Q108 Results
-- Q108 net revenues of $171.2 million, a 34% increase over Q407 net
revenues of $127.5 million
-- Q108 net income per diluted share of $0.61, compared to Q407 net income
per diluted share of $0.21
-- Q108 shipments of 41.8MW, compared to Q407 shipments of 37.8MW
2008 Outlook and Developments
-- Reiterating full year 2008 net revenue guidance of $650-$750 million on
shipments of 200-220MW, excluding e-Module shipments.
-- Production of e-Modules, a medium power module product using 100%
upgraded metallurgical grade (UMG) silicon, began in March and
shipments started in May.
-- Phase Two of the solar cell plant on track with the installation of an
additional 150MW of annual nameplate cell capacity starting in May
-- Phase One of our ingot and wafer plant in Luoyang on track with
installation of 60MW annual nameplate wafer capacity starting in May
JIANGSU, China, May 13 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("the Company," "CSI" or "we") (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the first quarter ended March 31, 2008.
Net revenues for the quarter were $171.2 million (including $2.2 million of silicon material sales), compared to net revenues of $17.5 million for the first quarter of 2007 (including $2.8 million of silicon materials sales) and $127.5 million for the fourth quarter of 2007 (including $2.4 million of silicon materials sales). Net income for the quarter was $19.0 million, or $0.61 per diluted share, compared to a net loss of $3.9 million, or $0.14 per diluted share, for the first quarter of 2007 and net income of $5.9 million, or $0.21 per diluted share, for the fourth quarter of 2007. If share-based compensation expenses of $2.2 million were excluded, non-GAAP net income for the quarter would have been $21.2 million, or $0.65 per diluted share.
Dr. Shawn Qu, Chairman and CEO of CSI, commented: "I am very pleased with our first quarter results and proud to say that our team has now achieved four consecutive quarters of revenue growth and profit margin improvement. Our impressive performance in the first quarter was due to a result of robust market demand for our products, strong pricing, effective management of foreign exchange exposure, strong operational execution of our flexible vertical integration business model, and our balanced supply strategy, which allowed us to increase our product delivery despite a general market shortage of silicon materials. In Q1, we significantly increased our internal solar cell production, which resulted in a positive impact on our bottom line. Our new Changshu solar module plant was completed on schedule during the quarter. This gave us the ability to quickly increase shipments in March following the severe weather conditions earlier in the year. Deliveries from most of our strategic suppliers are now generally on track."
Bing Zhu, CFO of CSI, noted: "We delivered on our promise to improve our gross margins and we were able to increase diluted earnings per share by close to 200% compared with Q4 2007 due to our disciplined financial management and continued operational efficiency. The significant upside to our bottom line was mainly contributed by three factors -- strong pricing, the strong Euro vs. USD, and our internal cost cutting. Although the large foreign exchange gain is likely a one-time event, we believe that the other factors will remain positive, and will, therefore, help us maintain a similar level of profitability going forward."
Revenue by Geography (US $ millions)
Q108 Q407 Q107
Region Revenue % Revenue % Revenue %
Europe 167.6 97.9% 124.1 97.3% 12.1 69.4%
Asia 2.4 1.4% 2.9 2.3% 3.3 18.9%
Americas 1.2 0.7% 0.5 0.4% 2.1 11.7%
Total Net 171.2 100% 127.5 100% 17.5 100%
Revenue
Note: Asian revenue included $2.2 million of silicon materials sales in
the first quarter of 2008 and $2.4 million of silicon materials
sales in the fourth quarter of 2007.
Recent Developments
We commenced commercial production of e-Modules, a cost-effective medium power solar module product using 100% upgraded metallurgical grade (UMG) silicon, in March. We converted one of our solar cell lines and dedicated it to UMG cells in early April and ramped up to full production shortly thereafter. We have produced approximately one MW of UMG cells over the past four weeks. We believe that we have so far achieved the technical and economic parameters which we preset for the ramp up phase. Delivery of e-Modules to our European and US customers started in early May. We believe that we are on track to achieve our prior estimate of shipping 30-40MW of e-Modules in 2008.
Outlook
Dr. Qu continued: "We also believe that we are on track to achieve our prior guidance of shipping 200 -220MW of regular solar modules in 2008, not including shipments of e-Modules, and to continue our record of quarter over quarter revenue growth. We intend to continue our long-term and proven supply chain strategy of combining internal solar wafer and cell production with direct purchasing from a select number of long-term strategic wafer and cell suppliers. We expect that many of the positive market trends that we witnessed in Q1 will continue for the rest of the year, and believe that the gross margin that we were able to achieve in Q1 bodes well for our ability to achieve our 13% - 15% gross margin target for the year."
Net revenue for Q208 is expected to be in the range of $185 - $190 million, with non-GAAP net income, determined by excluding share based compensation expenses, expected to be in the range of $17 - $18 million. Shipments for Q208 are expected to be approximately 45MW, including some tolling business.
Looking ahead to 2009, if all of our long-term supply contracts are fully implemented, we will have access to 200MW of regular polysilicon and wafers. Based on our strong position as a worldwide photovoltaic solar module supplier and the expansion plans of our strategic partners, we believe that we should be able to secure an additional 200MW of regular polysilicon and wafers, thereby enabling us to produce approximately 400MW of regular photovoltaic solar modules. In addition, we expect to produce 100 - 150MW of UMG silicon products in 2009.
Investor Conference Call / Webcast Details
A conference call has been scheduled for 8:00 p.m. on Tuesday, May 13, 2008 (in Jiangsu). This will be 8:00 a.m. on Tuesday, May 13, 2008 in New York. During the call, time will be set-aside for analysts and interested investors to ask questions of senior executive officers of the Company.
The call may be accessed by dialing: +1-800-688-0836 (domestic) or +1-617-614-4072 (international). The passcode to access the call is: 98964967. A replay of the call will be available starting one hour after the call and continuing until 10:00 p.m. on Tuesday, May 20, 2008 (in Jiangsu) or 10:00 a.m. on Tuesday, May 10, 2008 (in New York) at http://www.csisolar.com and by telephone at 1-888-286-8010 (domestic) or +1-617-801-6888 (international). The passcode to access the replay is: 11545239.
About Canadian Solar Inc. (Nasdaq: CSIQ)
Founded in 2001, Canadian Solar Inc. (CSI) is a vertically integrated manufacturer of solar cell, solar module and custom-designed solar application products serving customers worldwide. CSI is incorporated in Canada and conducts all of its manufacturing operations in China. Backed by years of experience and knowledge in the solar power market and the silicon industry, CSI has become a major global provider of solar power products for a wide range of applications. For more information, please visit http://www.csisolar.com .
Safe Harbor/Forward-Looking Statements
Certain statements in this press release including statements regarding expected future financial and industry growth 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 shortage or availability of the supply 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 price; 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 May 29, 2007. 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.
Condensed Consolidated Statements of Operations
(In Thousands of U.S. Dollars, except share and per share
data and unless otherwise stated)
Q1 2008 Q4 2007 Q1 2007
Net Revenues:
Net Revenues - Products 171,235 127,459 17,489
Cost of Revenues:
Cost of Revenues - Products 143,000 112,851 17,143
Gross Profit 28,235 14,608 346
Operating Expenses:
Selling Expenses 2,505 2,971 1,053
General and Administrative
Expenses 5,426 5,924 3,086
Research and Development Expenses 303 321 186
Total Operating Expenses 8,234 9,216 4,325
Income/(loss) from operations 20,001 5,392 (3,979)
Other Income (Expenses):
Interest Expenses (2,246) (1,423) (67)
Interest Income 102 166 285
Tax Refund for Reinvestment -- 925 --
Others - Net 8,174 727 --
Income (Loss) before Taxes 26,031 5,787 (3,761)
Income Taxes (7,036) 108 (93)
Net Income (Loss) 18,995 5,895 (3,854)
Basic Earning (Loss) per Share 0.69 0.22 (0.14)
Basic Weighted Average Outstanding
Shares 27,391,315 27,297,428 27,270,000
Diluted Earning (Loss) per Share 0.61 0.21 (0.14)
Diluted Weighted Average
Outstanding Shares 32,392,020 28,130,379 27,270,000
Canadian Solar Inc.
Reconciliation of US GAAP Gross Profit, Operating Income (Loss) and Net
Income (Loss) to Non-US GAAP Gross Profit, Operating Income (Loss)
and Net Income (Loss)
(Unaudited)
Use of Non-GAAP Financial Information
To supplement its condensed consolidated financial statements presented
in accordance with GAAP, CSI uses the following measures as defined
as non-GAAP financial measures by the SEC: adjusted operating income
(loss) and adjusted net income (loss), each excluding share-based
compensation, which we refer to as special items. CSI believes that
non-GAAP adjusted gross profit, adjusted operating income (loss) and
adjusted net income (loss) measures indicate the company's baseline
performance before subtracting those charges. In addition, these
non-GAAP measures are among the primary indicators used by the
management as a basis for its planning and forecasting of future periods.
The presentation of these non-GAAP measures is not intended to be
considered in isolation or as a substitute for the financial information
prepared and presented in accordance with GAAP.
Q1 2008
Gross Operating
Profit Income(Loss) Net Income(Loss)
US GAAP Profit (Loss) 28,235 20,001 18,995
Share-based Compensation 90 2,199 2,199
Non-US GAAP Profit (Loss) 28,325 22,200 21,194
Non-US GAAP Earning(Loss)
per Diluted Share 0.65
Adjusted Gross Margin 16.54%
Adjusted Operating Margin 12.96%
Q4 2007
Gross Operating
Profit Income(Loss) Net Income(Loss)
US GAAP Profit (Loss) 14,608 5,392 5,895
Share-based Compensation 90 2,181 2,181
Non-US GAAP Profit (Loss) 14,698 7,573 8,076
Non-US GAAP Earning(Loss)
per Diluted Share 0.29
Adjusted Gross Margin 11.53%
Adjusted Operating Margin 5.94%
Q1 2007
Gross Operating
Profit Income(Loss) Net Income(Loss)
US GAAP Profit (Loss) 346 (3,979) (3,854)
Share-based Compensation 69 2,224 2,224
Non-US GAAP Profit (Loss) 415 (1,755) (1,630)
Non-US GAAP Earning(Loss)
per Diluted Share (0.06)
Adjusted Gross Margin 2.37%
Adjusted Operating Margin (10.03)%
Non-US GAAP adjusted condensed consolidated statements of operations are
intended to present the Company's operating results, excluding special
items.
Canadian Solar Inc.
Condensed Consolidated Balance Sheets
(In Thousands of U.S. Dollars)
March 31 December 31
2008 2007
ASSETS
Current assets:
Cash and Cash Equivalents 32,195 37,667
Restricted Cash 1,054 1,625
Accounts Receivable, Net 119,398 58,637
Inventories 80,784 70,921
Value-added Tax Recoverable 15,823 12,247
Advances to Suppliers 26,211 28,745
Prepaid and Other Current Assets 4,958 10,058
Total Current Assets 280,423 219,900
Property, Plant and Equipment, Net 62,863 51,486
Intangible Assets 133 136
Advance to Suppliers 14,224 4,103
Prepaid Lease Payments 1,664 1,616
Deferred Tax Assets 4,686 3,966
Long-term Deferred Expenses 3,291 3,296
TOTAL ASSETS 367,284 284,503
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Short-term Borrowings 70,928 40,374
Accounts Payable 17,474 8,251
Other Payables 7,947 6,153
Advances from Suppliers and Customers 7,094 1,962
Income Tax Payable 4,608 143
Amounts Due to Related Parties -- 209
Other Current Liabilities 2,268 2,121
Total Current Liabilities 110,319 59,213
Accrued Warranty Costs 5,591 3,879
Provision for Uncertain Tax Positions 4,421 2,278
Long-term Debt 19,814 17,866
Convertible Notes 75,000 75,000
TOTAL LIABILITIES 215,145 158,236
Stockholders' Equity
Common Shares 97,572 97,454
Additional Paid-in-capital 28,733 26,534
Accumulated Earnings (Deficit) 15,293 (3,702)
Accumulated Other Comprehensive Income 10,541 5,981
TOTAL STOCKHOLDERS' EQUITY 152,139 126,267
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 367,284 284,503
For more information, please contact:
In Jiangsu, P.R. China
Bing Zhu, Chief Financial Officer
Canadian Solar Inc.
Tel: +86-512-6269-6755
Email: ir@csisolar.com
In the U.S.
Tyler Wilson
The Ruth Group
Tel: +1-646-536-7018
Email: twilson@theruthgroup.com
