RGS Energy posts quarterly profit as restructuring efforts take hold

LOUISVILLE —RGS Energy Inc. (Nasdaq: RGSE) on Monday reported a profit of $1.4 million for its second quarter that ended June 30, a big turnaround from a loss of $21.4 million during the same period a year ago.

The Louisville-based installer of solar rooftop systems, officially called Real Goods Solar Inc., reported revenue of $14.7 million compared with $19.6 million for the second quarter of 2014. The profit amounted to 28 cents per share for the quarter compared with a loss of $9.27 for the equivalent quarter a year ago.

During the quarter, RGS was facing possible delisting by Nasdaq for having a stock price below $1 per share. In May, the company issued a 1-for-20 reverse stock split that boosted its stock price from 96 cents per share to $2.66. On Monday it was trading at $1.78 per share.

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But there is still the issue of RGS Energy’s market capitalization. In April, Nasdaq issued a separate warning to RGS after its market capitalization, the combined value of its outstanding shares, stayed below $35 million for 30 consecutive business days. RGS has until Oct. 12 to get back into compliance with that rule or face delisting. RGS’ market capitalization as of Monday was $21.8 million.

“During the second quarter, we made great strides toward turning around our business that resulted in several accomplishments, including our return to positive stockholders’ equity and positive working capital,” Dennis Lacey, RGS’ chief executive, said in a prepared statement. “Since the end of the quarter, we have further reduced our accounts payable, the aging of which was hindering our business. We are now pivoting our efforts toward revenue growth by expanding our sales and construction capabilities.”

The company previously reported that it took actions to restructure its business operations that resulted in cutting the operating loss in half compared to the first quarter of this year.

The company did not emphasize originating new sales during the first half of the year as it focused on converting its long-standing backlog to revenue and achieving a better balance between sales and construction. Now that the company has reduced its backlog and established a stronger financial position that the company believes will support the expansion of its sales organization, it is now refocused on new sales order generation.

Approximately 25 percent of the company’s revenue for the second quarter of 2014 was from two states, Missouri and Colorado, which previously offered attractive incentives to homeowners. With the repeal of those incentives, the revenue from these states in the second quarter of 2015 was approximately 1 percent of revenue.

The company reported that it installed solar equipment on 438 roofs in the second quarter compared with 264 installations in the previous quarter and 568 installations in the second quarter of 2014.