omniture

Canadian Solar Reports Fourth Quarter and Full Year 2019 Results

2020-03-26 18:00 4300

GUELPH, Ontario, March 26, 2020 /PRNewswire/ -- Canadian Solar Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ), one of the world's largest solar power companies, today announced its financial results for the fourth quarter and full year ended December 31, 2019.

Fourth Quarter 2019 Highlights

  • Total module shipments were 2.5 GW, compared to 2.4 GW in the third quarter of 2019 and fourth quarter 2019 guidance of 2.3 GW to 2.4 GW.
  • Net revenue was $920 million, compared to $760 million in the third quarter of 2019 and fourth quarter 2019 guidance of $850 million to $880 million.
  • Gross profit was $230 million. Gross margin was 25.0%, compared to 26.2% in the third quarter of 2019 and fourth quarter 2019 guidance of 19% to 21%. Gross margin was 24.3% excluding the benefit of a U.S. anti-dumping ("AD") and countervailing duty ("CVD") true-up of $6.4 million.
  • Net income attributable to Canadian Solar was $67.7 million, or $1.12 per diluted share, compared to $58.3 million, or $0.96 per diluted share, in the third quarter of 2019.
  • Net cash provided by operating activities was approximately $247 million, compared to $22 million in the third quarter of 2019.
  • As of January 31, 2020, the Company's portfolio of utility-scale solar power plants in operation was 880.2 MWp with an estimated total resale value of approximately $1 billion.
  • The Company's board of directors authorized a $150 million share repurchase program for a six month-period beginning December 9, 2019.

Full Year 2019 Results 

  • Total module shipments were 8.6 GW, compared to 6.6 GW in 2018 and guidance of 8.4 GW to 8.5 GW.
  • Net revenue was $3.20 billion, compared to $3.74 billion in 2018 and guidance of $3.13 billion to $3.16 billion.
  • Net income attributable to Canadian Solar was $171.6 million, or $2.83 per diluted share, compared to $237.1 million, or $3.88 per diluted share in 2018.
  • Net cash provided by operating activities was approximately $600 million, compared to $216 million in 2018.

Fourth Quarter 2019 Results

Net revenue in the fourth quarter of 2019 was $920 million, compared to $760 million in the third quarter of 2019, and $901 million in the fourth quarter of 2018. The sequential increase was due to higher shipments recognized in revenue, stable module average selling price ("ASP") and the ongoing monetization of solar power plants.

Total module shipments in the fourth quarter of 2019 were 2,474 MW, compared to 2,387 MW in the third quarter of 2019 and fourth quarter 2019 guidance of 2,300 MW to 2,400 MW. This included 295 MW for the Company's utility-scale solar power projects.

Gross profit in the fourth quarter of 2019 was $230 million, compared to $199 million in the third quarter of 2019 and $271 million in the fourth quarter of 2018. The benefit of the AD/CVD true-up was $6.4 million in the fourth quarter of 2019, $24 million in the third quarter of 2019 and $16 million in the fourth quarter of 2018. Gross margin in the fourth quarter of 2019 was 25.0%, compared to 26.2% in the third quarter of 2019, 30.1% in the fourth quarter of 2018 and fourth quarter 2019 guidance of 19% to 21%. The improvement was due to a stable ASP and lower manufacturing costs.

Income from operations in the fourth quarter of 2019 was $111 million, compared to $80 million in the third quarter of 2019, and $137 million in the fourth quarter of 2018. Operating margin was 12.1% in the fourth quarter of 2019, compared to 10.5% in the third quarter of 2019 and 15.2% in the fourth quarter of 2018.

Non-cash depreciation and amortization charges in the fourth quarter of 2019 were $45 million, compared to $37 million in the third quarter of 2019 and $32 million in the fourth quarter of 2018.

The Company uses derivative instruments to hedge its foreign exchange positions. In the fourth quarter of 2019, the Company recorded a $6.6 million loss on the change in fair value of derivatives used in the Company's foreign exchange hedging program, partly offset by the foreign exchange gain of $4 million. The net effect of the currency moves and hedging was a $2.6 million loss during the fourth quarter, compared to a $0.5 million gain in the third quarter of 2019 and a net zero effect in the fourth quarter of 2018.

Net income attributable to Canadian Solar on a GAAP basis in the fourth quarter of 2019 was $67.7 million, or $1.12 per diluted share, compared to net income of $58.3 million, or $0.96 per diluted share in the third quarter of 2019, and net income of $111.6 million, or $1.81 per diluted share, in the fourth quarter of 2018. Net income attributable to Canadian Solar on a non-GAAP basis in the fourth quarter of 2019 was $63 million, or $1.04 per diluted share. This excludes the benefit of the AD/CVD true-up during the quarter of $6.4 million, net of income tax effect. For a reconciliation of results under GAAP to non-GAAP results, see the accompanying table "About Non-GAAP Financial Measures".

Dr. Shawn Qu, Chairman and Chief Executive Officer, commented: "I am pleased with the strong 2019 results, as revenue and gross margin were both ahead of expectations. The strategic decisions we made in R&D and production capacity helped us achieve one of the industry's highest margins, as we build upon our strong brand and maintain pricing power. We continue to be an innovation leader, recently setting another world record in cell conversion efficiency of 23.81% for N-type, large-area, multi-crystalline silicon solar cells. This further extends our competitive advantage, as we deliver modules with mono-like efficiencies at an attractive ASP. Along with the rest of the world, we have been working hard to ensure the health and safety of our employees in the face of the COVID-19 pandemic. We believe Canadian Solar's proven 19-year track record and the robust, conservative nature of our long-term strategy will allow the Company to emerge stronger from the current period of uncertainty."

Yan Zhuang, Acting Chief Executive Officer, commented: "We achieved strong results in Q4 and the full year 2019. On the Module and Systems Solutions side, 2019 module shipments grew by almost 30% year-over-year, while underlying gross margin increased by 480 basis points (excluding the benefit of the AD/CVD true-up), resulting in a highly profitable Q4. On the Energy side, we continue to grow and monetize our operating solar assets and pipeline, which currently stand at 880 MWp and 15.4 GWp, respectively. Strategically, we are evaluating ways to capture more value by retaining partial ownership in selected solar project assets we develop to create higher, more predictable and more profitable revenues, thereby creating additional value for the Company and its shareholders. Meanwhile, we have set up a global team focusing on system integration and energy storage, which will help to build the new technology DNA of the Company and lead the next wave of growth in this industry."

Dr. Huifeng Chang, Senior Vice President and Chief Financial Officer, added: "In Q4, we delivered $230 million of gross profit and $67.7 million of net income, both sequentially higher than the previous quarter driven by higher module sales, stable ASPs, lower costs and increased project sales. We generated $247 million of operating cash flow and increased our total cash position to $1.2 billion. We also reduced total debt to $1.95 billion, and lengthened its average maturity. Our liquidity is healthy and our balance sheet continues to improve. We are proactively taking contingency measures to preserve cash and minimize risk, should the macro situation deteriorate further. Likewise, our financial plan has the flexibility to quickly switch gears if the global economy recovers faster than expected. We plan to continue with our stock repurchase program to create extra value for shareholders as recent COVID-19-related panic-selling has brought our equity valuation below book value."

Energy Business Segment

Operating Results

Energy Business Segment Financial Results –

(In Thousands of U.S. Dollars, Except Percentages and Unless Otherwise Stated)


Three Months Ended


 Twelve Months Ended


Dec 31,
2019

Sep 30,
2019

Dec 31,
2018


Dec 31,
2019

Dec 31,
2018

Net revenues

215,370

97,550

336,214


719,445

1,575,594

Cost of revenues

182,424

77,589

243,923


635,716

1,302,779

Gross profit

32,946

19,961

92,291


83,729

272,815

Operating expenses

17,747

24,077

30,087


90,760

61,276

Income (loss) from
operations

15,199

(4,116)

62,204


(7,031)

211,539

Gross margin

15.3%

20.5%

27.5%


11.6%

17.3%

Operating margin

7.1%

-4.2%

18.5%


-1.0%

13.4%









Project Backlog and Pipeline

The Company's project backlog (formerly called its late-stage, utility-scale, solar project pipeline) totaled 3.7 GW, as of January 31, 2020. The backlog includes projects that have passed their Cliff Risk Date and are expected to be built in the next one to four years. The Cliff Risk Date depends on the country where a project is located and is defined as the date on which the project passes the last of the high-risk development stages (usually receipt of all required environmental approvals, interconnection agreements, feed-in tariff ("FiT") arrangements and PPAs). All projects in the current backlog have secured or are reasonably assured to secure a PPA or FiT.

The Company's project pipeline (formerly called its early-to-mid-stage, utility-scale, solar project pipeline) totaled 11.7 GW as of January 31, 2020.

Project Backlog and Pipeline by Region* (as of January 31, 2020)

Region

Backlog

Pipeline

Total


North America

1,597

5,232

6,829


Latin America

1,087

3,246

4,333


EMEA

206

2,113

2,319


Asia Pacific

806

676

1,482


China

45

410

455


Total

3,741

11,677

15,418


Note: Backlog and pipeline table represents the gross MWp size of the projects, including minority interest.

More recently, in 2018, the Energy team at Recurrent, the Company's subsidiary in the US, secured two PPAs for a total of 150 MWac with 180 MWh of storage attached. These landmark PPA wins have allowed Recurrent to develop deep in-house expertise on everything related to energy storage, including permitting, interconnection, engineering and design, structuring of off-take agreements to meet customer's needs, as well as plant operation. As a result of Recurrent's early mover advantage in the promising solar plus storage space, the Energy Business has been selected and is in negotiation with multiple different off-take parties for additional energy storage projects totaling 705 MWac with 2,820 MWh of storage.

The table below sets forth the Company's storage project backlog and pipeline as of January 31, 2020.


Backlog

Pipeline

Total

Storage (MWh)

320

2,500

2,820

Projects in Construction

In addition to its project backlog and pipeline, the Company has 512 MW of solar projects in construction.

Projects in Construction (as
of January 31, 2020)

MWp

Expected COD

Latin America Portfolio

449

2020-21

Japan Portfolio

63

2020

Total

512

-

Note: Approximately 264 MWp from LatAm portfolio in Brazil sold at NTP
to Nebras, with milestone revenue recognition over 2019-2021.

Solar Power Plants in Operation

In addition to its backlog, pipeline and projects in construction, as of January 31, 2020, the Company's power plants in operation totaled 1,023 MWp.

Plants in Operation – MWp (as of January 31, 2020)


North America

Latin America

EMEA

Asia Pacific

China

Total

216

100

18

230

459

1,023

Note: 880 MWp is owned by the Company and a minority interest of 143 MWp is owned by business
partners.

Energy Business Strategy Update

The Company's Energy business model has been to develop solar projects for sales and to selectively retain partial ownership of certain projects to capture long-term recurring cash flow and to leverage EPC, operations and management ("O&M"), asset management and other service business. Canadian Soar has one of the world's largest solar energy development platforms, with a track record of originating, developing, financing, building and bringing into commercial operation over 5.6 GWp of solar power plants across six continents. It currently employs 400 professionals to support its integrated business model. The Energy business team includes developers with expertise in developing both greenfield and brownfield projects, engineers who can design and manage the construction of solar power plants, energy experts that specialize in power marketing who focus on negotiating power purchase agreements ("PPAs") and hedging instruments, and experts in the O&M, as well as asset management of solar power plants. In addition, the Energy business has an in-house finance team with experience in a wide range of debt and equity instruments used to finance solar assets, including establishing private and public fund vehicles to optimize equity returns.

The Energy business has traditionally sold most of its project ownership at notice to proceed ("NTP") or commercial operation date ("COD"), depending on the best exit point for each particular project. The Company has also retained minority ownerships in certain projects to capture additional value. A successful example is the Canadian Solar Infrastructure Fund, which is sponsored by the Company and has been listed on Tokyo Stock Exchange since 2017. The Company is evaluating the expansion of these strategies into other markets as it helps to reduce lumpiness of revenue, profit and cash flow, while increasing the predictability and stability of its business and creating long-term value for shareholders.

Module and System Solutions (MSS) Business Segment

Operating Results 


MSS Business Segment Summary Financial Results* - (In Thousands of U.S.
Dollars, Except Percentages and Unless Otherwise Stated)


Three Months Ended


Twelve Months Ended


Dec 31, 2019

Sep 30, 2019

Dec 31, 2018


Dec 31, 2019

Dec 31, 2018

Net revenues

765,696

674,921

629,716


2,582,635

2,413,889

Cost of revenues

551,517

493,505

472,229


1,934,062

1,923,131

Gross profit

214,179

181,416

157,487


648,573

490,758

Operating expenses

100,329

94,730

104,658


368,858

349,149

Income from operations

113,850

86,686

52,829


279,715

141,609

Gross margin

28.0%

26.9%

25.0%


25.1%

20.3%

Operating margin

14.9%

12.8%

8.4%


10.8%

5.9%


Note: *Included effects of both sales to third party customers and to the Company's Energy Segment. Please refer to the attached financial tables for the
intercompany transaction elimination information. Income from operation amounts reflect management's allocation and estimate as some services are shared
by the two segments of the Company.

The table below provides the geographic distribution of MSS business net revenue:

MSS Net Revenue Geographic Distribution* (In Millions of U.S. Dollars, Except Percentages)


The fourth
quarter of
2019

% of Net
Revenue


Full year
2019

% of Net
Revenue

Asia

239

34


891

36

Americas

320

45


836

34

Europe and others

145

21


754

30

Total

704

100


2,481

100

*Note: Values do not include sales from the MSS business
to the Energy business.






Canadian Solar shipped 2.5 GW of modules to more than 60 countries in the fourth quarter of 2019 and 8.6 GW to 90 countries for the full year 2019. The top five markets ranked by revenue were the U.S., Brazil, China, Japan and Australia in the fourth quarter; and Brazil, the U.S., Australia, Japan and China for the full year of 2019.

Multi-crystalline modules accounted for 68% of the Company's module shipments in the fourth quarter and 74% for the full year of 2019, with mono-crystalline modules representing 32% and 26%, respectively. The Company's manufacturing capacity has the flexibility to produce both multi-crystalline and mono-crystalline modules, with the mix decision depending on the relative profitability and levelized cost of electricity ("LCOE") of the alternative products.

Manufacturing Capacity

The table below sets forth the Company's manufacturing capacity expansion plan from December 31, 2019 to December 31, 2020.

Manufacturing Capacity (MW)


31-Dec-2019

Actual

30-Jun-2020

Planned

31-Dec-2020

Planned

Ingot

1,850

1,850

2,350

Wafer

5,000

5,000

5,000

Cell

9,600

10,100

10,100

Module

13,040

14,850

16,050

The Company's manufacturing capacity expansion plan is subject to change based on market conditions.

Business Outlook

The Company's business outlook is based on management's current views and estimates given existing market conditions, order book, production capacity, anticipated timing of project sales, and the global economic environment. This outlook is subject to uncertainty with respect to, among other things, final customer demand and project construction and sale schedules, and in particular the impact of COVID-19. Management's views and estimates are subject to change without notice.

For the first quarter of 2020, the Company expects total module shipments to be in the range of 2.15 GW to 2.25 GW, including approximately 250 MW of module shipments to the Company's own projects that may not immediately be recognized as revenue. Total revenue is expected to be in the range of $780 million to $810 million, with gross margin expected to be between 26% and 28%.

For the full year of 2020, the Company expects total module shipments to be in the range of approximately 10 GW to 12 GW, with total revenue expected to be in the range of $3.4 billion to $3.9 billion.

Yan Zhuang, Acting Chief Executive Officer, commented: "We were experiencing strong demand across all regions until the past few days, as we started to see some delays and weakening demand. Our current guidance incorporates the estimated impact to the best of our knowledge today, but the situation is fluid and we are closely monitoring and analyzing market conditions. We have a globally diversified revenue base and tight control over the supply chain, which gives us significant flexibility and room to adjust to external changes. Our long-term outlook remains optimistic and we will continue to execute on our strategy and create value for the Company and its shareholders."

Recent Developments

On March 23, 2020, Canadian Solar announced the closing of a 17.7 MWp solar portfolio in Italy to Sonnedix.

On March 17, 2020, Canadian Solar announced it had secured a EUR55 million bilateral revolving credit facility with Intesa Sanpaolo to fund the construction of a 151 MWp portfolio of solar PV projects in Italy.

On March 12, 2020, Canadian Solar announced that it had signed a PPA with Amazon for its 146 MWp solar power project in Australia.

On March 9, 2020, Canadian Solar announced that it had signed a 15-year PPA contract with Techgen, S.A. de C.V. for a 103 MWp solar power project in Mexico.

On March 6, 2020, Canadian Solar announced that its technology team had set a world record of 23.81% conversion efficiency for n-type large area multi-crystalline silicon solar cell. The record-setting N-type P5 cell conversion efficiency was recently tested and certified by Germany's Institute für Solarenergieforschung GmbH (ISFH)

On February 19, 2020, Canadian Solar announced that it had commenced construction of two solar power projects totaling 26.6 MWp in Japan.

On February 18, 2020, Canadian Solar announced that it had completed the sale of the 56.3 MWp Yamaguchi Shin Mine solar power plant in Japan for an enterprise value of approximately JPY22.3 billion (US$205 million).

On February 10, 2020, Canadian Solar announced that it had secured 225.2 million Brazilian reais (US$55 million) non-recourse project financing from Nordeste do Brasil S.A. for its 152.4 MWp Lavras solar power projects.

On February 6, 2020, Canadian Solar announced that it had acquired a 47.5 MWp portfolio of solar power projects in Chile. These projects will become operational in two different stages beginning in the fourth quarter of 2020.

On February 5, 2020, Canadian Solar announced that it had signed a multi-year module supply agreement with Lightsource BP to deliver 1.2 GW of high efficiency polycrystalline solar modules for projects in the US and Australia.

On January 6, 2020, Canadian Solar announced the appointment of Lauren C. Templeton as an independent director, and Karl E. Olsoni as a strategic advisor to its Board of Directors.

On December 23, 2019, Canadian Solar announced that it had reached commercial operation on a 1.98 MWp solar power plant in Taiwan.

On December 9, 2019, Canadian Solar announced that its Board of Directors authorized a $150 million share repurchase program for a six-month period beginning December 9, 2019 and ending June 8, 2020.

On December 5, 2019, Canadian Solar announced that it had closed the sale of the 3.3 MWp Milborne solar power plant in the UK.

On December 2, 2019, Canadian Solar announced that it had completed the sale of a 10.8 MWp solar power plant in Japan to Canadian Solar Infrastructure Fund, Inc. for $42.1 million.

On November 20, 2019, Canadian Solar announced that it had reached commercial operation on a 53.4 MWp solar power project in Japan.

On November 18, 2019, Canadian Solar announced that its wholly owned subsidiary Recurrent Energy closed the sale of 99 percent of a partnership that owns the Class B membership interest in the 102 MWp NC 102 solar power projects in North Carolina, to NextEnergy Capital.

On November 14, 2019, Canadian Solar announced that it had sold a 49% interest in three solar power projects in Mexico totaling 370 MWp to Korea Electric Power Corporation (KEPCO) and Sprott Korea (Sprott). Under the agreement, KEPCO and Sprott will acquire the Company's remaining interest in the projects following COD.

Conference Call Information

The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on March 26, 2020 (8:00 p.m., March 26, 2020 in Hong Kong) to discuss the Company's fourth quarter and full year 2019 results and business outlook. The dial-in phone number for the live audio call is +1 866-519-4004 (toll-free from the U.S.), +852-3018-6771 (local dial-in from HK) or +1 845-675-0437 (from international locations). The passcode for the call is 4068575. A live webcast of the conference call will also be available on the Investor Relations section of Canadian Solar's website at www.canadiansolar.com.

A replay of the call will be available two hours after the conclusion of the call until 8:00 a.m. U.S. Daylight Time on Friday, April 3, 2020 (8:00 p.m., April 3, 2020 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.), +852-3051-2780 (local dial-in from HK) or +1-646-254-3697 (from international locations), with passcode 4068575. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.

About Canadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar power companies. It is a leading manufacturer of solar photovoltaic modules and provider of solar energy solutions and has a geographically diversified pipeline of utility-scale solar power projects in various stages of development. Over the past 19 years, Canadian Solar has successfully delivered over 40 GW of premium-quality, solar photovoltaic modules to customers in over 150 countries. Canadian Solar is one of the most bankable companies in the solar industry, having been publicly listed on NASDAQ since 2006. For additional information about the Company, follow Canadian Solar on LinkedIn or visit www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release regarding the Company's expected future shipment volumes, gross margins 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; volatility, uncertainty, delays and disruptions related to the COVID-19 pandemic; governmental support for the deployment of solar power; future available supplies 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; changes in demand from major markets such as Japan, the U.S., India and China; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; delays in utility-scale project approval process; delays in utility-scale project construction; delays in the completion of project sales; 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 filed on April 25, 2019. 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. Investors 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.

FINANCIAL TABLES FOLLOW


The following tables provide unaudited select financial data for the Company's Module and System Solutions ("MSS") and Energy businesses:




Select Financial Data - Module and System Solutions, and
Energy








Three Months Ended December 31, 2019
(In Thousands of U.S. Dollars, Except Percentages)




MSS


Energy


Elimination


Total

Net revenues 



$765,696


$215,370


$(61,359)


$919,707

Cost of revenues



551,517


182,424


(43,736)


690,205

Gross profit



214,179


32,946


(17,623)


229,502

Gross margin



28.0%


15.3%


——


25.0%

Income (loss) from
   operations



113,850


15,199


(17,623)


111,426

 




Twelve Months Ended December 31, 2019
(In Thousands of U.S. Dollars, Except Percentages)




MSS


Energy


Elimination


Total

Net revenues 



$2,582,635


$719,445


$(101,497)


$3,200,583

Cost of revenues



1,934,062


635,716


(87,692)


2,482,086

Gross profit



648,573


83,729


(13,805)


718,497

Gross margin



25.1%


11.6%


——


22.4%

Income (loss) from
   operations



279,715


(7,031)


(13,805)


258,879


 

 



Select Financial Data - Module and System
Solutions, and Energy









Three Months

Ended December

31, 2019



Twelve Months
Ended December

31, 2019



(In Thousands of U.S. Dollars)

MSS Revenues:






Solar modules and other solar power products



$619,988


$2,055,249

Solar system kits



31,430


116,449

EPC services



29,890


223,423

O&M services



5,963


19,405

Others (materials and components)



17,066


66,612

Subtotal



$704,337


$2,481,138

Energy Revenues:






Solar power projects



$193,970


$668,476

Electricity



1,801


5,866

Others (EPC and development services)



19,599


45,103

Subtotal



$215,370


$719,445

Total net revenues



$919,707


$3,200,583

 

 


Canadian Solar Inc.


Unaudited Condensed Consolidated Statements of Operations


(In Thousands of U.S. Dollars, Except Share and Per Share Data and Unless Otherwise Stated)





Three Months Ended


Twelve Months Ended



December
31,


September
30,


December

31,


December

31,


December

31,



2019


2019


2018


2019


2018












Net revenues

$ 919,707


$ 759,882


$ 901,041


$ 3,200,583


$ 3,744,512

Cost of revenues

690,205


560,968


629,732


2,482,086


2,969,430













Gross profit

229,502


198,914


271,309


718,497


775,082












Operating expenses:











Selling expenses

50,099


46,935


44,372


180,326


165,402


General and administrative
expenses

64,133


61,491


81,309


242,783


245,376


Research and development
expenses

10,179


11,567


15,417


47,045


44,193


Other operating income

(6,335)


(1,186)


(6,353)


(10,536)


(44,546)

Total operating expenses

118,076


118,807


134,745


459,618


410,425












Income from operations

111,426


80,107


136,564


258,879


364,657

Other income (expenses):











Interest expense

(19,734)


(19,240)


(23,003)


(81,326)


(106,032)


Interest income

2,979


2,579


2,180


12,039


11,207


Loss on change in fair value of
derivatives, net

(6,294)


(2,176)


(7,256)


(22,218)


(19,230)


Foreign exchange gain, net

3,717


2,825


7,328


10,370


6,529


Investment income (loss)

120


(738)


35,416


1,929


41,361

Other income (expenses), net

(19,212)


(16,750)


14,665


(79,206)


(66,165)












Income before income taxes and
equity in earnings(loss) of
unconsolidated investees

92,214


63,357


151,229


179,673


298,492

Income tax expense

(25,209)


(10,434)


(36,684)


(42,066)


(61,969)

Equity in earnings (loss) of
unconsolidated investees

923


2,303


(445)


28,948


5,908

Net income

67,928


55,226


114,100


166,555


242,431












Less: Net income (loss)
attributable to non-controlling
interests

191


(3,105)


2,516


(5,030)


5,361












Net income attributable to
Canadian Solar Inc.

$ 67,737


$ 58,331


$ 111,584


$ 171,585


$ 237,070












Earnings per share - basic

$   1.13


$   0.97


$   1.89


$   2.88


$   4.02

Shares used in computation - basic

59,846,779


59,900,740


59,160,338


59,633,855


58,914,540

Earnings per share - diluted

$   1.12


$   0.96


$   1.81


$   2.83


$   3.88

Shares used in computation - diluted

60,407,086


60,846,753


62,356,019


60,777,696


62,291,670


 

 

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(In Thousands of U.S. Dollars)



 Three Months Ended


 Twelve Months Ended



December 
31,


September
30,


December

31,


December

31,


December

31,



2019


2019


2018


2019


2018


Net Income

67,928


55,226


114,100


166,555


242,431


Other comprehensive income (net of
tax of nil):











Foreign currency translation adjustment

8,923


(13,419)


(38,399)


319


(50,577)


Loss on commodity hedge

——


——


(8,752)


——


(8,752)


Gain (loss) on changes in fair value of
derivatives

1,147


(1,314)


(3,416)


(5,847)


6,094


Comprehensive income

77,998


40,493


63,533


161,027


189,196


Less: comprehensive income (loss)
attributable to non-controlling interests

(2,216)


(3,529)


1,189


(11,100)


8,241


Comprehensive income attributable
to Canadian Solar Inc.

80,214


44,022


62,344


172,127


180,955


 

 

Canadian Solar Inc.


Unaudited Condensed Consolidated Balance Sheets


(In Thousands of U.S. Dollars)






December 31,


December 31,




2019


2018


ASSETS





Current assets:






Cash and cash equivalents

$      668,770


$     444,298



Restricted cash

526,723


480,976



Accounts receivable trade, net

436,815


498,231



Accounts receivable, unbilled

15,256


38



Amounts due from related parties

31,232


16,740



Inventories

554,070


262,022



Value added tax recoverable

108,920


107,222



Advances to suppliers

47,978


37,011



Derivative assets

5,547


4,761



Project assets

604,083


933,563



Prepaid expenses and other current
assets

253,542


289,459


Total current assets

3,252,936


3,074,321


Restricted cash

9,927


15,716


Property, plant and equipment, net

1,046,035


884,986


Solar power systems, net

52,957


54,898


Deferred tax assets, net

153,963


121,087


Advances to suppliers

40,897


48,908


Prepaid land use right

60,836


65,718


Investments in affiliates

152,828


126,095


Intangible assets, net

22,791


14,903


Goodwill

——


1,005


Derivatives assets

——


3,216


Project assets

483,051


352,200


Right-of-use assets*

37,733


——


Other non-current assets

153,253


129,605


TOTAL ASSETS

$    5,467,207


$       4,892,658


 

 

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets (Continued)

(In Thousands of U.S. Dollars)



December 31,


December 31,


2019


2018

Current liabilities:





Short-term borrowings

$    933,120


$    1,027,927


Long-term borrowings on project assets -
current

286,173


265,770


Accounts payable

585,601


379,462


Notes payable

544,991


369,722


Amounts due to related parties

10,077


16,847


Other payables

446,454


408,013


Convertible notes

——


127,428


Advance from customers

134,806


39,024


Derivative liabilities

10,481


13,698


Operating lease liabilities*

18,767


——


Tax equity liabilities

——


158,496


Other current liabilities

121,527


141,970

Total current liabilities

3,091,997


2,948,357

Accrued warranty costs

55,878


50,605

Long-term borrowings

619,477


393,614

Amounts due to related parties

——


568

Derivatives liabilities

1,841


——

Liability for uncertain tax positions

15,353


20,128

Deferred tax liabilities

56,463


35,698

Loss contingency accruals

28,513


24,608

Operating lease liabilities*

20,718


——

Financing liabilities

76,575


77,835

Other non-current liabilities

75,334


68,400

Total LIABILITIES

4,042,149


3,619,813

Equity:





Common shares

703,806


702,931


Treasury stock

(11,845)


——


Additional paid-in capital

17,179


10,675


Retained earnings

793,601


622,016


Accumulated other comprehensive loss

(109,607)


(110,149)

Total Canadian Solar Inc. shareholders'
equity

1,393,134


1,225,473

Non-controlling interests in subsidiaries

31,924


47,372

TOTAL EQUITY

1,425,058


1,272,845

TOTAL LIABILITIES AND EQUITY

$        5,467,207


$        4,892,658





Note: * The Company adopted ASU 2016-02 – Leases (Topic ASC842) in the first quarter of 2019 using the
optional transition method and elected certain practical expedients, which were permitted under the guidance
ASU 2018-11, Leases (Topic 842) – Targeted Improvements. The transition guidance allowed the Company not
to reassess prior conclusions related to contracts containing leases or lease classification. The adoption primarily
affected the condensed consolidated balance sheet through the recognition of right-of-use assets and lease
liabilities as of January 1, 2019. The adoption did not have a significant impact on the results of operations or cash
flows.

About Non-GAAP Financial Measures

To supplement its financial disclosures presented in accordance with GAAP, the Company uses non-GAAP measures which are adjusted from the most comparable GAAP measures for certain items as described below. The Company presents non-GAAP net income and diluted earnings per share so that readers can better understand the underlying operating performance of the business before the impact of AD/CVD true-up provisions. The non-GAAP numbers are not measures of financial performance under U.S. GAAP, and should not be considered in isolation or as an alternative to other measures determined in accordance with GAAP. These non-GAAP measures may differ from non-GAAP measures used by other companies, and therefore their comparability may be limited.

Statement of Operations Data:










(In Thousands of U.S. Dollars, Except Share and Per
Share Data)

































Three Months Ended


Twelve Months Ended



December
31
,

2019


September
30
,

2019


December
31,

2018


December
31
,

2019


December
31
,

2018












GAAP net income attributable to Canadian
Solar Inc.

67,737


58,331


111,584


171,585


237,070

Non-GAAP income adjustment items:











AD/CVD provision true-up

(6,415)


(24,291)


(16,098)


(52,323)


(50,172)


Tax impact

1,592


6,029


3,995


12,987


12,452

Non-GAAP net income attributable to
Canadian Solar Inc.

62,914


40,069


99,481


132,249


199,350












GAAP income per share - diluted

$   1.12


$   0.96


$   1.81


$   2.83


$   3.88

Non-GAAP income per share - diluted

$   1.04


$   0.66


$   1.61


$   2.19


$   3.28

Shares used in computation - diluted

60,407,086


60,846,753


62,356,019


60,777,696


62,291,670

 

 

Cision View original content:http://www.prnewswire.com/news-releases/canadian-solar-reports-fourth-quarter-and-full-year-2019-results-301030252.html

Source: Canadian Solar Inc.
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