ONTARIO, Canada, Sept. 2 /PRNewswire-Asia-FirstCall/ -- Canadian Solar Inc. (the "Company", "we" or "Canadian Solar") (Nasdaq: CSIQ), one of the world's largest solar companies, today announced its financial results for the second quarter ended June 30, 2010 and its outlook for the third quarter and full year 2010.
Net revenues for the second quarter of 2010 were $328.7 million, compared to net revenues of $336.9 million for the first quarter of 2010 and net revenues of $114.2 million for the second quarter of 2009.
Net income for the second quarter of 2010 was $3.2 million, or $0.07 per diluted share, compared to a net income for the first quarter of 2010 of $1.5 million, or $0.03 per diluted share.
Shipments for the second quarter of 2010 were 181.2 MW, compared to shipments of 185.0 MW for the first quarter of 2010 and shipments of 48.2 MW for the second quarter of 2009. The Company's sales came from the key solar industry markets worldwide, with Europe continuing to be the Company's largest contributing geographic market.
Dr. Shawn Qu, Chairman and CEO remarked: "Demand and pricing continued to be strong for the quarter, a situation we expect to continue throughout 2010. Q2 shipments were above prior guidance. We reduced our purchase of third party solar cells in order to improve our gross margin, a practice we will continue in Q3 and Q4. The rapid expansion of our internal capacity made this strategy possible. We manufactured 110 MW of cells internally in Q2 and purchased the balance. We expect to increase our internal quarterly cell output to 127 MW in Q3 and 180 MW in Q4. We also continue to build on our brand reputation for technology innovation and excellence. Since March, we have been shipping several new products, including enhanced selective emitter modules and our New Edge modules. Our enhanced selective emitter cells significantly increase the unit power output of our solar modules, while the New Edge modules permit rapid and inexpensive rooftop installation of solar systems. These products have been well received by our customers and we expect that these products will help us gain market share and give us better pricing power going forward."
Arthur Chien, CFO commented: "This quarter's results included a $9.0 million net foreign exchange charge, which is slightly less than predicted. Currency hedging reduced the impact of foreign exchange losses by $21.6 million. Q2 general and administrative expenses included additional legal and additional auditing costs of approximately $4.8 million related to the SEC subpoena and the internal audit committee investigation."
Revenue by Geography 2Q 2010 1Q 2010 2Q 2009 1H 2010 1H 2009 Region US$M % US$M % US$M % US$M % US$M % Europe 284.1 86.4% 298.2 88.5% 66.9 58.6% 582.3 87.5% 102.9 62.9% America 24.2 7.4% 19.1 5.7% 16.2 14.2% 43.3 6.5% 18.9 11.5% Asia and others 20.4 6.2% 19.6 5.8% 31.1 27.2% 40.0 6.0% 41.9 25.6% Total 328.7 100.0% 336.9 100.0% 114.2 100.0% 665.6 100.0% 163.7 100%
The outlook below is based on the Company's current views with respect to operating and market conditions, and its current order book and customers' forecasts, all of which are subject to change. The risks to our outlook also include changes in foreign exchange rates, products and materials pricing and the project financing environment.
-- 3Q10 Guidance: For 3Q10, we expect shipments of approximately 190 MW to 200 MW, with a gross margin of approximately 14.5% to 15.5%. -- Full-year Guidance: For the full year 2010, we are reiterating our shipments guidance of approximately 700 MW to 800 MW. -- Increased internal cell production: We are on track to expand our annual internal cell manufacturing capacity to 800 MW by the end of 3Q10. We expect to complete our third cell building by early 2011, and ramp up our total internal cell production capacity to 1.3 GW, of which 620 MW will be higher conversion efficiency cell capacity.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, remarked: "We are seeing improvements in many aspects of our operations. Our ingot and wafer costs have come down substantially and are now in line with leading wafer companies, and our cell conversion efficiencies using our proprietary enhanced selective emitter technology have exceeded 18%. We expect module pricing to remain relatively stable for the balance of the year. We expect that these factors, as well as our increased internal cell production, to support continued margin improvement through the fourth quarter. We also expect our increased internal cell production early next year to enable us to substantially improve our margin structure. Finally, we expect our solar system business to start generating meaningful income in Q4 and continue to grow in 2011.
Investor Conference Call / Webcast Details
The dial-in number for the live audio call, which will begin on Thursday, September 2, 2010 at 8:00 a.m. U.S. Eastern Time (8:00 p.m. September 2, 2010 in Hong Kong), is +1-617-597-5363. The conference call passcode is 10260478. A live webcast of the conference call will also be available on Canadian Solar's website at http://www.canadiansolar.com .
A replay of the call will be available approximately two hours after the conclusion of the live call through 11:00 a.m. on September 9, 2010, U.S. Eastern Time (11:00 p.m., September 9, 2010 in Hong Kong) by telephone at +1-617-801-6888. To access the replay, use passcode 92103221. A webcast replay will also be available at http://www.canadiansolar.com .
About Canadian Solar Inc. (NASDAQ: CSIQ)
Canadian Solar Inc. is one of the world's largest solar companies. As a leading vertically integrated provider of ingot, wafer, solar cell, solar module and other solar applications, Canadian Solar designs, manufactures and delivers solar products and solar system solutions for on-grid and off-grid use to customers worldwide. With operations in North America, Europe and Asia, Canadian Solar provides premium quality, cost-effective and environmentally-friendly solar solutions to support global, sustainable development. For more information, visit http://www.canadiansolar.com .
Safe Harbor/Forward-Looking Statements:
Certain statements in this press release including statements regarding our expected revenue recognition, expected future shipment volumes, gross and net margins, manufacturing capacities, processing costs, and cell conversion efficiencies, 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 the risks regarding the previously disclosed SEC and internal investigations as well as general business and economic conditions and the state of the solar industry; 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 Germany; 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; 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 August 19, 2010. 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. Unaudited Condensed Consolidated Statements of Operations (In Thousands of U.S. Dollars, Except Share And Per Share Data And Unless Otherwise Stated) Item 2Q 2010 1Q 2010 2Q 2009 1H 2010 1H 2009 Net revenues 328,675 336,931 114,176 665,606 163,641 Cost of revenues 284,069 295,018 91,096 579,087 144,456 Gross profit 44,606 41,913 23,080 86,519 19,185 Selling expenses 11,941 10,698 3,229 22,639 5,110 General and administrative expenses 13,957 8,174 6,410 22,131 10,928 Research and development expenses 1,689 1,834 530 3,523 1,000 Total operating expenses 27,587 20,706 10,169 48,293 17,038 Income from operations 17,019 21,207 12,911 38,226 2,147 Interest expenses (6,446) (3,862) (1,913) (10,308) (4,167) Interest income 1,630 1,395 2,849 3,025 3,412 Gain on change in fair value of derivatives 21,563 536 (1,050) 22,099 10,316 Exchange (loss) gain (30,529) (16,438) 6,038 (46,967) 3,162 Income before taxes 3,237 2,838 18,835 6,075 14,870 Income tax expenses 120 1,454 1,163 1,574 1,983 Net income 3,117 1,384 17,672 4,501 12,887 Less: Net income (loss) attributable to Non-controlling interest (101) (113) -- (214) -- Net income attributable to CSI 3,218 1,497 17,672 4,715 12,887 Basic earnings per share $0.08 $0.04 $0.50 $0.11 $0.36 Basic weighted average outstanding shares 42,840,944 42,755,446 35,699,453 42,798,432 35,692,919 Diluted earnings per share $0.07 $0.03 $0.49 $0.11 $0.36 Diluted weighted average outstanding shares 43,655,154 43,974,827 36,141,329 43,774,988 35,802,842 Canadian Solar Inc. Unaudited Condensed Consolidated Balance Sheets (In Thousands of U.S. Dollars) June 30, December 31, Item 2010 2009 Assets Current assets Cash and cash equivalents 255,197 160,111 Restricted cash 269,608 179,390 Accounts receivable, net of allowance for doubtful accounts 198,768 151,549 Inventories 182,410 164,313 Value added tax recoverable 33,094 39,495 Advances to suppliers 25,686 17,264 Foreign currency derivative assets 8,145 0 Prepaid and other current assets 41,070 41,865 Current assets - subtotal 1,013,978 753,987 Property, plant and equipment, net 247,439 217,136 Intangible assets 1,993 1,824 Advances to suppliers 33,858 35,210 Prepaid land use right 13,185 12,535 Investments 7,069 7,101 Deferred tax assets - non current 13,484 10,910 Other non-current assets 5,820 -- Total assets 1,336,826 1,038,703 Liabilities and equity Current liabilities Short term borrowings 548,891 251,702 Accounts payable 83,642 92,271 Notes payable 105,635 105,218 Other payables 37,421 34,724 Advances from customers 8,562 3,644 Amounts due to related parties 262 261 Foreign currency derivative liabilities -- 523 Provision for firm purchase commitment 14,084 13,823 Other current liabilities 14,562 12,775 Current liabilities - subtotal 813,059 514,941 Accrued warranty costs 23,321 16,900 Liability for uncertain tax positions 10,899 10,705 Convertible notes 885 866 Long term borrowings 13,253 29,290 Total liabilities 861,417 572,702 Common shares 501,084 500,322 Additional paid in capital (59,317) (61,269) Retained earnings 16,257 11,542 Accumulated other comprehensive income 17,243 15,121 Total Canadian Solar Inc. stockholders' equity 475,267 465,716 Non-controlling interest 142 285 Total equity 475,409 466,001 Total liabilities and equity 1,336,826 1,038,703
SOURCE Canadian Solar Inc.