Canadian Solar Inc. (the "Company," "Canadian Solar" or "we") (Nasdaq: CSIQ) today reported its unaudited US GAAP financial information for the fourth quarter and the year ended December 31, 2008.
Net revenues for the quarter were $73.0 million (including $5.4 million of silicon material sales), compared to net revenues of $127.5 million for the fourth quarter of 2007 (including $2.4 million of silicon materials sales) and $252.4 million for the third quarter of 2008 (including $nil of silicon materials sales). Net loss for the quarter was $50.6 million, or $1.42 per diluted share, compared to a net income of $6.0 million, or $0.21 per diluted share, for the fourth quarter of 2007 and net income of $11.1 million, or $0.31 per diluted share, for the third quarter of 2008. Excluding share-based compensation expenses of $1.0 million, non-GAAP net loss for the quarter would have been $49.6 million, or $1.39 per diluted share.
The net loss in the fourth quarter included a $23.3 million write-down for inventory against the net realizable value of inventories as a result of the rapid decrease in the market price and value of feedstock, work-in-progress and finished solar modules. The net loss also included a $12.8 million provision for doubtful accounts. The inventory write-down appears on the income statement as a component of cost of goods sold, while the provision for doubtful accounts appears in the income statement as a component of the SG & A expenses. The Company has $136.2M cash at the end of the quarter. Accounts receivables at the end of the quarter were $50.6 million compared with $153.1 million at the end of Q3. Over the same period the Company paid down approximately $78 million in short term and related party debt.
Net revenues for 2008 were $709.2 million, compared to $302.8 million for 2007, an increase of 134% per year. Net loss for 2008 was $10.0 million, or $0.32 per diluted share, compared to net loss of $0.2 million, or $0.01 per diluted share, for 2007. Excluding share-based compensation expenses of $9.1 million and debt conversion expenses of $10.2 million, non-GAAP net income for 2008 would have been $9.3 million, or $0.29 per diluted share.
Our effective management helped us to mitigate the impact of foreign exchange fluctuation in 2008. The total foreign exchange loss net of hedging gain on financial instruments was $5.6 million for the full year 2008.
Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented: ''The end of 2008 was a challenging time for Canadian Solar and for the industry. In Q4, difficult credit conditions for our customers, market-wide module and raw materials inventory price declines and winter weather in Germany directly affected our revenue growth and profitability. Despite these macroeconomic headwinds, we continued to post solid sales to paying customers and to maintain financial discipline. We ended the year with $709.2 million in annual net revenues, a 134% increase over full year 2007, and approximately $136 million in cash, an impressive accomplishment in such tough times. Some of these challenges will persist well into 2009. Nevertheless, Canadian Solar is well positioned to ride out the market turbulence and emerge as an even more successful player. Our strategy will continue to include protecting our balance sheet, maintaining and improving relationships with our high-quality customers who are larger, long-term solar players and to improving our already very competitive cost structure. We expect to achieve wafer to module processing costs of $0.60 per watt and polysilicon to module processing costs of $0.90 per watt by the end of Q2 2009. We believe our ongoing R&D will further improve our products and cost structure, and distinguish us from many of our competitors.''
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