SEC Filing | SolarEdge Technologies, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 8, 2017

SOLAREDGE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-36894	20-5338862
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)


1 HaMada Street, Herziliya Pituach, Israel		4673335
(Address of Principal executive offices)		(Zip Code)

Registrant’s Telephone number, including area code: 972 (9) 957-6620

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2 below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On November 8, 2017 SolarEdge Technologies, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2017. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, this information, including the exhibits hereto, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall such information, including the exhibits hereto be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits

Exhibit No.		Description
Exhibit 99.1		Press release dated November 8, 2017

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.

	SOLAREDGE TECHNOLOGIES, INC.

Date: November 8, 2017	By:	/s/ Ronen Faier
	Name:	Ronen Faier
	Title:	Chief Financial Officer

Exhibit 99.1

SolarEdge Announces Third Quarter 2017 Financial Results

FREMONT, Calif. — November 8, 2017. SolarEdge Technologies, Inc. (Nasdaq: SEDG), a global leader in PV inverters, power optimizers, and module-level monitoring services, today announced its financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Highlights

Revenues for the quarter of $166.6 million

GAAP gross margin for the quarter of 34.9%

GAAP operating income for the quarter of $25.4 million

GAAP net income for the quarter of $28.0 million

Non-GAAP net income for the quarter of $31.5 million

GAAP net diluted earnings per share for the quarter of $0.61

Non-GAAP net diluted earnings per share for the quarter of $0.66

Cash flow from operating activities of $33.6 million

676 Megawatts (AC) of inverters shipped for the quarter

“We are happy to report another record quarter, in revenues, profitability and cash flow generation. On the operational side, we shipped more than two million optimizers this quarter, and have now shipped more than 20 million optimizers since initiating sales in 2010,” said Guy Sella, Founder, Chairman and CEO of SolarEdge. “Sales this quarter from outside the United States were 51% of our revenues, resulting from our continued investment in global sales. We continue to generate increasing cash flow from operations which enhances our financial strength and allows us to continue to invest in new products and development of new markets.”

Quarter Ended September 30, 2017 Summary

The Company reported record revenues of $166.6 million, up 22% from the prior quarter and up 30% year over year.

GAAP gross margin reached 34.9%, up from 34.6% in the prior quarter and up from 32.6% year over year.

GAAP operating expenses were $32.7 million, an increase of 17% from the prior quarter and 38% year over year.

GAAP operating income was $25.4 million, up 33% from $19.1 million in the prior quarter and up from $18.2 million year over year.

GAAP net income was $28.0 million, up 24% from $22.5 million in the prior quarter and up from $15.6 million year over year.

Non-GAAP net income was $31.5 million, up 22% from $25.8 million in the prior quarter and up from $20.9 million year over year.

GAAP net diluted earnings per shares (“EPS”) was $0.61, up from $0.50 in the prior quarter and up from $0.35 year over year.

Non-GAAP net diluted EPS was $0.66, up from $0.55 in the prior quarter and up from $0.46 year over year.

As of September 30, 2017, cash, cash equivalents, restricted cash and marketable securities totaled $304.7 million, compared to $274.7 million on June 30, 2017.

Outlook for the Quarter Ending December 31, 2017

The Company also provides guidance for the fourth quarter ending December 31, 2017 as follows:

Revenues to be within the range of $175 million to $185 million;

Gross margins to be within the range of 33% to 35%.

Conference Call

The Company will host a conference call to discuss these results at 4:30 P.M. EST on Wednesday, November 8, 2017. The call will be available, live, to interested parties by dialing 888-298-3457. For international callers, please dial +1 719-325-2199. The Conference ID number is 6325065. A live webcast will also be available in the Investors Relations section of the Company’s website at: http://investors.solaredge.com

A replay of the webcast will be available in the Investor Relations section of the Company’s web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.

About SolarEdge

SolarEdge provides an intelligent inverter solution that has changed the way power is harvested and managed in solar photovoltaic systems. The SolarEdge DC optimized inverter system maximizes power generation at the individual PV module-level while lowering the cost of energy produced by the solar PV system. Supporting increased PV proliferation, the SolarEdge system consists of power optimizers, inverters, home energy management, storage solutions, and a cloud-based monitoring platform. SolarEdge’s solutions address a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. SolarEdge is online at http://www.solaredge.us

Use of Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures in this release. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles in the United States, or GAAP. Reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the accompanying tables to this release. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same captions and may differ from non-GAAP financial measures with the same or similar captions that are used by other companies. As such, these non-GAAP measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.

The Company uses these non-GAAP financial measures to analyze its operating performance and future prospects, develop internal budgets and financial goals, and to facilitate period-to-period comparisons. The Company believes that these non-GAAP financial measures reflect an additional way of viewing aspects of its operations that, when viewed with its GAAP results, provide a more complete understanding of factors and trends affecting its business.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This release contains forward looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include information, among other things, concerning: our possible or assumed future results of operations; future demands for solar energy solutions; business strategies; technology developments; financing and investment plans; dividend policy; competitive position; industry and regulatory environment; general economic conditions; potential growth opportunities; and the effects of competition. These forward-looking statements are often characterized by the use of words such as “anticipate,” “believe,” “could,” “seek,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” “would” or similar expressions and the negative or plural of those terms and other like terminology.

Forward-looking statements are only predictions based on our current expectations and our projections about future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. Given these factors, you should not place undue reliance on these forward-looking statements. These factors include, but are not limited to, the matters discussed in the section entitled “Risk Factors” of our Registration Statement on Form S-1 (including the related prospectus), Annual Report on Form 10-KT for the year ended December 31, 2016, filed on February 21, 2017, Current Reports on Form 8-K and other reports filed with the SEC. All information set forth in this release is as of November 8, 2017. The Company undertakes no duty or obligation to update any forward-looking statements contained in this release as a result of new information, future events or changes in its expectations.

Investor Contacts

SolarEdge Technologies, Inc.

Ronen Faier, Chief Financial Officer

+1 510-498-3263

investors@solaredge.com

Sapphire Investor Relations, LLC

Erica Mannion or Michael Funari

+1 617-542-6180

investors@solaredge.com

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017			2016
	Unaudited				Unaudited

Revenues	$	166,552	$	128,484	$	417,705		$	378,441
Cost of revenues		108,498		86,609		273,909			256,719

Gross profit		58,054		41,875		143,796			121,722

Operating expenses:

Research and development, net		14,363		9,935		38,546			27,876
Sales and marketing		13,217		10,036		35,953			27,792
General and administrative		5,078		3,664		12,782			10,191

Total operating expenses		32,658		23,635		87,281			65,859

Operating income		25,396		18,240		56,515			55,863

Financial income, net		2,666		390		7,671			1,892

Income before taxes on income		28,062		18,630		64,186			57,755

Taxes on income (tax benefit)		91		3,014		(484	)		4,067

Net income	$	27,971	$	15,616	$	64,670		$	53,688

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 30,			December 31,
	2017			2016
	Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	149,448		$	104,683
Restricted cash		1,400			897
Marketable Securities		81,488			74,465
Trade receivables, net		91,694			71,041
Prepaid expenses and other accounts receivable		38,201			21,347
Inventories		62,356			67,363

Total current assets		424,587			339,796

LONG-TERM ASSETS:
Marketable securities		72,351			44,262
Property, equipment and intangible assets, net		45,714			37,381
Prepaid expenses and lease deposits		732			489
Deferred tax assets, net		5,822			2,815

Total long term assets		124,619			84,947

Total assets	$	549,206		$	424,743

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Trade payables, net	$	42,700		$	34,001
Employees and payroll accruals		17,640			13,018
Warranty obligations		12,942			13,616
Deferred revenues		2,743			1,202
Accrued expenses and other accounts payable		16,407			8,648

Total current liabilities		92,432			70,485

LONG-TERM LIABILITIES:
Warranty obligations		58,625			44,759
Deferred revenues		26,858			18,660
Lease incentive obligation		1,838			2,061

Total long-term liabilities		87,321			65,480

COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS’ EQUITY:

Common stock		4			4
Additional paid-in capital		323,076			307,098
Accumulated other comprehensive loss		(297	)		(324	)
Retained earnings (accumulated deficit)		46,670			(18,000	)

Total stockholders’ equity		369,453			288,778

Total liabilities and stockholders’ equity	$	549,206		$	424,743

SOLAREDGE TECHNOLOGIES INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Nine months ended September 30,
	2017			2016
	Unaudited
Cash flows provided by operating activities:
Net income	$	64,670		$	53,688
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and intangible assets		4,932			3,468
Amortization of premiums on available-for-sale marketable securities		1,310			829
Stock-based compensation		12,183			8,132
Deferred tax assets, net		(3,063	)		2,327
Realized losses on Cash Flow Hedges		-			2

Changes in assets and liabilities:
Inventories		5,005			19,216
Prepaid expenses and other accounts receivable		(17,360	)		8,214
Trade receivables, net		(20,168	)		(38,105	)
Trade payables, net		8,667			(21,699	)
Employees and payroll accruals		4,509			(916	)
Warranty obligations		13,192			15,514
Deferred revenues		9,699			5,069
Accrued expenses and other accounts payable		7,537			2,192
Lease incentive obligation		(223	)		(185	)

Net cash provided by operating activities		90,890			57,746

Cash flows used in investing activities:
Purchase of property and equipment		(13,203	)		(13,869	)
Decrease (increase) in restricted cash		(503	)		2,471
Decrease (increase) in short and long-term lease deposits		(60	)		37
Investment in available-for-sale marketable securities		(82,469	)		(85,579	)
Maturities of available-for-sale marketable securities		46,513			21,654

Net cash used in investing activities		(49,722	)		(75,286	)

Cash flows from financing activities:
Issuance costs related to initial public offering		-			(194	)
Proceeds from issuance of shares upon exercise of options		3,795			1,774

Net cash provided by financing activities		3,795			1,580

Increase (decrease) in cash and cash equivalents		44,963			(15,960	)
Cash and cash equivalents at the beginning of the period		104,683			106,150
Effect of exchange rate differences on cash and cash equivalents		(198	)		(176	)

Cash and cash equivalents at the end of the period	$	149,448		$	90,014

SOLAREDGE TECHNOLOGIES INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(In thousands, except gross profit and per share data)

(Unaudited)

	Reconciliation of GAAP to Non-GAAP Gross Profit
	Three months ended						Nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016

Gross profit (GAAP)		58,054		47,066		41,875		143,796		121,722
Stock-based compensation		538		517		385		1,548		941
Gross profit (Non-GAAP)		58,592		47,583		42,260		145,344		122,663

	Reconciliation of GAAP to Non-GAAP Gross Margin
	Three months ended									Nine months ended
	September 30, 2017			June 30, 2017			September 30, 2016			September 30, 2017			September 30, 2016
Gross margin (GAAP)		34.9	%		34.6	%		32.6	%		34.4	%		32.2	%
Stock-based compensation		0.3	%		0.4	%		0.3	%		0.4	%		0.2	%
Gross margin (Non-GAAP)		35.2	%		35.0	%		32.9	%		34.8	%		32.4	%

	Reconciliation of GAAP to Non-GAAP Operating expenses
	Three months ended						Nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Operating expenses (GAAP)		32,658		27,951		23,635		87,281		65,859
Stock-based compensation R&D		1,423		1,280		927		3,908		2,398
Stock-based compensation S&M		1,439		1,204		849		3,673		2,421
Stock-based compensation G&A		1,137		1,033		939		3,054		2,371
Operating expenses (Non-GAAP)		28,659		24,434		20,920		76,646		58,668

	Reconciliation of GAAP to Non-GAAP Operating income
	Three months ended						Nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Operating income (GAAP)		25,396		19,115		18,240		56,515		55,863
Stock-based compensation		4,537		4,034		3,100		12,183		8,132
Operating income (Non-GAAP)		29,933		23,149		21,340		68,698		63,995

	Reconciliation of GAAP to Non-GAAP Tax on income (Tax benefit)
	Three months ended							Nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016			September 30, 2017			September 30, 2016
Tax on income (Tax benefit) (GAAP)		91		186		3,014			(484	)		4,067
Deferred tax asset (realized)		959		773		(2,179	)		3,064			(2,326	)
Tax on income (Tax benefit) (Non-GAAP)		1,050		959		835			2,580			1,741

	Reconciliation of GAAP to Non-GAAP Net income
	Three months ended								Nine months ended
	September 30, 2017			June 30, 2017			September 30, 2016		September 30, 2017			September 30, 2016
Net income (GAAP)		27,971			22,524			15,616		64,670			53,688
Stock-based compensation		4,537			4,034			3,100		12,183			8,132
Deferred tax realized (asset)		(959	)		(773	)		2,179		(3,064	)		2,326
Net income (Non-GAAP)		31,549			25,785			20,895		73,789			64,146

	Reconciliation of GAAP to Non-GAAP Net basic EPS
	Three months ended								Nine months ended
	September 30, 2017			June 30, 2017			September 30, 2016		September 30, 2017			September 30, 2016
Net basic earnings per share (GAAP)		0.66			0.54			0.38		1.55			1.32
Stock-based compensation		0.11			0.10			0.08		0.29			0.20
Deferred tax realized (asset)		(0.03	)		(0.02	)		0.05		(0.08	)		0.06
Net basic earnings per share (Non-GAAP)		0.74			0.62			0.51		1.76			1.58

	Reconciliation of GAAP to Non-GAAP Net diluted EPS
	Three months ended								Nine months ended
	September 30, 2017			June 30, 2017			September 30, 2016		September 30, 2017			September 30, 2016
Net diluted earnings per share (GAAP)		0.61			0.50			0.35		1.44			1.21
Stock-based compensation		0.07			0.06			0.06		0.19			0.14
Deferred tax realized (asset)		(0.02	)		(0.01	)		0.05		(0.06	)		0.05
Net diluted earnings per share (Non-GAAP)		0.66			0.55			0.46		1.57			1.40

	Reconciliation of GAAP to Non-GAAP No. of shares used in Net diluted EPS
	Three months ended						Nine months ended
	September 30, 2017		June 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Number of shares used in computing net diluted earnings per share (GAAP)		46,131,556		44,831,590		43,995,227		44,937,527		44,348,461
Stock-based compensation		1,535,258		2,228,246		1,742,211		2,084,722		1,343,651
Number of shares used in computing net diluted earnings per share (Non-GAAP)		47,666,814		47,059,836		45,737,438		47,022,249		45,692,112