UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 7.01. Regulation FD Disclosure.
On September 20, 2023, Sunnova Energy Corporation (the “Company”), a wholly owned subsidiary of Sunnova Energy International Inc. (“Sunnova”), announced the commencement of a proposed private offering of senior notes (the “Notes Offering”) as described in Item 8.01.
In connection with the Notes Offering, the Company expects to make available the following information to prospective investors.
We define Cash Flow Available for Debt Service or “CFADS” as (1) (a) net cash from (used in) operating activities of Sunnova and its subsidiaries calculated in accordance with GAAP and, (b) to the extent not duplicative, cash provided from activities from solar energy systems and/or an ancillary technology (“Projects”) when received by the Project company, excluding, in the case of each of clause (a) and (b) above, the effect of the following items: derivative origination and breakage fees from financing structure changes, payments to dealers for exclusivity and other bonus arrangements, net inventory and prepaid inventory (sales) purchases, payments of non-capitalized costs related to acquisitions and capital markets activities of the Company or Sunnova, payments of direct sales costs, excluding inventory, to the extent the related solar energy system is financed through a loan, payments to installers and builders for homebuilder asset-development activities, payments of customer rewards and including the effect of the following items: principal proceeds from customer notes receivable, financed insurance payments, distributions to redeemable noncontrolling interests and noncontrolling interests and (2) adjusted general and administration expenses plus interest payments made on non-recourse financings (other than securitizations), in each case for all or any portion of any such period that ends on or prior to December 31, 2023 and interest payments made on indebtedness other than non-recourse financing, minus principal payments on non-recourse financings constituting securitizations, other than principal repayments funded in exchange for, or out of or with the net cash proceeds of (i) any non-recourse financing, (ii) any indebtedness constituting refinancing indebtedness under the indenture or (iii) the sale or issuance of any equity interests of Sunnova. The foregoing is a summary of the definition of CFADS that will be included in the indenture governing the notes for purposes of calculating compliance with certain of the restrictive covenants described in “Description of the Notes.” This measurement is not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of liquidity. The GAAP measure most directly comparable to CFADS is net cash from (used in) operating activities. Our calculations of CFADS, as will be defined in our indenture, are not comparable to liquidity measures presented by other companies. Investors should not rely on CFADS as a substitute for any GAAP measure, including net cash used in operating activities. In addition, under the indenture governing the notes, our ability to engage in activities such as incurring additional indebtedness, making investments and paying dividends is expected to be tied to a ratio based on CFADS.
Reconciliation of Non-GAAP Measures
The following is a reconciliation of CFADS to net cash from (used in) operating activities, which is the GAAP measure most directly comparable to CFADS.
| Six Months Ended June 30, |
Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2022 | 2021 | |||||||||||||
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| Reconciliation of Net Cash Used in Operating Activities to CFADS | (in thousands) | |||||||||||||||
| Net cash used in operating activities |
$ | (182,542 | ) | $ | (162,343 | ) | $ | (333,426 | ) | $ | (209,230 | ) | ||||
| Cash when received from Projects |
4,929 | 5,620 | 12,394 | 3,231 | ||||||||||||
| Principal proceeds from customer note receivable |
80,931 | 52,653 | 109,760 | 66,879 | ||||||||||||
| Financed insurance payments |
(1,950 | ) | — | — | (2,254 | ) | ||||||||||
| Derivative origination and breakage fees from financing structure changes |
17,571 | 14,103 | 33,520 | 8,936 | ||||||||||||
| Distributions to redeemable noncontrolling interests and noncontrolling interests |
(18,372 | ) | (12,330 | ) | (29,771 | ) | (15,854 | ) | ||||||||
| Payments to dealers for exclusivity and other bonus arrangements |
55,747 | 26,932 | 50,078 | 28,850 | ||||||||||||
| Net inventory and prepaid inventory purchases for asset-development activities |
22,375 | 79,115 | 189,321 | 143,959 | ||||||||||||
| Payments of non-capitalized costs related to IPO |
— | — | — | — | ||||||||||||
| Payments of non-capitalized costs related to acquisitions |
2,018 | 2,313 | 6,681 | 6,776 | ||||||||||||
| Payments of non-capitalized costs related to equity offerings |
— | — | — | 609 | ||||||||||||
| Payments of direct sales costs, excluding inventory |
7,374 | 582 | 3,103 | 286 | ||||||||||||
| Payments to installers and builders for homebuilder asset-development activities |
20,411 | 20,769 | 45,217 | 24,967 | ||||||||||||
| Payments of customer rewards |
464 | 2,583 | 5,032 | 1,240 | ||||||||||||
| General and administrative expenses |
202,645 | 138,465 | 302,004 | 204,236 | ||||||||||||
| Bad debt expense |
(23,882 | ) | (17,003 | ) | (43,018 | ) | (25,634 | ) | ||||||||
| Depreciation expense |
(9,356 | ) | (5,535 | ) | (11,888 | ) | (9,126 | ) | ||||||||
| Amortization expense |
(14,696 | ) | (14,585 | ) | (29,224 | ) | (21,771 | ) | ||||||||
| Impairment and gain (loss) on disposals, net |
1 | — | — | — | ||||||||||||
| Non-cash compensation expense |
(14,318 | ) | (15,596 | ) | (24,218 | ) | (17,236 | ) | ||||||||
| ARO accretion expense |
(2,234 | ) | (1,735 | ) | (3,701 | ) | (2,897 | ) | ||||||||
| Loss on unenforceable contracts |
— | — | — | — | ||||||||||||
| Amortization of payments to dealers for exclusivity and other bonus arrangements |
(2,961 | ) | (1,735 | ) | (3,701 | ) | (2,897 | ) | ||||||||
| Net principal debt repayments related to securitizations |
(77,994 | ) | (77,718 | ) | (161,357 | ) | (120,021 | ) | ||||||||
| Cash paid for interest not related to securitizations |
66,594 | 24,335 | 57,692 | 20,202 | ||||||||||||
| CFADS |
$ | 132,790 | $ | 58,700 | $ | 173,872 | $ | 83,180 | ||||||||
The information in this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
| Item 8.01. | Other Events. |
On September 20, 2023, the Company issued a press release announcing the Notes Offering. A copy of such press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and incorporated into this Item 8.01 by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
The following materials are filed as exhibits to this Current Report on Form 8-K.
| Exhibit No. | Description | |
| 99.1 | Press release dated September 20, 2023. | |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL Document). | |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SUNNOVA ENERGY INTERNATIONAL INC. | ||||||
| Date: September 20, 2023 | By: | /s/ David Searle | ||||
| David Searle | ||||||
| Executive Vice President, General Counsel | ||||||
Exhibit 99.1
Sunnova Announces Proposed Private Offering of $400 Million “Green Bond”
HOUSTON, September 20, 2023 – Sunnova Energy Corporation (“SEC”), a wholly-owned subsidiary of Sunnova Energy International Inc. (“Sunnova”), today announced that it intends to offer, subject to market conditions, $400 million aggregate principal amount of green senior notes due 2028 (the “notes”) in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”) and to non-U.S. persons outside of the United States in reliance on Regulation S under the Securities Act.
The notes will be senior unsecured obligations of SEC, and interest will be payable semiannually in arrears. The notes will be guaranteed on a senior unsecured basis by Sunnova and Sunnova Intermediate Holdings, LLC.
SEC intends to allocate an amount equal to the net proceeds from the offering to finance or refinance, in whole or in part, existing or new eligible green projects, and pending such use, SEC will maintain or apply the net proceeds in accordance with its normal liquidity practices.
The notes have not been and will not be registered under the Securities Act or any state securities laws and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and other applicable securities laws.
This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall it constitute an offer, solicitation or sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
FORWARD LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally relate to future events or Sunnova’s future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “going to,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern Sunnova’s expectations, strategy, priorities, plans or intentions. Forward-looking statements in this press release include, but are not limited to, statements regarding the expectations in connection with the offering, the size and terms of the offering and the use of proceeds from the offering. Sunnova’s expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including supply chain uncertainties, results of operations and financial position, Sunnova’s competition, changes in regulations applicable to Sunnova’s business, fluctuations in the solar and home-building markets, availability of capital and Sunnova’s ability to attract and retain dealers and customers and manage its dealer and strategic partner relationships. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Sunnova’s filings with the U.S. Securities and Exchange Commission, including Sunnova’s annual report on Form 10-K for the year ended December 31, 2022 and subsequent quarterly reports on Form 10-Q. The forward-looking statements in this press release are based on information available to Sunnova as of the date hereof, and Sunnova disclaims any obligation to update any forward-looking statements, except as required by law.
ABOUT SUNNOVA
Sunnova Energy International Inc. (NYSE: NOVA) is a leading Energy as a Service (EaaS) provider with customers across the U.S. and its territories. Sunnova’s goal is to be the source of clean, affordable and reliable energy with a simple mission: to power energy independence so that home and business owners have the freedom to live life uninterrupted®.
Media Contact
Srishti Ahuja Tandon
srishti.ahujatandon@sunnova.com
Investor & Analyst Contact
Rodney McMahan
rodney.mcmahan@sunnova.com
281.971.3323
Document and Entity Information |
Sep. 20, 2023 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001772695 |
| Document Type | 8-K |
| Document Period End Date | Sep. 20, 2023 |
| Entity Registrant Name | Sunnova Energy International Inc. |
| Entity Incorporation State Country Code | DE |
| Entity File Number | 001-38995 |
| Entity Tax Identification Number | 30-1192746 |
| Entity Address, Address Line One | 20 East Greenway Plaza |
| Entity Address, Address Line Two | Suite 540 |
| Entity Address, City or Town | Houston |
| Entity Address, State or Province | TX |
| Entity Address, Postal Zip Code | 77046 |
| City Area Code | (281) |
| Local Phone Number | 892-1588 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Common Stock, $0.0001 par value per share |
| Trading Symbol | NOVA |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |