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Solar EnerTech Corp. Announces First Quarter of Fiscal Year 2011 Unaudited Financial Results

2011-02-11 16:22 1062

MOUNTAIN VIEW, Calif., Feb. 11, 2011 /PRNewswire-Asia/ -- Solar EnerTech Corp. (OTC Bulletin Board: SOEN) (the "Company") today announced unaudited financial results for the first quarter ended December 31, 2010.

First Quarter 2011 Highlights:

  • Revenue for the first quarter 2011 was $15.5 million, composed of $15.3 million in solar module sales and $0.2 million in solar cell sales.  This compares to $17.7 million of sales in the same quarter a year ago, composed of $15.3 million in solar module sales, $1.2 million in solar cell sales and $1.2 million in resale of raw materials.
  • Net income for the first quarter 2011 increased to $5.0 million from a loss of $3.9 million in the first quarter of the prior year.  Net income for the first quarter 2011 included $5.8 million in income from a reversal of payroll related tax accrual and $0.7 million in non-cash stock compensation expenses.

SOLAR MODULES

 

 

 

 

 

 

 

 

Q-1 2011

 

 

Q-1 2010

 

 

% Increase
(Decrease)

 

 

Solar Module Shipments

 

8.0MW

 

 

7.9MW

 

 

1%

 

 

Avg. Selling Price ($ / watt)

 

$1.91

 

 

$1.93

 

 

(1%)

 

 

 

 

 

 

 

 


Total module shipments increased 1% to 8.0 MW in the first quarter of fiscal year 2011 compared to 7.9 MW in the first quarter of fiscal year 2010.

Revenue for the first quarter of fiscal year 2011 decreased 12% to $15.5 million compared to $17.7 million in the first quarter a year ago. Revenue for the first quarter of fiscal year 2011 was comprised of approximately $15.3 million in solar module sales, of which more than 98% were sold to Europe and Australia, and $0.2 million in solar cell sales. Revenue for the first quarter of fiscal year 2010 was comprised of approximately $15.3 million in solar module sales, $1.2 million in solar cell sales and $1.2 million in resale of raw materials. The decrease in revenue compared to the prior year period was driven by decreases in solar cell and raw material sales as well as the decrease in average selling price for solar modules from $1.93 per watt in the three months ended December 31, 2009 to $1.91 per watt in the three months ended December 31, 2010. The decrease was partially offset by an increase in solar module shipments from 7.9 MW in the three months ended December 31, 2009 to 8.0 MW in the three months ended December 31, 2010.

Gross profit for the first quarter of fiscal year 2011 decreased to $1.1 million compared to $1.9 million in the first quarter of fiscal year 2010. Gross margin for the first fiscal quarter 2011 was 7% compared to 11% in the same prior year period. The decrease in gross profit was primarily due to an increase in raw material prices, specifically silicon wafer prices. Silicon wafer prices increased approximately 24% from RMB 16.0 per piece during the three months ended December 31, 2009 to RMB 19.9 per piece during the three months ended December 31, 2010.

Total operating expenses for the first quarter of fiscal year 2011 was negative $3.4 million, which included $5.8 million in income from a reversal of payroll related tax accrual and $0.7 million in non-cash stock compensation expenses.  Excluding these non-cash items, operating expenses for the first quarter of fiscal year 2011 were $1.7 million, or 11% of total sales. By comparison, total operating expenses for the first quarter of fiscal year 2011 were $2.3 million, which included $0.6 million of non-cash stock compensation expenses.  Excluding this non-cash item, operating expenses for the first quarter a year ago were $1.7 million, or 10% of total sales.

Net income for the first quarter of fiscal year 2011 was $5.0 million, or $0.03 per basic and diluted share, compared to a net loss of $3.9 million, or $0.04 per basic and diluted share, for the same period in fiscal 2010. The net income in the first quarter of fiscal year 2011 primarily resulted from the reversal of payroll related tax accrual.

Leo Shi Young, the Company's Chief Executive Officer, stated, "We continued to experience strong demand from our customer base for SolarE products during the first quarter of fiscal year 2011. Financial results of this quarter demonstrate the management's confidence to steer the company towards profitability at a challenging time when market selling prices are falling while material costs continue to rise. The key is the quality that we have maintained and continued to improve for our products, and the capability to meet the increasing demands from our customers in Europe, Australia and the United States."

"For the quarters to come, we expect to see stronger demand in high-efficiency, high quality products as the solar industry continues to grow more sophisticated. At the same time we are striving to streamline our operations, reduce our costs, and increase our market share," concluded Mr. Young.

Financial Position

As of December 31, 2010, the Company's assets included $1.7 million in cash, $6.9 million of accounts receivable, $0.9 million of prepayments primarily for the purchase of raw materials, $5.4 million of inventories on hand and $2.3 million of VAT and other receivables. Additionally, as of December 31, 2010, the Company's liabilities included $9.7 million of accounts payable, customer advance payments and accrued liabilities and $1.5 million of short-term loans.

As of December 31, 2010, the Company recorded a $1.5 million liability for an outstanding Series B-1 convertible note. The note bears interest at 6% per annum and is due on March 19, 2012.

About Solar EnerTech Corp.

Solar EnerTech is a photovoltaic solar energy cell manufacturing enterprise incorporated in the United States with its corporate office in Mountain View, California.  The Company has established a sophisticated 67,107-square-foot manufacturing facility at Jinqiao Modern Technology Park in Shanghai, China. The Company currently has two 25MW solar cell production lines and a 50MW solar module production facility.

Solar EnerTech has also established a Joint R&D Lab at Shanghai University to develop higher efficiency cells and to put the results of that research to use in its manufacturing processes.  Led by one of the industry's top scientists, the Company expects its R&D program to help bring Solar EnerTech to the forefront of advanced solar technology research and production.  For additional information regarding the Company, please visit http://www.solarE-power.com.

Safe Harbor Statement

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which are relevant as of the date of the given press release and should not be relied upon as of any subsequent date. Solar EnerTech undertakes no obligation to update publicly any forward-looking statements.

(Unaudited Financial Statements Follow)

Solar EnerTech Corp

Unaudited Consolidated Statements of Operations

 

 

 

Quarter Ended December 31,

 

 

 

2010

 

 

2009

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$             15,507,000

 

 

$             17,693,000

 

 

Cost of sales

 

(14,391,000)

 

 

(15,762,000)

 

 

    Gross profit

 

1,116,000

 

 

1,931,000

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general and administrative

 

2,351,000

 

 

2,218,000

 

 

Research and development

 

69,000

 

 

108,000

 

 

Gain on debt extinguishment

 

(32,000)

 

 

-

 

 

Reversal of payroll related tax accrual

 

(5,817,000)

 

 

-

 

 

  Total operating (income) expenses

 

(3,429,000)

 

 

2,326,000

 

 

 

 

 

 

 

  Operating income (loss)

 

4,545,000

 

 

(395,000)

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

Interest income

 

3,000

 

 

3,000

 

 

Interest expense

 

(71,000)

 

 

(4,425,000)

 

 

Gain on change in fair market value of compound embedded derivative

 

202,000

 

 

104,000

 

 

Gain on change in fair market value of warrant liability

 

466,000

 

 

921,000

 

 

Other expense

 

(158,000)

 

 

(132,000)

 

 

  Net income (loss)

 

$               4,987,000

 

 

$             (3,924,000)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share - basic

 

$                        0.03

 

 

$                      (0.04)

 

 

Net income (loss) per share - diluted

 

$                        0.03

 

 

$                      (0.04)

 

 

 

 

 

 

 

Weighted average shares outstanding - basic

 

160,416,534

 

 

88,256,706

 

 

Weighted average shares outstanding - diluted

 

171,351,607

 

 

88,256,706

 

 

 

 

 

 



Solar EnerTech Corp

Consolidated Balance Sheets

 

 

 

 

 

 

 

 

December 31, 2010

 

 

September 30, 2010

 

 

 

(Unaudited)

 

 

(Audited)

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$                   1,699,000

 

 

$                    6,578,000

 

 

Accounts receivable, net of allowance for doubtful account of $42,000 and $42,000 at December 31, 2010 and September 30, 2010, respectively

 

6,902,000

 

 

6,546,000

 

 

Advance payments and other

 

941,000

 

 

1,274,000

 

 

Inventories, net

 

5,392,000

 

 

4,083,000

 

 

VAT receivable

 

1,978,000

 

 

870,000

 

 

Other receivable

 

340,000

 

 

690,000

 

 

Total current assets

 

17,252,000

 

 

20,041,000

 

 

Property and equipment, net

 

8,375,000

 

 

8,874,000

 

 

Other assets

 

740,000

 

 

735,000

 

 

Deposits

 

103,000

 

 

102,000

 

 

Total assets

 

$                 26,470,000

 

 

$                  29,752,000

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$                   6,089,000

 

 

$                    7,895,000

 

 

Customer advance payment

 

979,000

 

 

2,032,000

 

 

Accrued expenses

 

2,631,000

 

 

2,596,000

 

 

Accounts payable and accrued liabilities, related parties

 

-

 

 

5,817,000

 

 

Short-term loans

 

1,464,000

 

 

1,312,000

 

 

Total current liabilities

 

11,163,000

 

 

19,652,000

 

 

Convertible notes, net of discount

 

1,473,000

 

 

1,531,000

 

 

Derivative liabilities

 

207,000

 

 

422,000

 

 

Warrant liabilities

 

436,000

 

 

902,000

 

 

Total liabilities

 

13,279,000

 

 

22,507,000

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

Common stock - 400,000,000 shares authorized at $0.001 par value 171,177,443 and 170,338,954 shares issued and outstanding at December 31, 2010 and September 30, 2010, respectively

 

171,000

 

 

170,000

 

 

Additional paid in capital

 

98,411,000

 

 

97,656,000

 

 

Other comprehensive income

 

2,958,000

 

 

2,755,000

 

 

Accumulated deficit

 

(88,349,000)

 

 

(93,336,000)

 

 

Total stockholders' equity

 

13,191,000

 

 

7,245,000

 

 

Total liabilities and stockholders' equity

 

$                 26,470,000

 

 

$                  29,752,000

 

 

 

 

 

 

 

 

 

 

 




 

 

Contact:

 

 

 

Solar EnerTech Corp.

 

CCG Investor Relations

 

 

Phone: +86-21-6886-2220

 

Mr. Mark Collinson, Partner

 

 

http://www.solarE-power.com

 

Phone : +1-310-954-1343

 

 

 

Email : mark.collinson@ccgir.com

 

 

 

www.ccgirasia.com

 

 

 

 

 

 


Source: Solar EnerTech Corp.
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