SUNation Energy, Inc. Q4 FY2023 earnings call

• Pineapple had solid operational and financial results in 2023 despite macro challenges, with four consecutive quarters of positive adjusted EBITDA. - Demand for solar and storage is strong, though not fully translated to Econ textbook demand yet. - Utilities keep raising electric rates, which benefits the solar industry. - Pineapple focuses on cost containment and margins, with a relentless focus on profitability and cash management. - The company aims to roll up leading local and regional residential solar and storage companies across the country.

In the fourth quarter of 2023, total revenue was $19.4 million, an increase of $2.3 million or 13% from the fourth quarter of 2022. The increase was primarily due to the SUNation acquisition. Total gross profit was $5.5 million, an increase of $515,000 or 10% year-over-year. Pro forma revenue for the 12 months ended December 31, 2023, was $79.6 million, up 8% from $74 million in 2022. Pro forma adjusted EBITDA for the fourth quarter of 2023 was positive $208,000, improving 222% from negative $171,000 in the prior year. Year-to-date pro forma adjusted EBITDA was $1.2 million, an improvement of $4.5 million or 137% from negative $3.3 million in the prior year.

• Kyle mentioned they are not providing revenue guidance for 2025 this quarter and will revisit the decision next quarter. - The company has its own budgets and forecasting, tracking towards internal goals, and will discuss with the Board before deciding on future guidance disclosures.

• Stubborn inflation has prevented rate cuts as expected. - Regulatory uncertainty and general economic malaise have kept some consumers on the sidelines. - Hedge fund shorts in the equity markets pose risks. - The legacy CSI receivable, which is unlikely to be collected and would go to CVR holders if collected.

Q: Talked about gross margin decline quarter-over-quarter, what drove that?

A: Eric explained it's related to indirect costs allocated into gross margin like rent, indirect labor, insurance, etc., due to U.S. GAAP accounting requirements and more consistent allocation methodology.

Q: Updates on Hawaii and NY/Long Island trends?

A: Kyle said Hawaii had a strong fourth quarter but lost support from the Battery Bonus Program; Long Island is healthy with a shift to increased battery storage potentially delayed due to utility IT issues.

Q: About legacy CSI receivables, can it be recovered?

A: Eric said the receivable is due from a government entity with low likelihood of collection, and if collected, would go to CVR holders as it's an asset of theirs