ONTARIO, Canada, Nov. 17 /PRNewswire-Asia-FirstCall/ -- Canadian Solar Inc.
(the "Company", "Canadian Solar" or "we") (Nasdaq: CSIQ) today announced its
unaudited financial results for the third quarter of 2009 ended September 30,
2009 and its outlook for the fourth quarter of 2009 and the full year 2010.
Net revenues for the third quarter of 2009 were $213.1 million, compared
to net revenues of $114.2 million for the second quarter of 2009 and $252.4
million for the third quarter of 2008.
Net income for the third quarter of 2009 was $25.3 million, or $0.69 per
diluted share, compared to $17.7 million, or $0.49 per diluted share, for the
second quarter of 2009 and $11.1 million, or $0.31 per diluted share, for the
third quarter of 2008.
Shipments for the third quarter of 2009 were 102.6 MW, compared to
shipments of 48.2 MW for the second quarter of 2009 and 60 MW for the third
quarter of 2008. Third quarter 2009 sales came from all geographic markets
important to the solar industry, with Europe continuing to be the Company's
largest contributing geographic market. Sales in that region grew strongly in
the quarter, increasing 179% from the second quarter of 2009.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented: "We broke our
previous records on both MW shipment volumes and net profit in this quarter.
The significant increases in sales and earnings were the result of the
successful implementation of our global sales strategy combined with our
strong brand name recognition, cost control and effective supply chain
management. Our flexible vertical integration model allowed us to capture the
sharp increase in market demand during the quarter and to raise our module
sales faster than the growth of our internal cell capacity. Our R&D
capability is another important competitive differentiator for Canadian Solar.
During the quarter, three of our solar module products recorded the highest
scores for P-type solar modules during the PV USA (PTC) tests, which are
mandatory for the California Solar Initiatives. Subsequent to the quarter end,
we pre-launched our high-output premium products using our enhanced selective
emitter technology. These products are expected to have monocrystalline cell
conversion efficiencies of 18.5% and multicrystalline cell efficiencies of 17%.
We are also in the process of testing a cost effective two-axis tracker."
Arthur Chien, CFO of Canadian Solar, noted: "We are pleased that we were
able to aggressively grow our top line while delivering an 11.9% net margin.
We remain focused on managing all operating and financing costs as we work to
improve profitability. We expect the expansion of our internal cell facility
in H1 2010 will help us to further offset ongoing industry pricing pressure,
while at the same time increasing our manufacturing process control.
Importantly, our disciplined management of our balance sheet continues to give
us superior operating leverage and a low cost of financing. The recent
successful closure of our follow-on stock offering in October further
strengthened our balance sheet and prepares us for the Company's expected
growth in 2010."
Revenue by Geography
3Q 2009 2Q 2009 3Q 2008
Region US$ million % US$ million % US$ million %
Asia 13.6 6.4% 31.1 27.2% 16.4 6.5%
Europe 186.6 87.6% 66.9 58.6% 222.4 88.1%
America 12.9 6.0% 16.2 14.2% 13.5 5.4%
Total 213.1 100.0% 114.2 100.0% 252.4 100.0%
Recent Developments
-- We completed batch testing of our enhanced selective emitter cells and
pre-launched our first commercially available 250/260 W modules at the
Solar Power International conference in Anaheim. We have begun
converting the first cell line over to our proprietary enhanced
selective emitter technology and expect to begin limited commercial
delivery of 260 W enhanced selective emitter modules early in 2010.
-- We have begun field-testing a two-axis tracker, which we believe will
be more effective but considerably less expensive than similar products
currently available on the market.
-- Completed a follow-on public offering of 6.9 million shares on October
21, 2009, which raised net proceeds of approximately $103.3 million.
-- Canadian Solar Japan recently received full JPEC certifications for our
residential roof solar systems and JET certification for our solar
modules. We have started to deliver these products to our Japanese
customers.
-- Appointed Arthur Chien, our CFO, as our new Compliance Officer,
effective November 2, 2009.
-- Appointed Charlotte Xi Klein as VP of Global Operations, effective
November 2, 2009. Ms. Klein joined Canadian Solar as corporate
controller in 2007 and most recently served as VP of Finance and
Compliance Officer, where she was also instrumental in establishing
Canadian Solar's overseas operations during the past 12 months. Prior
to joining Canadian Solar, she spent 18 years in the United States,
where she obtained her MBA and MA degrees and worked her way up from
cost accounting to controllership in sizable corporate manufacturing
facilities, such as Saint-Gobain Corporation and Armstrong World
Industries. She was previously a financial executive at ARAMARK
Corporation, a Fortune 500 company. She is also a member of the AICPA
and has been a Texas-licensed CPA since 1996.
-- Completed our recent expansion of solar module manufacturing capacity
to 820 MW, which we believe is the world's third largest.
-- On track in our Phase III solar cell capacity expansion, which we
expect to bring our cell capacity from 270MW to 420MW by December 2009.
Outlook for Q409 and 2010
The outlook below is based on the Company's current views with respect to
operating and market conditions, its current order book and customer'
forecasts, which are subject to change. The risks to our guidance also
include changes in product pricing, availability and pricing of feedstock, and
the project financing environment.
We are reiterating our fourth quarter 2009 guidance of shipments of
approximately 128 MW to 138 MW, with gross margin expected to be in the high-
teens on a percentage basis. We expect shipments of approximately 295 MW to
305 MW for the full year 2009.
For the full year 2010, we believe our shipments will be in the range of
600 MW to 700 MW. We believe that the demand for our high quality solar
modules will come from all major markets, including Germany, Italy, the U.S.,
the Czech Republic, South Korea and Spain. We also expect strong growth from
our newer markets, such as Canada, Japan and China.
Given the demand forecast, the Company plans to increase our solar module
production capacity from today's 820 MW to 1 GW by the end of April 2010, and
to increase our internal cell production capacity from 420 MW to 700 MW by
June 2010. We also intend to slightly increase our internal ingot and wafer
capacity in 2010.
Under this expansion plan, we expect to produce approximately 450 MW to
500 MW of solar cells internally, while outsourcing approximately 200 MW to
250 MW from our long-term solar cell partners.
By achieving a higher ratio of internal cell production compared to
external sourcing, we expect to sustain gross margins in the high teens and
maintain a healthy net profit margin.
Dr. Shawn Qu, Chairman and CEO, remarked: "We believe that we have
reasonable visibility for our 2010 forecast based on our channel checks. We
expect to more than double our shipments in 2010 and are preparing our
capacity expansion accordingly. This rapid growth is driven by our sales
strategy of combining a superior product with attractive pricing and value
added services. Furthermore, we intend to continue to aggressively develop
new markets for our products. We were successful in our strategy in the U.S.,
South Korea and the Czech Republic this year, and have targeted other new
markets such as Canada, Japan and China for 2010. We believe this strategic
diversification will significantly reduce our exposure to the traditional
solar markets such as Germany, Italy and Spain and allow us to build a solid
foundation for continued growth and market share expansion."
Investor Conference Call / Webcast Details
The dial-in number for the live audio call, which will begin today,
Tuesday, November 17, 2009 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. November
17, 2009 in Hong Kong), is +1-617-213-8059. The conference call passcode is
23659019. A live webcast of the conference call will also be available on our
website at http://www.canadiansolar.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 November 24, 2009, U.S.
Eastern Time (1:00 a.m., November 25, 2009 in Hong Kong) by telephone at
+1-617-801-6888. To access the replay, use passcode 19894949. A webcast
replay will also be available at http://www.canadiansolar.com .
About Canadian Solar Inc. (NASDAQ: CSIQ)
Canadian Solar Inc. is a leading vertically integrated provider of ingot,
wafer, solar cell, solar module and other solar applications. Canadian Solar
designs, manufactures and delivers solar products and solar systems for
on-grid and off-grid use to customers worldwide. Canadian Solar is one of the
world's largest solar module producers by manufacturing capacity. With
operations in North America, Europe and Asia, Canadian Solar provides premium
quality, cost-effective and environmentally-friendly solar solutions to
support global sustainable development. For more information, visit
http://www.canadiansolar.com .
Safe Harbor/Forward-Looking Statements:
Certain statements in this press release including statements regarding
our expected future shipment volumes, gross and net margins, manufacturing
capacities and cell conversion efficiencies, are forward-looking statements
that involve a number of risks and uncertainties that could cause actual
results to differ materially. These statements are made under the "Safe
Harbor" provisions of the U.S. Private Securities Litigation Reform Act of
1995. In some cases, you can identify forward-looking statements by such
terms as "believes," "expects," "anticipates," "intends," "estimates," the
negative of these terms, or other comparable terminology. Factors that could
cause actual results to differ include general business and economic
conditions and the state of the solar industry; governmental support for the
deployment of solar power; future available supplies of high-purity silicon;
demand for end-use products by consumers and inventory levels of such products
in the supply chain; changes in demand from significant customers, including
customers of our silicon materials sales; changes in demand from major markets
such as Germany; changes in customer order patterns; changes in product mix;
capacity utilization; level of competition; pricing pressure and declines in
average selling prices; delays in new product introduction; continued success
in technological innovations and delivery of products with the features
customers demand; shortage in supply of materials or capacity requirements;
availability of financing; exchange rate fluctuations; litigation and other
risks as described in the Company's SEC filings, including its annual report
on Form 20-F originally filed on June 8, 2009, as amended by its report on
Form 20-F/A filed on October 14, 2009. Although the Company believes that the
expectations reflected in the forward looking statements are reasonable, it
cannot guarantee future results, level of activity, performance, or
achievements. You should not place undue reliance on these forward-looking
statements. All information provided in this press release is as of today's
date, unless otherwise stated, and Canadian Solar undertakes no duty to update
such information, except as required under applicable law.
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 3Q 2009 2Q 2009 3Q 2008 2009 1-9 2008 1-9
Net revenues $213,126 $114,176 $252,362 $376,767 $636,183
Cost of
revenues 178,392 91,096 213,256 322,848 535,765
Gross profit 34,734 23,080 39,106 53,919 100,418
Selling
expenses 6,564 3,229 3,482 11,674 8,839
General and
administrative
expenses 7,327 6,410 9,267 18,255 21,178
Research and
development
expenses 964 530 603 1,963 1,352
Total
operating
expenses 14,855 10,169 13,352 31,892 31,369
Income from
operations 19,879 12,911 25,754 22,027 69,049
Interest
expenses (2,498) (1,913) (3,385) (6,665) (9,717)
Interest
income 756 2,849 819 4,168 979
Gain on debt
extinguishment -- -- -- -- 2,430
Debt
conversion
expenses -- -- -- -- (10,170)
Gain
(Loss) on
foreign
currency
derivatives (1,381) (1,050) 7,424 8,935 7,424
Exchange
gain
(loss) 9,665 6,038 (17,295) 12,827 (9,602)
Income before
taxes 26,421 18,835 13,317 41,292 50,393
Income tax (1,103) (1,163) (2,251) (3,086) (8,681)
Net income $25,318 $17,672 $11,066 $38,206 $41,712
Less: net
income
attributable
to non
controlling
interest (25) -- -- (25) --
Net income
attributable
to CSI
stockholders $25,343 $17,672 $11,066 $38,231 $41,712
Basic earnings
per share $0.71 $0.50 $0.32 $1.07 $1.39
Basic weighted
average
outstanding
shares 35,765,185 35,699,453 34,802,363 35,704,895 30,110,549
Diluted
earnings
per share $0.69 $0.49 $0.31 $1.06 $1.34
Diluted
weighted
average
outstanding
shares 36,571,071 36,141,329 35,630,794 36,126,760 31,197,198
Note: The third quarter 2008 net profit was decreased by $4,841 and the
nine months to September 30, 2008 net profit was increased by $1.1 million, as
compared to the third quarter 2008 and the nine months to September 30, 2008
net profit as per prior press release announcements due to 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)
September 30, December 31,
Item 2009 2008
Assets
Current assets
Cash and cash equivalents $103,094 $115,661
Restricted cash 132,620 20,622
Accounts receivable, net of allowance
for doubtful accounts 227,704 51,611
Inventories 144,351 92,683
Value added tax recoverable 31,306 15,900
Advances to suppliers 17,399 24,654
Foreign currency derivative
assets -- 6,974
Prepaid and other current assets 13,744 10,910
Current assets - subtotal 670,218 339,015
Property, plant and equipment, net 207,655 165,542
Intangible assets 202 263
Advances to suppliers 44,481 43,087
Prepaid land use right 12,599 12,782
Investment 4,171 3,000
Deferred tax assets - non current 7,912 6,966
Total assets 947,238 570,655
Liabilities and equity
Current liabilities
Short term borrowings 321,962 110,665
Accounts payable 156,487 29,957
Other payables 26,712 24,043
Advances from customers 1,839 3,571
Amounts due to related parties 356 94
Foreign currency derivative liabilities 1,850 --
Other current liabilities 6,470 4,333
Current liabilities - subtotal 515,676 172,663
Accrued warranty costs 14,282 10,847
Liability for uncertain tax positions 10,384 8,704
Convertible notes 857 830
Long term borrowings 30,751 45,357
Total liabilities 571,950 238,401
Common shares 395,425 395,154
Additional paid in capitals (62,411) (66,705)
Retained earnings (Accumulated deficit) 27,127 (11,104)
Accumulated other comprehensive
income 15,161 14,909
Total CSI stockholders' equity 375,302 332,254
Non-controlling interest (14) --
Total equity 375,288 332,254
Total liabilities and equity $947,238 570,655
SOURCE Canadian Solar Inc.
