First Quarter 2024: Revenue down 40% from Q1 2023 Gross profit down 40% from Q1 2023 Operating Expenses down 31% from Q1 2023 Operating Loss increased 2% from Q1 2023 Net Income of $1.2M, Net Loss attributable to common shareholders of $10.1M Adjusted EBITDA loss of $1.5M MINNETONKA, Minn., May 09, 2024 (GLOBE NEWSWIRE) -- Pineapple Energy Inc. (NASDAQ:PEGY), a leading provider of sustainable solar energy and back-up power to households and small businesses, today announced financial results for the first quarter ended March 31, 2024. Pineapple CEO Kyle Udseth commented, "The first quarter of 2024 presented the toughest operating conditions we've faced in our time as a public company. Negative Q1 EBITDA is not uncommon in the rooftop solar industry due to seasonality and timing, but we did unfortunately break our prior streak of four consecutive quarters with positive adjusted EBITDA. We've been hard at work in our efforts to get profitability back on-track in Q2, and one positive data point I can share is that kilowatts sold across the residential businesses in Q1 of 2024 were essentially flat year-over-year vs. Q1 of 2023, which shows strong performance from our sales teams, especially relative to broader market and industry trends. As we continue to optimize our lead-generation and conversion funnel and accelerate the sales engine, we believe we can continue pushing healthy volumes through our installation pipelines while simultaneously right-sizing our overhead expenses. We currently expect that our core markets of Long Island in New York and Oahu in Hawaii should be stable and strong for the remainder of the year and into 2025. We continue to evaluate opportunities to acquire new businesses and add new markets to further build off this strong foundation." Pineapple CFO Eric Ingvaldson commented, "In addition to unfavorable market conditions in the first quarter of 2024, the first quarter of 2023 was a tough comparison for Pineapple. In late 2022, permitting issues in Hawaii and delayed equipment deliveries in New York led to a significant number of projects originally scheduled for the fourth quarter of 2022 being installed in the first quarter of 2023. These timing issues led to a robust first quarter in the prior year during the period which is normally a seasonal low point for the business. Despite the year-over-year decline in revenue and gross profit, we were able to minimize the operating loss in the quarter by achieving a 31% reduction in operating expenses from the prior year." First Quarter Business Highlights Pro forma operating metrics Residential kW installed down 18% (Q1 2024 vs Q4 2023) Residential kW sold down 7% (Q1 2024 vs Q4 2023) Residential battery attachment rate down to 29% in Q1 2024, from 36% in Q4 2023 Backlog declined to $30M as of May 1, 2024, down from $36M as of December 31, 2023 First Quarter 2024 Results from Continuing Operations1   1st Quarter 2024 1st Quarter 2023 Revenue $13,219,197 $22,065,424 Gross Profit $4,805,448 $8,006,315 Operating Expense $6,988,402 $10,155,841 Operating Loss $(2,182,954) ($2,149,526) Other Income (Expense) $3,391,767 ($444,414) Net Income (Loss) $1,202,651 $(2,599,672) Net Loss Attributable to Common Shareholders 2 ($10,119,988) ($2,554,989) Cash, restricted cash & investments3 $3,292,451 $7,610,981 Diluted Loss per Share 2 ($0.26) ($0.26) Adjusted EBITDA4 $(1,509,570) $372,802 1 Includes continuing operations and excludes discontinued operations. 2 Includes $11,322,639 of deemed dividends attributable to shareholders in the first quarter of 2024. 3 Includes restricted cash and liquid investments of $1,502,495 as of March 31, 2024, and $5,690,567 as of March 31, 2023, earmarked for payment of contingent value rights. 4 Adjusted EBITDA is a non-GAAP financial measure. See "Non-GAAP Financial Measures" and the reconciliations in this release for further information. Total revenue was $13.2 million in the first quarter of 2024, down $8.8 million, or 40%, from the first quarter of 2023. Residential contract sales decreased $6,743,799, or 37%, due to a 29% reduction in residential kilowatts installed and also a decrease in average price per system installed as result of lower financing fees and lower battery attachment rate. Commercial contract sales decreased $1,830,586, or 65%, due to a delay in the start of commercial pipeline projects. In addition, there was software revenue of $250,000 in the first quarter of 2023 is related to a one-time licensing arrangement that did not recur in the first quarter of 2024. Total gross profit was $4.8 million in the first quarter of 2024, a decrease of $3.2 million, or 40%, from the first quarter of 2023. Gross profit decreased due primarily to decreased revenue. Gross margin remained flat at 36% during the first quarter of 2024 as compared to the first quarter of 2023. Total operating expenses were $7.0 million in the first quarter of 2024, a decrease of $3.2 million, or 31%, from the first quarter of 2023. The decrease in operating expenses was primarily due to lower amortization expense and lower sales and marketing expense, including commissions, on lower revenue in the quarter and decreased personnel expenses. Operating expenses in the first quarter of 2024 included $801,792 of amortization and depreciation expense, $197,306 of share-based compensation and a $350,000 favorable fair value remeasurement of earnout consideration. Other income (expense) was $3.4 million in the first quarter of 2024, an increase of $3.8 million, from the first quarter of 2023. The increase was primarily due to a $3.7 million fair value remeasurement gain on the warrant liability, and a $626,085 increase in favorable fair value remeasurement of contingent value rights, partially offset by a $306,652 increase in interest expense because of debt financing closed in the second quarter of 2023. Net loss from continuing operations attributable to common shareholders was $10.1 million, or ($0.26) per diluted share in the first quarter of 2024. This was a decline from the net loss from continuing operations attributable to common shareholders in the first quarter of 2023 of $2.6 million, or ($0.26) per diluted share. The net loss from continuing operations attributable to common shareholders in the first quarter of 2024 included $11.3 million in deemed dividends attributable to common shareholders. Net income from continuing operations in the first quarter of 2024 was $1,202,651, a 146% increase from a net loss from continuing operations of $2,599,672 in the first quarter of 2023. First quarter 2024 adjusted EBITDA decreased 505%, or $1,882,372, compared to the first quarter of 2023, due primarily to the decline in gross profit, partially offset by the decline in operating expenses. As of March 31, 2024, cash, cash equivalents, and restricted cash were $3.3 million. Of that amount, $1.5 million was held as restricted cash and investments that can only be used for the legacy CSI business and will be distributed to holders of CVRs (Contingent Value Rights). Status of Contingent Value RightsThe CVR (Contingent Value Rights) liability as of March 31, 2024, was estimated at $1.3 million and represents the estimated fair value as of that date of the legacy CSI assets to be distributed to CVR holders. First Fiscal Quarter 2024 Conference Call DetailsAs announced on May 6, 2024, Pineapple will discuss its first fiscal quarter results via a webcast and conference call on Friday, May 10, 2024 at 08:30 a.m. ET. The call will be hosted by Kyle Udseth, Chief Executive Officer and Eric Ingvaldson, Chief Financial Officer. When: Friday, May 10 Time: 8:30am ET Dial-In: (646) 307-1963 or toll free (800) 715-9871Conference ID: 6873571 Webcast:  https://edge.media-server.com/mmc/p/pfj2geyk     An archived webcast will be accessible from the "Recent Events" section of Pineapple's Investor Relations website for on-demand viewing at https://ir.pineappleenergy.com/news-events. About Pineapple EnergyPineapple is focused on growing leading local and regional solar, storage, and energy services companies nationwide. Our vision is to power the energy transition through grass-roots growth of solar electricity paired with battery storage. Our portfolio of brands (SUNation, Hawaii Energy Connection, E-Gear, Sungevity, and Horizon Solar Power) provide homeowners and small businesses with an end-to-end product offering spanning solar, battery storage, and grid services. Forward Looking StatementsThis press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, among others, statements regarding future financial performance, future growth or growth opportunities, future opportunities, future cost reductions, future flexibility to pursue acquisitions, future cash flows and future earnings. These statements are based on the Company's current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements here due to changes in economic, business, competitive or regulatory factors, and other risks and uncertainties, including those set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements in this press release speak only as of the date of this press release. The Company does not undertake any obligation to update or revise these forward-looking statements for any reason, except as required by law. Contacts: Pineapple Energy Kyle UdsethChief Executive Officer+1 (952) Eric IngvaldsonChief Financial Officer+1 (952)                         PINEAPPLE ENERGY INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)             ASSETS   March 31   December 31     2024       2023   CURRENT ASSETS:           Cash and cash equivalents $ 1,789,956     $ 3,575,283   Restricted cash and cash equivalents   1,502,495       1,821,060   Trade accounts receivable, less allowance for           credit losses of $132,586 and $94,085, respectively   4,976,483       5,010,818   Inventories, net   2,919,861       3,578,668   Related party receivables   27,387       46,448   Prepaid expenses   1,630,106       1,313,082   Costs and estimated earnings in excess of billings   6,570       57,241   Other current assets   293,923       376,048   TOTAL CURRENT ASSETS   13,146,781       15,778,648   PROPERTY, PLANT AND EQUIPMENT, net   1,442,561       1,511,878   OTHER ASSETS:           Goodwill   20,545,850       20,545,850