Gross profit increased to $2.3 million, or 24.2% of revenue, for the quarter from $1.8 million, or 28.0% of revenue, in the year-ago quarter. The decrease in gross margin percentage primarily reflects the consolidation of acquisitions, which have traditionally produced lower gross profit margins.
Operating expenses as a percent of revenue improved to 47.8% for the first quarter of 2009, from 35.4% in the year-ago quarter. This increase mainly reflects the impact of the consolidation of the acquisition of Regrid Power during the fourth quarter of 2008, integration costs related to the company’s 2008 acquisitions, severance costs from reducing work force, and the incremental costs related with being a public company.
Results for the first quarter of 2008 do not include Real Goods Solar’s acquisitions of Independent Energy Systems and Regrid Power, related integration costs, nor any of the costs associated with being a public company.
The first quarter is generally our slowest quarter of the year due to seasonality, winter weather and shorter installation days, commented Tom McCalmont, chief executive officer. This effect was magnified during the first quarter of 2009 by the very challenging economic environment. However, as the sun has come out this spring and our new marketing initiatives have taken hold, we have begun to see some initial momentum in sales and we are hopeful that this trend will continue as we enter into the prime summer selling months. While our optimism remains cautious, we are encouraged by the signing of a number of significant sales contracts during the last sixty days, representing over $30 million of revenue.
During the first quarter we remained highly focused on acquisition integration, which included further reductions in headcount, centralization of corporate functions, standardization of products and processes, and a drive towards improved operational efficiencies, said Erik Zech, chief financial officer. Additionally, we implemented significant improvements to the cost structure of our organization and expect to see initial benefits from these improvements during the second quarter. The continuing acquisition integration and cost saving initiatives have further positioned us to weather the recession and to drive future profitability. We also made improvements to our balance sheet during the quarter by reducing inventory and accounts receivable. As a result of these efforts, our cash position improved to $12.9 million at quarter end.
