Devens Factory Ships Over 1.5 Megawatts of Solar Panels
MARLBORO, Mass.--(BUSINESS WIRE)--
Evergreen Solar, Inc. (NasdaqGM: ESLR), a manufacturer of String
Ribbon(TM) solar power products with its proprietary, low-cost wafer
technology, today announced financial results for the quarter ended
September 27, 2008.
Recent Highlights:
-- Shipped over 1.5 megawatts of solar panels from the Devens
factory, twelve months after we broke ground for this 450,000
square foot green field facility
-- Received all 200 Quad furnaces to support the first 80 MW
Phase of which 135 furnaces were in operation by the end of
the quarter, ahead of our plan
-- Signed two new long-term sales contracts totaling more than
160 MW with United States-based Mainstream Energy LLC, and a
leading Japanese global enterprise company, extending the
company's total contractual backlog to more than 1 GW spanning
over the next 5 years. Shipments under these two new contracts
will begin in 2009 and continue through 2012. The solar panels
for these two contracts will be produced at the company's
Devens, Massachusetts facility and at the next factory the
company expects to build. With these new contracts, all 160 MW
of annual manufacturing capacity of the Devens facility is now
100 percent committed from 2010 and beyond
-- Received net proceeds of approximately $325.8 million relating
to the recently completed $375 million convertible notes
financing, enabling the company to complete the Devens
facility, begin construction of its string factory and fund
its working capital needs as it gradually begins to generate
cash from operations in 2009
"We are very pleased with the significant progress we have made
with our Devens facility, and we continue to remain on schedule with
the completion of both 80 MW phases," said Richard M. Feldt, Chairman,
President and Chief Executive Officer. "Virtually all of the equipment
required for the first 80 MW phase is on site and we will begin to
install equipment for the second phase late in the fourth quarter of
2008. We expect to begin shipping product from the second 80MW phase
during the first quarter of 2009.
"While the macro economic environment remains challenging, our
technology, business model and customer base all remain fundamentally
strong, as evidenced by the two long-term sales contracts we recently
signed, and as such, we remain confident in our ability to realize
substantial profitability in 2009," Feldt continued.
Financial Results for the Third Quarter 2008
Product sales were $17.8 million for the third quarter of 2008,
compared to $18.1 million for the second quarter of 2008 and $15.4
million in the third quarter of 2007. The sequential decrease in
product revenue was due to slightly lower average selling prices
resulting from the strengthening U.S. dollar during the third quarter
of 2008. Fees from EverQ, Evergreen Solar's joint venture with Q-Cells
AG and Renewable Energy Corporation ASA, were $4.3 million for the
third quarter of 2008, compared to $4.6 million for the second quarter
of 2008 and $2.8 million in the third quarter of 2007. These fees
consist of royalties associated with licensing Evergreen Solar's wafer
technology and reimbursement for marketing and sales support provided
by Evergreen Solar for EverQ product.
Gross margin was $1.2 million, or 5.7%, for the third quarter of
2008, compared to $7.9 million, or 34.7%, for the second quarter of
2008 and $4.5 million, or 24.9%, in the third quarter of 2007. Gross
margin decreased sequentially, as expected, due to higher costs
associated with the initial production of our Devens facility. Higher
initial production costs are temporary and result from inefficiencies
that companies typically incur in the initial stages of significant
capacity changes.
Net loss was $23.8 million for the third quarter of 2008, or $0.18
per share, compared to a net loss of $8.9 million, or $0.08 per share,
for the second quarter of 2008 and a net loss of $3.7 million, or
$0.04 per share, in the third quarter of 2007. The sequential increase
in the net loss was principally due to costs related to the start-up
and initial production of the Devens facility, combined with net
foreign exchange losses of $5.0 million. Approximately 4.4 million and
1.5 million shares were included in the per share computation for the
quarter and year-to-date periods ended September 27, 2008, relating to
shares of common stock previously issued in connection with a common
stock lending agreement with Lehman Brothers International (Europe)
("Lehman"), pursuant to which we loaned 30.9 million shares of our
common stock to Lehman. The common stock lending agreement was
consummated in connection with the Company's recently completed $375
million convertible notes financing. Under current accounting rules,
since there was an obligation of Lehman to return the borrowed shares,
such shares would have been excluded from the company's per share
calculation. However, due to the recent bankruptcy filing by Lehman,
the company will now include these shares in its per share calculation
on a weighted average basis pending the company exercising all of its
legal remedies.
Guidance for Fourth Quarter 2008
Revenue for the fourth quarter of 2008 is expected to be
approximately $45 million to $55 million, including approximately $4.0
million of selling fees and royalty payments from EverQ. Production is
expected to be approximately 12 MW to 15 MW, including about 8 MW to
11 MW from the Devens facility.
Gross margin is expected to be between 5% and 10%.
Operating expenses, excluding factory startup costs, are expected
to be approximately $12.5 million to $13.5 million. Factory startup
costs are expected to be in the range of $9.0 million to $12.0
million, including approximately $2.7 million of accelerated
depreciation on equipment associated with the Marlboro ramp down.
Operating loss is expected to be between $16.0 million and $22.0
million. Net loss is expected to be approximately $13.0 million to
$19.0 million, or $0.08 to $0.12 per share, based upon approximately
162 million weighted average shares outstanding.
About Evergreen Solar, Inc.
Evergreen Solar, Inc. develops, manufactures and markets String
Ribbon(TM) solar power products using its proprietary, low-cost wafer
technology. The company's patented wafer manufacturing technology uses
significantly less polysilicon than conventional processes. Evergreen
Solar's products provide reliable and environmentally clean electric
power for residential and commercial applications globally. For more
information about the company, please visit www.evergreensolar.com.
Evergreen Solar(R) and String Ribbon(TM) are trademarks of Evergreen
Solar, Inc.
Conference Call Information
Evergreen Solar's management will conduct a conference call at
5:00 p.m. (ET) today to review the Company's third-quarter financial
results. The conference call will be webcast live over the Internet
and can be accessed by logging on to the "Investors" section of
Evergreen Solar's website, www.evergreensolar.com, prior to the event.
The call can also be accessed by dialing (888) 221-3915 or (913)
312-0413 (International) prior to the start of the call. For those
unable to join the live conference call, a replay will be available
from 8:00 p.m. (ET) on October 16 through 8:00 p.m. (ET) on October
23. To access the replay, dial (888) 203-1112 or (719) 457-0820 and
refer to confirmation code 5710490.
Safe Harbor Statement
This press release contains forward-looking statements made
pursuant to the safe harbor provisions of Section 21E of the
Securities Exchange Act of 1934. These statements are based on
management's current expectations or beliefs. Such forward-looking
statements include, but are not limited to, those related to: guidance
for the fourth quarter of 2008, including expectations regarding
future revenue, earnings and gross margin performance; the ability to
achieve significant profitability in 2009, the value of the long-term
solar panel contracts denominated primarily in Euros; the timing and
costs associated with new factories and future production capacity and
our polysilicon supply. These statements are neither promises nor
guarantees, and involve risks and uncertainties that could cause
actual results to differ materially from such forward-looking
statements, including risks associated with the company's ability to
successfully manufacture and sell its products; uncertainties related
to government regulations, subsidies and incentives; risks from
various economic factors such as fluctuations in currency exchange
rates and other risks and uncertainties identified in the company's
filings with the Securities and Exchange Commission. Evergreen Solar
disclaims any obligation to update or revise such statements to
reflect any change in company expectations, or in events, conditions
or circumstances on which any such statements may be based, or that
may affect the likelihood that actual results will differ from those
set forth in the forward-looking statements.
Evergreen Solar, Inc. (Nasdaq: ESLR)
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(Unaudited)
December September
31, 2007 27, 2008
---------- -----------
Assets
Current assets:
Cash and cash equivalents $ 29,428 $ 187,926
Marketable securities 70,275 97,314
Restricted cash 41,000 24,000
Accounts receivable, net of allowances for
doubtful accounts 9,297 12,184
Grants receivable 5,818 1,661
Inventory 8,094 12,326
Prepaid cost of inventory - 8,866
VAT receivable, net 10,549 1,330
Other current assets 7,729 7,671
---------- -----------
Total current assets 182,190 353,278
Investment in and advances to EverQ 87,894 113,155
Restricted cash 414 219
Deferred financing costs 1,991 7,842
Loan receivable from silicon supplier 21,904 43,788
Prepaid cost of inventory 143,035 161,612
Fixed assets, net 114,641 339,209
Other assets 1,186 2,654
---------- -----------
Total assets $ 553,255 $1,021,757
========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 57,005 $ 41,792
Accrued employee compensation 4,875 6,194
Accrued interest 1,969 3,508
Accrued warranty 705 976
Other current liabilities 5,408 13,857
---------- -----------
Total current liabilities 69,962 66,327
Subordinated convertible notes 90,000 -
Senior convertible notes - 373,750
Deferred income taxes - 8,800
---------- -----------
Total liabilities 159,962 448,877
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value, 250,000,000
shares authorized, 102,252,965 and 164,791,114
issued and outstanding at December 31, 2007
and September 27, 2008, respectively 1,023 1,648
Additional paid-in capital 521,695 735,235
Accumulated deficit (136,280) (169,077)
Accumulated other comprehensive income 6,855 5,074
---------- -----------
Total stockholders' equity 393,293 572,880
---------- -----------
Total liabilities and stockholders' equity $ 553,255 $1,021,757
========== ===========
Evergreen Solar, Inc. (Nasdaq: ESLR)
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
Year-to-Date Period
Quarter Ended Ended
September September September September
29, 2007 27, 2008 29, 2007 27, 2008
--------- --------- --------- ---------
Product revenues $15,383 $ 17,803 $ 41,417 $ 54,180
Royalty and fee revenues 2,807 4,264 6,263 13,590
--------- --------- --------- ---------
Total revenues 18,190 22,067 47,680 67,770
Cost of revenues 13,660 20,820 36,881 50,914
--------- --------- --------- ---------
Gross profit 4,530 1,247 10,799 16,856
--------- --------- --------- ---------
Operating expenses:
Research and development 5,381 5,541 15,749 16,371
Selling, general and
administrative 5,079 6,174 15,355 17,060
Facility start-up and
equipment write-offs 358 11,665 358 28,227
--------- --------- --------- ---------
Total operating expenses 10,818 23,380 31,462 61,658
--------- --------- --------- ---------
Operating loss (6,288) (22,133) (20,663) (44,802)
Other income (expense):
Foreign exchange gains
(losses), net (133) (5,017) 611 (1,361)
Interest income 3,268 4,242 6,678 10,004
Interest expense (914) (2,500) (2,750) (2,862)
--------- --------- --------- ---------
Other income (expense), net 2,221 (3,275) 4,539 5,781
--------- --------- --------- ---------
Loss before equity income
(loss) (4,067) (25,408) (16,124) (39,021)
Equity income (loss) from
interest in EverQ 404 1,558 (1,266) 6,224
--------- --------- --------- ---------
Net loss $(3,663) $(23,850) $(17,390) $(32,797)
========= ========= ========= =========
Net loss per share (basic and
diluted) $ (0.04) $ (0.18) $ (0.21) $ (0.27)
Weighted average shares used
in computing basic and
diluted net loss per share 98,343 132,034 82,692 119,807
Evergreen Solar, Inc.
Michael El-Hillow, 508-251-3311
Chief Financial Officer
investors@evergreensolar.com
Source: Evergreen Solar, Inc.
