2007 Results
-- Q4 net revenues of $127.5 million, a 31% increase over Q3 net revenues
of $97.4 million
-- Q4 net income per diluted share of $0.20 compared to Q3 net income per
diluted share of $0.02
-- Full year 2007 net revenues of $302.8 million, a 344% increase over
full year 2006 net revenues of $68.2 million
-- Q4 shipments of 37.8MW, bringing full year 2007 shipments to 83.5MW, a
542% increase over full year 2006 shipments of 15.4MW
2008 Outlook and Developments
-- Reiterates full year 2008 net revenue guidance of $650-$750 million on
shipments of 200-220MW
-- Over 90% of projected 2008 module sales secured by firm contracts
-- Almost all projected 2008 silicon, wafer and cell requirements secured
by firm contracts
-- 100MW of new solar cell production capacity installed in November 2007
and expected to reach full capacity in Q1 2008
-- New Changshu solar module facility completed on schedule in February
2008, bringing total annual solar module production capacity to 400MW
JIANGSU, China, March 5 /Xinhua-PRNewswire/ -- Canadian Solar Inc. (“the Company,” “CSI,” or “we”) (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the fourth quarter and the year ended December 31, 2007.
Net revenues for the quarter were $127.5 million (including $2.4 million of silicon material sales), compared to net revenues of $24.4 million for the fourth quarter of 2006 (including $8.3 million of silicon materials sales) and $97.4 million for the third quarter of 2007 (including $3.8 million of silicon materials sales). Net income for the quarter was $5.5 million, or $0.20 per diluted share, compared to a net loss of $5.1 million, or $0.21 per diluted share, for the fourth quarter of 2006 and net income of $0.5 million, or $0.02 per diluted share, for the third quarter of 2007. Excluding share-based compensation expenses of $2.2 million, non-GAAP net income for the quarter would have been $7.7 million, or $0.27 per diluted share.
Net revenues for 2007 were $302.8 million, compared to $68.2 million for 2006. Net loss for 2007 was $0.7 million, or $0.02 per diluted share, compared to net loss of $9.4 million, or $0.50 per diluted share, for 2006. Excluding share-based compensation expenses of $9.2 million, non-GAAP net income for 2007 would have been $8.5 million, or $0.31 per diluted share.
Dr. Shawn Qu, Chairman and CEO of CSI, commented: “In Q4, we continued to have strong sales growth, through both our long-term, tier-one distributors and project facilitators and our new partners in targeted geographic territories. Our strategic decision to focus on tier-one distributors and project-based companies has created a robust and sustainable market for our products. The Company ended the year in a much stronger position thanks to increased sales and marketing efforts, key personnel hires, secured silicon supply arrangements, and successful execution of our capacity expansion and vertical integration into solar cell manufacturing. As a result of these initiatives, we were able to outpace the rapidly growing solar industry and increase our market share. We fulfilled our commitment to turn the company around and brought added value to our shareholders through solid top line growth and bottom line improvement, quarter over quarter.”
Dr. Qu continued, “Our ‘trade-mark’ flexible vertical integration model and balanced supply strategy, which includes direct purchasing of cells from select long-term suppliers to supplement our internal cell manufacturing capabilities, enabled us to meet demand, and off-set supply constraints and high pricing experienced in the market during the year. Looking ahead, our prospects remain strong to expand production to meet customer demand in new and existing markets.”
Bing Zhu, CFO of CSI, noted: “We are encouraged by our success in Q4, especially the significant improvement in our net revenues and gross margin. We expect further improvements in our gross margin in 2008 as our annual cell production capacity increases from 100MW to 250MW. Our current cash position, the expected profit and local bank financing are sufficient to support our planned expansion and near term working capital needs. We are committed to maintaining profitability as we expand our operations.”
Revenue by Geography (US $ millions)
Q407 Q307 Q406 FY07 FY06
Region Revenue % Revenue % Revenue % Revenue % Revenue %
Europe 124.1 97.3% 93.0 95.5% 11.0 45.0% 286.6 94.6% 52.0 76.2%
Asia 2.9 2.3% 4.4 4.5% 13.4 54.8% 13.6 4.5% 14.2 20.9%
Americas 0.5 0.4% 0.0 0.2% 2.6 0.9% 2.0 2.9%
Total Net
Revenue 127.5 100% 97.4 100% 24.4 100% 302.8 100% 68.2 100%
Note: Asian revenue included $2.4 million of silicon materials sales in
the fourth quarter of 2007 and$3.8 million of silicon materials
sales in the third quarter of 2007.
Recent Developments
-- Received approximately $73 million net proceeds from a private offering
of senior convertible notes in December 2007.
-- Opened a new Changshu solar module facility in February 2008, bringing
our total annual solar module production capacity to 400MW.
-- Expansion of our solar cell manufacturing capacity from 100MW to 250MW
is on track for completion by the Q3 2008.
-- Phase One of our Luoyang solar ingot and wafer plant is on track for
completion in the summer of 2008, providing us with annual solar wafer
capacity of 40-60MW.
-- Diversified our silicon wafer supply sources by signing supply
contracts with four new suppliers.
Outlook
Dr. Qu continued: “With more than 80MW shipped in 2007 and over 200MW of deliveries forecasted for 2008, CSI is quickly gaining the critical size and economy of scale to establish itself as a long-term player in the solar industry. The severe snowstorms in China at the end of January caused some delays in deliveries from suppliers. CSI management responded by leveraging our strong and diversified supply chain and increased supply from other resources. We believe that we are still on track for quarter over quarter revenue growth and margin improvement. This clearly demonstrates the capability of our management team, our strong relationships with loyal supply partners, and the unique strength of our flexible vertical integration business model.”
Net revenue for the first quarter of 2008 is expected to be in the range of $150-$155 million, with non-GAAP operating income, determined by excluding share based compensation expenses, expected to be in the range of $12 - $12.5 million. Shipments for the first quarter of 2008 are expected to be approximately 40MW, including some tolling business.
Based on current customer orders, market forecasts and supply contracts, we reiterate our forecast for 2008 net revenues of $650-$750 million on shipments of 200-220MW of regular solar modules. We intend to continue our long-term 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. The Company believes that it has contractually secured nearly all of its silicon, wafer and cell requirements for 2008 to support its guidance. The Company continues to advance new technologies; including the use of upgraded metallurgical silicon (UMG) based solar module products. The Company expects to ship around 1MW of UMG solar module products in Q1 and aims to ship 30-40MW of UMG solar module products in the full year 2008.
Looking ahead to 2009, if all of our long-term supplier contracts are fully implemented, we should have access to approximately 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 photovoltaic solar cells, thereby enabling us to produce approximately 400MW of regular photovoltaic solar modules and 100-150MW of UMG products in 2009.
Investor Conference Call / Webcast Details
A conference call has been scheduled for 9:00 p.m. on Wednesday, March 5, 2008 (in Jiangsu). This will be 8:00 a.m. on Wednesday, March 5, 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: +1-866-383-7989 (domestic) or +1-617-597-5328 (international). The passcode to access the call is: 91205021. A replay of the call will be available starting one hour after the call and continuing until 10:00 p.m. on Wednesday, March 12, 2008 (in Jiangsu) or 10:00 a.m. on Wednesday, March 12, 2008 (in New York) at 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: 37681104.
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)
12 Months 12 Months
Q4 2007 Q4 2006 2007 2006
Net Revenues:
Net Revenues - Product 122,952 24,371 298,291 68,144
Net Revenues - Others 4,507 -- 4,507 68
Total Net Revenues 127,459 24,371 302,798 68,212
Cost of Revenues:
Cost of Revenues -
Product 109,164 24,271 275,335 55,804
Cost of Revenues -
Others 3,687 -- 3,687 68
Total Cost of Sales 112,851 24,271 279,022 55,872
Gross Profit 14,608 100 23,776 12,340
Operating Expenses:
Selling Expenses 2,971 1,233 7,531 2,909
General and
Administrative
Expenses 5,924 3,409 17,302 7,924
Research and
Development Expenses 321 315 998 398
Total Operating
Expenses 9,216 4,957 25,831 11,231
Income/(loss) from
operations 5,392 (4,857) (2,055) 1,109
Other Income
(Expenses):
Interest Expenses (1,423) (213) (2,367) (2,193)
Interest Income 166 272 562 363
Loss on Change in Fair
Value of Derivatives -- -- -- (6,997)
Loss on Change in Fair
Value of Instruments
Related to Convertible
Notes -- -- -- (1,190)
Tax Refund for
Reinvestment 925 -- 925 --
Others - Net 727 (77) 2,443 (90)
Income (Loss) before
Taxes 5,787 (4,875) (492) (8,998)
Income Taxes (249) (230) (172) (432)
Net Income (Loss) 5,538 (5,105) (664) (9,430)
Basic Earning (Loss)
per Share 0.20 (0.21) (0.02) (0.50)
Basic Weighted Average
Outstanding Shares 27,297,428 24,120,000 27,283,305 18,986,498
Diluted Earning (Loss)
per Share 0.20 (0.21) (0.02) (0.50)
Diluted Weighted
Average Outstanding
Shares 28,130,379 24,120,000 27,283,305 18,986,498
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 gross profit, adjusted operating income (loss) and adjusted net income (loss), each excluding share-based compensation and other one-time non-cash charges, expenses or gains, 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.
Q4 2007 Q4 2006
Gross Operating Net Gross Operating Net
Profit Income Income Profit Income Income
(Loss) (Loss) (Loss) (Loss)
US GAAP
Profit(Loss) 14,608 5,392 5,538 100 (4,857) (5,105)
Share-based
Compensation 90 2,181 2,181 72 2,651 2,651
Convertible
Note Charge -- -- -- -- -- --
Total Special
Items 90 2,181 2,181 72 2,651 2,651
Non-US GAAP
Profit(Loss) 14,698 7,573 7,719 172 (2,206) (2,454)
Non-US GAAP
Earning(Loss)
per Diluted
Share 0.27 (0.10)
Adjusted Gross
Margin 11.53% 0.71%
Adjusted
Operating
Margin 5.94% (9.05)%
12 Months 2007 12 Months 2006
Gross Operating Net Gross Operating Net
Profit Income Income Profit Income Income
(Loss) (Loss) (Loss) (Loss)
US GAAP
Profit (Loss) 23,776 (2,055) (664) 12,340 1,109 (9,430)
Share-based
Compensation 253 9,200 9,200 169 6,145 6,145
Convertible
Note Charge -- -- -- 8,893
Total Special
Items 253 9,200 9,200 169 6,145 15,038
Non-US GAAP
Profit(Loss) 24,029 7,145 8,536 12,509 7,254 5,608
Non-US GAAP
Earning(Loss)
per Diluted
Share 0.31 0.28
Adjusted Gross
Margin 7.94% 18.34%
Adjusted
Operating
Margin 2.45% 10.63%
Non-US GAAP adjusted condensed consolidated statements of operations are
intended to present the Company’s operating results, excluding special
items.
Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheets
(In Thousands of U.S. Dollars)
December 31 December 31
2007 2006
ASSETS
Current assets:
Cash and Cash Equivalents 37,667 40,911
Restricted Cash 1,626 825
Accounts Receivable, Net 58,637 17,344
Inventories 70,921 39,700
Value-added Tax Recoverable 12,247 2,281
Advances to Suppliers 32,847 13,484
Prepaid and Other Current Assets 9,705 2,398
Total Current Assets 223,650 116,943
Property, Plant and Equipment, Net 51,897 7,910
Intangible Assets 136 39
Prepaid Lease Payments 1,205 1,103
Deferred Tax Assets - Non-current 3,958 3,639
Long-term Deferred Expenses 3,296 --
TOTAL ASSETS 284,142 129,634
LIABILITIES AND STOCKHOLDER’S EQUITY
Current Liabilities:
Short-term Borrowings 40,374 3,311
Accounts Payable 8,251 6,874
Other Payables 6,153 993
Advances from Suppliers and Customers 1,962 3,225
Income Tax Payable 143 112
Amounts Due to Related Parties 209 149
Other Current Liabilities 2,121 1,191
Total Current Liabilities 59,213 15,855
Accrued Warranty Costs 3,879 875
Provision for Uncertain Tax Issue 2,279 --
Long-term Debt 17,866 --
Convertible Notes 75,000 --
TOTAL LIABILITIES 158,237 16,730
Stockholders’ Equity
Common Shares 97,454 97,302
Additional Paid-in-capital 26,534 17,334
Accumulated Deficit (4,060) (2,783)
Accumulated Other Comprehensive Income 5,977 1,051
TOTAL STOCKHOLDERS’ EQUITY 125,905 112,904
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY 284,142 129,634
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.
Gerrard Lobo
The Ruth Group
Tel: +1-646-536-7023
Email: globo@theruthgroup.com
SOURCE Canadian Solar Inc.
