Inside this Issue

• EMPLOYEE BUSINESS UPDATE• VILLAGRID: VILLARA’S EXCITING NEW BREAKTHROUGH PRODUCT

NEW

SLET

TER VI LL AGR I D ED IT ION AUGUST

EMPLOYEE BUSINESS UPDATEMAY & JUNE 2020

It’s time for a business update, this time reviewing our May and June results as well as the first three quarters of our fiscal year. Looking at the revenue side, we once again see the ongoing impacts of Covid-19 on our billing, with May coming in about $1.2 million below budget and June proving to be even more painful at $2.5 million below budget. Added together with April’s shortfall, our second quarter caused us to fall well behind our Year-to-Date budget by about $4.3 million. Additionally, our projections for the rest of the year are also well below plan at about 18% below budget. That is the bad news: the good news on the revenue front is that we are starting to increase our weekly pace of building so we are not losing more ground against the budget, which projects similar weekly billing increases.

As to the bigger picture, our home builders are experiencing phenomenal success with their home sales. One builder reported that their May sales were “the best month in the last 11 years at least”, and overall in the Sacramento region builders more than recovered the lost sales of March and April during May and June. As of the end of June, Year-to-Date 2020 home sales in Sacramento moved ahead of 2019 Year-to-Date sales, which is also fantastic. One builder representative told me recently that they are now selling homes that won’t be completed until March or April of 2021, which is way further out than they really prefer to be.

With this positive sales back-drop, our estimating team is seeing huge “Wins” in July, which are the new projects that we won the bids for. As we put together our 2021 fiscal budget, we are currently projecting revenue that is about what we experienced in 2019, although if the current sales pace continues we will most likely do better than that. Below are the actual revenue numbers for the month and Year-to-Date:

GREETINGS VILLARANS!

As we know, monthly revenue is important, but the most important number in a monthly financial is the “Net Income” number at the bottom of the statement, and once again Team Villara did a great job of outdoing yourselves by managing costs amid these tough Covid-19 days. We exceeded our “Pre-Bonus Operating Income” budget handily, coming in at 158% of plan in May and 142% of plan in June. WOO-HOO!

So with the first three quarters of the fiscal year under our belt, let’s talk about how we did and what we need to do to finish strong in terms of bonuses. October-December results had us at 113% of our Pre Bonus Operating Income (PBOI). January-March started out fairly well, but with the first wave of COVID-19 job closures in Mid-March, we fell below plan by almost 5% (not too bad, all things considered). April - June combined saw a powerful come-back, allowing us to end the first three quarters with an overall bonus income factor of 146%. What an amazing accomplishment in light of everything we’ve been through in dealing with the first onslaught of the Pandemic, including the full shutdown of the Plant for a day and a half, on top of the mass confusion we all experienced in the day-to-day flip-flops. We’re very pleased to have exceeded our financial goal.

Our Year-to-Date “Run TMC” results show absolutely phenomenal results in the “Time” category at 2.7% under budget. At the close of December we were way over on our time (+2.3% over budget), but you guys managed it extremely well since then, even through the pandemic. THANK YOU!

On the other hand, our material costs continue to be high, to the tune of .1%, or $39,231 over. We need to put a laser focus on our material and cut the waste as much as possible. Every penny we can recover goes directly into the bonus fund, so we ask that you all pitch in and help us get our material costs under control so we can see as strong a bonus pool as possible.

These overall results put us in a great spot to finish the fiscal year strong. With only August and September to go, let’s all focus on “Run TMC”, with special emphasis on Material. Thank you for what you do every day. Please stay safe and healthy.

Building People, Building Trust, Building Dreams - - - together!Blessings,

Rick Wylie

President

VILLAGRIDHOME BATTERY

STORAGE

Did you know that Residential New Construction builders here in California have been mandated to install solar power on most new homes? Energy battery storage is a great complementary product. Additionally, existing homes in areas experiencing more than two blackouts per year are eligible for massive rebates that almost make the battery free to the homeowner.

No doubt you’ve heard stories of people who have purchased a solar system for their home only to realize during a black out that their solar system doesn’t actually store the energy it’s collecting, so they’re in the dark like everyone else. Or worse, they bought a battery storage system, but it turned out the system doesn’t provide enough energy to power their home.

VillaGrid is very different. It’s the highest power home battery system on the market. VillaGrid is the safest, longest lasting, most efficient battery storage, returning the highest lifetime usable

The safest, longest lasting, most efficient, highest power, highest lifetime usable

energy, lowest lifetime cost of ownership, and deployable in the harshest habitable environments on the planet. And it’s made

by our very own Villara Solar.

Team members:From left to rightBob KittellEric JohnsonCurt WylieWill Landgraf

energy with the lowest lifetime cost of ownership, and is deployable in the harshest habitable environments on the planet. It’s a battery back-up system that provides energy stability for an increasingly unreliable grid, and the ability to store solar energy and consume it later during peak tariff rate periods. The battery offers peace of mind, and supports a grid-resilient lifestyle that is permeating the state of California. Additionally, the system comes with a 20-year warranty, the first of its kind in the industry.

Villara will launch the VillaGrid this November to our builder-partners with the expectation for a ramp up in manufacturing by the end of 2021.

Of course the path that leads from ‘vision’ to reality is a hard one to travel. A residential battery energy storage system cannot be installed in the state of California unless the product is certified by a Nationally Recognized Testing Laboratory (NRTL) to at least three UL safety standards. The certification process involves a construction review, electrical testing, mechanical testing, functional safety testing, fire safety testing, plus documentation compliance. (The documentation alone required the contributions of at least 8 people!) UL certification for energy storage systems is a rigorous, time consuming, and unforgiving process and was a huge hurdle to clear.

I have to say that in all my years with Villara, this has to be one of my proudest moments. My sincerest gratitude goes out to the entire team who gave it their all to bring this product to fruition; Will Landgraf, Eric Johnson, Curt Wylie & Bob Kittell.

With 60-140% more power than the most popular competitors, you can expect to see VillaGrid, Villara’s breakthrough product, being installed in new construction homes everywhere.

Rick Wylie

TECH SPECS & FEATURESFIRE SAFETY

Safest Battery Chemistry

LONGEST WARRANTY20 years

POWER2.4x the power

VALUE10x total lifetime energy

INCENTIVESEligible for additional credits

EXTREME TEMPERATURESHot or cold, you’re covered

The Villara battery energy storage system provides energy stability for an increasingly unreliable grid, and the ability to store solar energy and consume it later during peak tariff rate periods.

TECH SPECS & FEATURES

VI LL AGR I D ED IT ION

The Capital Cup is an annual event that adapts the historic Ryder Cup format—steeped in tradition—to promote community pride, and raise money for the Sacramento region’s most deserving charities. Over its five-year history, the Capital Cup has raised $5.6 million, shared between 50 charitable organizations. This year Villara’s Executive Leadership Team has decided to step-up it’s commitment to the Capital Cup by becoming the major sponsor; the event is now titled the Villara/DCA Capital Cup. “We’re very proud of the fact our sponsorship, when added to what had already been contributed, takes the grand-prize to a whole new level - - - $100,000! This year the Capital Cup’s goal is to raise over $2 million for local charities, and I’m betting we beat that goal!”, says Rick Wylie.

Each year, executive leaders from the Sacramento region are divided into two teams for an exciting three-day golf competition, competing on behalf of their favorite charity for a share of the $55,000 prize fund. Our own Rick Wylie has been participating in the annual event since its beginning in 2015; this will be his 6th year. Last year he was able to raise $130,981, plus his team showed up to win the grand prize and win they did, making the over-all contri-bution to his selected charity, Bayside’s City-Serve, $141,481!

This year Rick will be playing on behalf of Bayside Church’s Motion campaign. “As a member of Bayside for over 20 years, I’ve seen first-hand how Bayside is committed to meeting the spiritual, emotional, and physical needs of our community and many parts of the world”, Rick commented. In June 2018 Bayside launched its Motion campaign which raises funds for 56 local and global projects, all designed to really make a difference.

VILLARA GOES ALL IN TO RAISE FUNDS FOR LOCAL CHARITIES

Villara has stepped up to become the Title Sponsor of the 2020 Capital Cup.

WANT TO GET INVOLVED?

On the last day of the event, September

27th, Rick is allowed to have a caddy join

him. If you’ve always wanted to be in the

middle of the action at a Ryder Cup style

event, this is your opportunity. The event

will enjoy its last day at the beautiful North

Ridge Country Club in Fair Oaks. Rick’s

caddy will be selected thru a drawing to

be held on September 9th, send

your name to Mary Almas at

almasm@Villara.com to be included.

Golfers and caddies will have a golf cart, you won’t need to carry the clubs. Caddies will receive a Villara shirt to wear the day of the event. The Capital Cup Planning Committee will notify caddies after Labor Day if COVID-19 will prevent them from participating.

VILLARA CAPITAL CUP 2020

The ‘Motion Campaign’ is committed to fully funding 56 charitable projects. Below are a few of

those charities and the goals to help them.

Donations go thru Bayside, not to Bayside.

ST. JOHN’S CENTER FOR WOMEN AND CHILDREN

Expand the Sacramento counseling center to provide services for 400 women and children annually

TEARFUNDEducate and support vulnerable women and children in a heavily trafficked region in India near the Nepal

border.

SACRAMENTO WORLD IMPACT Launch programs in Sacramento to come alongside

low income and under-resourced families

MOBILE MEDICAL CLINIC Partner with Elica Health Centers to provide medical and dental care to the most vulnerable in the Sacra-

mento region

VOLUNTEERS OF AMERICA Provide hope and a brighter future for those in need in

Sacramento

AGAPE INTERNATIONAL MISSIONS (AIM) Help build and launch an elementary school in Cam-

bodia for children vulnerable to sex trafficking

FAITH ALIVE HOSPITAL Assist in funding and equipping the first Pediatric

Hospital in Jos, Nigeria

WE WANT TO HEARFROM YOU!

STORY TO SHARE?COMMENTS?QUESTIONS?

REACH OUT TO EB AT:

ARREOLAE@VILLARA.COM