Sunergy Renewables, LLC (“Sunergy” or the
“Company”), a leading Florida-based provider of
residential solar and energy efficiency solutions, today reported
financial results for the 2023 fiscal first half ended June 30,
2023.
First Half 2023 Operational Highlights
- Net revenue increased 80% to $48.8 million for
the 2023 fiscal first half
- Gross profit increased to $9.6 million for the
2023 fiscal first half
- Adjusted EBITDA increased to $4.5 million for
the 2023 fiscal first half
- Solar system installations increased by 65%
compared to the 2022 fiscal first half
- Submitted S-4 Filing to the SEC for review.
This filing is in regard to the business combination agreement
Sunergy entered into with ESGEN Acquisition Corp.
(“ESGEN”) (Nasdaq: ESACU, ESAC, ESACW) on April
19, 2023. Additional details can be found in the original
announcement, linked here.
Management Commentary“Our business has seen
significant growth so far in 2023,” said Sunergy CEO Tim
Bridgewater. “Driven by strength in emerging markets for Sunergy,
solar system installations grew 65% in the first half, resulting in
record net revenue and gross profit. Our rapid sales-to-install
cycle and commitment to profitability have helped our sales team
continue outpacing the industry in installs and revenue per sales
pitch, insulating Sunergy from broader U.S. residential solar
industry headwinds.
“This week’s S-4 filing represents a significant step towards
the completion of our business combination. We’re encouraged that
residential solar is still in its early innings and confident that
we can execute our growth strategy as we look to capture the robust
market opportunity in front of us. We believe that we’re poised to
enter the public markets at a time when Sunergy’s commitment to
straightforward growth and sustainable profitability will be
well-received, and look forward to displaying our progress over the
coming quarters.”
First Half 2023 Financial ResultsResults
compare the 2023 fiscal first half ended June 30, 2023 to the 2022
fiscal first half ended June 30, 2022 unless otherwise
indicated.
- Net revenue totaled $48.8 million, an 80% increase from $27.2
million in the comparable year-ago period. This increase was
primarily due to increases in sales dealers and partners that led
to an increase in number of solar system installations in the
period.
- Gross profit increased to $9.6 million (19.6% of net revenue)
from $3.9 million (14.3% of net revenue) for the comparable
year-ago period. The increase in gross profit was primarily due to
the increase in net revenue, while the increase in gross margin was
primarily due to improved integration of the combined business a
year after the Company’s merger with Sun First Energy, LLC.
- Net income increased to $2.4 million (4.9% of net revenue) from
a net loss of approximately $43,000 (-0.2% of net revenue) in the
comparable year-ago period.
- Adjusted EBITDA, a non-GAAP measurement of operating
performance reconciled below, increased to $4.5 million (9.3% of
net revenue) from approximately $717,000 (2.6% of net revenue) in
the comparable year-ago period.
- As of June 30, 2023, cash and cash equivalents totaled $3.4
million, compared to $2.3 million at December 31, 2022.
The closing of the proposed Business Combination is expected to
take place in the first quarter of 2024, subject to stockholder
approval. For more information, please visit the ESGEN investor
relations website at esgen-spac.com.
About SunergySunergy is a vertically integrated
provider of residential solar energy systems and energy efficiency
solutions currently serving customers in Florida, Texas and
Arkansas that is focused on markets it believes have high demand
and limited competitive saturation. With its differentiated sales
approach and vertically integrated offerings, Sunergy serves
customers who desire to reduce high energy bills and contribute to
a more sustainable future.
About ESGEN Acquisition Corp.ESGEN (Nasdaq:
ESACU, ESAC, ESACW) is a blank check company formed for the purpose
of effecting a merger, share exchange, asset acquisition, share
purchase, recapitalization, reorganization or similar business
combination with one or more businesses or entities. ESGEN is led
by Chief Executive Officer, Andrejka Bernatova and Chief Financial
Officer, Nader Daylami, and is affiliated with Energy Spectrum
Capital, a Dallas-based private equity firm with long-standing
experience building companies across the energy infrastructure
landscape over multiple decades.
Non-GAAP Financial Measures
Adjusted EBITDASunergy defines Adjusted EBITDA,
a non-GAAP financial measure, as net income (loss) before
interest and other expenses, net, income tax expense, depreciation
and amortization, as adjusted to exclude stock-based compensation
and merger and acquisition expenses (“M&A
expenses”). Sunergy utilizes Adjusted EBITDA as an
internal performance measure in the management of the Company’s
operations because the Company believes the exclusion of
these non-cash and non-recurring charges allows
for a more relevant comparison of Sunergy’s results of operations
to other companies in the industry. Adjusted EBITDA should not be
viewed as a substitute for net loss calculated in accordance with
GAAP, and other companies may define Adjusted EBITDA
differently.
The following table provides a reconciliation of net income
(loss) to Adjusted EBITDA for the periods presented:
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Three months
endedJune 30, |
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Six months
endedJune 30, |
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Year EndedDecember 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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2022 |
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2021 |
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Net income (loss) |
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797,249 |
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590,797 |
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2,400,187 |
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(42,947 |
) |
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8,665,770 |
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$ |
7,091,049 |
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Adjustment: |
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Other income, net |
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31,168 |
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11,512 |
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41,712 |
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(52,501 |
) |
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(20,004 |
) |
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(28,399 |
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Depreciation and amortization |
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489,566 |
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413,066 |
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922,165 |
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812,109 |
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1,706,243 |
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379,823 |
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Income tax expense |
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— |
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— |
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— |
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— |
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— |
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— |
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M&A Expenses |
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1,161,764 |
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— |
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1,161,764 |
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— |
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— |
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— |
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Adjusted
EBITDA |
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2,479,747 |
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1,015,375 |
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4,525,828 |
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716,661 |
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10,352,009 |
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7,442,473 |
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Adjusted EBITDA MarginSunergy defines Adjusted
EBITDA margin, a non-GAAP financial measure, expressed as
a percentage, as the ratio of Adjusted EBITDA to revenue, net.
Adjusted EBITDA margin measures net income (loss) before interest
and other expenses, net, income tax expense, depreciation and
amortization, as adjusted to M&A expenses and is expressed as a
percentage of revenue. In the table above, Adjusted EBITDA is
reconciled to the most comparable GAAP measure, net income (loss).
Sunergy utilizes Adjusted EBITDA margin as an internal performance
measure in the management of the Company’s operations because the
Company believes the exclusion of
these non-cash and non-recurring charges allows
for a more relevant comparison of the Company’s results of
operations to other companies in Sunergy’s industry.
The following table sets forth Sunergy’s calculations of
Adjusted EBITDA margin for the periods presented:
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Three months
endedJune 30, |
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Six months
endedJune 30, |
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Year EndedDecember 31, |
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2023 |
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2022 |
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2023 |
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2022 |
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2022 |
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2021 |
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Numerator:
Adjusted EBITDA |
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2,479,747 |
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1,015,375 |
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4,525,828 |
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716,661 |
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10,352,009 |
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7,442,473 |
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Denominator:
Revenue, net |
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30,079,365 |
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18,944,306 |
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48,810,854 |
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27,195,945 |
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88,963,855 |
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24,589,664 |
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Ratio of Adjusted EBITDA to
revenue, net |
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8.2 |
% |
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5.4 |
% |
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9.3 |
% |
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2.6 |
% |
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11.6 |
% |
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30.3 |
% |
Forward-Looking StatementsThis news release
contains forward-looking statements within the meaning of section
27A of the Securities Act of 1933, as amended (the “Securities
Act”), and Section 21E of the Exchange Act of 1934, as amended,
that are based on beliefs and assumptions and on information
currently available to ESGEN and Sunergy. Forward-looking
statements include, but are not limited to, statements that refer
to projections, forecasts or other characterizations of future
events or circumstances, including any underlying assumptions. The
words “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,”
“project,” “estimate,” “expect,” “strategy,” “future,” “likely,”
“may,” “should,” “will” and similar references to future periods
may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking.
Forward-looking statements may include, for example, statements
about ESGEN’s and Sunergy’s ability to timely effectuate the
proposed business combination discussed in this news release; the
benefits of the proposed business combination; the future financial
performance of the combined company following the transactions;
changes in ESGEN’s or Sunergy’s strategy, future operations,
financial position, estimated revenues and losses, projected costs,
prospects, the ability to raise additional funds prior to the
closing of the business combination and plans and objectives of
management. These forward-looking statements are based on
information available as of the date of this news release, and
current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly,
forward-looking statements should not be relied upon as
representing ESGEN’s or Sunergy’s views as of any subsequent date,
and none of ESGEN or Sunergy undertakes any obligation to update
forward-looking statements to reflect events or circumstances after
the date they were made, whether as a result of new information,
future events or otherwise, except as may be required under
applicable securities laws. You should not place undue reliance on
these forward-looking statements. As a result of a number of known
and unknown risks and uncertainties, ESGEN’s and Sunergy’s actual
results or performance may be materially different from those
expressed or implied by these forward-looking statements. Some
factors that could cause actual results to differ include:
(i) the timing to complete the proposed business combination;
(ii) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
definitive agreements relating to the proposed business
combination; (iii) the outcome of any legal proceedings that may be
instituted against ESGEN, Sunergy or others following announcement
of the proposed business combination; (iv) the inability to
complete the proposed business combination due to the failure to
obtain the approval of ESGEN shareholders; (v) the combined
company’s success in retaining or recruiting, or changes required
in, its officers, key employees or directors following the proposed
business combination; (vi) the combined company’s ability to obtain
the listing of its common stock and warrants on the Nasdaq
following the proposed business combination; (vii) the risk that
the proposed business combination disrupts current plans and
operations of Sunergy as a result of the announcement and
consummation of the proposed business combination; (viii) the
ability to recognize the anticipated benefits of the proposed
business combination; (ix) unexpected costs related to the proposed
business combination; (x) the amount of any redemptions by public
shareholders of ESGEN being greater than expected; (xi) the
management and board composition of the combined company following
the proposed business combination; (xii) limited liquidity and
trading of the combined company’s securities; (xiii) the use of
proceeds not held in ESGEN’s trust account or available from
interest income on the trust account balance; (xiv) geopolitical
risk and changes in applicable laws or regulations; (xv) the
possibility that ESGEN, Sunergy or the combined company may be
adversely affected by other economic, business, and/or competitive
factors; (xvi) operational risk; (xvii) litigation and regulatory
enforcement risks, including the diversion of management time and
attention and the additional costs and demands on Sunergy’s
resources; (xviii) the risks that the consummation of the proposed
business combination is substantially delayed or does not occur;
and (xix) other risks and uncertainties, including those to be
included under the heading “Risk Factors” in the registration
statement on Form S-4 filed by ESGEN with the SEC on September 18,
2023 (File No. 333-274551) (as may be amended from time to time,
the “Registration Statement”) and those included under the heading
“Risk Factors” in ESGEN’s Annual Report on Form 10-K for the year
ended December 31, 2022 (the “Annual Report”) and in its subsequent
periodic reports and other filings with the SEC. In light of the
significant uncertainties in these forward-looking statements, you
should not regard these statements as a representation or warranty
by ESGEN, Sunergy, their respective directors, officers or
employees or any other person that ESGEN and Sunergy will achieve
their objectives and plans in any specified time frame, or at all.
The forward-looking statements in this news release represent the
views of ESGEN and Sunergy as of the date of this news release.
Subsequent events and developments may cause that view to change.
However, while ESGEN and Sunergy may elect to update these
forward-looking statements at some point in the future, there is no
current intention to do so, except to the extent required by
applicable law. You should, therefore, not rely on these
forward-looking statements as representing the views of ESGEN or
Sunergy as of any date subsequent to the date of this news
release.
No Offer or SolicitationThis news release
relates to a proposed business combination between ESGEN and
Sunergy. This document does not constitute a proxy statement or
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the potential transaction and does
not constitute an offer to sell or exchange, or the solicitation of
an offer to buy or exchange, any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, sale or
exchange would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act.
Important Information for Investors and Stockholders and
Where to Find ItIn connection with the proposed business
combination between ESGEN and Sunergy, ESGEN filed the Registration
Statement initially on September 18, 2023, that includes a
preliminary proxy statement/prospectus of ESGEN, and after the
Registration Statement is declared effective, ESGEN will mail a
definitive proxy statement/prospectus relating to the proposed
business combination to ESGEN’s shareholders. The Registration
Statement, including the proxy statement/prospectus contained
therein, when declared effective by the SEC, will contain
important information about the proposed business combination and
the other matters to be voted upon at a meeting of ESGEN’s
shareholders to be held to approve the proposed business
combination (and related matters). This news release does not
contain all the information that should be considered concerning
the proposed business combination and other matters and is not
intended to provide the basis for any investment decision or any
other decision in respect of such matters. ESGEN may also file
other documents with the SEC regarding the proposed
business combination. ESGEN shareholders and other interested
persons are advised to read the preliminary proxy
statement/prospectus and the amendments thereto and the definitive
proxy statement/prospectus, when available, and other documents
filed in connection with the proposed business combination, as
these materials will contain important information about ESGEN,
Sunergy and the proposed business combination.
When available, the definitive proxy statement/prospectus and
other relevant materials for the proposed business combination will
be mailed to ESGEN shareholders as of a record date to be
established for voting on the proposed business combination.
Shareholders will also be able to obtain copies of the preliminary
proxy statement/prospectus, the definitive proxy
statement/prospectus and other documents filed or that will be
filed with the SEC, free of charge, by ESGEN through the
website maintained by the SEC at www.sec.gov, or by
directing a request to: ESGEN Acquisition Corporation, 5956
Sherry Lane, Suite 1400, Dallas, TX 75225.
Participants in the SolicitationESGEN and
Sunergy and their respective directors, officers and related
persons may be deemed participants in the solicitation of proxies
of ESGEN shareholders in connection with the proposed business
combination. ESGEN shareholders and other interested persons may
obtain, without charge, more detailed information regarding the
directors and officers of ESGEN, and a description of their
interests in ESGEN is contained in ESGEN’s final prospectus related
to its initial public offering, dated October 21, 2021, the
Annual Report and in ESGEN’s subsequent period reports and
other filings with the SEC. Information regarding the persons
who may, under SEC rules, be deemed participants in the
solicitation of proxies to ESGEN shareholders in connection with
the proposed business combination and other matters to be voted
upon at the ESGEN shareholder meeting is set forth in the
Registration Statement. Additional information regarding the
interests of participants in the solicitation of proxies in
connection with the proposed business combination is included in
the Registration Statement. You may obtain free copies of these
documents as described in the preceding paragraph.
Sunergy Contacts
For Investors:Cody Slach and Tom ColtonGateway
Groupsunergy@gateway-grp.com
For Media:Zach Kadletz and Anna RutterGateway
Groupsunergy@gateway-grp.com
ESGEN Acquisition Corp. Contacts
For Media & Investors:Nader
Daylaminader@esgen-spac.com
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