Executive Summary

Q1 2014 revenue rose year over year to $3.61M but fell sharply sequentially from Q4 2013 ($15.38M), while net loss narrowed to $0.83M and EPS was ($0.00) per share; operating expenses were significantly reduced versus the prior year .
Balance sheet liquidity remained tight (cash $0.27M) and equity negative, but management executed a $21.75M private placement agreement and repaid Cathay Bank debt in May, which are intended to improve financial flexibility .
No formal numerical guidance was provided; management emphasized strategic repositioning, new leadership appointments, and entry into China residential solar via YES! kits .
Potential stock reaction catalysts: closing of the $21.75M private placement, further EPC project funding progress, and monetization/settlement of legacy assets (e.g., collections from previously written-off projects) .

What Went Well and What Went Wrong

What Went Well

Year-over-year improvement: Net sales increased to $3.6M (from $1.8M), net loss narrowed to $0.8M (from $3.1M), and operating expenses fell to $1.3M (from $3.4M), reflecting cost control and operating discipline .
Balance sheet actions: Repayment of Cathay Bank debt, $1M cash collection from a previously written-off project, and executing a $21.75M private placement agreement to bolster liquidity .
Strategic momentum and leadership: Appointed seasoned executives (Roger Yu as interim CFO; H.K. Cheong as COO) and pursued entry into China residential solar through YES! branded kits; “We are pleased with the significant progress we have made recently toward improving SPI Solar’s balance sheet” – Min Xiahou, Global CEO .

What Went Wrong

Sequential revenue decline and soft gross margin: Revenue fell to $3.6M from $15.4M in Q4, with gross margin at ~5.5%, indicating lower project mix and scale vs. recent quarters .
Liquidity constraints: Cash decreased to $0.27M (from $1.03M at year-end), and the company carried substantial current liabilities and negative equity, underscoring the need for external financing .
Legacy and sponsor uncertainty: Prior quarter results included $11.1M in one-time charges (e.g., Mountain Creek impairment, contract losses, bad debt reserve), and LDK Solar’s liquidation created uncertainty around sponsorship and business impacts .

Financial Results

Metric	Q1 2013	Q3 2013	Q4 2013	Q1 2014
Revenue ($USD Millions)	$1.77	$21.30	$15.38	$3.61
Gross Profit ($USD Millions)	$0.48	-$0.90 (derived)	-$3.31	$0.20
Gross Margin (%)	27.1% (0.48/1.77)	-4.2% (-0.90/21.30)	-21.5% (-3.31/15.38)	5.5% (0.20/3.61)
Operating Expenses ($USD Millions)	$3.45	$3.40	$14.54	$1.29
Net Income (Loss) ($USD Millions)	-$3.14	-$3.60	-$18.69	-$0.83
Diluted EPS ($USD)	($0.02)	($0.02)	($0.09)	($0.00)
Net Income Margin (%)	-178% (-3.14/1.77)	-16.9% (-3.60/21.30)	-121.5% (-18.69/15.38)	-23.0% (-0.83/3.61)

KPIs and Balance Sheet

KPI	Q4 2013	Q1 2014
Cash and Equivalents ($USD Millions)	$1.03	$0.27
Total Current Assets ($USD Millions)	$24.13	$22.68
Total Current Liabilities ($USD Millions)	$60.68	$60.08
Stockholders’ Deficit ($USD Millions)	-$2.87	-$3.63
Accounts Payable – Related Party ($USD Millions)	$50.91	$50.90

Consensus vs Actual (Q1 2014)

Metric	Consensus (S&P Global)	Actual	Beat/Miss
Revenue	Unavailable	$3.61M	N/A
EPS	Unavailable	($0.00)	N/A

Note: Wall Street consensus via S&P Global was unavailable due to missing SPGI/Capital IQ mapping for SPI; no estimate comparison could be performed.

Segment Breakdown

Disclosure	Q1 2014
Reported segments	Not disclosed in press release or 8-K exhibit

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2014 / Q2 2014	Not provided	Not provided	Maintained (no formal guidance)
Gross Margin	FY 2014 / Q2 2014	Not provided	Not provided	Maintained (no formal guidance)
OpEx	FY 2014 / Q2 2014	Not provided	Not provided	Maintained (no formal guidance)
OI&E / Tax Rate	FY 2014 / Q2 2014	Not provided	Not provided	Maintained (no formal guidance)
Dividends	FY 2014	Not provided	Not provided	Maintained (no formal guidance)

Related strategic/financing actions affecting outlook:

Private placement: $21.75M for 135.94M shares at $0.16; expected to close within three months subject to conditions and increase in authorized shares .
Debt actions: Cathay Bank debt repaid May 15, 2014 .
Project funding: Progress toward China Development Bank funding with expected mid-year completion (from Q4 release) .

Earnings Call Themes & Trends

Note: No Q1 2014 earnings call transcript was found.

Topic	Previous Mentions (Q-2: Q3 2013)	Previous Mentions (Q-1: Q4 2013)	Current Period (Q1 2014)	Trend
Financing & Liquidity	Emphasis on EPC project execution; higher revenue but negative gross profit suggested funding/terms pressure	One-time charges; progress on financing (Imclone removed $28.3M construction loan; seeking CDB funding mid-year)	$21.75M private placement; repayment of Cathay Bank debt; $1M collected from written-off project	Improving liquidity via equity raise and debt reduction
Strategic Positioning	Heavy EPC focus; volatile margins	“Downstream” positioning; JV and ownership of Mountain Creek (64.5% interest)	Entry into China residential solar via YES! kits and leadership changes	Evolving towards downstream/consumer kits; strengthening team
Sponsor/Shareholder Dynamics	—	LDK Solar liquidation disclosed; impact unknown	Not specifically updated; management focused on improving balance sheet	Ongoing uncertainty re legacy sponsor
Project Portfolio	Q3 revenue/COGS suggest heavy project throughput	JV with KDC Solar; project administration; Imclone financing progress	Continued progress in NJ, HI, CA projects	Active portfolio execution with selective ownership

Management Commentary

“We are pleased with the significant progress we have made recently toward improving SPI Solar’s balance sheet… expected to strengthen our strategy of uncovering solar business opportunities. One such opportunity is our Yes! solar initiative… harness emerging growth prospects in the residential solar sector in China.” – Min Xiahou, Global CEO .
“The solar market is finally moving out of winter and we are confident that SPI’s positioning in the downstream business is a right choice… We will continue to focus on our EPC specialties and explore further business opportunities in solar.” – Charlotte Xi, President, Global COO, Interim CFO .
“We are very pleased by the commitment demonstrated by these investors in this private placement… improve its financial condition and continue to build upon… projects.” – Min Xiahou, on private placement .

Q&A Highlights

No Q1 2014 earnings call transcript available, so no Q&A highlights could be extracted.

Estimates Context

Wall Street consensus estimates (S&P Global) for Q1 2014 revenue and EPS were unavailable due to missing SPGI/Capital IQ mapping for SPI; therefore, no beat/miss assessment versus consensus could be made. If mapping becomes available, we would compare actual revenue of $3.61M and EPS of ($0.00) to consensus and highlight any statistically significant deviations .

Key Takeaways for Investors

Sequential downtick in revenue and modest gross margin underscore the need for ongoing project funding and disciplined execution; cost reductions meaningfully improved operating profile versus prior year .
Liquidity actions (debt repayment; equity private placement) are central near-term catalysts for stabilizing the balance sheet and enabling project pipeline conversion .
Strategic pivot toward downstream ownership and China residential kits (YES!) may diversify revenue sources and improve margin quality over time, contingent on execution and market uptake .
Legacy issues (LDK liquidation, prior one-time charges) remain overhangs; watch for further disclosures on sponsor impacts and resolution of historical receivables .
Monitor closing of private placement (requires authorized shares increase), funding milestone with China Development Bank, and additional EPC wins to gauge near-term revenue trajectory .
With negative equity and high current liabilities (including related-party payables), external financing and asset monetization will likely remain pivotal to the medium-term thesis .
No formal guidance; investors should track quarterly revenue/margin cadence and cash levels as leading indicators of progress toward sustainable profitability .

SPI Energy Co., Ltd. (SPI)·Q1 2014 Earnings Summary