PowerSecure International, the diversified energy services company, posted its second consecutive quarterly loss, eliciting yawns from investors who focused instead on a more appetizing financial target: PowerSecure’s backlog.
The key to the Wake Forest company’s financial outlook is its long-term contracts that will deliver revenue in the future. PowerSecure posted an all-time record backlog of $349 million Wednesday that is expected to generate cashflow over the next six years.
During a conference call, PowerSecure CEO Sidney Hinton told analysts that the company is “hunting elephants” and explained the big-game metaphor as a business strategy fueled by paying top dollar to superstar sales reps.
“We have adopted a strategy a couple of years ago of going after industry leaders, proven individuals,” Hinton said. “We always spent more money on one person (rather) than have a team of three or four junior people.”
Never miss a local story.
The Wake Forest company’s shares closed Wednesday at $10.02, up 22 cents. The stock is down 42 percent this year.
Earlier PowerSecure announced that second-quarter sales fell 18.7 percent to $57.1 million and the company lost $2.7 million for the three-month period. PowerSecure took a hit in sales in all three divisions: distributed generated, utility infrastructure and energy efficiency.
Company officials attributed the weak second quarter to an unfavorable arrangement with a major utility customer, which has since been renegotiated, and to delays in work assignments form another major utility customer. PowerSecure does not identify its customers as a general rule.
Meanwhile, the 700-employee company’s backlog surged 55 percent since the first quarter of 2014, when it was at a healthy $225 million. PowerSecure’s backlog has grown 42 percent year-over-year since hitting $245 million in the second quarter of 2013.
The backlog has swelled thanks to two of the biggest contracts in the energy services company’s 14-year history. Under the deals, PowerSecure will construct a pair of industrial-scale solar farms for one of the largest investor-owned electric utilities in the country.