Enphase Energy Inc. President and CEO Paul Nahi resigned effective Aug. 8, a little more than a month after the energy management company warned that a low stock price had left it at risk of being delisted from the Nasdaq exchange.
"Having managed Enphase from a concept through global leadership, I feel the time is right for a new CEO to continue its growth, while Enphase increases market share, expands into new geographies and explores new opportunities," Nahi said in a news release. Nahi has been chief executive of the energy management company since January 2007. He will provide consulting services to the company for another three months.
Steve Gomo, lead independent director of Enphase's board, said the board is vetting CEO candidates from inside and outside the company and aims to name Nahi's successor by Aug. 31, a tight time frame that Gomo admitted could prove challenging. Noting work he said Nahi has done recently "to stabilize the company's financial situation," Gomo said on an Aug. 8 earnings conference call that the search for a new CEO "got ... underway some time ago."
"We have a robust set of candidates," Gomo said. "And there's no guarantee that the 31st is going to happen as we expect, but we're in a position right now where we think we can pull that off given the candidates we have."
In the meantime, the company's board created an Office of the CEO, consisting of CFO Bert Garcia and COO Badri Kothandaraman.
Enphase shares rose 2.3% to 89 cents in trading Aug. 8 and were up in after-hours trading.
The company, which in January said it was laying off almost one-fifth of its employees, on June 28 said it can regain compliance with listing requirements if its stock price closes above $1 for at least 10 consecutive business days by Dec. 20.
Enphase reported a second-quarter net loss of $12.1 million, or a loss of 14 cents per share, compared to a loss of $16.7 million, or a loss of 36 cents per share, in the year-earlier period. Revenues in the second quarter declined by 6% from a year earlier to $74.7 million. Operating expenses fell by 24% year over year to $22.8 million.
Kothandaraman said the market for Enphase's battery storage product is developing more slowly than anticipated.
"While slow to develop, we expect the worldwide storage market will eventually grow as costs come down and as utilities better understand how to incorporate distributed storage onto the grid," Kothandaraman said.
He said the product's "combination of solar plus storage functioning as an energy-management system with tight coupling between the two" will ultimately provide a competitive advantage. Enphase also sells microinverters that turn the power generated by solar panels into usable electricity.
Enphase ran into headwinds in 2015 as pricing pressure increased on its microinverters business. The company responded by cutting costs in an effort to regain a share in the residential solar market. In January, Nahi said layoffs were necessary to improve the company's financial position "while we deliver the new and innovative products we have promised our customers." The job cuts, which were expected to eliminate approximately 18% of the company's workforce, followed an 11% cut the company announced in September 2016.