 Corporate Presentation
September 2013
NASDAQ:
RSOL
SERVING SOLAR SINCE 1978
Exhibit 99.1 |
 This
presentation includes forward-looking statements relating to matters that are not
historical facts. Forward-looking statements may be identified by the use of words
such as "expect," "intend," "believe," "will," "should" or
comparable
terminology
or
by
discussions
of
strategy.
While
Real
Goods
Solar believes its assumptions and expectations underlying forward-looking
statements
are
reasonable,
there
can
be
no
assurance
that
actual
results
will not be materially different. Risks and uncertainties that could cause
materially different results include, among others, receiving shareholder
approval for the merger with Mercury Energy, Inc., successfully closing the
merger and other acquisitions, realizing synergies and other benefits from
the merger and other acquisitions, introduction of new products and
services, the possibility of negative economic conditions, and other risks
and uncertainties included in Real Goods Solar’s filings with the Securities
and Exchange Commission. Real Goods Solar assumes no duty to update
any forward-looking statements.
©
2013 Real Goods Solar. All Rights Reserved.
Important Cautions Regarding Forward Looking
Statements
2
SERVING
SOLAR
SINCE
1978
NASDAQ:RSOL |
 SERVING
SOLAR
SINCE
1978
Key Stats: RSOL (NASDAQ)
3
Stock
Price
(9/5/2013)
$2.00
52 Week Low-High
$0.40 -
$7.17
Avg. Daily Vol. (3
mo.) 1,974,610
Shares
Outstanding
1
30.2M
Public Float, est.
18.3M
Insider Holdings
~26%
Institutional Holdings
~35%
Market Cap
$60.5M
Enterprise Value
$60.3M
EV/Revenue
(ttm)
0.7x
Net Revenue (ttm)
$90.6M
EPS
(ttm)
$(1.84)
Cash
(mrq)
$6.9M
Total Assets
(mrq)
$29.8M
Total Debt
(mrq)
$6.8M
Total Liabilities
(mrq)
$27.9M
Employees
~385
Data source: S&P Capital IQ
(ttm) –
trailing twelve months as of Jun. 30, 2013
(mrq) –
most recent quarter as of Jun. 30, 2013
1) Shares outstanding as of August 8, 2013
NASDAQ:RSOL |
 NASDAQ:RSOL SERVING SOLAR SINCE 1978
Who We Are
Real Goods Solar
is one of the nation’s largest
and pioneering solar energy providers and
first public pure-play
We’ve installed well over 100 MW of solar
systems corresponding to 15,500+ residential,
commercial, government, and utility
installations nationwide
We offer a comprehensive end-to-end
solution for our customers to reduce their
utility costs while also reducing their carbon
footprint
Significant investments and process
improvements in the past 18 months have
created a highly scalable business model with
additional opportunity for margin capture
4 |
 Longstanding
Commitment to the Sector and Deep Knowledge of Solar
*Currently
in
13
edition
with
over
500,000
sold.
1978
Real Goods Solar Trading Company opens first store; sold
the first solar panels in retail at over $100/W
1982
First Solar Living Source Book printed*
1986
Launched mail order catalog (95% customers off grid)
1991
Public offering directly to customers
1992
Launched National Tour of solar homes
1996
Opened Solar Living Center
2001
Merged with Gaiam
2003
Launched residential division
2008
IPO
2008 –
2009
Acquired Marin Solar, Carlson Solar, Independent Energy
Systems, Regrid Power
2011
Acquired Alteris –
became a major national residential and
commercial solar company
2012
Mid 2012, new CEO hired to address key challenges post
Alteris and to restore profitability and growth
2013
Company surpassed 15,500 installations corresponding to
well over 100MW of solar energy deployed since inception
August
2013
Completed Acquisition of assets of Syndicated Solar and
announced agreement to acquire Mercury Energy
5
th
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 SERVING SOLAR SINCE 1978
Solar represents an unlimited supply of
renewable energy
Solar has now become an attractive
investment
Not dependent on new construction
Strong state and federal mandates
Equipment costs trending lower while
technology is improving
Solar per kWh cost approaching or at grid
parity in key states (even with decreasing
incentives), as utility rates rise
Broader availability of consumer financing
Solar industry to see investment of $800
billion to
$1.2 trillion
over next decade ¹
Bright Future for Solar Power
Bright Future for Solar Power
6
Strong
Outlook
for
Growth
in
Solar
Power
(U.S., in Giga Watts -
GW)
2
NASDAQ:RSOL
SERVING SOLAR SINCE 1978
1.
Source Enerdata; McKinsey Global Solar Initiative 2. Source: http://www.seia.org/ - U.S. Solar Market Insight:
Year-in-review 2012 Report – Solar Energy Industries Association (SEIA)
and GTM Research |
 Utility rates
rising in key Solar states: average cost per kWh up
~63%
to
~$0.13
from
1990
to
2011
High utility rates in key solar States:
average cost per kWh ranging from
$0.12-$0.33 in June 2013
Solar significantly reduces short and
long-term customer utility costs
with ROI as high as 30%+
Price of solar-PV modules expected
to drop 10% annually until 2020
Solar equipment manufacturing
capacity expected to double over
the next 3-5 years
Key Market Drivers: Rising Electric Bills &
Declining Solar-PV Module Prices
1)
Energy
Information
Administration
(EIA),
historical
data
for
CA,
CO,
NJ, NY & VT. Released Oct. 1, 2012. Next update Sept. 2013.
2)
EIA
Electricity Monthly Update, data for CA, MI, NY, DC, MD, NJ, CT,
RI, MA, NH, VT Released Aug. 22, 2013. Next update: Sept. 23, 2013.
3)
McKinsey Report: Solar Power: Darkest before dawn. April 2012.
7
Source: US Energy Information Administration
SERVING SOLAR SINCE 1978
Average Electric Utility
Rates in Key Solar States
Keep Rising….
…While Falling U.S. Solar-PV
Module Prices Makes Solar
More Affordable
$0.13
$2.76
$0.64
$0.08
Q1-09
Q1-10
Q1-11
Q1-12
Q1-13
1
2
3
NASDAQ:RSOL
Source: GTM Research and U.S. Solar Market Insight
3 |
 SERVING SOLAR SINCE
1978 NASDAQ:RSOL
June 2013 vs. June 2012:
Cost of Electricity Rising in Key U.S. Solar States
8
Source: Energy Information Administration, Electricity Monthly Update. Released Aug. 22, 2013.
Next update: Sept. 23, 2013. Average electricity
costs across the U.S.
increased 3.2%
to
10.47
cents per kWh
25 States saw
average electricity
costs increase by
more than 3%
-9% -
-3%
-3% -
-1%
1% -
9%
9% -
30%
-1% -
1%
U.S. Electric Industry Percent Change in Average
Cents per kWh, June 2013 vs. June 2012 |
 We Offer
Solutions Across Multiple Market Segments 9
More
than
15,500
Installations
Nationwide
–
More
than
100MW
Real Goods Solar
Utility
Commercial
Residential
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 Alteris
Renewables Acquisition of Alteris in Late 2011 Created a Strong
National Player with a Balanced Portfolio
10
SERVING
SOLAR
SINCE
1978
Northeast based
4,000+ installs
25+ MW
Primarily commercial
Very strong presence in
the education sector
Acquisition
successfully integrated
by late 2012
NASDAQ:RSOL |
 Marquee
Customers 11
In addition to a strong residential track record, we have successfully provided solar
solutions to many key commercial customers across the country such as…
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 On Track for
Record Top & Bottom Line Growth in 2013
12
($ millions)
1) Guidance issued and only effective on 9/9/2013
Estimated revenue of
$115-120 million for
2013, excluding
Mercury
Pro forma 2013
revenue, with Mercury
of $132-137 million
$115-$120
$132-$137
2012 was a challenging year as
we completed the integration
of Alteris and addressed key
organizational issues
We expect to be EBITDA
positive for the second
half of 2013 and achieve
profitability in Q4
NASDAQ:RSOL
$12.1
$16.8
$18.9
$39.2
$64.3
$77.3
$109.3
$92.9
SERVING SOLAR SINCE 1978 |
 We Have Made
Foundational Improvements to the Business in the Past 12 months Setting the Stage for the
Next Leg of Our Journey 13
New management quickly established and drove three corporate-wide priorities
•
Getting back on our historical growth performance and trajectory
•
Investing in project development and sales talent and capabilities
•
We increased commercial backlog by 91% at the end of Q2 2013 compared to the end of Q4
2012 •
Improving cash flow and liquidity
•
Much more disciplined management of working capital
•
Aggressive focus on lead-time reduction from origination to conversion
•
Strengthened
the
balance
sheet
with
net
proceeds
of
$8.4
million
from
private
placement
of equity
securities in June 2013; Q2 2013 ended and we expect Q3 2013 to end with zero drawn against
our $6.5 million line of credit
•
Reducing operating expenses and improving productivity
•
Improved key business processes in sales and operations
•
Eliminated resource redundancies and flattened the management structure
•
On a run-rate basis, we will exit Q3 2013 at $2 million lower opex than Q3 2012 while
having grown the business (over $8 million of annualized opex reduction)
Successfully completed the integration of Alteris and added top-notch management
talent in key areas
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 14
Source: GTM Research and SEIA, Q1 USSMI Report
State
California
6
Colorado
HQ +2
Connecticut
2
Missouri
1
New Jersey
1
New York
1
Rhode Island
1
Vermont
1
1
Total
17
US PV Installations
Office
Locations
Massachusetts
•
17 offices in key solar states
•
Installations in more than 30 states
We Are now Ready to Better Capture the Growth
Runway with a Stronger Foundation and Footprint |
 We Offer Our
Customers a Comprehensive End-to-End Solution
15
Benefits of being a full
turnkey solar provider
Real Goods Solar operates as a turnkey solar solution provider in addition to its
extensive ‘EPC’
(Engineering, Procurement and Construction) capabilities.
•
Single point of contact simplifies communication for the
customers
•
Ensures quality and reduces risks
•
Project costs are well-defined and tightly-managed
•
Improved customer experience and confidence
Origination
Engineering
Construction
Operations/
Maintenance
Performance
Site evaluation
Financing
arrangements
•
Contracting
•
Engineering
Specification
•
Custom Design
•
Incentive
Processing
•
Product Selection
•
Permitting
•
Construction
•
Utility
Integration
•
System
Commissioning
•
Site Monitoring
•
Preventative
Maintenance
•
Warranty
Management
•
Customer &
Partner
Integration
•
Production
Guarantee
•
Optimize ROI
•
•
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 The Economics
are Compelling with Purchase or The Economics are Compelling with Purchase or
Lease of Solar Energy Systems
Lease of Solar Energy Systems
16
Purchase
Lease
Typical Payback in
seven years or less in
many geographies
Minimal risk
No money down
Power Purchase
Agreement
Fixed cost of
electricity for life of
system
Immediate savings
Investment in solar provides a natural hedge against rising energy prices
Monetize solar rebates and tax incentives: 30% Renewable Energy Tax Credit
Customers typically make purchase decisions based on reducing monthly utility bill
Corporate programs to reduce carbon footprint are also emerging as strong enablers
NASDAQ:RSOL
SERVING
SOLAR
SINCE
1978
ROI as good as 20%-30% |
 Industry is
still immature and very fragmented
Most players in the
downstream have limited
financial strength and with no
real value creation option
Real Goods Solar has the
platform to pursue highly
selective acquisitions to
strategically accelerate
growth and to increase the
overall depth, breadth, and
performance of the company
In Addition to Organic Growth, Selective Acquisition
will be a Strong Source of Value Creation
17
Real Goods Solar a leading installer
among more than 2,000 nationwide ¹
Source: GTM Research “Five Residential PV Installers to Watch in 2013, U.S. PV
Leaderboard.” 1) Company estimate.
NASDAQ:RSOL
SERVING
SOLAR
SINCE
1978
U.S. Residential Solar Installers 2012
Market Share |
 Acquisition of
Syndicated Solar Strengthens Residential Division
18
18
NASDAQ:RSOL
SERVING SOLAR SINCE 1978
Syndicated Solar
Expanded footprint to Missouri and
enhanced presence in Colorado and
California
Added 40+ employees mostly in the
front-end
Rapid growth over past few years
through:
•
Efficient residential sales processes
•
Highly scalable and nimble business
model
•
Integrated software tools
Revenue up 192% from $2.5 million in
2011 to $7.3 million in 2012 |
 Mercury Solar
Systems Based in Port Chester, New York, one of the
region’s top solar companies
Adds sales and operational talent and
complementary geographies
Commercial and residential customers across
Northeast, totaling nearly 2,000 solar
installations
•
Installed 50+ MWs of solar projects that
have cumulatively generated $250+ million
in revenues
Signed definitive agreement to acquire
Mercury for 7.9 million shares of consideration
subject to certain customary adjustments
Upon closing, Mercury will add 50+ employees
and ~$10 million of cash and no debt
Expected Mercury Solar Systems Acquisition to Expand
Northeast Commercial & Residential Capabilities
19
3,588kW -
Manalapan, NY
1,288 kW -
Robbinsville, NJ
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 35-year
Track Record: Longer than any other major player
Substantial market Depth and Breadth:
strong residential and commercial
capabilities with deep knowledge of key verticals
Highly
Integrated:
end-to-end
capabilities
all
the
way
from
lead
generation
and
project development to design, construction, commissioning, and O&M
Nationwide
Presence:
able
to
deliver
cost-effective
solar
solutions
to
homeowners
and businesses in multiple states
Low Risk Business Model:
broad geographic spread and diversified client base
(across different segments and geographical markets)
Strong Consumer Brand:
well recognized, opens doors
Opportunity
for
Margin
Expansion:
SG&A
productivity
and
project
finance
Leadership Depth and Talent:
senior team with a proven track record
High Potential for Investor Value Creation:
through organic growth and through
selective acquisitions and against a backdrop of highly undervalued stock compared
to peers
Our Competitive Advantages and Key
Takeaways
20
NASDAQ:RSOL
SERVING
SOLAR
SINCE
1978 |
 Contact Us
NASDAQ: RSOL
RealGoodsSolar.com
Real Goods Solar, Inc.
833 West South Boulder Road
Louisville, CO 80027
Tel 303.222.8400
Kam Mofid, CEO
Tony DiPaolo, CFO
Investor Relations
Liolios Group, Inc.
Ron Both
Tel 949.574.3860
RSOL@liolios.com
21
SERVING SOLAR SINCE 1978
NASDAQ:RSOL |
 Appendix
22
SERVING SOLAR SINCE 1978
NASDAQ:RSOL |
 NASDAQ:RSOL SERVING SOLAR SINCE 1978
Pro Forma Income Statement June 30, 2013
23
June 30, 2013 -
6 months ended
Real Goods Solar
Mercury
Pro Forma Combined
Revenue
37,458
7,677
45,135
Cost of revenue
28,099
5,592
33,691
Gross Profit
9,359
2,085
11,444
Selling and operating
12,317
2,834
14,902
General and administrative
3,579
748
4,327
Total operating expenses
15,896
3,582
19,229
Loss from operations
(6,537)
(1,497)
(7,785)
Interest and other expense
164
5
169
Earnings (loss) before income taxes
(6,701)
(1,502)
(7,954)
Income tax expense (benefit)
-
-
-
Net earnings (loss)
(6,701)
(1,502)
(7,954)
Net earnings (loss) per common share
Basic
(0.25)
(0.23)
Diluted
(0.25)
(0.23)
Weighted-average common shares outstanding
Basic
27,253
35,153
Diluted
27,253
35,153 |
 Pro Forma Balance Sheet
June 30, 2013 24
Costs in excess of billings on uncompleted contracts Billings in excess of
costs on uncompleted contracts
Real Goods Solar
Mercury
Pro Forma Combined
Assets
Current assets
Cash and cash equivalents
6,859
11,507
17,416
Accounts receivable , net
10,194
979
11,173
2,749
1,386
4,135
Inventory, net
4,697
1,154
5,851
Other current assets
1,710
1,194
2,904
Total current assets
26,209
16,220
41,479
Property and Equipment
3,596
695
4,291
Goodwill and intangibles, net
-
3,681
9,262
Notes receivable, net
-
160
160
Deferred tax assets
-
4,163
-
Other assets
-
125
125
Total assets
29,805
25,044
55,317
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
10,183
3,199
13,382
Accrued liabilities
3,315
1,250
4,565
2,474
479
2,953
Related party debt
3,600
-
3,600
Other current liabilities
776
421
1,197
Total current liabilities
20,348
5,349
25,697
Related party debt
3,150
-
3,150
Common stock warrant liability
3,702
-
3,702
Other liabilities
696
3,676
696
Total liabilities
27,896
9,025
33,245
Stockholders' equity
Common stock
3
22
11
Preferred stock
-
14,219
-
Additional paid in capital
86,870
27,009
107,975
Accumulated deficit
(84,964)
(25,231)
(85,914)
Total stockholders' equity
1,909
16,019
22,072
Total liabilities and stockholders' equity
29,805
25,044
55,317
NASDAQ:RSOL
SERVING SOLAR SINCE 1978 |
 SERVING SOLAR SINCE 1978
Additional
Information
About
the
Pending
Acquisition
of
Mercury
Energy,
Inc.
Important Disclosure
25
NASDAQ:RSOL
This communication does not constitute an offer to sell or the solicitation of an offer to buy
any securities or a solicitation of any vote or approval. The transaction described
herein will be submitted to the shareholders of each of Real Goods Solar and Mercury for approval. Real
Goods Solar has filed with the Securities and Exchange Commission a registration statement on
Form S-4 containing a joint proxy statement/prospectus of Real Goods Solar and
Mercury as well as other relevant documents in connection with the transaction.
SHAREHOLDERS ARE URGED TO READ IN THEIR ENTIRETY THE REGISTRATION STATEMENT AND JOINT PROXY
STATEMENT/PROSPECTUS WHEN THEY BECOME AVAILABLE, AND ANY OTHER RELEVANT DOCUMENTS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT REAL GOODS
SOLAR, MERCURY AND THE PROPOSED TRANSACTION.
A free copy of the registration statement and joint proxy statement/prospectus as well as
other filings containing information about Real Goods Solar and Mercury, may be
obtained at the SEC’s website (www.sec.gov). These documents may also be obtained, free of charge, from
the investor relations section of Real Goods Solar’s website (www.RealGoodsSolar.com) or
by directing a request to 833 W. South Boulder Road, Louisville, Colorado 80027,
Attention: Secretary, Real Goods Solar, Inc., heidi.french@realgoods.com or (303) 222-8430.
Real Goods Solar and its directors and executive officers may be deemed to be participants in
the solicitation of proxies from the shareholders of Real Goods Solar in connection
with the transaction. Information about Real Goods Solar’s directors and executive officers is
set forth in Real Goods Solar’s Amendment No. 1 to Annual Report on Form 10-K/A for
the year ended December 31, 2012, as filed with the Securities and Exchange Commission
on April 30, 2013. Additional information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be obtained by reading the joint
proxy statement/prospectus regarding the transaction when it becomes available. Free
copies of these documents may be obtained as described above.
This document shall not constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act
of 1933, as amended.
|