Real Goods Solar, Inc. – Class A (NASDAQ: RGSE) recently updated on how it fared in 1Q2016 and growth plans that it has for the future. Among other things, management discussed the continued execution on the turnaround plan and access to funding to enable the company to attain its various growth targets.
Real Goods Solar, Inc. – Class A (NASDAQ: RGSE)’s turnaround and liquidity plan revolves around reducing debt, driving internal efficiency and increasing shareholders’ equity. Moreover, the company is working to lower the level of sales required to achieve breakeven in operating income.
Because of the operating efficiency efforts, the company saw its expenses related to selling, general administrative and operating fall 34% to $3.5 million in 1Q2016 relative to 1Q2015.
$10 million in convertible notes and warrants
It is worth noting that so far the management of Real Goods Solar, Inc. – Class A (NASDAQ: RGSE) is mainly focusing attention on lowering costs of operations and raising additional capital. Last month, the company completed a convertible note and warrants offering valued at $10 million. It received gross cash of $750,000 from the offering and said that the remaining $9.25 million was held in a restricted cash account.
The important of the note issuance
According to the management of Real, the recent notes issuance would enable the company to both secure funding for operations in the coming months. Additionally, the capital raise should enable the company to meet NASDAQ’s requirement on minimum stockholders’ equity.
What transpired for Real Goods Solar, Inc. – Class A (NASDAQ: RGSE) during 1Q2016?
Real Goods Solar, Inc. – Class A (NASDAQ: RGSE)’s revenue contracted to $4.94 million in 1Q2016 from $10.6 million in 1Q2015. But net loss improved to $3.65 million compared to $3.73 million.
During 1Q2016, Real revealed that its residential backlog rose 3.5% to $9.8 million compared backlog of $9.5 million in the corresponding quarter a year earlier. Still in the quarter, Real revealed inking several deals in Rhode Island. Backlog in Rhode Island also ascended to $4.5 million.
According to Real Goods Solar, Inc. – Class A (NASDAQ: RGSE)’s CEO, Dennis Lacey, shortage of capital in 1H2016 has hampered some of their transformation efforts but he believes that the company will still deliver on its turnaround promise to shareholders.