Thursday August 6, 2009, 7:00 am EDT
ONTARIO, Canada, Aug. 6 /PRNewswire-Asia-FirstCall/ —
Q209 Highlights
— Net revenues of $114.2 million, a 131% increase from Q109 net revenues of $49.5 million.
— Shipments of 48.2 MW, a 168% increase from Q109 shipments of 18 MW.
— Gross margin of 20.2% and net margin of 15.5%, compared to Q109 negative gross margin of 7.9% and Q109 negative net margin of 9.7%.
— Earnings per diluted share of $0.49, compared to Q109 net loss per diluted share of $0.13.
Canadian Solar Inc. (“the Company”, “Canadian Solar” or “we”) (CSIQ) today announced its unaudited financial results for the second quarter of 2009 ended June 30, 2009 and its outlook for third quarter 2009 shipments.
Net revenues for the quarter were $114.2 million, compared to net revenues of $212.6 million for the second quarter of 2008 and $49.5 million for the first quarter of 2009.
Net income for the quarter was $17.7 million, or $0.49 per diluted share, compared to $12.1 million, or $0.41 per diluted share, for the second quarter of 2008 and a net loss of $4.8 million, or $0.13 per diluted share, for the first quarter of 2009.
Our Q209 shipments were 48.2 MW, including 39.5 MW of conventional high efficiency polysilicon modules, 7.0 MW of our proprietary e-Modules, and 1.7 MW of cells and solar application products.
The increase in Q209 sales came from all geographic markets important to the solar industry. Europe continues to be our largest contributing geographic market. Our sales in this region increased 86% to $66.9 million in Q209 from $36.0 million in Q109. The Company also experienced strong sales growth in Asia and America, with sequential gains of 188% and 500%, respectively, over Q109, resulting in a diversified and balanced global market distribution.
The company has been making continuous improvements on solar cell conversion efficiency and production cost. For our new, higher efficiency monocrystalline cells, we reached over 18.5% cell efficiency in pilot production, while the average efficiency of the current monocrystalline cell in mass production was 17.2% during Q2. For multicrystalline cells, our average efficiency was about 16.1% during the quarter. For our proprietary low-cost e-Modules, the average cell efficiency was about 15% during the quarter. On the cost side, we have successfully reduced our wafer to module processing cost for polysilicon solar modules to $0.60 per watt in Q209 from $0.71 per watt in Q109.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented: “Our second quarter revenue came in well ahead of expectations as we benefitted from robust customer orders around the world. We are glad that we took a conservative financial management strategy in Q4 of 2008 and Q1 this year, including prudent inventory measures and cash management, which allowed us to compete in Q2 with low materials and financing costs. These advantages, combined with our competitive processing costs and lean operating structure, resulted in a significant improvement in our gross margin and net margin, and position us for success in future quarters. We have noticed that many customers and their financing banks choose Canadian Solar products due to our competitive prices, product quality and strength of our balance sheet. Our flexible vertical integration business model, reputation for high-quality and our solid customer relationships allow us not only to compete, but also to gain market share in a tough economic environment.”
Arthur Chien, CFO of Canadian Solar, noted: “We significantly reduced our higher priced inventory in Q2, and are now very well positioned to benefit from further declines in raw materials costs as we work to increase our market share. Our current inventory primarily consists of feedstock, wafer and cells we will use for Q3 shipments.”
Revenue by Geographical Location (US $ millions)
Region 2009 Q2 2009 Q1 2008 Q2
Revenue % Revenue % Revenue %
Asia 31.1 27.2 % 10.8 21.8 % 13.1 6.2 %
Europe 66.9 58.6 % 36.0 72.7 % 188.3 88.6 %
America 16.2 14.2 % 2.7 5.5 % 11.2 5.2 %
Total 114.2 100 % 49.5 100 % 212.6 100 %
Region 2009 H1 2008 H1
Revenue % Revenue %
Asia 41.9 25.6 % 15.5 4.0 %
Europe 102.9 62.9 % 355.9 92.7 %
America 18.9 11.5 % 12.4 3.3 %
Total 163.7 100 % 383.8 100 %
Recent Developments
— On track to expand module capacity to 820 MW, cell plant capacity to 420 MW by the end of Q3 and to expand the ingot and wafer plant to 200 MW by year end.
— As part of its growth plan Canadian Solar has recently arranged for approximately $300 million in additional bank lines that can be drawn down at any time. This gives the Company a total of $524 million in available bank lines.
— Established and staffed Canadian Solar Japan, Inc., a wholly owned subsidiary, to address the growing market in Japan and expect to start sales in Q4 of 2009.
— Incorporated and staffed Canadian Solar Solutions, Inc., a wholly owned subsidiary in Ontario, Canada to address the significant market opportunities in Canada.
Outlook
Based on the market situation, forecast and our current order book, we expect to have shipments of approximately 90 MW to 100 MW in Q309. We now expect shipments of approximately 260-270 MW for the full year 2009, up from prior guidance of 200 MW to 220 MW. The above outlook is based on the Company’s current views with respect to operating and market conditions, which are subject to change. The risks to our guidance also include change of product pricing and project financing environment.
Dr. Shawn Qu, Chairman and CEO, remarked: “We believe that the very large growth in customer orders in Q309 over Q209 demonstrates our ability to gain market share. These share gains are the result of our competitive pricing, high product quality and the bankability of our products. Although the market remains uncertain and the solar project financing remains challenging, we think that we will carry this momentum forward into Q4 as we continue to expand our business in diversified geographies, including Germany, Italy, the Czech Republic, Spain, Korea and US. We also expect to see sales contributions from Japan, China and Canada in the near future.”
Investor Conference Call / Webcast Details
The dial-in number for the live audio call, which will begin today, Thursday, August 6, 2009 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. August 6, 2009 in Hong Kong), is +1-617-847-8712. The conference call passcode is 63818298. A live webcast of the conference call will also be available on Canadian Solar’s website at http://www.canadian-solar.com .
A replay of the call will be available approximately one hour after the conclusion of the live call through 12:00 p.m. on August 13, 2009, U.S. Eastern Time (12:00 a.m., August 14, 2009 in Hong Kong) by telephone at +1-617-801-6888. To access the replay, use passcode 52551852. A webcast replay will also be available at http://www.canadian-solar.com .
Canadian Solar Inc.
Unaudited Condensed Consolidated Statements of Operations
(In Thousands of U.S. Dollars, Except Share And Per Share Data And Unless
Otherwise Stated)
Item 2009 Q2 2009 Q1 2008 Q2 2009 H1 2008 H1
Net revenues $114,176 $49,465 $212,585 $163,641 $383,820
Cost of revenues 91,096 53,360 179,509 144,456 322,509
Gross profit
(loss) 23,080 (3,895) 33,076 19,185 61,311
Selling expenses 3,229 1,881 2,852 5,110 5,357
General and
administrative
expenses 6,410 4,518 6,485 10,928 11,911
Research and
development
expenses 530 470 447 1,000 749
Total operating
expenses 10,169 6,869 9,784 17,038 18,017
Income (loss)
from operations 12,911 (10,764) 23,292 2,147 43,294
Interest expenses (1,913) (2,254) (3,509) (4,167) (6,332)
Interest income 2,849 563 59 3,412 161
Gain on debt
extinguishment -- -- 2,430 -- 2,430
Debt conversion
expenses -- -- (10,170) -- (10,170)
Gain (Loss)
on foreign
currency
derivatives (1,050) 11,366 -- 10,316 --
Exchange gain
(loss) 6,038 (2,876) (619) 3,162 7,693
Income (loss)
before taxes 18,835 (3,965) 11,483 14,870 37,076
Income tax (1,163) (820) 580 (1,983) (6,428)
Net income
(loss) $17,672 $(4,785) $12,063 $12,887 $30,648
Basic earnings
(loss) per
share $0.50 $(0.13) $0.43 $0.36 $1.10
Basic weighted
average out-
standing
shares 35,699,453 35,686,313 28,085,875 35,692,919 27,738,862
Diluted
earnings (loss)
per share $0.49 $(0.13) $0.41 $0.36 $1.05
Diluted weighted
average
outstanding
shares 36,141,329 35,686,313 29,384,701 35,802,842 29,210,678
Note: The Q2 08 and H1 08 net profit were increased by $1.5 million and
$1.1 million respectively as compared to the Q2 08 and H1 08 net
profit as per press release announcements after the retrospective
application of FASB Staff Position - APB 14-1 on January 1, 2009.
Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheets
(In Thousands of U.S. Dollars)
Item 2009.6.30 2008.12.31
Assets
Current assets
Cash and cash equivalents $86,832 $115,661
Restricted cash 158,558 20,622
Accounts receivable, net of
allowance for doubtful accounts 115,679 51,611
Inventories 107,635 92,683
Value added tax recoverable 18,728 15,900
Advances to suppliers 19,572 24,654
Foreign currency derivative assets -- 6,974
Prepaid and other current assets 15,809 10,910
Current assets - subtotal 522,813 339,015
Property, plant and equipment, net 172,348 165,542
Intangible assets 219 263
Advances to suppliers 43,582 43,087
Prepaid land use right 12,658 12,782
Investment 3,000 3,000
Deferred tax assets - non current 6,537 6,966
Total assets 761,157 570,655
Liabilities and stockholders' equity
Current liabilities
Short term borrowings 266,744 110,665
Accounts payable 59,536 29,957
Other payables 21,810 24,043
Advances from customers 4,107 3,571
Amounts due to related parties 41 94
Foreign currency derivative liabilities 169 --
Other current liabilities 6,608 4,333
Current liabilities - subtotal 359,015 172,663
Accrued warranty costs 12,190 10,847
Liability for uncertain tax positions 9,882 8,704
Convertible notes 848 830
Long term borrowings 30,738 45,357
Total liabilities 412,673 238,401
Common shares 395,252 395,154
Additional paid in capitals (63,548) (66,705)
Retained earnings (Accumulated deficit) 1,783 (11,104)
Accumulated other comprehensive income 14,997 14,909
Total stockholders' equity 348,484 332,254
Total liabilities and stockholders'
equity $761,157 $570,655
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