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):  November 8, 2017
 

 
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
 
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):
 
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))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company          
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.          
 

 
Item 2.02.          Results of Operations and Financial Condition.

On November 8, 2017 SolarEdge Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2017. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
 
In accordance with General Instruction B.2 of Form 8-K, this information, including the exhibits hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information, including the exhibits hereto be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
 
Item 9.01. Financial Statements and Exhibits

Exhibit No.
 
Description
 



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:  November 8, 2017
By:
/s/ Ronen Faier
 
 
Name:
Ronen Faier
 
 
Title:
Chief Financial Officer
 




Exhibit 99.1
 

SolarEdge Announces Third Quarter 2017 Financial Results
 
FREMONT, Calif. — November 8, 2017. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in PV inverters, power optimizers, and module-level monitoring services, today announced its financial results for the third quarter ended September 30, 2017.
 
Third Quarter 2017 Highlights
 
·
Revenues for the quarter of $166.6 million
 
·
GAAP gross margin for the quarter of 34.9%
 
·
GAAP operating income for the quarter of $25.4 million
 
·
GAAP net income for the quarter of $28.0 million
 
·
Non-GAAP net income for the quarter of $31.5 million
 
·
GAAP net diluted earnings per share for the quarter of $0.61
 
·
Non-GAAP net diluted earnings per share for the quarter of $0.66
 
·
Cash flow from operating activities of $33.6 million
 
·
676 Megawatts (AC) of inverters shipped for the quarter
 
“We are happy to report another record quarter, in revenues, profitability and cash flow generation.  On the operational side, we shipped more than two million optimizers this quarter, and have now shipped more than 20 million optimizers since initiating sales in 2010,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Sales this quarter from outside the United States were 51% of our revenues, resulting from our continued investment in global sales. We continue to generate increasing cash flow from operations which enhances our financial strength and allows us to continue to invest in new products and development of new markets.”
 
Quarter Ended September 30, 2017 Summary
 
The Company reported record revenues of $166.6 million, up 22% from the prior quarter and up 30% year over year.
 
GAAP gross margin reached 34.9%, up from 34.6% in the prior quarter and up from 32.6% year over year.
 
GAAP operating expenses were $32.7 million, an increase of 17% from the prior quarter and 38% year over year.
 
GAAP operating income was $25.4 million, up 33% from $19.1 million in the prior quarter and up from $18.2 million year over year.
 
GAAP net income was $28.0 million, up 24% from $22.5 million in the prior quarter and up from $15.6 million year over year.
 

 
Non-GAAP net income was $31.5 million, up 22% from $25.8 million in the prior quarter and up from $20.9 million year over year.
 
GAAP net diluted earnings per shares (“EPS”) was $0.61, up from $0.50 in the prior quarter and up from $0.35 year over year.
 
Non-GAAP net diluted EPS was $0.66, up from $0.55 in the prior quarter and up from $0.46 year over year.
 
As of September 30, 2017, cash, cash equivalents, restricted cash and marketable securities totaled $304.7 million, compared to $274.7 million on June 30, 2017.
 
Outlook for the Quarter Ending December 31, 2017
 
The Company also provides guidance for the fourth quarter ending December 31, 2017 as follows:

·
Revenues to be within the range of $175 million to $185 million;
 
·
Gross margins to be within the range of 33% to 35%.
 
Conference Call
 
The Company will host a conference call to discuss these results at 4:30 P.M. EST on Wednesday, November 8, 2017. The call will be available, live, to interested parties by dialing 888-298-3457. For international callers, please dial +1 719-325-2199. The Conference ID number is 6325065.  A live webcast will also be available in the Investors Relations section of the Company’s 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 will 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. Supporting increased PV proliferation, the SolarEdge system consists of power optimizers, inverters, home energy management, storage solutions, and a cloud-based monitoring platform. SolarEdge’s solutions address a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. SolarEdge is online at http://www.solaredge.us
 

 
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 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.
 
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), Annual Report on Form 10-KT for the year ended December 31, 2016, filed on February 21, 2017, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of November 8, 2017.  The Company 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
+1 510-498-3263
investors@solaredge.com

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

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

   
Three months ended
September 30,
   
Nine months ended
September 30,
 
   
2017
   
2016
   
2017
   
2016
 
   
Unaudited
   
Unaudited
 
                         
Revenues
 
$
166,552
   
$
128,484
   
$
417,705
   
$
378,441
 
Cost of revenues
   
108,498
     
86,609
     
273,909
     
256,719
 
                                 
Gross profit
   
58,054
     
41,875
     
143,796
     
121,722
 
                                 
Operating expenses:
                               
                                 
Research and development, net
   
14,363
     
9,935
     
38,546
     
27,876
 
Sales and marketing
   
13,217
     
10,036
     
35,953
     
27,792
 
General and administrative
   
5,078
     
3,664
     
12,782
     
10,191
 
                                 
Total operating expenses
   
32,658
     
23,635
     
87,281
     
65,859
 
                                 
Operating income
   
25,396
     
18,240
     
56,515
     
55,863
 
                                 
Financial income, net
   
2,666
     
390
     
7,671
     
1,892
 
                                 
Income before taxes on income
   
28,062
     
18,630
     
64,186
     
57,755
 
                                 
Taxes on income (tax benefit)
   
91
     
3,014
     
(484
)
   
4,067
 
                                 
Net income
 
$
27,971
   
$
15,616
   
$
64,670
   
$
53,688
 


 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 
   
September 30,
   
December 31,
 
   
2017
   
2016
 
   
Unaudited
       
ASSETS
           
             
CURRENT ASSETS:
           
Cash and cash equivalents
 
$
149,448
   
$
104,683
 
Restricted cash
   
1,400
     
897
 
Marketable Securities
   
81,488
     
74,465
 
Trade receivables, net
   
91,694
     
71,041
 
Prepaid expenses and other accounts receivable
   
38,201
     
21,347
 
Inventories
   
62,356
     
67,363
 
                 
   Total current assets
   
424,587
     
339,796
 
                 
LONG-TERM ASSETS:
               
   Marketable securities
   
72,351
     
44,262
 
   Property, equipment and intangible assets, net
   
45,714
     
37,381
 
   Prepaid expenses and lease deposits
   
732
     
489
 
   Deferred tax assets, net
   
5,822
     
2,815
 
                 
   Total long term assets
   
124,619
     
84,947
 
                 
Total assets
 
$
549,206
   
$
424,743
 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
CURRENT LIABILITIES:
               
Trade payables, net
 
$
42,700
   
$
34,001
 
Employees and payroll accruals
   
17,640
     
13,018
 
Warranty obligations
   
12,942
     
13,616
 
Deferred revenues
   
2,743
     
1,202
 
Accrued expenses and other accounts payable
   
16,407
     
8,648
 
                 
   Total current liabilities
   
92,432
     
70,485
 
                 
LONG-TERM LIABILITIES:
               
Warranty obligations
   
58,625
     
44,759
 
Deferred revenues
   
26,858
     
18,660
 
Lease incentive obligation
   
1,838
     
2,061
 
                 
   Total long-term liabilities
   
87,321
     
65,480
 
                 
COMMITMENTS AND CONTINGENT LIABILITIES
               
                 
STOCKHOLDERS’ EQUITY:
               
                 
Common stock
   
4
     
4
 
Additional paid-in capital
   
323,076
     
307,098
 
Accumulated other comprehensive loss
   
(297
)
   
(324
)
Retained earnings (accumulated deficit)
   
46,670
     
(18,000
)
                 
   Total stockholders’ equity
   
369,453
     
288,778
 
                 
Total liabilities and stockholders’ equity
 
$
549,206
   
$
424,743
 


 
SOLAREDGE TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

   
Nine months ended
September 30,
 
   
2017
   
2016
 
   
Unaudited
 
Cash flows provided by operating activities:
           
Net income
 
$
64,670
   
$
53,688
 
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization of property, equipment and intangible assets
   
4,932
     
3,468
 
Amortization of premiums on available-for-sale marketable securities
   
1,310
     
829
 
Stock-based compensation
   
12,183
     
8,132
 
Deferred tax assets, net
   
(3,063
)
   
2,327
 
Realized losses on Cash Flow Hedges
   
-
     
2
 
                 
Changes in assets and liabilities:
               
Inventories
   
5,005
     
19,216
 
Prepaid expenses and other accounts receivable
   
(17,360
)
   
8,214
 
Trade receivables, net
   
(20,168
)
   
(38,105
)
Trade payables, net
   
8,667
     
(21,699
)
Employees and payroll accruals
   
4,509
     
(916
)
Warranty obligations
   
13,192
     
15,514
 
Deferred revenues
   
9,699
     
5,069
 
Accrued expenses and other accounts payable
   
7,537
     
2,192
 
Lease incentive obligation
   
(223
)
   
(185
)
                 
Net cash provided by operating activities
   
90,890
     
57,746
 
                 
Cash flows used in investing activities:
               
Purchase of property and equipment
   
(13,203
)
   
(13,869
)
Decrease (increase) in restricted cash
   
(503
)
   
2,471
 
 Decrease (increase) in short and long-term lease deposits
   
(60
)
   
37
 
Investment in available-for-sale marketable securities
   
(82,469
)
   
(85,579
)
Maturities of available-for-sale marketable securities
   
46,513
     
21,654
 
                 
Net cash used in investing activities
 
 
(49,722
)
 
 
(75,286
)
                 
Cash flows from financing activities:
               
Issuance costs related to initial public offering
 
 
-
   
 
(194
)
Proceeds from issuance of shares upon exercise of options
   
3,795
     
1,774
 
                 
Net cash provided by  financing activities
   
3,795
     
1,580
 
                 
Increase (decrease)  in cash and cash equivalents
   
44,963
     
(15,960
)
Cash and cash equivalents at the beginning of the period
   
104,683
     
106,150
 
Effect of exchange rate differences on cash and cash equivalents
   
(198
)
   
(176
)
                 
Cash and cash equivalents at the end of the period
 
$
149,448
   
$
90,014
 


 
SOLAREDGE TECHNOLOGIES INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In thousands, except gross profit and per share data)
(Unaudited)
 
   
Reconciliation of GAAP to Non-GAAP Gross Profit
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
                               
Gross profit (GAAP)
   
58,054
     
47,066
     
41,875
     
143,796
     
121,722
 
Stock-based compensation
   
538
     
517
     
385
     
1,548
     
941
 
Gross profit (Non-GAAP)
   
58,592
     
47,583
     
42,260
     
145,344
     
122,663
 
 
   
Reconciliation of GAAP to Non-GAAP Gross Margin
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Gross margin (GAAP)
   
34.9
%
   
34.6
%
   
32.6
%
   
34.4
%
   
32.2
%
Stock-based compensation
   
0.3
%
   
0.4
%
   
0.3
%
   
0.4
%
   
0.2
%
Gross margin (Non-GAAP)
   
35.2
%
   
35.0
%
   
32.9
%
   
34.8
%
   
32.4
%
 
   
Reconciliation of GAAP to Non-GAAP Operating expenses
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Operating expenses (GAAP)
   
32,658
     
27,951
     
23,635
     
87,281
     
65,859
 
Stock-based compensation R&D
   
1,423
     
1,280
     
927
     
3,908
     
2,398
 
Stock-based compensation S&M
   
1,439
     
1,204
     
849
     
3,673
     
2,421
 
Stock-based compensation G&A
   
1,137
     
1,033
     
939
     
3,054
     
2,371
 
Operating expenses (Non-GAAP)
   
28,659
     
24,434
     
20,920
     
76,646
     
58,668
 
 
   
Reconciliation of GAAP to Non-GAAP Operating income
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Operating income (GAAP)
   
25,396
     
19,115
     
18,240
     
56,515
     
55,863
 
Stock-based compensation
   
4,537
     
4,034
     
3,100
     
12,183
     
8,132
 
Operating income (Non-GAAP)
   
29,933
     
23,149
     
21,340
     
68,698
     
63,995
 
 
   
Reconciliation of GAAP to Non-GAAP Tax on income (Tax benefit)
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Tax on income (Tax benefit) (GAAP)
   
91
     
186
     
3,014
     
(484
)
   
4,067
 
Deferred tax asset (realized)
   
959
     
773
     
(2,179
)
   
3,064
     
(2,326
)
Tax on income (Tax benefit) (Non-GAAP)
   
1,050
     
959
     
835
     
2,580
     
1,741
 
 
   
Reconciliation of GAAP to Non-GAAP Net income
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Net income (GAAP)
   
27,971
     
22,524
     
15,616
     
64,670
     
53,688
 
Stock-based compensation
   
4,537
     
4,034
     
3,100
     
12,183
     
8,132
 
Deferred tax realized (asset)
   
(959
)
   
(773
)
   
2,179
     
(3,064
)
   
2,326
 
Net income (Non-GAAP)
   
31,549
     
25,785
     
20,895
     
73,789
     
64,146
 

 
 
   
Reconciliation of GAAP to Non-GAAP Net basic EPS
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Net basic earnings per share (GAAP)
   
0.66
     
0.54
     
0.38
     
1.55
     
1.32
 
Stock-based compensation
   
0.11
     
0.10
     
0.08
     
0.29
     
0.20
 
Deferred tax realized (asset)
   
(0.03
)
   
(0.02
)
   
0.05
     
(0.08
)
   
0.06
 
Net basic earnings per share (Non-GAAP)
   
0.74
     
0.62
     
0.51
     
1.76
     
1.58
 
 
   
Reconciliation of GAAP to Non-GAAP Net diluted EPS
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Net diluted earnings per share (GAAP)
   
0.61
     
0.50
     
0.35
     
1.44
     
1.21
 
Stock-based compensation
   
0.07
     
0.06
     
0.06
     
0.19
     
0.14
 
Deferred tax realized (asset)
   
(0.02
)
   
(0.01
)
   
0.05
     
(0.06
)
   
0.05
 
Net diluted earnings per share (Non-GAAP)
   
0.66
     
0.55
     
0.46
     
1.57
     
1.40
 
 
   
Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS
 
   
Three months ended
   
Nine months ended
 
   
September 30,
2017
   
June 30,
2017
   
September 30,
2016
   
September 30,
2017
   
September 30,
2016
 
Number of shares used in computing net diluted earnings per share (GAAP)
   
46,131,556
     
44,831,590
     
43,995,227
     
44,937,527
     
44,348,461
 
Stock-based compensation
   
1,535,258
     
2,228,246
     
1,742,211
     
2,084,722
     
1,343,651
 
Number of shares used in computing net diluted earnings per share (Non-GAAP)
   
47,666,814
     
47,059,836
     
45,737,438
     
47,022,249
     
45,692,112