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Real Goods Solar (RSOL)
Q2 2013 Earnings Call
August 13, 2013 4:30 pm ET
Kamyar Mofid - Chief Executive Officer and Director
Anthony M. DiPaolo - Chief Financial Officer and Principal Accounting Officer
Matt Koranda - Roth Capital Partners, LLC, Research Division
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We would like to remind everyone that this call is available for replay through August 20, 2013. Starting later this evening, a webcast replay will also be available via the link provided in today's press release, as well as available on the company's website at realgoodssolar.com.
Now, I'd now like to turn the call over to Chief Executive Officer of Real Goods Solar, Mr. Kam Mofid. Please go ahead, sir.
Thank you, Crescent. Good afternoon, everyone, and thank you for joining us today. Today, we are going to talk about the operational progress we made during the second quarter, which included setting the stage for strong performance improvement in 2013 and getting ready for an exciting 2014. We will also talk about 2 complementary acquisitions we recently announced, intended to further advance our position as a leading provider of solar power systems in one of the nation's fastest-growing industries.
But before I go into this further, I'd like to ask Tony to walk us through the financial results, after which, I will provide some additional color and we will be glad to then take Q&A. Tony, please proceed.
Anthony M. DiPaolo
Thank you, Kam, and the thank you, everyone, for joining our call today.
Our net revenue for the second quarter of 2013 was $20.7 million compared to $21.4 million in the same quarter last year. The revenue decline reflects lower prices paid by customers as a result of competitive pricing pressures within the solar installation market. The decrease in the average selling price of solar energy systems more than offset the increase in our deployed solar energy systems compared to the same year ago quarter. We deployed 5.6 megawatts of solar energy systems in the second quarter of 2013 compared to 4.7 megawatts in last year's second quarter.
Gross profit was $4.8 million or 23.1% of net revenue in the second quarter of 2013, compared to $5.3 million or 24.8% of net revenue in the same quarter last year. The gross margin decrease reflects the aforementioned competitive pricing pressures.
Our total expenses were $7.9 million for the second quarter of 2013 compared to $9.3 million for the same quarter last year. The decrease in operating expenses is primarily attributable to successful implementation of productivity improvements and other cost reduction and cost avoidance initiatives. This substantial decline in operating expenses led to a significant 20% improvement in our loss from operations.
Loss from operations was $3.2 million in the second quarter of 2013 versus $4 million in the same year ago quarter.
Our net loss for the second quarter of 2013 was $2.9 million, which is $0.11 per share and compared to a net loss of $2.5 million or $0.09 per share in the same quarter last year. The increase in the net loss reflects the impact of an income tax benefit of $1.6 million recorded last year, but there's no corresponding tax benefit recorded in this year's second quarter.
Now turning to the balance sheet. We ended the second quarter of 2013 with $6.9 million on hand. During the second quarter, we successfully completed a private placement of equity securities, raising net proceeds of $8.4 million. The proceeds were used in part to fully pay down borrowings under our revolving line of credit with Silicon Valley Bank. At June 30, we had $5.2 million of unused borrowing capacity under that revolving credit line.
We are presently discussing the terms of an extension of our credit line with Silicon Valley Bank. We believe a renewal will occur prior to the September 30 maturity of the Silicon Valley Bank line of credit.
This completes my summary report and our results for the second quarter of 2013. For a more detailed and complete analysis of results, please review our reports on Form 10-Q, which we filed with the Securities and Exchange Commission today and is available at www.sec.gov, as well as at our website. I will also be happy to answer any questions during the Q&A session.
Now I'd like to turn the call back over to Kam.
Thank you very much, Tony. With 2013 expected to be another record year for the industry according to Greentech Media Research and the Solar Energy Industries Association, the solar industry is the fastest-growing energy source in the U.S., powering homes, businesses and utility grids across the nation. As a major downstream solar solutions provider with substantial reach, we address all these growing segments of the market nationwide. Now it is indeed, and will likely continue to be, an exciting period to be in solar.
It was almost exactly a year ago when I joined the company. I think it would be an understatement to say we had simultaneous challenges facing us on a number of fronts this time last year. I feel it is important to briefly reflect on what we said we would do to turn the company around and what we have in fact done.