Canadian Solar Reports Fourth Quarter and Full Year 2009 Results

Submitted by orville on March 3, 2010
in

Canadian Solar Inc. (Nasdaq: CSIQ), one of the world's largest solar companies, today announced its unaudited financial results for the fourth quarter and the year ended December 31, 2009.

Financial Highlights

  • 4Q09 net revenues of $287.0 million, compared to 3Q09 net revenues of $213.1 million and 4Q08 revenues of $68.8 million.
  • 4Q09 shipments of 155.5 MW, compared to 3Q09 shipments of 102.6 MW and 4Q08 shipments of 19.6MW. 4Q09 gross margin of 15.4%, compared to 3Q09 gross margin of 16.3% and 4Q08 gross margin of negative 42.7%. 4Q09 net income per diluted share of $0.35 compared to 3Q09 net income per diluted share of $0.69 and 4Q08 net loss of $1.38 per diluted share.
  • Full year 2009 net revenues of $663.8 million, compared with full year 2008 net revenues of $705.0 million.
  • Full year 2009 shipments of 325.5 MW, a 94% increase over full year 2008 shipments of 167.5 MW.

For the fourth quarter of 2009, net revenues were $287.0 million, compared to net revenues of $68.8 for the fourth quarter of 2008 and $213.1 million for the third quarter of 2009. Net income for the fourth quarter was $14.9 million, or $0.35 per diluted share, compared to a net loss of $49.2 million, or $1.38 per diluted share, for the fourth quarter of 2008.

4Q09 shipment is 155.5 MW including 146.5 MW of module sales, approximately 6.5 MW of off-spec solar cells, and 2.5 MW of modules shipped to a solar power plant project, which the Company built and sold during the quarter. The net proceeds of these project sales are classified as investment income in the profit and loss statement.

For the full year 2009, net revenues were $663.8 million, compared to $705.0 million for full year 2008. Net income for the full year 2009 was $53.1 million, or $1.41 per diluted share, compared to a net loss for the full year 2008 of $7.5 million, or $0.24 per diluted share.

Dr. Shawn Qu, Chairman and CEO, commented: "In 2009 we rebounded from net revenues of $49.5 million in the first quarter to over $287.0 million in the fourth quarter; a record for both our quarterly revenue and shipments. The rapid quarterly shipment and revenue increase we achieved is due to our world-wide market share growth and improving cost structure. We delivered products to more than 300 customers in seven core country markets and 18 secondary markets. In 2010 we expect shipments growth in ten core countries: Germany, Italy, Spain, the Czech Republic, France, the U.S., Canada, Japan, Korea and China. We are excited about our growth potential in these markets with the increasing brand recognition."

Arthur Chien, CFO of CSI, noted: "Gross profit increased significantly to more than $40 million in 4Q09, compared to a loss of nearly $30 million in 4Q08. We achieved this increase by investing in our business to support revenue growth opportunities. Accordingly there were increased sales, general and administrative expenses during the quarter, both to support increased year end shipments and to prepare ourselves for ongoing growth in sales in 2010. 4Q09 results also reflect the impact of a $5.1 million foreign exchange loss. Overall, we achieved an increase in net income for 2009 of $53.1 million compared to a loss in 2008 of $7.5 million. Both inventory days and accounts receivable days declined quarter over quarter, while our cash position, leverage ratios and balance sheet improved considerably year over year. We expect these improvements to continue into 2010."

Recent Developments

  • Enhanced selective emitter products are expected to begin shipping in March 2010.
  • Produced first metal wrap-through (MWT) cells, and commenced testing and engineering work to determine the commercialization timeline of this product.
  • Dual-axis trackers and specialty residential rooftop module products are expected to begin shipping in March 2010.
  • Commenced the site selection and approvals process to establish a module manufacturing facility in Ontario, Canada.
  • Entered into an 18 MW distribution deal with West Holding Ltd of Japan and a similar arrangement with another Japanese distributor. Started regular shipments in December 2009
  • Entered into a 60 MW contract with Fire Energy Group. Fire Energy Group will promote and distribute Canadian Solar's PV products in Spain, Germany, Italy, the U.S., the Czech Republic, Morocco and China.
  • The Company completed and sold its first 250 kW PV system in Ontario.
  • Five of our solar module products are currently ranked amongst the highest performing in California's mandatory PV USA (PTC) ratings for P-Type modules. PTC ratings are becoming a widely accepted standard for measuring real-world module power and performance.
  • Tai Seng Png, Vice President, Business Integration, resigned effective April 12, 2010. His duties are being assumed by Charlotte Xi Klein, Vice President, Global Operations.

Financial Outlook

The outlook below is based on the Company's current views with respect to operating and market conditions, its current order book and customers' forecasts, which are subject to change. The risks to our guidance also include changes in product pricing, availability and pricing of feedstock, and the project financing and exchange rate environment.

For the first quarter of 2010, we expect shipments of approximately 180 MW to 190 MW and gross margin in the mid-teens.

For the second quarter of 2010, we expect continued growth in MW shipments and a relatively stable pricing environment.

For the full year 2010, we reiterate expectations that shipments will be in the range of 600 MW to 700 MW. However, we recognize that the demand for our high quality solar modules will come in very strong from all major markets, including Germany, Italy, the U.S., the Czech Republic, Korea and Spain. We also expect strong growth from our newer markets, such as Canada, Japan and France. We plan to revisit and update our annual guidance as the year progresses.

Given the strong demand forecast, we expect to have an equal or slightly higher volume of externally purchased cells than internally produced cells in both Q1 and Q2. We are targeting to maintain a mid-teen gross margin level with this supply chain structure. The Company is on track to increase our internal cell production capacity from today's 420 MW to 700 MW by July 2010. We also believe that we are on track to improve the yield of our newly ramped-up ingot and wafer facility and expect a positive margin contribution in Q2. We also intend to further increase our internal ingot and wafer capacity in 2010.

Dr. Shawn Qu continued: "Demand is expected to be very strong for all of 2010. In the 1Q10, we are expecting shipments growth over 4Q09 with further sequential shipments growth in 2Q10. For the second half of the year, we expect the improved cost structure to result from both lower processing costs and from increased internal cell capacity. Finally some of our new premium products and new markets are expected to contribute positively to our earnings, especially in Q3 and Q4."

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.

Source: Canadian Solar