Revenue increase of 4% for The Peck Company Holdings in First Quarter 2020 Results

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The Peck Company Holdings, Inc. (NASDAQ: PECK) announced the Company’s financial results for the first quarter ended March 31, 2020 (“Q1 2020”).

Key Financial Highlights for Q1 2020

  • Revenues increased 4% to $4.0 million
  • Gross profit decreased 66% to $0.3 million
  • Backlog and pipeline increased to $40.8 million

Subsequent to the End of Q1 2020

On April 22, 2020, Peck and GreenBond Advisors formed a strategic Green Bond partnership to align capital for construction of new solar projects. The partnership will acquire, build and own the new solar projects. The new investment partnership is designed to increase Peck’s access to capital for the construction of new solar projects and to scale its existing pipeline of new EPC business. Peck has partnered with GreenSeed Investors LLC and its affiliate GreenBond Advisors LLC to gain access to the rapidly growing Green Bond segment of the fixed income markets. Of note, this partnership provides Peck with access to project growth capital through additional EPC contract work from Green Bond proceeds while improving working capital and strengthening liquidity ratios.

GreenBond Advisors was recently formed to deliver financial product innovation into the Green Bond market. They have created a new Green Bond product that allows risk-adverse investment capital to be more easily directed into new green energy infrastructure development at an earlier stage of the project development cycle than is typically the case for existing Green Bonds. This innovation by Green Bond Advisors will provide Peck with a strategic advantage in the marketplace as an EPC company, because Peck can bring a level of funding certainty to developers for early stage projects that will meet the project performance criteria.

Financial Results for the Three Months Ended March 31, 2020

Revenue for the three months ended March 31, 2020 was $3.98 million, an increase of $0.13 million, or 4%, compared to $3.85 million for the three months ended March 31, 2019. The Company had a few projects that were ceased or delayed due to the current COVID-19 pandemic. The Company anticipates that these projects will continue or begin once the current Stay at Home orders are lifted or relaxed.

Backlog and pipeline at March 31, 2020 was $40.8 million.

Gross profit for the three months ended March 31, 2020 was $0.3 million, a decrease of $0.5 million, or 66%, compared to $0.8 million for the three months ended March 31, 2019. The resulting gross margin was 7.5% for the three months ended March 31, 2020, compared to 23.0% for the three months ended March 31, 2019. Lower gross margin for the three months ended March 31, 2020 was the result of inefficiencies in labor costs due to the uncertainty of the COVID-19 pandemic. In addition, the Company incurred unplanned expenditures on two large solar projects due to the winter conditions in the Northeast.

General and administrative expenses for the three months ended March 31, 2020 were $0.6 million, an increase of $0.3 million, or 134%, compared to $0.3 million for the three months ended March 31, 2019. The increase in general and administration expenses were primarily due to activities related to administrative expenses costs of becoming a public company as well as supporting infrastructure expansion in the three months ended March 31, 2020, compared to the three months ended March 31, 2019.

Warehousing and other operating expenses for the three months ended March 31, 2020 were $0.2 million, compared to $0.2 million for the three months ended March 31, 2019. Warehousing and other operating expenses include Company-owned solar array depreciation and salaries associated with Company-owned solar arrays, general warehousing costs, project-related travel and performance related expenses.

Operating loss for the three months ended March 31, 2020 was $0.6 million, compared to an operating income of $0.4 million for the three months ended March 31, 2019. The decrease in operating income was primarily due to an increase in the operational infrastructure required to support the current growth trajectory as well as the additional expense of being a publicly listed company.

Depreciation expenses for the three months ended March 31, 2020 were $155,012, compared to $150,483 for the three months ended March 31, 2019. Depreciation expenses were stable when compared to the three months ended March 31, 2019 as the Company has not had significant capital expenditures for the three months ended March 31, 2020.

Income tax benefit for the three months ended March 31, 2020 was $142,311 compared to the income tax provision for the three months ended March 31, 2019 of $500.

Net loss for the three months ended March 31, 2020 was $0.4 million, compared to a net income of $0.4 million for the there months ended March 31, 2019. The net loss was the result of inefficiencies in labor costs due to the uncertainty of the COVID-19 pandemic. In addition, the Company incurred unplanned expenditures on two large solar projects due to the winter conditions in the Northeast. The resulting earnings per share (EPS) for the three months ended March 31, 2020 was a loss of ($0.08) per diluted share, compared to $0.12 for the three months ended March 31, 2019.

Adjusted EBITDA for the three months ended March 31, 2020 was a loss of $0.3 million, compared to income of $0.6 million for the three months ended March 31, 2019.

Adjusted EPS for the three months ended March 31, 2020 was a loss of ($0.06), compared to $0.18 for the three months ended December 31, 2019.

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