zk1618482.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of report (Date of earliest event reported):  May 9, 2016

 
SOLAREDGE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
 

         
Delaware
 
001-36894
 
20-5338862
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
1 HaMada Street, Herziliya Pituach, Israel
 
4673335
(Address of Principal executive offices)
 
(Zip Code)

Registrant’s Telephone number, including area code: 972 (9) 957-6620
 
Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2 below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 

 
Item 2.02.                      Results of Operations and Financial Condition.

On May 9, 2016, SolarEdge Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2016.  The Company previously announced that the Company would hold a conference call and live webcast at 5:00 p.m., Eastern time, on May 9, 2016, to discuss these results.  A copy of the press release announcing the Company’s financial results for the quarter ended March 31, 2016 is furnished hereto as Exhibit 99.1 and is incorporated herein by reference.

This information, including the exhibits hereto, will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and it will not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.                      Financial Statements and Exhibits.

(d)           List of Exhibits

Exhibit No.
 
Description
Exhibit 99.1
 
Press release dated May 9, 2016
 
 

 
SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
SOLAREDGE TECHNOLOGIES, INC.
 
       
Date:  May 9, 2016
By:
/s/ Ronen Faier  
    Name: Ronen Faier  
    Title: Chief Financial Officer  

 
 
 

 
Exhibit Index

Exhibit No.
 
Description
Exhibit 99.1
 
Press release dated May 9, 2016

 


exhibit_99-1.htm


Exhibit 99.1
 

 
SolarEdge Announces Fiscal Third Quarter Financial Results
 
Fremont, CA — May 9, 2016. SolarEdge Technologies, Inc. (NASDAQ: SEDG) today announced its financial results for the fiscal third quarter ended March 31, 2016.
 
Fiscal Third Quarter 2016 Highlights
 
 
·
Record revenue of $125.2 million, up 0.3% from last quarter and 44.9% year-over-year
 
·
GAAP gross margin of 32.5%
 
·
GAAP net income of $20.8 million
 
·
Non-GAAP net income of $23.3 million
 
·
416 Megawatts (AC) of inverters shipped
 
"We are pleased with another strong quarter despite challenging market conditions. Our growing customer base, continued diligent execution, strong balance sheet and increased cash flow from operations, coupled with our advanced technology, position us well moving forward,” said Guy Sella, Founder, Chairman and CEO of SolarEdge.
 
Revenues
 
The Company reported revenues of $125.2 million, an increase of $0.4 million, or 0.3% from the prior quarter and an increase of $38.8 million or 44.9% from the fiscal third quarter of 2015.
 
Gross margins
 
GAAP gross margin was 32.5%, up from 30.9% in the prior quarter and up from 27.4% in the fiscal third quarter of 2015. Non-GAAP gross margin was 32.7%, up from 31.1% in the prior quarter and 27.6% in the fiscal third quarter of 2015. See “Reconciliation on Non-GAAP Measures” below.
 
Operating expenses
 
GAAP operating expenses were $21.0 million, or 16.8% of revenue, an increase from $19.3 million, which represented 15.5% of revenue in the prior quarter and an increase from $13.9 million, or 16.1% of revenue when compared to the same fiscal quarter of 2015.
 
Operating income
 
Operating income was $19.7 million, up from $19.3 million in the prior quarter and up from operating income of $9.8 million in the fiscal third quarter of 2015.
 
Financial Expenses
 
Financial income of $2.0 million compared to financial expense of $1.0 million in the previous quarter and financial expense of $3.4 million in the same quarter last year.
 
 
 

 
Net Income
 
GAAP net income was $20.8 million, down from $24.1 million in the prior quarter (including a one-time $6.6 million tax asset) and up from $6.0 million in the fiscal third quarter of 2015. Non-GAAP net income was $23.3 million, an increase from $19.8 million in the prior quarter and an increase from $8.7 million in the fiscal third quarter of 2015. See “Reconciliation on Non-GAAP Measures” below.
 
EPS
 
GAAP net diluted earnings per share (“EPS”) was $0.47, down from $0.55 in the prior quarter (including the one-time $6.6 million tax asset) and up from $0.01 in the fiscal third quarter of 2015.  Non-GAAP net diluted EPS was $0.51, an increase from $0.44 in the prior quarter and an increase from $0.20 in the fiscal third quarter of 2015. See “Reconciliation on Non-GAAP Measures” below.
 
Cash
 
At March 31, 2016, cash, cash equivalents, restricted cash and investment in marketable securities, totaled $172.2 million compared to $162.0 million on December 31, 2015. During the fiscal third quarter, the Company generated $15.3 million from operating activities.
 
Outlook for the Fiscal Fourth Quarter 2016
 
The Company provides guidance for the fiscal fourth quarter of 2016 as follows:

 
·
Revenues to be within the range of $125 million to $134 million;
 
·
Gross margins to be within the range of 29.0 % to 31.0%.
 
Conference Call
 
The Company will host a conference call to discuss these results at 5:00 P.M. Eastern Time on Monday, May 9, 2016. The call will be available, live, to interested parties by dialing +1 877-681-3375. For international callers, please dial +1 719-325-4907. The Conference ID number is 4543534.  A live webcast will also be available in the Investors Relations section of SolarEdge website at: http://investors.solaredge.com
 
A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and remain available for approximately 30 calendar days.
 
About SolarEdge
 
SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. The SolarEdge system consists of power optimizers, inverters, storage solutions and a cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations.
 
 
 

 
Use of Non-GAAP Financial Measures
 
The Company has presented certain non-GAAP financial measures in this release, including non-GAAP gross margin, non-GAAP net income and non-GAAP net diluted EPS. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this press release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

For a reconciliation of non-GAAP measures to their most comparable GAAP measures, please see “Reconciliation on Non-GAAP Measures” below.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward looking statements include information, among other things, concerning: our projection of future
revenues and gross margin, our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; new products and services; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.

 
 

 
Forward-looking statements are only predictions based on our current expectations and our projections about future events. These forward looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual revenues, gross margins, other financial results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward looking statements. Given these factors, you should not place undue reliance on these forward-looking statements. These factors include, but are not limited to, the matters discussed in Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2015 and, Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, when it becomes available, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of May 9, 2016. SolarEdge undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

Investor Contacts
 
SolarEdge Technologies, Inc.
Ronen Faier, Chief Financial Officer
investors@solaredge.com
+1 510-498-3263

Sapphire Investor Relations, LLC
Erica Mannion or Michael Funari
investors@solaredge.com
+1 617-542-6180

 
 

 

SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
 
   
Three months ended
March 31,
   
Nine months ended
March 31,
 
   
2016
   
2015
   
2016
   
2015
 
   
Unaudited
   
Unaudited
 
                         
Revenues
  $ 125,205     $ 86,399     $ 365,091     $ 226,658  
Cost of revenues
    84,471       62,698       252,248       173,146  
                                 
Gross profit
    40,734       23,701       112,843       53,512  
                                 
Operating expenses:
                               
                                 
Research and development, net
    8,709       5,490       23,999       15,317  
Sales and marketing
    8,826       6,422       25,903       17,541  
General and administrative
    3,460       1,990       9,066       4,270  
                                 
Total operating expenses
    20,995       13,902       58,968       37,128  
                                 
Operating income
    19,739       9,799       53,875       16,384  
                                 
Financial income (expenses), net
    2,029       (3,436 )     998       (3,378 )
                                 
Income before taxes on income
    21,768       6,363       54,873       13,006  
                                 
Taxes on income (tax benefit)
    969       398       (4,463 )     1,146  
                                 
Net income
  $ 20,799     $ 5,965     $ 59,336     $ 11,860  

 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
   
March 31,
   
June 30,
 
   
2016
   
2015
 
   
Unaudited
       
ASSETS
           
CURRENT ASSETS:
           
Cash and cash equivalents
  $ 84,070     $ 144,750  
Restricted cash
    944       3,639  
Marketable Securities
    44,059       -  
Trade receivables, net
    56,145       35,428  
Prepaid expenses and other accounts receivable
    18,613       32,645  
Inventories
    85,514       73,950  
Total current assets
    289,345       290,412  
PROPERTY AND EQUIPMENT, NET
    26,213       14,717  
LONG-TERM ASSETS:
               
Long-term marketable securities
    43,151       -  
Long-term prepaid expenses and lease deposits
    440       529  
Deferred tax assets, net
    6,486       -  
Intangible assets, net
    737       -  
      50,814       529  
Total assets
  $ 366,372     $ 305,658  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
CURRENT LIABILITIES:
               
Trade payables
  $ 45,138     $ 80,684  
Employees and payroll accruals
    12,358       6,814  
Warranty obligations
    13,510       9,431  
Deferred revenues
    2,642       1,676  
Accrued expenses and other accounts payable
    7,797       6,987  
Total current liabilities
    81,445       105,592  
LONG-TERM LIABILITIES
               
Warranty obligations
    33,149       22,448  
Deferred revenues
    13,266       8,289  
Lease incentive obligation
    2,265       2,385  
Total long-term liabilities
    48,680       33,122  
COMMITMENTS AND CONTINGENT LIABILITIES
               
STOCKHOLDERS’ EQUITY:
               
Share capital
    4       4  
Additional paid-in capital
    296,480       287,152  
Accumulated other comprehensive income (loss)
    417       (222 )
Accumulated deficit
    (60,654 )     (119,990 )
Total stockholders’ equity
    236,247       166,944  
Total liabilities and stockholders’ equity
  $ 366,372     $ 305,658  

 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 
   
Nine months ended
March 31,
 
   
2016
   
2015
 
   
Unaudited
 
Cash flows provided by (used in) operating activities:
           
Net income
  $ 59,336     $ 11,860  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation
    2,601       1,647  
Amortization of intangible assets
    63       -  
Amortization of premiums on available-for-sale marketable securities
    209       -  
Stock-based compensation related to employees and non-employees consultants stock options
    6,689       1,750  
Financial income, net related to term loan
    -       (992 )
Remeasurement of warrants to purchase preferred and common stock
    -       2,065  
Changes in assets and liabilities:
               
Inventories
    (11,446 )     (39,071 )
Prepaid expenses and other accounts receivable
    13,186       (12,198 )
Trade receivables, net
    (20,681 )     (25,993 )
Deferred tax assets, net
    (6,627 )     -  
Trade payables
    (35,554 )     39,604  
Employees and payroll accruals
    5,517       883  
Warranty obligations
    14,780       9,718  
Deferred revenues
    5,942       2,116  
Accrued expenses and other accounts payable
    497       2,733  
Lease incentive obligation
    (120 )     2,243  
Net cash provided by (used in) operating activities
    34,392       (3,635 )
                 
Cash flows used in investing activities:
               
Purchase of property and equipment
    (11,545 )     (8,254 )
Purchase of intangible assets
    (800 )     -  
Decrease (increase) in restricted cash
    2,695       (1,973 )
Decrease (increase) in short and long-term lease deposits
    23       (24 )
Purchases of available-for-sale marketable securities
    (88,883 )     -  
Maturities of available-for-sale marketable securities
    1,000       -  
Net cash used in investing activities
    (97,510 )     (10,251 )
                 
Cash flows from financing activities:
               
Proceeds from short-term bank loans
    -       23,000  
Repayments of short term loan
    -       (36,326 )
Repayments of term loan
    -       (5,919 )
Proceeds from issuance of stock
    -       24,712  
Proceeds from IPO, net
    -       133,944  
Proceeds from exercise of employees and non-employees consultants stock options
    2,639       46  
Net cash provided by financing activities
    2,639       139,457  
Increase (decrease) in cash and cash equivalents
    (60,479 )     125,571  
Cash and cash equivalents at the beginning of the period
    144,750       9,754  
Erosion due to exchange rate differences
    (201 )     (121 )
Cash and cash equivalents at the end of the period
  $ 84,070     $ 135,204  

 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(unaudited)
 
Reconciliation of Non-GAAP Financial Measures
 
   
Reconciliation of GAAP to Non-GAAP Gross Profit
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
                               
Gross profit (GAAP)
    40,734       38,582       23,701       112,843       53,512  
Stock-based compensation
    246       209       142       635       254  
Gross profit (Non-GAAP)
    40,980       38,791       23,843       113,478       53,766  
                                         
   
Reconciliation of GAAP to Non-GAAP Gross Margin
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Gross margin (GAAP)
    32.5 %     30.9 %     27.4 %     30.9 %     23.6 %
Stock-based compensation
    0.2 %     0.2 %     0.2 %     0.2 %     0.1 %
Gross margin (Non-GAAP)
    32.7 %     31.1 %     27.6 %     31.1 %     23.7 %
                                         
   
Reconciliation of GAAP to Non-GAAP Operating expenses
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Operating expenses (GAAP)
    20,995       19,320       13,902       58,968       37,128  
Stock-based compensation R&D
    724       518       184       1,637       450  
Stock-based compensation S&M
    842       749       292       2,207       546  
Stock-based compensation G&A
    819       750       354       2,210       502  
Operating expenses (Non-GAAP)
    18,610       17,303       13,072       52,914       35,630  
                                         
   
Reconciliation of GAAP to Non-GAAP Operating income
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Operating income (GAAP)
    19,739       19,262       9,799       53,875       16,384  
Stock-based compensation
    2,631       2,226       972       6,689       1,752  
Operating income (Non-GAAP)
    22,370       21,488       10,771       60,564       18,136  
                                         
   
Reconciliation of GAAP to Non-GAAP Finance expenses
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Finance expenses (Income) (GAAP)
    (2,029 )     959       3,436       (998 )     3,378  
Warrants remeasurement
    ----       ----       1,800       ----       2,065  
Finance expenses (Non-GAAP)
    (2,029 )     959       1,636       (998 )     1,313  
                                         
   
Reconciliation of GAAP to Non-GAAP Tax on income (Tax benefit)
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Tax on income (Tax benefit) (GAAP)
    969       (5,802 )     398       (4,463 )     1,146  
Tax benefit due to deferred tax asset
    100       6,527       ----       6,627       ----  
Tax on income (Tax benefit) (Non-GAAP)
    1,069       725       398       2,164       1,146  
                                         
   
Reconciliation of GAAP to Non-GAAP Net income
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Net income (GAAP)
    20,799       24,105       5,965       59,336       11,860  
Stock-based compensation
    2,631       2,226       972       6,689       1,752  
Warrants remeasurement
    ----       ----       1,800       ----       2,065  
Tax benefit due to deferred tax asset
    (100 )     (6,527 )     ----       (6,627 )     ----  
Net income (Non-GAAP)
    23,330       19,804       8,737       59,398       15,677  
 
 
 

 
 
   
Reconciliation of GAAP to Non-GAAP Net basic EPS
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Net basic earnings per share (GAAP)
    0.52       0.61       0.01       1.49       0.02  
Stock-based compensation
    0.06       0.06       0.03       0.17       0.05  
Warrants remeasurement
    ----       ----       0.04       ----       0.07  
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods
    ----       ----       0.14       ----       0.34  
Tax benefit due to deferred tax asset
    ----       (0.17 )     ----       (0.16 )     ----  
Net basic earnings per share (Non-GAAP)
    0.58       0.50       0.22       1.50       0.48  
                                         
   
Reconciliation of GAAP to Non-GAAP No. of shares used in net basic EPS
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Number of shares used in computing net basic earnings per share (GAAP)
    40,362,093       39,511,967       2,822,893       39,725,227       2,817,090  
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods
    ----       ----       36,297,931       ----       30,025,279  
Number of shares used in computing net basic earnings per share (Non-GAAP)
    40,362,093       39,511,967       39,120,824       39,725,227       32,842,369  
                                         
   
Reconciliation of GAAP to Non-GAAP Net diluted EPS
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Net diluted earnings per share (GAAP)
    0.47       0.55       0.01       1.34       0.01  
Stock-based compensation
    0.04       0.03       0.01       0.11       0.05  
Warrants remeasurement
    ----       ----       0.04       ----       0.05  
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods
    ----       ----       0.14       ----       0.32  
Tax benefit due to deferred tax asset
    ----       (0.14 )     ----       (0.14 )     ----  
Net diluted earnings per share (Non-GAAP)
    0.51       0.44       0.20       1.31       0.43  
                                         
   
Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS
 
   
Three months ended
   
Nine months ended
 
   
Mar 31, 2016
   
Dec 31, 2015
   
Mar 31, 2015 (1)
   
Mar 31, 2016
   
Mar 31, 2015 (1)
 
Number of shares used in computing net diluted earnings per share (GAAP)
    44,577,901       44,007,348       7,099,046       44,347,071       5,534,903  
Stock-based compensation
    1,071,876       1,341,335       647,474       1,033,227       670,669  
Warrants remeasurement
    ----       0       103,777       0       36,839  
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods
    ----       ----       36,297,931       ----       30,025,279  
Number of shares used in computing net diluted earnings per share (Non-GAAP)
    45,649,777       45,348,683       44,148,228       45,380,298       36,267,690  
 
(1) Assumes shares of common stock outstanding after accounting for the automatic conversion of the shares of preferred stock then outstanding into common stock at the beginning of fiscal year 2015.