Full Year Revenues of US$350.9 million, an Increase of 49.4% from 2007; Annual Shipments of 107.2 MW Represents a Year-over-Year Growth of 44.9%.
NANJING, China, March 19 /PRNewswire-Asia/ -- China Sunergy Co., Ltd. (Nasdaq: CSUN), (“China Sunergy” or the “Company”) a specialized solar cell manufacturer based in Nanjing, China, announced today its financial results for the fourth quarter and full year 2008.
Full Year Financial Results
-- Revenues increased 49.4% to US$350.9 million from US$234.9 million in
2007.
-- Gross profit for 2008 was US$15.5 million, a decline from US$18.0
million in 2007. Gross margin was 4.4% compared to 7.7% in 2007.
-- Adjusted non-GAAP net loss, which excludes share-based compensation and
change in fair value of foreign currency derivative loss of US$9.9
million, was US$9.4 million, compared to non-GAAP net loss of US$5.0
million in 2007. GAAP net loss was US$22.5 million as the Company was
impacted by the global financial crisis during the second half of 2008.
-- Adjusted non-GAAP net loss per ADS, which excludes share-based
compensation and change in fair value of foreign currency derivative
loss, was US$0.24 both on basic and diluted basis, compared to a
non-GAAP net loss of US$0.16 in 2007. GAAP net loss per ADS was US$0.57
both on basic and diluted basis.
Fourth Quarter Financial Results
-- Revenues were US$43.2 million, representing a 39.6% and 63.7% decrease
compared to the fourth quarter of 2007 and the third quarter of 2008,
respectively; revenues generated from solar cell sales were US$40.5
million, representing a 40.2% and 64.3% decrease compared to the fourth
quarter of 2007 and the third quarter of 2008, respectively.
-- Gross loss was US$14.3 million compared to gross profit US$4.6 million
and gross profit US$11.1 million during the fourth quarter of 2007 and
the third quarter of 2008, respectively. Gross margin was negative
33.1%, compared to 6.4% and 9.3% during the fourth quarter of 2007 and
the third quarter of 2008, respectively. Gross margin excluding
inventory provision was negative 8.5%, in line with expectations
announced in February.
-- Adjusted non-GAAP net loss, which excludes share-based compensation and
change in fair value of foreign currency derivative loss of US$9.0
million, was US$16.6 million, compared to non-GAAP net loss of US$2.1
million and non-GAAP net income of US$2.0 million in the fourth quarter
of 2007 and the third quarter of 2008, respectively. GAAP net loss was
US$26.3 million, including a US$10.6 million inventory provision.
-- Adjusted non-GAAP net loss per ADS, which excludes share-based
compensation and change in fair value of foreign currency derivative
loss, was US$0.42 on both basic and diluted basis, compared to a non-
GAAP net loss of US$0.05 and a non-GAAP net income of US$0.05per ADS in
the fourth quarter of 2007 and the third quarter of 2008, respectively.
GAAP net loss per ADS was US$0.66 on both basic and diluted basis.
-- Operating cash flow in the fourth quarter was positive US$1.7 million.
-- During the fourth quarter of 2008, China Sunergy conducted open market
repurchases of its 4.75% Convertible Senior Notes due 2013. Through
December 31, 2008, China Sunergy repurchased US$6.5 million aggregate
principal amount of the convertible notes for a total cash
consideration of US$2.0 million. As a result, China Sunergy realized a
net gain of US$4.5 million
* Please refer to “Reconciliation Tables of GAAP to adjusted Non-GAAP Figures” at the end of this press release.
Commenting on the results, Dr. Allen Wang, CEO of China Sunergy, said:
“China Sunergy has faced the same unprecedented and volatile environment as many of our peers across the solar sector, as a result of the ongoing global financial crisis. The severe pressure we initially experienced in September have persisted, as reflected by our lower than anticipated financial results including our negative gross margin and a higher than expected net loss. In the past months, we have experienced cancellation or postponement of orders, even as we reduced the selling price of our products significantly in response to market conditions. Although our recent financial results have been drastically impacted, we shipped 45 percent more solar cells in 2008 than in 2007 and remained cash flow positive at an operational level. We expect conditions to remain difficult in the coming quarter, however we retain our belief and confidence that our advanced solar cell offerings, coupled with our R&D, engineering and manufacturing capabilities will ensure the Company fulfills its long-term potential.”
Operational Highlights
-- Full year production of 111.0 MW of solar cells represented a 38.2%
increase compared to 80.3 MW in 2007. Fourth quarter production of 20.1
MW of solar cells represented a 9.9% decrease on a year-over-year basis
and a 43.7% decrease sequentially, as the Company proactively reduced
production given the demand environment.
-- Shipments of solar power products amounted to approximately 107.2 MW in
2008, representing a 44.9% increase from 74.0MW in 2007. Shipments in
the fourth quarter amounted to approximately 14.1 MW, representing a
39.2% decrease on a year-over-year basis and a 58.7% decrease
sequentially, as shipments were impacted by reduced downstream demand
given the rapid decline in the availability of solar project financing.
-- Shipments of high efficiency cells (defined as any cells with a
conversion efficiency rate of over 17%) during the fourth quarter of
2008 amounted to 6.5MW, or 46.1% of total solar cell shipments,
comparing with 11.1 MW, or 34.0% of total solar cell shipments, during
the third quarter of 2008. The Company will continue to focus on its
high efficiency products to benefit from their increased margins and
customer preference.
-- The Company has recently entered into several important sales and
framework agreements with a diverse client base.
- A supply of between 10MW and 30MW of solar cells in 2009 to asola
Advanced and Automotive Solar System GmbH ("asola"), a German solar
module manufacturing company. China Sunergy also entered into a
10-year framework agreement with asola the potential delivery of up
to 480MW of solar cells from 2009 to 2018.
- The supply of 22MW of solar cells in 2009 to Solarwatt AG, a leading
manufacturer of solar modules in Germany.
- A supply agreement for 12MW of multi-crystalline solar cells in 2009
to Ajit Solar Pvt Ltd ("Ajit Solar"), a privately-owned module
manufacturer based in Jaipur, India.
- The supply of between 20MW to 25MW of solar cells in 2009 to a U.S.
based manufacturer of photovoltaic products, utilizing wafers
procured from that manufacturer.
-- China Sunergy established its European headquarters in Munich, Germany
in June 2008, and has recently increased its European sales force,
enhancing its sales and marketing capabilities throughout Europe.
“The solar sector will continue to be impacted by the broader, macro economic climate leading to reduced ASP and market demand,” continued Dr. Wang. “To mitigate these challenges, which we believe are likely to remain in the near future, the Company has been actively negotiating for lower raw material costs and continuing to focus on developing advanced, high efficiency cells while realizing our sales strategy of actively targeting more diverse solar markets within Europe, the U.S. and Asia. Despite the challenging financing environment, we continued to secure sales agreements both in the fourth quarter and more recently, and we remain optimistic about our long-term prospects and the growth of China Sunergy.”
Recent Technological Developments
China Sunergy continued to make important progress with the production and development of its high efficiency cells.
-- Average selective emitter (“SE”) mono-crystalline cell conversion
efficiency was 17.3% in the fourth quarter of 2008. Mono-crystalline
cells produced on the HP lines achieved an average conversion
efficiency rate of approximately 16.8%.
-- The installation of four new selective emitter cell production lines
was completed at the end of November, bringing the total number of SE
lines to five as of the end of 2008. Given any specific quality of
wafer, SE cells can not only generally achieve higher conversion
efficiencies than P and HP-type cells, but also display greater wafer
quality tolerance.
-- China Sunergy has successfully tested multi-crystalline wafers on one
SE production line, resulting in selective emitter multi-crystalline
(“SEM”) cells. These new cells have a 16.5% average conversion
efficiency, with some test lots reaching 17%, compared to the normal
15.7% for P-Type multi-crystalline cells. Given the popularity of high
efficiency multi-crystalline cells and that the conversion of SE lines
to multi-crystalline capability requires minimal time and capital
expenditure, the Company aims to start commercial production in the
second quarter of 2009.
-- Three of the four HP cell lines were refurnished, enabling multi-
crystalline wafers to be used in these lines. This allows the Company
more flexibility in both the procurement of raw materials and the
product offering.
-- At the end of 2008, the Company had five SE cell lines, four HP lines,
three capable of using multi-crystalline and mono-crystalline wafers,
and one normal P-type line for multi-crystalline cells for a total
name-plate capacity of 320MW.
-- China Sunergy’s N-type cell consistently achieved an average
efficiency of over 19% at the laboratory level during the quarter.
However, due to the capital requirements of an N-type production line
and a new priority regarding the SEM opportunity, the Company now
anticipates production beginning in the first half of 2010.
Fourth Quarter & Full Year 2008 Financial Review
Revenues, Shipment and Production
Revenues in 2008 grew 49.4% to US$350.9 million, compared to US$234.9 million in 2007. During the fourth quarter of 2008, revenues decreased 39.6% on a year-over-year basis, and 63.7% sequentially to US$43.2 million.
Sales from solar cells, modules, cells processed under OEM arrangements, and other sales during the year accounted for 95.0%, 3.1%, 0.8%, and 1.1% of total revenue respectively. Shipments for the year, including 2.6MW for module sales, amounted to approximately 107.2 MW, compared to 74.0MW during 2007. For the fourth quarter, sales from solar cells, modules, cells processed under OEM arrangements and other sales accounted for 93.8%, 0%, 0.7% and 5.5% of total revenues, respectively. Shipments, including 0.5 MW of solar cells processed under OEM arrangements, amounted to approximately 14.1 MW, compared to 23.2 MW during the fourth quarter of 2007 and 34.1 MW during the third quarter of 2008.
During 2008 the Company increased its sales of core cell products by 63.2% to US$333.4 million, while for the fourth quarter, quarter-on-quarter sales of solar cell products declined by 64.3% as compared to the previous quarter.
The percentage of solar cell sales in overseas markets of total solar cell sales increased to 42.9% in 2008 from 38.3% in 2007. These sales were 56.4% in the fourth quarter of 2008 compared to 40.6% and 45.1% in the fourth quarter of 2007 and the third quarter of 2008, respectively.
Gross Profit/Loss, Gross Margins and Average Selling Price (“ASP”)
Gross profit for the year was US$15.5 million, a decline from US$18.0 million in 2007, and gross margin of 4.4% compared to 7.7% in 2007. Gross loss for the quarter was US$14.3 million, which led to a blended gross margin of negative 33.1%, down from 9.3% in the previous quarter, mainly due to US$10.6 million of inventory provision.
Blended ASP was US$3.32 per watt during 2008 compared to US$2.92 per watt during 2007, and during the fourth quarter it declined from US$3.48 per watt in the previous quarter to US$2.97 per watt, mainly as a result of the decline in sales price following the start of the global financial crisis in September 2008. The blended ASP for the fourth quarter of 2007 was US$3.02.
Wafer Costs
Wafer costs continued to account for a large portion of overall manufacturing costs. In 2008, wafer costs rose to US$2.78 per watt compared to US$2.43 per watt in 2007. Wafer costs per watt as a percentage of total production costs per watt rose from 89.9% in 2007 to 90.2% in 2008 due to the rising wafer spot price in the first eight months of 2008. Other production costs, which mainly consisted of other raw materials, labor, depreciation and utilities, were US$0.30 per watt in 2008.
In the fourth quarter of 2008, blended wafer costs as reported declined to US$2.74 per watt compared to US$2.87 per watt in the third quarter of 2008. Although the spot price of wafers declined more significantly during the quarter, this blended cost included existing wafer inventory, which was already purchased at higher cost earlier in 2008. As existing inventory is utilized, the Company will be able to benefit from the reduced spot market pricing of wafers. Wafer costs per watt as a percentage of total production costs per watt declined from 91.1% in the third quarter of 2008 to 86.3% in the fourth quarter of 2008, due to the rapid wafer cost decrease. Other production costs for the quarter, were US$0.43 per watt compared to US$0.28 in the third quarter of 2008, mainly due to the decreased production volume.
SG&A, Operating Profit/Loss and Net Income/Loss
Our SG&A expenses were US$20.1 million for 2008, compared to US$15.3 million in 2007, which included share based compensation charge US$3.2 million and US$0.5 million, respectively. SG&A expenses in the fourth quarter of 2008 were US$5.7 million, compared to US$5.3 million in the fourth quarter of 2007 and US$4.9 million sequentially, which included share based compensation charge US$0.6 million, US$0.1 million, and US$0.9 million, respectively.
The Company incurred an operating loss of US$6.5 million for 2008. This compares to an operating profit of US$0.2 million in 2007. Loss from operations was US$20.4 million for the fourth quarter, compared to an operating loss of US$1.2 million and an operating profit of US$5.7 million for the fourth quarter of 2007 and the third quarter of 2008, respectively.
Interest expense for the fourth quarter 2008 was US$2.4 million, compared to US$2.0 million for the fourth quarter of 2007 and US$2.1 million for the third quarter of 2008, respectively. The increase was attributable to the change in accounting treatment for the issuance costs of those convertible bonds which were bought back in December 2008.
Full year net loss was US$22.5 million, compared to net loss of US$4.9 million in 2007, due to poor business conditions in the fourth quarter. GAAP basic and diluted net loss attributable to holders of ordinary shares was US$0.57 per ADS in 2008 compared to a GAAP basic and diluted net loss of US$0.21 per ADS in 2007.
In the fourth quarter, the Company reported a net loss of US$26.3 million, due mainly to a significant increase in inventory provisions of US$10.6 million as well as a US$9.0 million change in the fair value of foreign currency derivatives, both of which were not cash related. This compares to a net income of US$0.2 million in the previous quarter and a net loss of US$2.3 million in the fourth quarter of 2007.
Non-GAAP net loss, which excludes share-based compensation and change in fair value of foreign currency derivative loss, was US$16.6 million in the fourth quarter of 2008, compared to net loss of US$2.1 million and net income of US$2.0 million in the fourth quarter of 2007 and the third quarter of 2008, respectively. Non-GAAP net loss for the year, which excludes share-based compensation and change in fair value of foreign currency derivative loss of US$9.9 million, was US$9.4 million, compared to non-GAAP net loss of US$5.0 million in 2007. GAAP net loss for the full year was US$22.5 million mainly due to the poor fourth quarter financial results.
The non-GAAP measures are described and reconciled to the corresponding GAAP measures in the section below titled “Use of Non-GAAP Financial Measures.”
Balance Sheet and Cash Flow
As of December 31, 2008, the Company had cash and cash equivalents of US$94.8 million. Net operating cash inflow for 2008 was US$91.7 million and US$1.7 million for the fourth quarter. Depreciation and amortization was US$5.8 million and US$1.8 million for the year and fourth quarter respectively, with capital expenditures were of US$48.8 million for 2008 and US$13.4 million for the fourth quarter. The capital expenditures were largely payments for land use rights in Shanghai and equipment relating to the Company’s selective emitter cell lines.
Commenting on the financial results, Kenneth Luk, CFO of China Sunergy, said:
“China Sunergy achieved lower than expected financial results in the fourth quarter due to the ongoing global financial crisis. We recorded a gross margin of negative 33.1% mainly attributable to inventory write down, and a net loss of US$26.3 million which included foreign currency derivative losses incurred in the fourth quarter. However, since the majority of losses were not cash related we remained cash flow positive at the operational level, and had cash and cash equivalents of US$94.8 million at the end of the year.”
“The first quarter has not been encouraging for a rapid near-term recovery, as we have seen weak performance primarily due to continued poor demand and decline in ASP. However, we do anticipate our first quarter demonstrating both operational and financial improvement over the fourth quarter of 2008. China Sunergy will take all precautionary and necessary steps to successfully navigate through these uncertain times as we look to continue signing new sales agreements, expand into new markets and carefully monitor and reduce our supply costs as we monetize our impressive R&D capabilities.”
Outlook & Selected Company Objectives
Entering 2009, China Sunergy will focus on the following key business strategies during the year:
-- Extend industry leadership in high efficiency cells. The Company aims
to achieve increased efficiency throughout the year, with average SEM
cell efficiency of 16.8% and increasing improvement in existing
selective emitter and HP cells. The Company will also work to ensure
production level N-type efficiency will remain above 19% when
introduced in 2010. China Sunergy has already seen conversion
efficiency of its products increased by 0.2% overall in the first two
months of 2009, compared with the 2008 average.
-- Improve internal operational efficiencies to reduce conversion costs to
US$0.22 per watt, while enhancing yield by 5% to the mid-90% level.
-- Take advantage of current wafer price environment and exact greater
control over incoming wafer quality while establishing stable and
long-term relationships with high quality suppliers.
-- Diversify customer coverage, through the greater saturation of existing
markets and the penetration of new geographies.
-- Offer differentiated products and services through advanced design,
research and manufacturing capabilities.
As the Company pursues these strategies, the economic environment will impact China Sunergy more than originally anticipated in the near term, especially in the first quarter of 2009. A slowdown of orders as a result of the weak credit environment and an ongoing decline in ASP have affected the Company’s gross margin and will continue in the first quarter of 2009.
Taking into account the above strategies, blended with declining ASP, requests for re-pricing, a decrease in demand volume and a destocking of relatively expensive, previously purchased wafers, the Company believes the gross margin for the first quarter will remain negative, but overall financial and operational results should be better than the fourth quarter of 2008.
For the full year of 2009, the Company believes that demand exists although is limited by the current economic situation. China Sunergy will focus on maintaining the recent momentum seen by the Company with regards to signing agreements while proceeding cautiously on supply procurement and capital expenditure. Given current trends, the Company believes that it will achieve gross margins of 15% to 20% for the second half of 2009. For the full year, China Sunergy expects shipments of 150MW to 200MW.
Additional Company Updates
China Sunergy recently announced the resignation of CFO Kenneth Luk effective March 31, 2009, who will return to Hong Kong for family reasons. Mr. Luk has served as CFO of China Sunergy since December 17, 2007. He will remain available in an advisory capacity to the Company for a certain period of time after his resignation becomes effective, and the Company is currently undergoing a search for a new CFO.
Quarterly Earnings Conference Call Details
China Sunergy will host an earnings conference call at 5:00am (Pacific Time) / 8:00am (Eastern Time) / 8:00pm (Beijing/Hong Kong) on March 19, 2009. The management team will be on the call to discuss results and business highlights of the quarter and full year.
The dial-in details for the live conference call are as follows:
U.S. toll free number: +1.800.260.8140
International: +1.617.614.3672
Passcode: 21001471
For those who cannot access the live broadcast, a replay will be available online and from two hours after the end of the call until April 3rd, 2009. Please dial:
U.S. toll free number: +1-888-286-8010
International: +1-617-801-6888
Passcode: 13065814
A webcast of the call and replay with be available online at http://www.chinasunergy.com .
About China Sunergy Co., Ltd.:
China Sunergy Co., Ltd. (NASDAQ: CSUN) ("China Sunergy") is a specialized manufacturer of solar cell products in China. China Sunergy manufactures solar cells from silicon wafers utilizing crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect. China Sunergy sells solar cell products to Chinese and overseas module manufacturers and system integrators, who assemble solar cells into solar modules and solar power systems for use in various markets. For more information please visit http://www.chinasunergy.com .
Use of Non-GAAP Financial Measures
To supplement China Sunergy’s consolidated financial results presented in accordance with GAAP, China Sunergy uses the following measures defined as non-GAAP financial measures by the SEC: net income excluding share-based compensation and change in fair value of foreign currency derivative loss, and basic and diluted net income per ADS excluding share-based compensation and change in fair value of foreign currency derivative loss. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Reconciliations of non-GAAP financial measures to the nearest comparable GAAP measures" set forth at the end of this release. China Sunergy believes that these non-GAAP financial measures provide meaningful supplemental information regarding its performance by excluding certain expenses and expenditures that may not be indicative of its operating performance from a cash perspective. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company’s performance and when planning and forecasting future periods. The Company expects to provide net income on a non-GAAP basis using a consistent method on a quarterly basis going forward. A limitation of using non-GAAP net income excluding share-based compensation and change in fair value of foreign currency derivative loss, and basic and diluted net income per ADS excluding share-based compensation and change in fair value of foreign currency derivative loss is that these non-GAAP measures exclude the share-based compensation and change in fair value of foreign currency derivative loss that have been and will continue to be for the foreseeable future a significant recurring expense in the business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are comparable to non-GAAP financial measures.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements and are based on current expectations, assumptions, estimates and projections about the company and the industry, and involve known and unknown risks and uncertainties, including but not limited to, the company’s ability to raise additional capital to finance the company’s activities; the effectiveness, profitability, and the marketability of its products; the economic slowdown in China and elsewhere and its impact on the company’s operations; demand for and selling prices of the company’s products, the future trading of the common stock of the company; the ability of the company to operate as a public company; the period of time for which its current liquidity will enable the company to fund its operations; the company’s ability to protect its proprietary information; general economic and business conditions; the volatility of the company’s operating results and financial condition; the company’s ability to attract or retain qualified senior management personnel and research and development staff; future shortage or availability of the supply of raw materials; impact on cost-competitiveness as a result of entering into long-term arrangements with raw material suppliers and other risks detailed in the company’s filings with the Securities and Exchange Commission. The company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
For further information contact:
Financial Dynamics
Peter Schmidt: peter.schmidt@fd.com
Tel: +86-10-8591-1953
The following financial information is extracted from the Company’s condensed consolidated financial statements for the respective periods.
China Sunergy Co., Ltd.
Unaudited Condensed Consolidated Income Statement Information
(In US$ ‘000, except share and per share data)
For the 3 months ended
Dec 31, Sep 30, Dec 31,
2008 2008 2007
Sales to third parties 27,916 102,006 66,256
Sales to related parties 15,289 17,031 5,241
Total sales 43,205 119,037 71,497
Cost of goods sold (57,513) (107,987) (66,888)
Gross profit (loss) (14,308) 11,050 4,609
Operating expenses:
Selling expenses (1,290) (582) (571)
General and administrative expenses (4,439) (4,319) (4,771)
Research and development expenses (386) (431) (449)
Total operating expenses (6,115) (5,332) (5,791)
Income/(Loss) from operations (20,423) 5,718 (1,182)
Interest expense (2,428) (2,081) (2,027)
Interest income 497 408 456
Other income/(expenses), net 2,463 (3,728) 32
Changes in fair value of derivatives (9,016) (848) --
Income/(Loss) before income tax (28,907) (531) (2,721)
Income tax (expense) benefit 2,634 742 467
Net income/(loss) (26,273) 211 (2,254)
Net income/(loss) attributable to
ordinary shareholders (26,273) 211 (2,254)
Net income/(loss) per ADS
Basic ($0.66) $0.01 ($0.06)
Diluted ($0.66) $0.01 ($0.06)
Weighted average ADS outstanding
Basic 39,759,696 39,737,547 39,555,463
Diluted 39,759,696 40,392,139 39,555,463
China Sunergy Co., Ltd.
Unaudited Condensed Consolidated Income Statement Information
(In US$ ‘000, except share and per share data)
For the Year Ended
December 31
2008 2007
Sales to third parties 297,299 224,316
Sales to related parties 53,621 10,592
Total sales 350,920 234,908
Cost of goods sold (335,454) (216,881)
Gross profit 15,466 18,027
Operating expenses:
Selling expenses (3,324) (1,644)
General and administrative expenses (16,779) (13,664)
Research and development expenses (1,871) (2,555)
Total operating expenses (21,974) (17,863)
Income/(Loss) from operations (6,508) 164
Interest expense (8,069) (7,394)
Interest income 1,665 1,577
Other income/(expenses), net (2,268) 93
Changes in fair value of
derivatives (9,864) --
Income/(Loss) before income tax (25,044) (5,560)
Income tax (expense) benefit 2,583 705
Net income/(loss) (22,461) (4,855)
Dividend on Series A redeemable
convertible preferred shares -- (155)
Dividend on Series B redeemable
convertible preferred shares -- (330)
Dividend on Series C redeemable
convertible preferred shares -- (233)
Net income/(loss) attributable to
ordinary shareholders (22,461) (5,573)
Net income/(loss) per ADS
Basic ($0.57) ($0.21)
Diluted ($0.57) ($0.21)
Weighted average ADS outstanding
Basic 39,679,982 30,860,960
Diluted 39,679,982 30,860,960
China Sunergy Co., Ltd
Unaudited Condensed Consolidated Balance Sheet Information
(In US$ ‘000, except share and per share data)
Dec 31, Sep 30, Dec 31,
2008 2008 2007
Assets
Current Assets
Cash and cash equivalents 94,800 122,099 60,458
Restricted cash 62,400 56,690 23,473
Accounts Receivable (net) 9,448 16,156 26,817
Other receivable (net) 11,531 11,330 16,316
Inventories 59,125 41,046 56,092
Advance to suppliers 7,320 34,178 79,912
Amount due from related companies 18,583 17,788 2,112
Current deferred tax assets 1,927 430 527
Total current assets 265,134 299,717 265,707
Prepayments for equipment 173 5,498 7,535
Property, plant and equipment, net 102,609 87,658 45,394
Long-term deferred assets 1,379 1,418 --
Land use rights 6,441 2,144 2,179
Deferred tax assets 1,512 262 329
Restricted cash- Collateral account 17,502 31,416 --
Convertible bond issuance cost 3,451 3,757 --
Total assets 398,201 431,870 321,144
Liabilities and shareholders’
equity
Current liabilities
Short-term bank borrowings 97,299 103,398 121,841
Accounts payable 29,099 15,333 7,157
Notes payable 14,631 14,666 --
Accrued expenses and other current
liabilities 4,640 4,975 2,344
Advance from customers 706 1,789 4,893
Amount due to related companies 247 1,176 8
Income tax payable -- 292 --
Total current liabilities 146,622 141,629 136,243
Collateral account payable 17,502 31,416 --
Derivative liability 9,058 851 --
Other liabilities 1,187 999 1,053
Convertible bond payable 48,099 55,147 --
Total liabilities 222,468 230,042 137,296
Minority Interest 299 299 --
Shareholders’ equity
Ordinary shares: US$0.0001 par
value; 267,766,443 and 237,332,777
shares issued outstanding as of
December 31, 2008 and December 31,
2007, respectively 27 27 24
Additional paid-in capital 182,070 181,438 178,361
Subscription receivable (405) (405) --
Retained deficit (27,315) (1,042) (4,855)
Accumulated other comprehensive
income 21,057 21,511 10,318
Total shareholders’ equity 175,434 201,529 183,848
Total liabilities and shareholders’
equity 398,201 431,870 321,144
* Note 1
Reconciliation of non-GAAP results of operations measures to the nearest
comparable GAAP measures
(In US$ ‘000)
For the 3 months ended
Dec 31, Sep 30, Dec 31,
2008 2008 2007
GAAP Net income/(loss) (26,273) 211 (2,254)
Stock based compensation 633 925 144
Changes in fair value of
derivatives- REC contract 6,763 848 --
Changes in fair value of
derivatives- Euro hedging 2,253 -- --
Non-GAAP Net income/(loss) (16,624) 1,984 (2,110)
Non-GAAP Net income/(loss) per ADS
Basic ($0.42) $0.05 ($0.05)
Diluted ($0.42) $0.05 ($0.05)
Weighted average ADS outstanding
Basic 39,759,696 39,737,547 39,555,463
Diluted 39,759,696 40,392,139 39,555,463
Reconciliation of non-GAAP results of operations measures to the nearest
comparable GAAP measures
(In US$ ‘000)
For the Year Ended
December 31
2008 2007
GAAP Net income/(loss) (22,461) (5,573)
Stock based compensation 3,232 536
Changes in fair value of
derivatives- REC contract 7,611 --
Changes in fair value of
derivatives- Euro hedging 2,253 --
Non-GAAP Net income/(loss) (9,365) (5,037)
Non-GAAP Net income/(loss) per ADS
Basic ($0.24) ($0.16)
Diluted ($0.24) ($0.16)
Weighted average ADS outstanding
Basic 39,679,982 30,860,960
Diluted 39,679,982 30,860,960
