zk1516759.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 7, 2015
 

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 Instruction A.2. below):
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
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 7, 2015, SolarEdge Technologies, Inc., a Delaware corporation (the “Company”), issued a press release announcing earnings for the third quarter ended March 31, 2015. A copy of the earnings press release is furnished as Exhibit 99.1 to this current report.
 
On April 23, 2015, the Company also announced that it would hold a conference call and live webcast at 5:00 p.m., Eastern Time, on May 7, 2015, to discuss these results.
 
This information, including Exhibit 99.1, 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) The following exhibit is being furnished with this Current Report on Form 8-K.
 
Exhibit Number
 
Description
   
99.1
 
SolarEdge Technologies, Inc. Press Release, dated May 7, 2015.

 
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 12, 2015
By:
/s/ Ronen Faier  
    Name: Ronen Faier  
    Title:   Chief Financial Officer  
       

 
EXHIBIT INDEX
 
Exhibit Number
 
Description
   
99.1
 
SolarEdge Technologies, Inc. Press Release, dated May 7, 2015.

2




exhibit_99-1.htm


Exhibit 99.1
 
 
SolarEdge Announces Fiscal Third Quarter Financial Results
 
Fremont, CA — May 7, 2015. SolarEdge Technologies, Inc. (NASDAQ: SEDG) today announced its financial results for the fiscal third quarter ended March 31, 2015.
 
Third Quarter 2015 Highlights
 
 
·
Record revenue of $86.4 million, up 17.9% from last quarter and 182.7% year-over-year
 
·
GAAP gross margin of 27.4%
 
·
GAAP net income of $6.0 million
 
·
Non-GAAP net income of $8.7 million
 
·
248 Megawatts AC inverters shipped
 
“I am happy to report record revenues of $86 million this quarter. This is in line with our expectations of moderate growth despite seasonality, coupled with the addition of a new sizeable customer. We expect revenue growth to continue through 2015 as originally projected,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Our increased manufacturing capacity allowed us to reduce air shipments and combined with our planned cost reduction activities, increased our gross margin. The result of these two factors drove non-GAAP net profit to $8.7 million for the quarter, our third consecutive profitable quarter. We continued to see strong growth in the United States and Europe both in the residential and commercial markets. In the past quarter, we continued development of energy storage solutions which we expect to bring to market toward the end of 2015.”
 
Revenues
 
The Company reported revenues of $86.4 million, an increase of $13.1 million, or 17.9% from the prior quarter and an increase of $55.8 million or 182.7% from the same financial quarter in 2014.
 
Gross margins
 
GAAP gross margin was 27.4% up from 21.5% in the prior quarter and up from 20.4% in the third fiscal quarter of 2014. Non-GAAP gross margin was 27.6%, up from 21.6% in the prior quarter and 20.5% in the third fiscal quarter of 2014. This growth was driven mainly by cost reduction measures, reduction in the portion of air shipments compared to ocean freight and economies of scale related to the increased production volumes.
 
Operating expenses
 
GAAP operating expenses were $13.9 million, including an IPO related expense of $0.6 million, or 16.1% of revenue, an increase from $11.5 million, or 15.8% of revenue in the prior quarter and an increase from $10.8 million, or 35.3% of revenue when compared to the same fiscal quarter of 2014.
 
 
 

 
 
Operating income
 
GAAP operating income was $9.8 million, up from $4.2 million in the prior quarter and up from an operating loss of $4.5 million in the fiscal third quarter of 2014.
 
Financial Expenses
 
Financial expenses were $3.4 million compared to $0.5 million in the previous quarter and $0.6 million in the same quarter last year. The expenses included $1.8 million mark to market expenses related to warrants issued to a lender on a debt that been repaid in full as well as the effect of foreign currency fluctuations between the Euro and US Dollar.
 
Net Income
 
GAAP net income was $6.0 million, up from $3.4 million in the prior quarter and up from a net loss of $5.2 million in the third quarter of 2014. Non-GAAP net income was $8.7 million, an increase from $4.1 million in the prior quarter and an increase from a net loss of $5.0 million in the fiscal third quarter of 2014.
 
EPS
 
Net diluted earnings per share (“EPS”) was $0.01, up from $0.00 in the prior quarter and up from a net diluted loss per share of $1.87 in the third fiscal quarter of 2014, based on 7,099,046 shares, 2,815,694 shares and 2,806,044 shares, respectively.  This does not include the shares issued in the initial public offering which closed on March 31, 2015 or the conversion of preferred to common stock effected as of that date. Non-GAAP net diluted EPS was $0.20, an increase from $0.12 in the prior quarter and an increase from a net diluted loss per share of $0.19 in the third fiscal quarter of 2014, based on 44,148,228 shares, 34,197,530 shares and 26,503,344 shares, respectively.
 
Cash
 
At March 31, 2015, cash, cash equivalents and restricted cash, totaled $138.8 million, which include net cash proceeds from our initial public offering of $134.8 million, compared to $27.2 million on December 31, 2014. At March 31, 2015, the Company did not have any debt.
 
Outlook for the Fourth Quarter
 
The Company also provides guidance for the fourth fiscal quarter of 2015 as follows:

 
·
Revenues to be within the range of $92 million to $96 million;
 
·
Gross margins to be within the range of 26% to 28%.

 
 

 
 
Conference Call
 
The Company will host a conference call to discuss these results at 5:00 P.M. Eastern Time on Thursday, May 7, 2015. The call will be available, live, to interested parties by dialing +1 877-419-6603. For international callers, please dial +1 719-325-4795. The Conference ID number is 9169560.  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 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. 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. SolarEdge 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.
 
 
 

 
 
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 possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; 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 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 the section entitled “Risk Factors” of our Registration Statement on Form S-1 (including the related prospectus), Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, 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 7, 2015.  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.

 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

   
Three months ended
March 31,
   
Nine months ended
March 31,
 
   
2015
   
2014
   
2015
   
2014
 
                         
Revenues
  $ 86,399     $ 30,560     $ 226,658     $ 88,644  
Cost of revenues
    62,698       24,331       173,146       75,397  
Gross profit
    23,701       6,229       53,512       13,247  
                                 
Operating expenses:
                               
Research and development, net
    5,490       4,864       15,317       13,686  
Sales and marketing
    6,422       4,592       17,541       12,372  
General and administrative
    1,990       1,318       4,270       3,120  
Total operating expenses
    13,902       10,774       37,128       29,178  
                                 
Operating income (loss)
    9,799       (4,545 )     16,384       (15,931 )
                                 
Financial expenses, net
    3,436       626       3,378       2,317  
                                 
Income (loss) before taxes on income
    6,363       (5,171 )     13,006       (18,248 )
                                 
Taxes on income
    398       67       1,146       88  
                                 
Net income (loss)
  $ 5,965     $ (5,238 )   $ 11,860     $ (18,336 )
                                 
Net basic earnings (loss) per share of common stock
  $ 0.01     $ (1.87 )   $ 0.02     $ (6.56 )
Net diluted earnings (loss) per share of common stock
  $ 0.01     $ (1.87 )   $ 0.01     $ (6.56 )
                                 
Number of shares used in computing net basic earnings (loss) per share of common stock
    2,822,893       2,806,044       2,817,090       2,795,397  
Number of shares used in computing net diluted earnings (loss) per share of common stock
    7,099,046       2,806,044       5,534,903       2,795,397  

 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
   
March 31,
   
June 30,
 
   
2015
   
2014
 
   
Unaudited
   
Audited
 
ASSETS
           
Current assets
           
Cash and cash equivalents
  $ 135,204     $ 9,754  
Restricted cash
    3,575       1,602  
Trade receivables, net
    45,093       19,267  
Prepaid expenses and other accounts receivable
    25,312       13,151  
Inventories
    64,522       25,499  
Total current assets
    273,706       69,273  
Property and equipment, net
    11,903       5,351  
Long-term lease deposit and prepaid expenses
    380       367  
Long-term deferred charges
    -       7  
Total assets
  $ 285,989     $ 74,998  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
               
                 
Current liabilities:
               
Short term bank loan
  $ -     $ 13,326  
Current maturities of term loan
    -       3,474  
Trade payables
    36,233       36,815  
Employees and payroll accruals
    6,017       5,210  
Warranty obligations
    7,661       5,496  
Deferred revenues
    1,098       1,729  
Accrued expenses and other accounts payable
    52,428       6,893  
Total current liabilities
    103,437       72,943  
                 
Long-term liabilities:
               
Warranty obligations
    20,238       12,685  
Deferred revenues
    6,995       4,252  
Warrants to purchase common stock
    2,830       765  
Term loan
    -       3,444  
Lease incentive obligation
    1,959       -  
Total long-term liabilities
    32,022       21,146  
                 
Commitments and Contingent liabilities
               
                 
Convertible Preferred Series A, B, C, D, D-1, D-2 and D-3 stock
    -       116,203  
                 
Stockholders’ equity (deficiency):
               
Share capital
               
Common stock
    4       * -  
Additional paid-in capital
    280,040       5,878  
Accumulated other comprehensive loss
    (263 )     (61 )
Accumulated deficit
    (129,251 )     (141,111 )
Total stockholders’ equity (deficiency)
    150,530       (135,294 )
                 
Total liabilities and stockholders’ equity (deficiency)
  $ 285,989     $ 74,998  

 
 

 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
   
Nine months ended
March 31,
 
   
2015
   
2014
 
Cash flows used in operating activities:
           
Net income (loss)
  $ 11,860     $ (18,336 )
Adjustments to reconcile net income (loss) to net cash used in operating activities:
               
Depreciation
    1,647       1,451  
Stock-based compensation related to employee and non-employee consultants stock options
    1,750       791  
Interest expenses related to Bank Loan
    -       36  
Financial expenses (income), net related to term loan
    (992 )     506  
Remeasurement of warrants to purchase preferred and common stock
    2,065       (45 )
Changes in assets and liabilities:
               
Inventories
    (39,071 )     (10,406 )
Prepaid expenses and other accounts receivable
    (12,198 )     (3,910 )
Trade receivables, net
    (25,993 )     (4,102 )
Trade payables
    (1,264 )     14,270  
Employees and payroll accruals
    883       1,059  
Warranty obligations
    9,718       6,743  
Deferred revenues
    2,116       (715 )
Accrued expenses and other accounts payable
    43,601       (229 )
Lease incentive obligation
    2,243       -  
Net cash used in operating activities
    (3,635 )     (12,887 )
                 
Cash flows used in investing activities:
               
Purchase of property and equipment
    (8,254 )     (2,263 )
Increase in restricted cash
    (1,973 )     (18 )
Decrease (increase) in long-term deposits
    (24 )     26  
Net cash used in investing activities
    (10,251 )     (2,255 )
                 
Cash flows from financing activities:
               
Proceeds from short-term bank loans
    23,000       16,361  
Repayments of short-term bank loans
    (36,326 )     (9,019 )
Payments of term loan
    (5,919 )     (1,616 )
Proceeds from issuance of Series D-2 Convertible Preferred stock, net
    -       669  
Proceeds from issuance of Series E Convertible Preferred stock, net
    24,712       -  
Proceeds from IPO, net
    133,944       -  
Receipt on account of shares
    -       7,115  
Proceeds from exercise of employee stock options
    46       51  
Net cash provided by  financing activities
    139,457       13,561  
                 
Increase (decrease) in cash and cash equivalents
    125,571       (1,581 )
Cash and cash equivalents at the beginning of the period
    9,754       13,142  
Erosion due to exchange rate differences
    (121 )     (89 )
                 
Cash and cash equivalents at the end of the period
  $ 135,204     $ 11,472  
 
 
 

 
 
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)

   
Three months ended
March 31,
   
Nine months ended
March 31,
 
   
2015
   
2014
   
2015
   
2014
 
Gross profit (GAAP)
  $ 23,701     $ 6,229     $ 53,512     $ 13,247  
Stock-based compensation cost of revenues
    140       33       254       80  
Gross profit (Non-GAAP)
  $ 23,841     $ 6,262     $ 53,766     $ 13,327  
                                 
Gross margin (GAAP)
    27.4 %     20.4 %     23.6 %     14.9 %
Stock-based compensation
    0.2 %     0.1 %     0.1 %     0.1 %
Gross margin (Non-GAAP)
    27.6 %     20.5 %     23.7 %     15.0 %
                                 
Operating expenses (GAAP)
  $ 13,902     $ 10,774     $ 37,128     $ 29,178  
Stock-based compensation R&D
    183       102       449       288  
Stock-based compensation S&M
    292       74       545       215  
Stock-based compensation G&A
    355       69       502       208  
Operating expenses (Non-GAAP)
  $ 13,072     $ 10,529     $ 35,632     $ 28,467  
                                 
Operating income (loss) (GAAP)
  $ 9,799     $ (4,545 )   $ 16,384     $ (15,931 )
Stock-based compensation
    970       278       1,750       791  
Operating income (loss) (Non-GAAP)
  $ 10,769     $ (4,267 )   $ 18,134     $ (15,140 )
                                 
Finance expenses (GAAP)
  $ 3,436     $ 626     $ 3,378     $ 2,317  
Warrants remeasurement adjustment
    1,800       (8 )     2,065       (45 )
Finance expenses (Non-GAAP)
  $ 1,636     $ 634     $ 1,313     $ 2,362  
                                 
Net income (loss) (GAAP)
  $ 5,965     $ (5,238 )   $ 11,860     $ (18,336 )
Stock-based compensation
    970       278       1,750       791  
Warrants remeasurement adjustment
    1,800       (8 )     2,065       (45 )
Net income (loss) (Non-GAAP)
  $ 8,735     $ (4,968 )   $ 15,675     $ (17,590 )
                                 
Net basic earnings (loss) per share (GAAP)
  $ 0.01     $ (1.87 )   $ 0.02     $ (6.56 )
Stock-based compensation
    0.03       0.01       0.05       0.03  
Warrants remeasurement adjustment
    0.04       -       0.07       -  
Additional earnings per share giving effect to IPO and conversion of preferred stock at the beginning of the periods (1)
    0.14       1.67       0.34       5.87  
Net basic earnings (loss) per share (Non-GAAP)
  $ 0.22     $ (0.19 )   $ 0.48     $ (0.66 )
                                 
Number of shares used in computing net basic earnings (loss) per share (GAAP)
    2,822,893       2,806,044       2,817,090       2,795,397  
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods (1)
    36,297,931       23,697,300       30,025,279       23,665,917  
Number of shares used in computing net basic earnings (loss) per share (Non-GAAP)
    39,120,824       26,503,344       32,842,369       26,461,314  
                                 
Net diluted earnings (loss) per share (GAAP)
  $ 0.01     $ (1.87 )   $ 0.01     $ (6.56 )
Stock-based compensation
    0.02       0.01       0.05       0.03  
Warrants remeasurement adjustment
    0.04       -       0.05       -  
Additional earnings per share giving effect to IPO and conversion of preferred stock at the beginning of the periods (1)
    0.13       1.67       0.32       5.87  
Net diluted earnings (loss) per share (Non-GAAP)
  $ 0.20     $ (0.19 )   $ 0.43     $ (0.66 )
                                 
Number of shares used in computing net diluted earnings (loss) per share (GAAP)
    7,099,046       2,806,044       5,534,903       2,795,397  
Additional shares related Stock-based compensation
    647,474               670,669          
Additional shares relate to warrants remeasurement adjustment
    103,777               36,839          
Additional shares giving effect to IPO and conversion of preferred stock at the beginning of the periods (1)
    36,297,931       23,697,300       30,025,279       23,665,917  
Number of shares used in computing net diluted earnings (loss) per share (Non-GAAP)
    44,148,228       26,503,344       36,267,690       26,461,314  

 
(1)
Assumes shares of common stock outstanding after accounting for (i) the automatic conversion of the shares of preferred stock then outstanding into common stock at the beginning of fiscal year 2015; and (ii) the issuance of 8,050,000 shares of common stock (associated with our initial public offering) at the beginning of the third fiscal quarter instead of the IPO closing date, March 31, 2015.
 
 
 

 
 
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
+1 415-471-2700