Revolution Lighting (RVLT) Lowers Q4 Revenue Guidance

Revolution Lighting Technologies, Inc. (NASDAQ: RVLT) provided an update to its preliminary fourth quarter and full year 2017 results, including a recognition of a non-cash goodwill and intangible asset impairment/restructuring charge that we will record in 2017.

A slower recovery from the unprecedented weather conditions in Texas and the southeastern United States at our Value Lighting division coupled with a slip of a number of energy savings projects to the first quarter of 2018 has resulted in fourth quarter revenue of approximately $35 million versus prior fourth quarter guidance of $47-$50 million (*** consensus is $47.7 million) . We expect to report adjusted EBITDA of break even and positive cash flow of $4-$5 million in the fourth quarter.

As a result, our total revenue for the full year 2017 is expected to be approximately $152 million versus our previous guidance of $165-$170 million. While we are disappointed in our fourth quarter and full year 2017 results, we will enter 2018 with a record backlog at Value Lighting and Revolution Lighting overall to provide us with a strong start to 2018, a year we are very excited and optimistic about.

Our preliminary guidance for 2018 revenue is $165-$175 million with adjusted EBITDA and cash flow in the 8-10% range.

While 2017 was a difficult year for Revolution Lighting, we achieved a number of important accomplishments to support a strong and successful 2018 and beyond:

• Received the U.S. Navy certification of our advanced LED tube for use throughout the entire U.S. Navy Fleet, and received our first large order during the fourth quarter, which will be delivered beginning in the fourth quarter and completed in the first quarter 2018.
• Won a position in a LED multi-year retrofit program with a major big box retailer; received our second order during the fourth quarter, a portion of which will be shipped in the first quarter 2018.
• Strengthened our marketing and sales organization, including completion of key management changes at our Value Lighting and Energy Services divisions.
• Opened a new 60,000 square foot state-of-the-art facility in Simi Valley, California to support the production of our Buy American Act (BAA) and Trade Agreement Act (TAA) LED tubes and fixtures, which will be key in winning many military, government, municipal and commercial projects.
• Significantly expanded our product portfolio, including flat panels, wall packs, high bays and other products to capitalize on the changing product mix taking place in the LED space.
• Initiated our "Lighting as a Service" (LAAS) program in two northeastern states. If fully implemented, they will provide significant revenue opportunities in 2018 and beyond.
• Developed a leading lighting control solution, providing a simple, flexible and scalable system to meet any need, now and in the future for IOT, POE and important security programs.

Non-cash goodwill and intangible asset impairment/restructuring charge:

Due to the poor performance of our common stock we are required under generally accepted accounting principles to reduce our book value to align with our market capitalization. As a result, we will record an adjustment to the carrying values of our goodwill and intangible assets and will record a charge associated with the restructuring of our operations, reducing and consolidating warehouse space and the reduction of inventory by eliminating certain product lines. These are all non-cash charges that will result in higher margins and stronger financial performance going forward.

As a result of the above, we will record a noncash charge of approximately $65-$70 million in the fourth quarter which is comprised of $50-$55 million in the reduction of the carrying value of goodwill and intangible assets and $15 million related in the restructuring and inventory charges as noted above. These actions will have no impact on our compliance with our bank debt covenants, and will improve liquidity and cash flow moving forward.

"I am confident that the actions that we are taking will significantly improve our Company, our operations and our business prospects," said Robert V. LaPenta, Chairman, CEO and President of Revolution Lighting Technologies. "Our reorganized leadership team is excited about the current position of the Company, and we look forward to a great 2018 and beyond."

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