2007'05.16.Wed
Canadian Solar Reports First Quarter 2007 Results
May 14, 2007
JIANGSU, China, May 14 /Xinhua-PRNewswire-FirstCall/ --
Canadian Solar Inc. ("the Company,"
"CSI," or "we") (Nasdaq: CSIQ) today
reported its preliminary unaudited financial results for
the first quarter ended March 30, 2007.
Net revenues for the first quarter of 2007 were $17.5
million, including $2.8 million silicon material sales,
compared to net revenues of $8.8 million for the first
quarter of 2006. The net loss for the first quarter of
2007 was $3.9 million, or $0.14 per diluted share, compared
to the net loss of $7.1 million, or $0.46 per diluted share,
for the first quarter of 2006. Excluding share-based
compensation expenses of $2.2 million and the non-cash tax
provision of $0.22 million, the net loss for the first
quarter of 2007 would have been $1.4 million, or $0.05 per
diluted share.
Dr. Shawn Qu, Chairman and CEO of CSI, commented:
"Q1 developed as expected, with year-over-year revenue
growth, an improvement in blended gross margin and stable
pricing compared to Q4 2006. During the quarter, we took
the opportunity to reorganize our supply chain to position
the Company for success in 2007. In addition, we increased
our sales contracts worldwide. The additional sales and
marketing resources we added continue to pay off. We saw a
clear trend of market demand moving towards high market
reputation and financially strong module manufacturers,
like CSI. This led to a much higher level of customer
activity starting in March 2007, which we expect will
further build throughout the year. CSI continues to ramp up
its in-house solar cell manufacturing, while also
maintaining long-term strategic purchasing from a few
selected supply partners. We believe this balanced supply
approach creates a win-win situation and provides us with
the ability to respond quickly to increased demand from our
customers. We continue to build CSI's brand as a trusted
supplier of solar products based on product design,
performance and customization, as well as after-sale
services."
Bing Zhu, our Chief Financial Officer, said: "We
made good progress in Q1. In line with normal seasonal
patterns and the Chinese New Year factory shut down, Q1
started slowly but picked-up in March. The European
market, which was weak in Q406, rebounded strongly and
represented over 69% of our sales in Q107, compared to
about 45% in Q406. We continue to diversify our geographic
reach. Sales to South America represented almost 11% of our
revenues in Q1 from nil in previous quarters. In Q207, we
expect to also begin selling into Italy and Korea. We are
pleased that blended gross margin improved in Q1 compared
to Q406 and we expect this trend to continue in Q2 and
through the year as we start to benefit from higher solar
module shipments, lower materials costs and the continued
ramp-up of our in-house cell production lines."
On April 15, 2007, CSI officially opened its first
solar cell manufacturing facility, with a manufacturing
area of about 10,000 sq meters in Suzhou, China. CSI's
first solar cell line, which was installed on February 10,
2007, approximately one month ahead of schedule, has begun
producing solar cells. The Company expects to complete
Line 2 on schedule at the end of June. Lines 3 and 4,
originally planned for completion in December, will be
installed on or ahead of schedule, which would bring the
total cell manufacturing capacity to 100MW. The new cell
facility, which took just seven months from ground breaking
to production, exemplifies CSI's ability to execute its
strategy to become one of the top ten providers of solar
energy solutions in the world.
Revenue by Geography (US $ millions)
Q106 Q406
Q107
Region Revenue % Revenue %
Revenue %
China 73 0.8% 13,355 54.8%
3,308 18.9%
Europe 7,752 88.2% 11,013 45.2%
12,139 69.4%
North America 928 10.6% - 0.0%
225 1.3%
South America - 0.0% - 0.0%
1,817 10.4%
Other 38 0.4% 4 0.0%
- 0.4%
Total Net Revenue 8,791 100.0% 24,372 100.0%
17,489 100.0%
Note: Revenue to China in Q1 07 included $2.8 million
silicon materials
sales and in Q4 06 included $8.3 million silicon
materials sales.
Outlook
Based on current market conditions and our order
backlog and production capacity, the Company expects net
revenues for the second quarter of 2007 to be in the range
of $55 million to $58 million, with cash operating income,
determined on a non-GAAP basis by excluding share based
compensation and other non-cash items, in the range of $1.5
million to $1.6 million. Blended average solar cell cost is
expected to decrease in Q2 compared with Q1, with additional
cost reductions through 2007.
The financial information presented in this press
release is preliminary and remains subject to additional
review and final year-end closing procedures to be
performed by us and the completion of the 2006 audit by our
external auditors, in particular the completion of the new
US GAAP regulation FIN 48 analysis for all open tax years.
We expect our audited financial results for 2006 will be
finalized in late May 2007 and we expect to file our annual
report on 20-F, including audited 2006 financial statements,
with the Securities and Exchange Commission
("SEC") shortly thereafter.
Investor Conference Call / Webcast Details
A conference call has been scheduled for 9:00 p.m. on
Monday, May 14, 2007 (in Jiangsu). This will be 9:00 a.m.
on Monday, May 14, 2007 in New York. During the call, time
will be set-aside for analysts and interested investors to
ask questions of executive officers.
The call may be accessed by dialing 800-322-2803
(domestic) or +1-617-614-4925 (international). The
passcode to access the call is 46828385. A replay of the
call will be available starting one hour after the live
call and continuing until noon on Tuesday, May 22, 2007 (in
Jiangsu) or midnight on Monday, May 21, 2007 (in New York)
at www.csisolar.com and by telephone at 888-286-8010
(domestic) or +1-617-801-6888 (international). The
passcode to access the replay is 89796178.
About Canadian Solar Inc.
Founded in 2001, Canadian Solar Inc. (CSI) is a
vertically integrated manufacturer of solar module and
custom-designed solar application products serving
worldwide customers. CSI is incorporated in Canada but
conducts 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 visit www.csisolar.com.
Contacts:
In Jiangsu, P.R. China In the U.S.
Bing Zhu, Chief Financial Officer David Pasquale
Canadian Solar Inc. The Ruth Group
Phone: +86-512-62696755 Phone:
+1-646-536-7006
ir@csisolar.com
dpasquale@theruthgroup.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 registration
statement on Form F-1 originally filed on October 23, 2006,
as amended. 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 CSI undertakes
no duty to update such information, except as required
under applicable law.
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)
Q1 2006 Q4 2006
Q1 2007
Net Revenues:
Net Revenues - product 8,733 24,372
17,489
Net Revenues - others 58 -
-
Total Net revenues 8,791 24,372
17,489
Cost of Revenues:
Cost of Revenues - product 6,261 24,272
17,143
Cost of Revenues - others 58 -
-
Total Cost of Sales 6,319 24,272
17,143
Gross profit 2,472 100
346
Operating expenses
Selling expenses 125 1,233
1,053
General and administrative
expenses 396 3,797
3,086
Research and development
expenses 28 38
186
Total operating expenses 549 4,068
4,325
Income/(Loss) from operations: 1,923
(4,968) (3,979)
Other income (expenses):
Interest expenses (754)
(213) (67)
Interest income 19 271
285
Loss on change in fair value
of derivatives (6,997) -
-
Loss on change in fair value
of instruments related to
convertible notes (1,190) -
-
Others - net 6
(77) -
Income (loss) before taxes (6,993)
(4,987) (3,761)
Income taxes (73)
(169) (93)
Net Income (loss) (7,066)
(5,156) (3,854)
Basic loss per share 0.46 0.21
0.14
Diluted loss per share 0.46 0.21
0.14
Basic weighted averaging
outstanding share 15,427,995 24,120,000
27,270,000
Diluted weighted averaging
outstanding share 15,427,995 24,120,000
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 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 referred 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 other charges which the
management considers to be outside of the company's core
operating results. 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 2006
Q1 2007
Gross Operating Net Gross
Operating Net
Profit Income Income Profit
Income Income
(Loss) (Loss)
(Loss) (Loss)
US GAAP Profit/
(Loss) 2,472 1,923 (7,066) 346
(3,979) (3,854)
Convertible
Note charge 8,590
Share-based
compensation
charge 69
2,224 2,224
Total special items 8,590 69
2,224 2,224
Non-US GAAP Profit/
(Loss) 2,472 1,923 1,524 415
(1,755) 1,630
Adjusted Gross Margin 28.12%
2.37%
Adjusted Operating
Expense - % of
Revenue 6.25%
12.01%
Adjusted Operating
Margin 21.87%
(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.
Unaudited Condensed Consolidated Balance Sheets
(In Thousands of U.S. Dollars)
December 31 March 31
2006
2007
ASSETS
Current Assets:
Cash and cash equivalents
40,911 26,212
Restricted cash
825 -
Accounts receivable, net
17,344 20,044
Inventories
39,700 48,588
Value added tax recoverable
2,281 3,501
Advances to suppliers
13,484 11,906
Prepaid and other current assets
2,399 1,007
Total current assets
116,944 111,258
Property, plant and equipment, net
7,910 14,099
Intangible assets
39 53
Prepaid lease payments
1,103 1,108
Deferred tax assets - non current
3,674 3,199
TOTAL ASSETS
129,670 129,717
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short term borrowings
3,311 10,344
Accounts payable
6,874 3,403
Other payables
993 1,641
Advances from suppliers and customers
3,225 704
Amounts due to related parties
149 174
Other current liabilities
1,191 847
Income tax payable
86 156
Total current liabilities
15,829 17,269
Accrued warranty costs
875 1,026
TOTAL LIABILITIES
16,704 18,295
Stockholders' equity
Common shares
97,402 97,402
Additional paid in capital
17,348 19,572
Accumulated deficit
(2,834) (7,300)
Accumulated other comprehensive income
1,050 1,748
Total stockholders' equity
112,966 111,422
LIABILITIES AND STOCKHOLDER'S EQUITY
129,670 129,717
For more information, please contact:
In Jiangsu, P.R. China, Bing Zhu
Chief Financial Officer
Canadian Solar Inc.
Tel: +86-512-62696755
Email: ir@csisolar.com
in the U.S.
David Pasquale
The Ruth Group
Tel: +1-646-536-7006
Email: dpasquale@theruthgroup.com
PR
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