omniture

ReneSola Announces First Quarter 2016 Results

2016-05-23 18:59 1555

SHANGHAI, May 23, 2016 /PRNewswire/ -- ReneSola Ltd ("ReneSola" or the "Company") (www.renesola.com) (NYSE: SOL), a leading fully-integrated solar project developer and provider of energy efficient technology products, today announced its unaudited financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Highlights


Q1 2016

Q/Q Change

Y/Y Change

Revenue

$260.7

-12.0%

-25.3%

Gross Profit

$44.5

-6.2%

+21.4%

Operating Income

$12.2

-27.7%

N/A

Net Income

$5.7

-13.9%

N/A

  • Revenue of $260.7 million was in-line with management guidance range of $260-$270 million
  • Gross margin increased to 17.1% from 16.0% in Q4 2015 and 10.5% in Q1 2015
  • Net Income was $5.7 million, compared with $6.7 million in Q4 2015 and net loss of $18 million in Q1 2015
  • Total external module shipments were 350.7 MW while module shipments to the Company's downstream projects were 20.1 MW;
  • Sold 9.7 MW of projects in Bulgaria; the sales were booked as disposal of assets and contributed to operating income of $2.5 million;
  • The Company now has a solar power project pipeline of 785.3 MW at different development stages; and
  • The Company connected four utility-scale projects to UK grid during the quarter with total capacity of approximately 20 MW

"The quarter played out largely as we had anticipated and was marked by solid growth in the downstream project pipeline, margin improvement, and in-line revenue performance. Despite somewhat negative sentiment in the solar industry during the quarter, we are executing on our strategy to remain a global leader across the solar value chain. We are profitable, with over 700 MW of project pipeline in various development stages, and a flourishing business in LED distribution. Our first quarter results demonstrated the continuation of the successful execution of the new strategy unveiled last year," commented Mr. Xianshou Li, ReneSola's Chief Executive Officer.

Li continued, "As we look to the remainder of 2016, we will maintain our commitment to growing profitably, prudently managing our operations and building financial strength. We believe we are in a position to execute well and build a great foundation to increase shareholder value in 2016 and beyond."

First Quarter 2016 Financial Results

Revenue of $260.7 million was down 12.0% q/q and 25.3% y/y and in-line with guidance of $260-$270 million. The revenue decline reflects lower module ASP and lower module shipments to external customers as the Company continues to scale back its OEM business and shift towards downstream project development.

Gross profit of $44.5 million was down 6.2% q/q and up 21.4% y/y. Gross margin increased to 17.1% from 16.0% in Q4 of 2015 and 10.5% in Q1 of 2015. The sequential margin improvement in the quarter was due to wafer margin improvement.

Operating expenses of $32.3 million were 12.4% of revenue, up from 10.3% in Q4 of 2015 and down from 13.2% in Q1 of 2015.

Operating income was $12.2 million, compared to operating income of $16.9 million in Q4 of 2015and operating loss of $9.5 million in Q1 of 2015. Operating margin decreased sequentially to 4.7% from 5.7% in Q4 of 2015.

Non-operating expenses of $6.1 million include net interest expense of $9.1 million and loss on derivative of $0.6 million, offset by foreign exchange gains of $2.9 million.

Net income was $5.7 million, compared to a net income of $6.7 million in Q4 of 2015 and a net loss of $18.0 million in Q1 of 2015. Earnings per ADS were $0.06, compared to $0.07 in Q4 of 2015.

Balance Sheet, Liquidity and Capital Resources

The Company had cash and equivalents (including restricted cash) of $190 million as of March 31, 2016. Total debt was $737 million, largely in-line with the debt balance as of December 31, 2015. Short-term borrowings increased $66.8 million in the quarter due to an increase of working capital loans and factoring arrangements, coupled with the fact that $31 million of the current portion of long-term borrowings were reclassified as short-term borrowings. Total long-term borrowings decreased in the quarter as the long-term loan associated with the Bulgaria projects was transferred to the buyer, and as mentioned above, a portion of the long-term borrowings was reclassified as short-terms borrowings. During the quarter, the Company repurchased all of the remaining convertible notes of $26.1 million.

First Quarter Operating Highlights

Since disclosing its strategic shift to solar power project development at the start of 2015, the Company has focused its efforts on developing, operating and selling high-quality solar power projects. Activity is centered on building a pipeline of distributed generation and utility-scale projects in attractive geographies worldwide.

Project Sales

The Company sold two projects in Bulgaria in the first quarter of 2016, representing a total of 9.7 MW of generating capacity. Because these projects were recognized as long-term assets on the balance sheet since the end of 2013, the sale was booked as disposal of assets and the gain on sale was included in operating income. The purchase included cash payment of $5.1 million and the assumption of project debt. The structure of the transaction reflects the Company's continued focus to reduce debt and monetize projects assets.

Project Sales

Location

Size (MW)

Nove ECO

Bulgaria

5.0

MG Solar

Bulgaria

4.7

Operating Assets

After the sale of projects in Bulgaria, the Company currently owns and operates two solar power projects it developed in earlier years. While the Company expects the projects to produce a steady stream of recurring revenue, the Company is holding its operating assets for eventual sale.

IPP Assets

Location

Size (MW)

Lucas EST

Romania

6.0

Ecosfer Energy

Romania

9.4

Project Pipeline

The company currently has 785.3 MW of projects in various stages of development. The geographic distribution of projects is outlined in the table below.

Project Location

Total Pipeline (MW)

Late Stage Projects of Total Pipeline (MW)

USA

121.4

103.3[1]

UK

180.5

65.3

Japan

31.5

29.6

Canada

32.3

9.0

Poland

140.0


Turkey

116.0

116.0[2]

Spain

75.0


Thailand

50.0


France

38.6


Total

785.3

323.2

[1] On March 25, 2016, the Company entered into a binding settlement term sheet with Pristine and certain of its affiliates to resolve our dispute, dismiss the action that we previously filed against Pristine and transfer 88 MW solar energy projects under development in California, North Carolina, and Minnesota by Pristine and its affiliates to one of our wholly owned subsidiaries in the United States. Upon consummation of the transfer, we will be the 100% owner of the 88 MW portfolio of solar energy projects.

[2] With the start of operation, the projects will be transferred into a joint venture, of which Renesola will hold 50% of equity interest.

Modules and Wafers

The Company continues to fully utilize its capacity to provide high quality products at lower cost to select customers. The Company considers its competitive advantages to be improving conversion efficiency and supply chain management.

During the first quarter, total external module shipments were 350.7 MW, representing a decrease of 6.0% from Q4 2015. Total wafer shipments were 351.0 MW, up 29.8% q/q and up 79.9% y/y.

LED

During the first quarter, ReneSola's LED business reached revenue of $6.2 million, up from $4.9 million in Q4 2015, and achieved a gross margin of over 30%.

The energy efficiency market is a large and growing market, and LED lighting is a critical element. A key strategic focus of the Company is to grow its share in the high-growth LED market by utilizing its world-wide distribution channels.

Outlook

For Q2 2016, the Company expects revenue in the range of $280 million to $290 million and gross margin to be approximately 18%.

For full year 2016, the Company continues to expect revenue in the range of $1.0 to $1.2 billion. The revenue outlook reflects continued scale-back of OEM module production from external sales and shift toward downstream solar energy project development to pursue higher profitability.

Conference Call Information

ReneSola's management will host an earnings conference call on May 23, 2016 at 8:30 a.m. U.S. Eastern Time (8:30 p.m. China Time).

Dial-in details for the earnings conference call are as follows:


Phone Number

Toll-Free Number

United States

+1 8456750437

+1 8665194004

Hong Kong

+852 30186771

+852 800906601

Mainland China

+86 8008190121

+86 4006208038


Other International

+65 67135090


Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is 7893729.

A replay of the conference call may be accessed by phone at the following numbers until May 31, 2016. To access the replay, please again reference the conference passcode 7893729.


Phone Number

Toll-Free Number

United States

+1 6462543697

+1 8554525696

Hong Kong

+852 30512780

+852 800963117

Mainland China

+86 8008700206

+86 4006322162


Other International

+61 281990299


Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of ReneSola's website at http://www.renesola.com.

About ReneSola

Founded in 2005, and listed on the New York Stock Exchange in 2008, ReneSola (NYSE: SOL) is an international leading brand and technology provider of energy efficient products. Leveraging its global presence and expansive distribution and sales network, ReneSola is well positioned to provide its highest quality green energy products and on-time services for EPC, installers, and green energy projects around the world. For more information, please visit www.renesola.com.

Safe Harbor Statement

This press release contains statements that constitute ''forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when the Company describes what it "believes," "expects" or "anticipates" will occur, what "will" or "could" happen, and other similar statements), you must remember that the Company's expectations may not be correct, even though it believes that they are reasonable. The Company does not guarantee that the forward-looking statements will happen as described or that they will happen at all. Further information regarding risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements is included in the Company's filings with the U.S. Securities and Exchange Commission, including the Company's annual report on Form 20-F. The Company undertakes no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though the Company's situation may change in the future.

For investor and media inquiries, please contact:

In China:

ReneSola Ltd
Ms. Rebecca Shen
+86 (21) 6280-9180 x106
ir@renesola.com

The Blueshirt Group Asia
Mr. Gary Dvorchak, CFA
+86 (138) 1079-1480
gary@blueshirtgroup.com

In the United States:

The Blueshirt Group
Mr. Ralph Fong
+1 (415) 489-2195
ralph@blueshirtgroup.com


RENESOLA LTD

Unaudited Consolidated Balance Sheets

(US dollars in thousands)



Mar 31,


Dec 31,


Mar 31,



2016


2015


2015

ASSETS







Current assets:







Cash and cash equivalents


38,687


38,045


47,857

Restricted cash


151,339


140,338


180,291

Accounts receivable, net of allowances for doubtful accounts


176,391


161,166


133,462

Inventories


181,659


193,171


268,546

Advances to suppliers-current


28,316


18,480


50,629

Amounts due from related parties


95


111


12

Value added tax recoverable


20,573


24,525


29,261

Prepaid income tax


1,900


3,609


1,108

Prepaid expenses and other current assets


15,901


27,770


48,457

Project assets


34,949


20,214


65,791

Deferred convertible notes issue costs-current


-


35


414

Derivative assets


-


56


1,839

Assets held-for-sale


-


4,241


-

Deferred tax assets-current, net


2,242


5,989


3,568

Total current assets


652,052


637,750


831,235








Property, plant and equipment, net


603,248


630,462


728,670

Prepaid land use right, net


37,179


37,240


40,381

Deferred tax assets-non-current, net


14,121


10,238


17,428

Deferred convertible notes issue costs-non-current






-

Advances for purchases of property, plant and equipment


1,288


382


954

Deferred project costs


20,874


20,874


-

Other long-lived assets


10,144


9,374


8,360

Total assets


1,338,906


1,346,320


1,627,028








LIABILITIES AND SHAREHOLDERS' EQUITY














Current liabilities:







Convertible bond payable-current




26,145


62,850

Short-term borrowings


735,610


668,788


681,707

Accounts payable


301,976


300,176


478,559

Advances from customers-current


24,985


28,101


53,109

Amounts due to related parties


3,189


2,677


2,889

Other current liabilities


62,727


77,237


118,794

Income tax payable


124


130


124

Derivative liabilities


343


30


22

Warrant liability


158


578


1,733

Total current liabilities


1,129,112


1,103,862


1,399,787








Convertible notes payable-non-current






-

Long-term borrowings


1,551


38,777


41,342

Advances from customers-non-current






1,191

Deferred revenue


32,376


32,376


-

Warranty


38,070


36,024


34,298

Deferred subsidies and other


23,116


23,242


24,988

Other long-term liabilities


15


105


1,128

Total liabilities


1,224,240


1,234,386


1,502,734








Shareholders' equity







Common shares


477,419


477,965


478,391

Additional paid-in capital


7,707


7,669


6,882

Accumulated loss


(429,544)


(435,277)


(448,230)

Accumulated other comprehensive income


59,084


61,577


87,251

Total equity attribute to ReneSola Ltd


114,666


111,934


124,294

Total shareholders' equity


114,666


111,934


124,294








Total liabilities and shareholders' equity


1,338,906


1,346,320


1,627,028

RENESOLA LTD

Unaudited Consolidated Statements of Income

(US dollar in thousands, except ADS and share data)






Three Months Ended



Mar 31, 2016


Dec 31, 2015


Mar 31, 2015








Net revenues


260,696


296,388


349,003

Cost of revenues


(216,191)


(248,917)


(312,338)

Gross profit


44,505


47,471


36,665

GP%


17.1%


16.0%


10.5%








Operating (expenses) income:







Sales and marketing


(13,500)


(12,465)


(21,843)

General and administrative


(13,269)


(15,211)


(13,736)

Research and development


(8,190)


(9,518)


(13,418)

Other operating income


2,694


6,651


2,812

Total operating expenses


(32,265)


(30,543)


(46,185)



-12.4%


-10.3%


-13.2%

Income (loss) from operations


12,240


16,928


(9,520)



4.7%


5.7%


-2.7%

Non-operating (expenses) income:







Interest income


777


544


932

Interest expense


(9,860)


(10,352)


(10,842)

Foreign exchange gains (losses)


2,945


2,056


(16,070)

Gains (losses) on derivatives, net


(602)


(1,159)


4,501

Investment gain on disposal of subsidiaries


7




-

Gains on repurchase of convertible bonds


213


-


11,648

Fair value change of warrant liability


420


(315)


158








Income (loss) before income tax,
noncontrolling interests


6,140


7,702


(19,193)








Income tax (expense) benefit


(407)


(1,046)


1,165

Net income (loss)


5,733


6,656


(18,028)








Less: Net income (loss) attributed to noncontrolling
interests






-

Net income (loss) attributed to holders of
ordinary shares


5,733


6,656


(18,028)



Earnings per share







Basic


0.03


0.03


(0.09)

Diluted


0.03


0.03


(0.09)








Earnings per ADS







Basic


0.06


0.07


(0.18)

Diluted


0.06


0.07


(0.18)








Weighted average number of shares used in computing
loss per share







Basic


203,163,310


203,137,831


203,918,702

Diluted


203,163,310


203,137,831


203,918,702







Three Months ended



Mar 31, 2016


Dec 31, 2015


Mar 31, 2015

Net income (loss)


5,733


6,656


(18,028)

Other comprehensive income (loss)







Foreign exchange translation adjustment


(2,493)


(4,629)


6,171

Other comprehensive income (loss)


(2,493)


(4,629)


6,171








Comprehensive income (loss)


3,240


2,027


(11,857)

Less:comprehensive loss attributable to non-
controlling interest


-


-


-

Comprehensive income (loss) attributable to
Renesola


3,240


2,027


(11,857)

RENESOLA LTD

Unaudited Consolidated Statements of Cash Flow

(US dollar in thousands)



Three Months Ended


Three Months Ended



Mar 31, 2016


Mar 31, 2015






Operating activities:





Net profit/(loss)


5,733


(18,028)

Adjustment to reconcile net loss to net cash provided by (used in) operating activity:





Inventory write-down


0


331

Depreciation and amortization


21,218


22,430

Amortization of deferred convertible bond issuances costs and premium


33


387

Allowance of doubtful receivables, advance to suppliers and prepayment for purchases of property,
plant and equipment


(1,108)


383

Loss on derivatives


(56)


(4,501)

Fair value change of warrant liability


(420)


(158)

Gain from settlement of certain payables





Gain from advances from customers


0


-

Share-based compensation


225


425

Loss on disposal of long-lived assets


1,208


(493)

Gain on disposal of solar project


(2,527)


-

Impairment of goodwill




-

Impairment of Intangible assets




-

Impairment of long-lived assets




-

Reversal of firm purchase commitment




-

Gain on disposal of subsidiaries




-

Gain on CB repurchase


(212)


(11,648)






Changes in assets and liabilities:





Accounts receivable


(15,263)


(6,921)

Inventories


2,489


52,526

Project assets and deferred project cost


(3,227)


(2,098)

Advances to suppliers


(9,728)


(23,833)

Amounts due from related parties


509


(170)

Value added tax recoverable


4,413


473

Prepaid expenses and other current assets


10,415


(2,245)

Prepaid land use rights, net


230


(742)

Proceeds from disposal of land use right




-

Deferred project costs





Accounts payable


(1,196)


21,510

Advances from customers


(3,465)


(27,133)

Income tax payable


1,548


99

Other current liabilities


(15,696)


(9,510)

Deferred revenue





Other long-term liabilities


(230)


(380)

Other non-current assets





Other long-term assets




(239)

Accrued warranty cost


1,854


2,520

Deferred taxes assets


(1,044)


(2,011)

Provision for litigation


(89)


-

Net cash provided by (used in) operating activities


(4,386)


(9,026)






Investing activities:





Purchases of property, plant and equipment


(2,240)


(387)

Advances for purchases of property, plant and equipment


-


(1,241)

Cash received from government subsidy


-


-

Proceeds from disposal of property, plant and equipment


-


23

Changes in restricted cash


(10,211)


(58,197)

Net cash received (paid) on settlement of derivatives


420


4,371

Purchases of investment securities


-


-

Proceeds from disposal of subsidiaries


5,140


-

Net cash provided by (used in) investing activities


(6,891)


(55,431)






Financing activities:





Proceeds from bank borrowings


264,262


265,599

Proceeds from issuance of common shares


-


-

Proceeds from related parties


-


(4,072)

Repayment of bank borrowings


(227,058)


(236,907)

Proceeds from exercise of stock options




1,625

Paid for CB repurchase


(25,931)



Share issuance costs




-

Repurchace from noncontrolling interests




-

Repurchase of convertible notes




(20,059)

Cash paid for ADS/s repurchase


(733)


-

Net cash provided by (used in) financing activities


10,540


6,186






Effect of exchange rate changes


1,379


6,280






Net increase (decrease) in cash and cash equivalents


642


(51,991)

Cash and cash equivalents, beginning of period/year


38,045


99,848

Cash and cash equivalents, end of period/year


38,687


47,857

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Source: ReneSola Ltd.
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