North Bay Business Journal

Tuesday, February 26, 2013, 4:39 pm

Enphase revenues rise 45 percent, loss widens in 2012

Ships 3 millionth solar power inverter since founded

By Loralee Stevens, Special to the Business Journal

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    PETALUMA — Enphase Energy, Inc. (NASDAQ: ENPH), today reported 2012 revenues increased 45 percent, though fourth-quarter sales were barely changed from a year before and net loss expanded in both periods.

    Revenues for the fourth quarter, parallel to the end of calendar quarter, were $57.6 million, slightly up from the $57.1 million the company earned in the same quarter of last year. Full-year sales were $216.7 million, up 44.9 percent from $149.5 million in 2011.

    Fourth-quarter net loss expanded to $7.74 million, or a loss of $0.19 per share, up from $5.54 million a year before. The loss over the year expanded to $38.2 million, or $1.24 a share, from $32.3 million.

    “We finished fiscal 2012 with impressive results highlighted by continued gross margin expansion and significant improvements in cash flow,” said Paul Nahi, president and chief executive officer.

    “We’re already seeing an uptick in orders in Europe as people adjust to the rather abrupt drop in incentives,” he added. “In the U.S., Federal incentives are like a rock in comparison, and our sales have remained steady and growing. During the next couple of years we expect 20 percent-30 percent sales growth.”

    Enphase reported record gross margin of 27.9 percent for the quarter, up 500 basis points year-over-year, and its first ever sequential decline in operating expenses.

    The company sold 384,000 units in the fourth quarter. Full-year sales were 1.5 million units, up from 1.0 million in 2011.  During the quarter, the company shipped its 3,000,000th microinverter since its inception.

    Meanwhile, Satcon Technology Corp., maker of inverters for photovoltaic energy arrays and one of Enphase’s major competitors, announced today that it will liquidate its assets. Analysts speculated that Satcon was unable to lower costs sufficiently to remain in a market where the cost of solar cells has dropped dramatically, putting pressure on component makers to match price lowering.

    Satcon’s inverters converted direct current to alternating current at the installation level, rather than at the module level like the Enphase inverters. That’s what makes the Enphse devices less expensive, more efficient and safer for installers and technicians, according to analysts.

    “We don’t really play in the same space as Satcom, but I predict a further shake-out in the industry,” said Mr. Nahi. “The companies that are left standing, if they have the right technology and teams, will do very well.”

    Enphase employs 384 worldwide.

    The company’s stock price was $5.05 at the close of trading Tuesday, up 21 cents, or 4.34 percent from Monday.

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