Evergreen Solar Announces Third Quarter 2008 Results
Thursday October 16, 4:05 pm ET
Devens Factory Ships Over 1.5 Megawatts of Solar Panels
MARLBORO, Mass.--(BUSINESS WIRE)--Evergreen Solar, Inc. (NasdaqGM: ESLR - News), a manufacturer of String Ribbon™ 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™ 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® and String Ribbon™ 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. |
