Real Goods Solar, Inc. (NASDAQ:RGSE) Q3 2018 Earnings Conference Call Transcript

Nov 07, 2018 • 04:30 pm ET


Real Goods Solar, Inc. (NASDAQ:RGSE) Q3 2018 Earnings Conference Call Transcript


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Good afternoon, and thank you for joining us today to discuss RGS Energy's Third Quarter ended September 30, 2018. With us today is the company's Chief Executive Officer, Dennis Lacey.

Following Mr. Lacey's remarks, he will take questions from buy and sell-side analysts.

Before the conclusion of today's call, I'll provide the necessary cautions regarding forward-looking statements made by management during this call.

We would like to remind everyone this call is available for replay starting this evening via the link, provided in yesterday's press release through November 14, 2018, and will also be available on the company's website at for the next 12 months.

Now, I would like to turn the call over to Chief Executive Officer of RGS Energy, Mr. Dennis Lacey. Please go ahead.

Dennis Lacey

Thank you. The capstone of our efforts to reinvent RGS was put in place last week with the announcement that we received product certification from UL for POWERHOUSE 3.0. Clearly exciting news for us, and so much so, we announced it within one hour of receiving the letter from UL. This certification means that RGS is now a manufacturer. Further, it starts the nationwide commercial launch of POWERHOUSE, beginning a new era for our company, one that we believe will greatly benefit our shareholders. POWERHOUSE 3.0 is the product at the right time, allowing us to also operate outside the solar residential EPC space where many companies report operating losses.

Just like the format we used last quarter, the press release we issued yesterday lays it all out, including our results for the quarter, where we stand with POWERHOUSE reservations, how our expected future cash and capital position looks. Further within our financial model in the press release, you can see hypothetical future earnings per share.

I would like to move to address questions that seem to come up routinely for us. Our answers have not changed.

First off, we typically get asked, do we need to raise capital? No. We believe we do not need to do another capital raise, having raised all the capital we expect to be needed to commercialize POWERHOUSE. As you saw in yesterday's press release, we expect to receive approximately another $3 million of cash as the remainder investor notes are converted to stock. We included these shares to be issued in the table illustrating our future expected fully diluted shares. In summary, that cash, along with the approximately $9 million of cash we reported at September 30, is why we do not believe we need to raise capital to commercialize POWERHOUSE.

Further, as we show on the press release, there is a potential for future cash of almost $20 million from the future exercise of common stock warrants. It is our belief that after the downward selling pressure on our stock from the note offering thesis (ph), our stock price can rise to levels where common stock warrants are exercised.

Related to this is another question we often get, when will the overhang of shares from