, 2018.

Depreciation expenses for the year ended December 31, 2019 were $0.6 million, an increase of $0.1 million, or 16%, compared to $0.5 million for the year ended December 31, 2018. Depreciation expenses increased primarily due to the purchase of additional equipment for the construction of Peck’s solar array assets.

Interest expense for the year ended December 31, 2019 was $0.3 million, an increase of $0.2 million, or 132%, compared to $0.1 million for the year ended December 31, 2018. Interest exepnses increased primarily due to increased utilization of Peck’s line of credit.

Net loss for the year ended December 31, 2019 was $0.4 million, compared to a net income of $1.1 million for the year ended December 31, 2018. The net loss for the year ended December 31, 2019 was primarily due to a $1.1 million provision for income taxes, compared to nil for the year ended December 31, 2018.

Pro-forma net income, excluding such a provision for income taxes but taking into effect a normalized tax rate, for the year ended December 31, 2019 was $0.5 million, compared to a net income of $0.8 million for the year ended December 31, 2018. The resulting pro-forma earnings per share (EPS) for the year ended December 31, 2019 was $0.11 per diluted share, compared to $0.33 per diluted share (EPS) for the year ended December 31, 2018.

Adjusted EBITDA for the year ended December 31, 2019 was $1.9 million, an increase of $0.2 million, or 12%, compared to $1.7 million for the year ended December 31, 2018.

Adjusted EPS for the year ended December 31, 2019 was $0.42, compared to $0.52 for the year ended December 31, 2018.

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:

 

 

Year ended
December 31,

 

 

 

2019

 

 

2018

 

Net income (loss)

 

$

(427,759

)

 

$

1,056,222

 

Depreciation and amortization

 

 

621,234

 

 

 

537,484

 

Interest expense

 

 

313,068

 

 

 

134,810

Income Tax

 

 

1,104,840

 

 

 

250

 

EBITDA

 

 

1,611,383

 

 

 

1,728,766

 

Other costs

 

 

273,819

 

 

 

0

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

 

1,885,202

 

 

 

1,676,989

 

 

 

 

 

 

 

 

 

 

Weighted Average shares outstanding

 

 

4,447,681

 

 

 

3,234,501

 

 

 

 

 

 

 

 

 

 

Adjusted EPS

 

 

0.42

 

 

 

0.52

 

Conference Call Information

Fourth Quarter and Year End 2019 Earnings Results Conference Call

Date: Monday, March 30, 2020

Time: 4:30 PM ET

Dial-in: 1-877-407-3974 (Domestic)

1-201-689-8040 (International)

 

Webcast: https://www.webcaster4.com/Webcast/Page/2298/33820

For those unable to participate during the live broadcast, a replay of the call will also be available from 7:30 p.m. Eastern Time on March 30, 2020 through 11:59 p.m. Eastern Time on April 13, 2020 by dialing 1-877-481-4010 (domestic) and 1-919-882-2331 (international) and referencing the replay pin number: 33820.

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.

The Peck Company Holdings, Inc.

Consolidated Balance Sheets

December 31, 2019 and 2018

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash

 

$

95,930

 

 

$

313,217

 

Accounts receivable, net of allowance

 

 

7,363,605

 

 

 

2,054,413

 

Costs and estimated earnings in excess of billings

 

 

1,272,372

 

 

 

718,984

 

Due from stockholders

 

 

0

 

 

 

2,858

 

Other current assets

 

 

201,326

 

 

 

0

 

Total current assets

 

 

8,933,233

 

 

 

3,089,472

 

 

 

 

 

 

 

 

 

 

Property and equipment:

 

 

 

 

 

 

 

 

Building and improvements

 

 

672,727

 

 

 

666,157

 

Vehicles

 

 

1,283,364

 

 

 

1,147,371

 

Tools and equipment

 

 

517,602

 

 

 

493,760

 

Solar arrays

 

 

6,386,025

 

 

 

6,386,025

 

 

 

 

8,859,718

 

 

 

8,693,313

 

Less accumulated depreciation

 

 

(2,193,007

)

 

 

(1,571,774

)

 

 

 

6,666,711

 

 

 

7,121,539

 

Other Assets:

 

 

 

 

 

 

 

 

Captive insurance investment

 

 

140,875

 

 

 

80,823

 

Due from stockholders

 

 

0

 

 

 

250,000

 

Deferred finance charges

 

 

365,035

 

 

 

0

 

Cash surrender value – life insurance

 

 

0

 

 

 

224,530

 

 

 

 

505,910

 

 

 

555,353

 

Total assets

 

$

16,105,854

 

 

$

10,766,364

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

3,949,458

 

 

$

1,495,785

 

Accrued expenses

 

 

119,211

 

 

 

236,460

 

 

 

 

 

 

 

 

 

 

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

126,026

 

 

 

180,627

 

Accrued losses on contract in progress

 

 

0

 

 

 

9,128

 

Due to stockholders

 

 

342,718

 

 

 

33,463

 

Line of credit

 

 

3,510,100

 

 

 

972,524

 

Current portion of deferred compensation

 

 

27,880

 

 

 

27,068

 

Current portion of long-term debt

 

 

426,254

 

 

 

410,686

 

Total current liabilities

 

 

8,501,647

 

 

 

3,365,730

 

 

 

 

 

 

 

 

 

 

Long-term liabilities:

 

 

 

 

 

 

 

 

Deferred compensation, net of current portion

 

 

88,883

 

 

 

116,711

 

Deferred tax liability

 

 

1,098,481

 

 

 

0

 

Long-term debt, net of current portion

 

 

1,986,050

 

 

 

2,212,885

 

Total liabilities

 

 

3,173,414

 

 

 

2,329,596

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock – 0.0001 par value 1,000,000 shares authorized, 0 issued and outstanding

 

 

0

 

 

 

0

 

Common stock – 0.0001 par value 49,000,000 shares authorized, 5,298,159 and 3,234,501 issued and outstanding as of December 31, 2019 and 2018 , respectively

 

 

529

 

 

 

323

 

Additional paid-in capital

 

 

826,388

 

 

 

552,630

 

Retained earnings

 

 

3,603,876

 

 

 

4,518,085

 

Total Stockholders’ equity

 

 

4,430,793

 

 

 

5,071,038

 

Total liabilities and stockholders’ equity

 

$

16,105,854

 

 

$

10,766,364

 

The Peck Company Holdings, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2019 and 2018

 

 

 

 

 

 

(reclassified)

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

Earned revenue

 

$

28,221,569

 

 

$

15,956,097

 

Cost of earned revenue

 

 

24,050,197

 

 

 

12,806,767

 

Gross profit

 

 

4,171,372

 

 

 

3,149,330

 

 

 

 

 

 

 

 

 

 

Warehouse and other operating expenses

 

 

864,359

 

 

 

732,196

 

General and administrative expenses

 

 

2,316,900

 

 

 

1,226,102

 

Total operating expenses

 

 

3,181,259

 

 

 

1,958,298

 

Operating income

 

 

990,113

 

 

 

1,191,032

 

 

 

 

 

 

 

 

 

 

Other income (expenses)

 

 

 

 

 

 

 

 

Interest expense

 

 

(313,068

)

 

 

(134,810

)

Total other income (expenses)

 

 

(313,068

)

 

 

(134,810

)

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

677,045

 

 

 

1,056,222

 

Provision for income taxes

 

 

1,104,840

 

 

 

250

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(427,795

)

 

$

1,055,972

 

 

 

 

 

 

 

 

 

 

Pro forma information

 

 

 

 

 

 

 

 

Net (loss) income

 

$

677,045

 

 

$

1,056,222

 

Income tax expense

 

 

187,677

 

 

 

292,785

 

 

 

$

489,368

 

 

$

763,437

 

Net (loss) income per share

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

4,447,681

 

 

 

3,234,501

 

Diluted

 

 

4,447,681

 

 

 

3,234,501

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.10

)

 

$

0.33

 

Diluted

 

$

(0.10

)

 

$

0.33

 

The Peck Company Holdings, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2019 and 2018

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(427,795

)

 

$

1,055,972

 

 

 

 

 

 

 

 

 

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation

 

 

621,234

 

 

 

537,484

 

Provision for deferred income taxes

 

 

1,098,481

 

 

 

0

 

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(5,309,192

)

 

 

1,071,945

 

Prepaid expenses

 

 

(201,326

)

 

 

0

 

Costs and estimated earnings in excess of billings

 

 

(553,388

)

 

 

(314,885

)

Accounts payable

 

 

2,453,673

 

 

 

(707,687

)

Accrued expenses

 

 

(117,249

)

 

 

(87,677

)

Billings in excess of costs and estimated earnings on uncompleted contracts

 

 

(54,601

)

 

 

(73,556

)

Accrued losses on contract in progress

 

 

(9,128

)

 

 

9,128

 

Deferred compensation

 

 

(27,005

)

 

 

143,768

 

Net cash (used in ) provided by operating activities

 

 

(2,526,296

)

 

 

1,634,492

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of solar arrays and equipment

 

 

(166,405

)

 

 

(2,729,089

)

Cash surrender value – life insurance

 

 

224,530

 

 

 

(83,897

)

 

 

 

 

 

 

 

 

 

Investment in captive insurance

 

 

(60,052

)

 

 

(44,823

)

Net cash used in investing activities

 

 

(1,927

)

 

 

(2,857,809

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Net borrowings on line of credit

 

 

2,561,690

 

 

 

972,524

 

Proceeds from long-term debt

 

 

136,089

 

 

 

930,395

 

Payments of long-term debt

 

 

(347,356

)

 

 

(387,622

)

Due to stockholders

 

 

309,255

 

 

 

(245,715

)

Recapitalization costs paid

 

 

(129,100

)

 

 

0

 

Stockholder distributions paid

 

 

(219,600

)

 

 

(493,829

)

Net cash provided by financing activities

 

 

2,310,936

 

 

 

1,021,468

 

Net decrease in cash

 

 

(217,287

)

 

 

(447,564

)

Cash, beginning of year

 

 

313,217

 

 

 

760,781

 

Cash, end of year

 

$

95,930

 

 

$

313,217

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid during the year for:

 

 

 

 

 

 

 

 

Interest

 

$

244150

 

 

$

134,810

 

Income taxes

 

 

5,859

 

 

 

250

 

 

 

 

 

 

 

 

 

 

Supplemental schedule of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

Vehicles purchased and financed

 

$

126,793

 

 

$

189,563

 

Accrued S corporation distributions which have not been paid

 

$

266,814

 

 

 

 

 

 

Michael d’Amato
[email protected]
p802-264-2040

Source: The Peck Company Holdings, Inc.