• Record Revenue of $24.6 Million
  • Operating Income Increased Over Three Times to $1.2 Million

BOULDER, Colo., Nov. 3, 2010 (GLOBE NEWSWIRE) -- Real Goods Solar, Inc. (Nasdaq:RSOL), a leading residential solar energy integrator, today announced results for its third quarter ended September 30, 2010.

Net revenue for the third quarter of 2010 increased 7.2% to $24.6 million from $23.0 million recorded in the same period last year. All of the year-over-year revenue growth was organic.

Gross profit increased to $6.2 million, or 25.3% of net revenue, for the third quarter of 2010 from $5.0 million, or 21.8% of net revenue, in the comparable period last year. The increase in gross profit percentage primarily reflects improved selling and installation practices as well as declines in module prices over the last year.

Operating expenses as a percent of net revenue decreased to 20.5% for the third quarter of 2010 from 20.7% in the comparable period last year. This decrease primarily reflects the leveraging of fixed costs and cost savings achieved by integrating all acquired businesses onto a single set of systems and a unified brand.

Operating income for the third quarter of 2010 improved significantly to $1.2 million, as compared to $258 thousand for the comparable period last year. EBITDA for the third quarter of 2010, prior to shared-based and bonus compensation, was $1.9 million, or 7.5% of net revenue. Refer to the Non-GAAP Financial Measures table below.

Net income for the third quarter of 2010 improved to $704 thousand, or $0.04 per share, as compared to $158 thousand, or $0.01 per share, for the comparable period last year.

For the nine months ended September 30, 2010, revenue grew to $57.2 million, a 26.4% increase from $45.2 million in the comparable period last year. Operating income for the nine month period was $1.6 million as compared to a loss of $2.9 million last year. Net income for the nine month period was $1.0 million as compared to a loss of $1.8 million last year.

For the twelve month period ended September 30, 2010, revenue increased to $76.3 million, representing 30.0% organic revenue growth from the previous twelve months. Operating income for the twelve month period was $2.0 million and EBITDA, prior to share-based and bonus compensation, was $3.6 million. Refer to the Non-GAAP Financial Measures table below.

"We are very pleased with our third quarter revenue performance, our improved gross profit margin and our expanding profitability," commented John Schaeffer, President. "Internal revenue growth for the last twelve months has been 30% and we continue to see strong demand for both residential and commercial solar. We remain focused on building our backlog and on hiring installation crews where appropriate to expand our production capacity and keep up with demand."

"Our financial metrics across the board were very strong in the third quarter," said Erik Zech, Chief Financial Officer. "Our ability to show improved gross margins along with declines in operating expenses as a percentage of net revenue are both indicative of the progress we have made in optimizing our business. Our balance sheet remained strong with cash increasing by $3.0 million from the end of the year and by $3.4 million from the previous quarter to $15.2 million, and no debt."

Real Goods Solar will host a conference call tomorrow, November 4, 2010, at 8:30 a.m. PDT (11:30 a.m. EDT) to review the third quarter results.
Dial-in No.: 877-941-1430 (domestic) or 480-629-9667 (international)
Passcode: Real Goods

A replay of the call will begin approximately two hours after the end of the call and will continue until midnight EST on November 11, 2010.
Replay number: 877-870-5176 (domestic) or 858-384-5517 (international)
Pin: 4381108

About Real Goods Solar, Inc.

Real Goods Solar, Inc. is a leading residential solar energy integrator, having installed over 6,500 solar systems. Real Goods Solar offers turnkey solar energy services, and has 32 years of experience in residential solar energy, beginning with the sale in 1978 of the first solar photovoltaic, or PV, panels in the United States.  For more information about Real Goods Solar, please visit www.realgoodssolar.com, or call (888) 507-2561.

The Real Goods Solar, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6455

This press release includes forward-looking statements relating to matters that are not historical facts. Forward-looking statements may be identified by the use of words such as "expect," "intend," "believe," "will," "should" or comparable terminology or by discussions of strategy. While Real Goods Solar believes its assumptions and expectations underlying forward-looking statements are reasonable, there can be no assurance that actual results will not be materially different. Risks and uncertainties that could cause materially different results include, among others, introduction of new products and services, completion and integration of acquisitions, the possibility of negative economic conditions, and other risks and uncertainties included in Real Goods Solar's filings with the Securities and Exchange Commission. Real Goods Solar assumes no duty to update any forward-looking statements.
REAL GOODS SOLAR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
(In thousands, except per share data) 
         
  Three Months Ended Three Months Ended
  September 30, 2010 September 30, 2009
Net revenue  $24,626 100.00% $22,966 100.0%
Cost of goods sold  18,407 74.7% 17,952 78.2%
Gross profit  6,219 25.3% 5,014 21.8%
Operating expenses  5,044 20.5% 4,756 20.7%
Income from operations  1,175 4.8% 258 1.1%
Interest income  2 0.0% 1 0.0%
Income before income taxes  1,177 4.8% 259 1.1%
Income tax expense  473 1.9% 101 0.4%
Net income attributable to Real Goods Solar, Inc.  $704 2.9% $158 0.7%
         
Weighted-average shares outstanding:         
Basic  18,305   18,271  
Diluted  18,305   18,273  
         
Net income per share attributable to Real Goods Solar, Inc. common shareholders:        
Basic  $0.04   $0.01  
Diluted  $0.04   $0.01  
 
REAL GOODS SOLAR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
(Unaudited) 
(In thousands, except per share data) 
         
  Nine Months Ended Nine Months Ended
  September 30, 2010 September 30, 2009
Net revenue  $57,162 100.0% $45,210 100.0%
Cost of goods sold  41,874 73.3% 34,616 76.6%
Gross profit  15,288 26.7% 10,594 23.4%
Operating expenses  13,663 23.9% 13,527 29.9%
Income (loss) from operations  1,625 2.8% (2,933) -6.5%
Interest income  5 0.0% 1 0.0%
Income (loss) before income taxes  1,630 2.8% (2,932) -6.5%
Income tax expense (benefit)  641 1.1% (1,138) -2.5%
Net income (loss) attributable to Real Goods Solar, Inc.  $989 1.7% $(1,794) -4.0%
         
Weighted-average shares outstanding:         
Basic  18,298   18,145  
Diluted  18,373   18,145  
         
Net income (loss) per share attributable to Real Goods Solar, Inc. common shareholders:        
Basic  $0.05   $(0.10)  
Diluted  $0.05   $(0.10)  
 
REAL GOODS SOLAR, INC. 
CONDENSED CONSOLIDATED BALANCE SHEETS 
(Unaudited) 
(In thousands) 
 
  September 30, December 31,
  2010 2009
     
Assets    
Current assets:    
Cash and cash equivalents  $15,227 $12,206
Accounts receivable, net  16,022 13,996
Inventory, net  7,311 4,769
Deferred costs on uncompleted contracts  313 1,024
Deferred advertising costs  254 114
Receivable and deferred tax assets  1,007 833
Other current assets  714 598
Total current assets  40,848 33,540
     
Property and equipment, net  5,217 5,145
Goodwill  732 732
Deferred tax assets  2,942 3,064
Other assets  527 813
Total assets  $50,266 $43,294
     
Liabilities and shareholders' equity    
Current liabilities:    
Accounts payable  $14,452 $8,821
Accrued liabilities  2,460 2,500
Payable to Gaiam  1,743 1,636
Total current liabilities  18,655 12,957
Total shareholders' equity  31,611 30,337
Total liabilities and shareholders' equity  $50,266 $43,294

Non-GAAP Financial Measures

We have utilized the non-GAAP information set forth below as an additional device to aid in understanding and analyzing our financial results for the three and nine months ended September 30, 2010. We believe that these non-GAAP measures will allow for a better evaluation of the operating performance of our business and facilitate meaningful comparison of the results in the current period to those in prior periods and future periods. Reference to these non-GAAP measures should not be considered a substitute for results that are presented in a manner consistent with GAAP.

Reconciliations of our three and twelve months ended September 30, 2010 GAAP income from operations to our non-GAAP earnings before interest, taxes, depreciation, and share-based and bonus compensation are set forth below (unaudited, in thousands):

  For the Three Months Ended 9/30/2010 For the Twelve Months Ended 9/30/2010
     
Income from operations $ 1,175 $ 1,962
     
Exclusion of depreciation  133 505
Exclusion of share-based and bonus compensation  542   1,113
     
Non-GAAP EBITDA $ 1,850 $ 3,580
CONTACT:  Real Goods Solar, Inc.          Erik Zech, Chief Financial Officer          415-295-4952          erik.zech@realgoods.com

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