GUELPH, Ontario, Aug. 14, 2017 /PRNewswire/ -- Canadian Solar
Inc. ("Canadian Solar" or the "Company") (NASDAQ: CSIQ), one of the
world's largest solar power companies, today announced its
financial results for the quarter ended June
30, 2017.
Second Quarter 2017 Highlights
- Total solar module shipments were 1,745 MW, compared to 1,480
MW in the first quarter of 2017, and second quarter guidance in the
range of 1,530 MW to 1,580 MW.
- Net revenue was $692.4 million,
compared to $677.0 million in the
first quarter of 2017, and second quarter guidance in the range of
$615.0 million to $635.0
million.
- Net revenue from the total solutions business as a percentage
of total net revenue was 6.5% compared to 18.8% in the first
quarter of 2017.
- Gross margin was 24.2%, including the benefits of two AD/CVD
reversals of $42.6 million and
$15.0 million based on the final
rates of Solar 1 AR3 and Solar 2 AR1, respectively. Gross margin
was 15.9%, excluding these reversal benefit, compared to 13.5% in
the first quarter of 2017, and second quarter guidance of 13.0% to
15.0%.
- Net income attributable to Canadian Solar was $38.2 million, or $0.63 per diluted share, compared to a net loss
of $13.3 million, or $0.23 per diluted share, in the first quarter of
2017.
- Non-GAAP net loss attributable to Canadian Solar, which
excludes the AD/CVD reversal benefit and an insurance compensation
gain, net of income tax effect, was $9.1
million, or $0.15 per diluted
share, compared to a non-GAAP adjusted net loss attributable to
Canadian Solar in the first quarter of 2017 of $6.0 million, or $0.10 per diluted share, which excludes a
provision for LDK of $8.6 million,
net of income tax effect. (For a reconciliation of GAAP to non-GAAP
results, see accompanying tables "Reconciliation of U.S. GAAP to
Non-GAAP Financial Measures.")
- Cash, cash equivalents and restricted cash balance as of
June 30, 2017 was $961.6 million, compared to $961.4 million as of March
31, 2017.
- Net cash used in operating activities was approximately
$83.4 million, compared to net cash
used in operating activities of $55.8
million in the first quarter of 2017.
- The Company's portfolio of solar power plants in commercial
operation was 1,260.2 MWp as of June 30,
2017, with an estimated total resale value of approximately
$1.8 billion. Only the class B share
value of the Company's tax equity deal projects in the U.S. was
included in this resale value.
- In July 2017, the Company
completed the sale of the 281 MWp Great Valley Solar project,
previously called Tranquillity 8, to Sempra Renewables LLC, a unit
of Sempra Energy.
- The Company completed the sale of an 80% interest in each of
191.5 MWp Pirapora I, 115 MWp Pirapora II and 92.5 MWp Pirapora III
to EDF. EN do Brasil.
Second Quarter 2017 Results
Net revenue in the second quarter of 2017 was $692.4 million, up 2.3% from $677.0 million in the first quarter of 2017 and
down 14.1% from $805.9 million in the
second quarter of 2016. Solar module shipments recognized in
revenue totaled 1,638 MW, compared to 1,489 MW recognized in
revenue in the first quarter of 2017 and 1,290 MW recognized in
revenue in the second quarter of 2016. Solar module shipments
recognized in revenue in the second quarter of 2017 included 29.2
MW used in the Company's total solutions business, compared to
176.3 MW in the first quarter of 2017 and 18.7 MW in the second
quarter of 2016.
The following table is a summary of net revenue by geographic
region based on the location of customers' headquarters (in
millions of US$, except percentages).
|
Q2
2017
|
Q1
2017
|
Q2
2016
|
US$M
|
%
|
US$M
|
%
|
US$M
|
%
|
The
Americas
|
$150.0
|
21.7
|
$200.1
|
29.6
|
$383.9
|
47.6
|
Asia
|
452.7
|
65.3
|
394.3
|
58.2
|
318.4
|
39.5
|
Europe and
Others
|
89.7
|
13.0
|
82.6
|
12.2
|
103.6
|
12.9
|
Total
|
692.4
|
100
|
677.0
|
100
|
805.9
|
100
|
Gross profit in the second quarter of 2017 was $167.8 million, compared to $91.4 million in the first quarter of 2017 and
$138.5 million in the second quarter
of 2016. Gross margin in the second quarter of 2017 was 24.2%,
compared to 13.5% in the first quarter of 2017, and compared to
17.2% in the second quarter of 2016. Gross profit in the second
quarter of 2017 includes the benefits of a $42.6 million and a $15.0
million AD/CVD reversals based on the final rates of Solar 1
AR3 and Solar 2 AR1, respectively. Excluding this benefit, gross
margin was 15.9% in the second quarter of 2017.
Total operating expenses were $84.1
million in the second quarter of 2017, down 10.3% from
$93.7 million in the first quarter of
2017 and down 15.0% from $98.9
million in the second quarter of 2016.
Selling expenses were $39.3
million in the second quarter of 2017, up 15.9% from
$33.9 million in the first quarter of
2017 and up 16.1% from $33.9 million
in the second quarter of 2016. The sequential increase of
$5.4 million was primarily due to
higher shipping and handling cost, resulting from higher module
shipment volume, increased professional service fees, and increased
external sales commission.
General and administrative expenses were $53.0 million in the second quarter of 2017, down
3.8% from $55.1million in the first
quarter of 2017 and up slightly from $52.9
million in the second quarter of 2016. Excluding the
$8.6 million provision for the LDK
legal case in the first quarter of 2017, the sequential increase
was primarily due to an increase in various professional service
fees, an increase in sales tax associated with prior years' sales
and an increased property insurance premium.
Research and development expenses were $7.3 million in the second quarter of 2017,
compared to $5.6 million in the first
quarter of 2017 and $5.1 million in
the second quarter of 2016. The sequential and year-over-year
increases reflect the Company's continued commitment to investing
in and commercializing solar energy technologies that differentiate
the Company and strengthen its competitive position through higher
efficiency, and more sought after energy solutions.
Other operating income was $15.5
million in the second quarter of 2017, compared to other
operating income of $0.9 million in
the first quarter of 2017 and other operating loss of $7.1 million in the second quarter of 2016, Other
operating income in the second quarter of 2017 included insurance
compensation of $15.2 million for the
loss of profit related to the June
2016 tornado damage to the Company's Funing cell
factory.
Income from operations was $83.7
million in the second quarter of 2017, compared to a loss
from operations of $2.3 million in
the first quarter of 2017, and income from operations of
$39.6 million in the second quarter
of 2016. Operating margin was 12.1% in the second quarter of 2017,
compared to negative 0.3% in the first quarter of 2017 and 4.9% in
the second quarter of 2016.
Non-cash depreciation and amortization charges were
approximately $21.2 million in the
second quarter of 2017, compared to $17.1
million in the first quarter of 2017, and $25.5 million in the second quarter of 2016.
Non-cash equity compensation expense was $4.2 million in the second quarter of 2017,
compared to $0.9 million in the first
quarter of 2017 and $1.9 million in
the second quarter of 2016.
Interest expense was $26.7 million
in the second quarter of 2017, compared to $24.1 million in the first quarter of 2017 and
$11.9 million in the second quarter
of 2016.
Interest income was $1.4 million
in the second quarter of 2017, compared to $2.5 million in the first quarter of 2017 and
$2.4 million in the second quarter of
2016.
The Company recorded a loss on change in fair value of
derivatives, predominantly from foreign exchange hedging positions
of forwards, of $1.8 million in the
second quarter of 2017, compared to a loss of $7.8 million in the first quarter of 2017 and a
loss of $1.6 million in the second
quarter of 2016. Foreign exchange loss in the second quarter of
2017 was $11.6 million compared to a
foreign exchange gain of $14.2
million in the first quarter of 2017 and a foreign exchange
gain of $24.9 million in the second
quarter of 2016.
Income tax expense was $9.0
million in the second quarter of 2017, compared to income
tax benefit of $3.1 million in the
first quarter of 2017 and income tax expense of $16.3 million in the second quarter of 2016.
Net income attributable to Canadian Solar was $38.2 million, or $0.63 per diluted share, in the second quarter of
2017, compared to net loss attributable to Canadian Solar of
$13.3 million, or $0.23 per diluted share, in the first quarter of
2017 and net income attributable to Canadian Solar of $40.4 million, or $0.68 per diluted share, in the second quarter of
2016. Non-GAAP net loss attributable to Canadian Solar, which is
adjusted to exclude the AD/CVD reversal and an insurance
compensation gain, net of income tax effect, was $9.1 million, or $0.15 per diluted share, in the second quarter of
2017, compared to a non-GAAP net loss attributable to Canadian
Solar of $6.0 million, or
$0.10 per diluted share, in the first
quarter of 2017, which is adjusted to exclude the LDK legal case
provision of $8.6 million, net of
income tax effect. For a reconciliation of measures presented in
accordance with generally accepted accounting principles in
the United States ("GAAP") to the
non-GAAP measures, a table is available at the end of this press
release.
Financial Condition
The Company had $961.6 million of
cash, cash equivalents and restricted cash as of June 30, 2017, compared to $961.4 million as of March
31, 2017.
Accounts receivable, net of allowance for doubtful accounts, as
of June 30, 2017 were $367.6 million, compared to $368.6 million as of March
31, 2017. Accounts receivable turnover was 56 days in the
second quarter of 2017, compared to 59 days in the first quarter of
2017.
Inventories as of June 30, 2017
were $283.2 million, compared to
$274.5 million as of March 31, 2017. Inventory turnover was 52 days in
the second quarter of 2017, compared to 48 days in the first
quarter of 2017.
Accounts and notes payable as of June 30,
2017 were $899.5 million,
compared to $847.2 million as of
March 31, 2017.
Excluding the borrowings included in 'Liabilities
held-for-sale', short-term borrowings as of June 30, 2017 were $2.04
billion, compared to $1.71
billion as of March 31, 2017.
Long-term borrowings as of June 30,
2017 were $273.0 million,
compared to $462.1 million as of
March 31, 2017.
The Company had approximately $1.18
billion in non-recourse bank borrowings as of June 30, 2017. Senior convertible notes totaled
$126.0 million as of June 30, 2017, compared to $125.8 million as of March
31, 2017. Total borrowings directly related to utility-scale
solar power projects, which included approximately $1.10 billion of non-recourse borrowings, were
$1.30 billion as of June 30, 2017, compared to $1.20 billion as of March
31, 2017.
In the second quarter of 2017, the Company invested RMB 220.6 million ($32.6
million) into Suzhou Gaochuangte New Energy Co., Ltd., a
solar EPC company in China,
increasing Canadian Solar's holdings from 40% to 80%. A preliminary
allocation of the share purchase price to assets acquired and
liabilities assumed has been made based on available information
and management's best estimates. The final allocation of the
purchase price may differ from this preliminary allocation.
Dr. Shawn Qu, Chairman and Chief
Executive Officer of Canadian Solar, remarked, "Q2 was a solid
quarter, with solar module shipments, revenue and gross margin all
coming in above guidance. We continue to make progress with respect
to the monetization of our operating solar power plants in the
U.S., Japan, Brazil, China
and the U.K. We have entered into exclusive discussions with the
winner of the binding bids submitted for 703 MWp of our U.S. solar
power plant assets and expect to finalize the sale over the coming
months. Separately, in July, we completed the sale of an additional
281 MWp solar power projects, which are still in construction in
the U.S. In Japan, we are on track
to launch a JREIT listing in the near future, with an initial
portfolio of 65 MWp of solar power plants."
Dr. Huifeng Chang, Senior Vice
President and Chief Financial Officer of Canadian Solar, added: "We
are pleased with our second quarter results. The higher module
shipments were driven by strong demand for solar modules in
China, India, Japan
and the U.S., with the gross margin improvement due to higher than
expected average selling price and better cost controls. Results in
the quarter benefitted from an AD/CVD reversal, and the
finalization of an insurance claim related to the tornado damage of
our Funing cell factory. The insurance payment included
compensation of $15.2 million for the
loss of profit from the business interruption, which is recorded as
'Other operation incomes'. We remain confident we will finalize
several project monetization events, including our JREIT in
Japan, and the sales of solar
power project assets in the U.S., Japan, China
and the U.K. Our focus is on delivering a healthy return to our
shareholders, maximizing operating cash flow and deleveraging our
balance sheet in order to fund the next phase of the Company's
growth."
Utility-Scale Solar Project Pipeline
The Company divides its utility-scale solar project pipeline
into two parts: an early-to-mid-stage pipeline and a late-stage
pipeline. The late-stage pipeline primarily includes projects
that have energy off-take agreements and are expected to be built
within the next two to four years. The Company used to include
certain Japanese projects under bidding process as late-stage. In
the future, the Company will describe these projects as mid-stage.
The Company has also moved certain Chinese projects from the
category of late-stage to mid-stage. The Company continues to advance these
mid-stage projects as usual, and
will add them back to the list of late-stage once the PPA or FIT is
received.
Late-Stage Utility-Scale Solar Project Pipeline
As of July 31, 2017, the Company's
late-stage solar project pipeline, including those in construction,
totaled approximately 1,391 MWp, which included 362 MWp in
Japan, 120 MWp in the U.S., 210
MWp in China, 399 MWp in
Brazil, 108 MWp in India, 118 MWp in Australia, 68 MWp in Mexico and 6 MWp in Africa. The Company cautions that some
late-stage projects may not reach completion due to risks as
failure to secure permits and grid connection, among others.
In the United States, as
previously announced, the Company completed the sale of the 281 MWp
Great Valley Solar project, previously called Tranquillity 8, to
Sempra Renewables LLC, a unit of Sempra Energy. The Great Valley
Project currently is under construction and Sempra Renewables will
assume construction of the project and operate the facility.
The table below sets forth the Company's late-stage
utility-scale solar project pipeline in the U.S. as of July 31, 2017:
U.S.
Project
|
MWp
|
Location
|
Status
|
Expected
COD
|
Gaskell West
1
|
28
|
Kern county,
CA
|
Development
|
2018
|
IS 42
|
92
|
Fayetteville,
NC
|
Construction
|
2017
|
Total
|
120
|
|
|
|
In Japan, as of July 31, 2017, the Company's pipeline of
utility-scale solar power projects totaled approximately 572 MWp,
as an additional 51 MWp reached COD in the second quarter of this
year. 362 MWp of these projects are described as late-stage for
which interconnection agreements and FIT are secured. 159 MWp of
the late-stage projects are under construction and 203 MWp are
under development. Canadian Solar has additional 210 MWp of
utility-scale solar projects in the bidding process, which will be
added to the list of late-stage projects once FIT is awarded. The
table below sets forth the expected commercial operation schedule
of the Company's late-stage utility-scale solar power projects in
Japan as of July 31, 2017:
Expected Japan COD
Schedule of Late-Stage Projects
(MWp)
|
H2
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021 and
Thereafter
|
|
Total
|
51.4
|
|
75.4
|
|
99.2
|
|
118.4
|
|
18
|
|
362.4
|
In Brazil, the Company has a
total of 399 MWp of late-stage
projects. The table below sets forth the Company's late-stage
utility-scale solar project pipeline in Brazil as of July 31,
2017:
Brazil
Project
|
MWp
|
Location
|
Status
|
Expected
COD
|
Pirapora I
|
191.5
|
Brazil
|
Construction
|
2017
|
Pirapora
II
|
115
|
Brazil
|
Development
|
2018
|
Pirapora III
(formerly Vazante)
|
92.5
|
Brazil
|
Construction
|
2017
|
Total
|
399
|
|
|
|
The Company completed the sale of an 80% interest in each of
191.5 MWp Pirapora I, 115 MWp Pirapora II and 92.5 MWp Pirapora III
to EDF. The Company supplies modules for all the Pirapora projects.
The Company expects to bring Pirapora I to COD in Q3 of 2017.
In India, as of July 31, 2017, the Company's late-stage
utility-scale power project pipeline stood at 108 MWp. The 108 MWp
SECI Maharashtra project is currently under development and is
expected to reach commercial operation by the end of 2017. The 18
MWp Kamareddy project and the 18 MWp Ramnapet project were
connected to the grid in July
2017.
In China, the Company connected
a total of 58.2 MWp of solar power projects to the grid in the
second quarter of this year. As of July 31,
2017, the late-stage utility-scale power pipeline was at 210
MWp and the mid-stage pipeline was 131.8 MWp in China.
Solar Power Plants in Operation
In addition to its late-stage utility-scale solar project
pipeline, the Company has a portfolio of solar power plants in
operation, totaling 1,260.2 MWp as of June
30, 2017, which are recorded on its balance sheet as project
assets ($1,308.5 million), assets
held-for-sale ($203.5 million) and
solar power systems, net ($65.8
million). Revenue from the sale of electricity generated by
the plants recorded as "assets held-for-sale" and "solar power
systems, net" in the second quarter of 2017 totaled $9.8
million, compared to $5.2 million in the first quarter of
2017.
The sale of projects recorded as 'project assets' (build to
sell) on the balance sheet will be recorded as revenue once
revenue recognition criteria are met, and the gain from the sale of
projects recorded as 'assets held-for-sale' and 'solar power
systems, net' (build to own) on the balance sheet will be
recorded within 'other operating income (expenses)' in the income
statement.
The table below sets forth the Company's total portfolio of
solar power plants in operation as of June
30, 2017:
Plants in
Operation (MWp)
|
U.S.
|
Japan
|
U.K.
|
China
|
Other
|
Total
|
808
|
110.5
|
150
|
186.7
|
5
|
1,260.2
|
Manufacturing Capacity
The Company plans to expand its ingot, wafer, cell and module
capacities to 1.1 GW, 4.0 GW, 4.70 GW and 7.19 GW, respectively, by
December 31, 2017. The table below
sets forth the Company's capacity expansion plan from December 31, 2016 to December 31, 2017:
|
Manufacturing
Capacity Roadmap (MW)
|
|
December
31,2016
|
June 30,
2017
|
December 31,
2017
|
Ingot
|
400
|
-
|
1,100
|
Wafer
|
1,000
|
2,000
|
4,000
|
Cell
|
2,440
|
4,490
|
4,700
|
Module
|
6,170
|
6,970
|
7,190
|
The Company continues to ramp up its new multi-crystalline
silicon ingot casting workshop in Baotou, China, with 50 new casting furnaces with a 700
MW annual capacity, operated in G6 mode, producing 36 bricks per
ingot. The Company has now successfully relocated its older casting
ingot furnaces, previously in Luoyang, China, to Baotou in order to benefit from
lower electricity cost. The Company expects to complete the ramp up
at Baotou in the third quarter of 2017 and reach 1,100 MW of annual
internal ingot casting capacity. The Company plans to migrate the
50 new casting furnaces to G7 mode, producing 49 bricks per ingot,
by the middle of 2018, thereby raising its ingot capacity to 1,500
MW and further reducing costs. The new Baotou ingot factory will
also help the Company to reduce the amount it pays to purchase
external ingots and thus reduce its all-in module manufacturing
costs.
The Company's wafer manufacturing capacity recently reached 2.0
GW and will reach 3.0 GW in the third quarter of 2017 and 4.0 GW by
December 31, 2017, all of which will
use diamond wire-saw technology. Diamond wire-saw technology is
compatible with the Company's proprietary and highly efficient Onyx
black silicon multi-crystalline solar cell technology,
significantly reducing silicon usage and manufacturing cost.
The Company's solar cell manufacturing capacity as of
June 30, 2017 was 4.49 GW. The annual
capacity at the Company's Funing cell factory has reached 1,440 MW,
with an additional 850 MW cell capacity at the Company's
South East Asia facility. The
Company plans to debottleneck the production in its Funing and
South East Asia plants later this
year, allowing the Company's cell manufacturing capacity to reach
4.70 GW by December 31, 2017.
The Company expects that its total worldwide module
manufacturing capacity will exceed 7.19 GW by December 31, 2017.
Business Outlook
The Company's business outlook is based on management's current
views and estimates with respect to operating and market
conditions, its current order book and the global financing
environment. It is also subject to uncertainties relating to
customer final demand and solar project construction schedules.
Management's views and estimates are subject to change without
notice.
For the third quarter of 2017, the Company expects total solar
module shipments to be in the range of approximately 1.65 GW to
1.70 GW, including approximately 86 MW of shipments to the
Company's utility-scale solar power projects that may not be
recognized as revenue in the third quarter of 2017. Total revenue
for the third quarter of 2017, which includes revenue from both of our solar module sales and from our
energy business, is expected to be in the range of $805 million to $825 million. Gross margin for
the third quarter of 2017 is expected to be between 15% and
17%.
The Company reiterates its expectation that total module
shipments in 2017 will be in the range of 6.0 GW to 6.5 GW. The
module shipments recognized in revenue and total annual revenue
will depend on market conditions, including ASP trends. The Company
continues to expect it will connect approximately 1 GW to 1.2 GW of
new solar projects globally in 2017, based on the commercial
operation date (COD). These projects are located in the U.S.,
Japan, China, the UK, India, Brazil
and Africa. The revenue from the
Company's energy business will mainly come from the monetization of
the Company's high quality solar power plant assets in the U.S.,
Japan, China, UK, India and Brazil. Management expects that the increase
in vertical integration along the manufacturing cycle will help the
Company maintain or improve its gross margin.
Recent Developments
On August 10, 2017, Canadian Solar
announced that it sold 80% of the interests in its 92.5 MWp
Pirapora III solar energy project in Brazil to EDF Energies Nouvelles' local
subsidiary, EDF EN do Brasil.
On August 8, 2017, Canadian Solar
announced that Sempra Renewables LLC, a unit of Sempra Energy
(NYSE:SRE), has acquired its 200 MWac/281 MWp Great Valley Solar
project, previously called Tranquillity 8.
On August 7, 2017, Canadian Solar
announced that the 191.5 MWp Pirapora I project had secured a
project financing facility amounting to BRL529 million (US$163
million) from the Brazilian Development Bank.
On July 18, 2017, Canadian Solar
announced that it started commercial operation of 52.5 MWp of solar
photovoltaic (PV) power plants in Japan in the first half of 2017. The 52.5 MWp
of plants include the 47.7 MWp Mashiki plant, the 2.4 MWp Yamagata
Asahimachi plant, the 1.3 MWp Shizuoka Tashiro plant and the 1.1
MWp Saitama Shiroishi plant.
On June 19, 2017, Canadian Solar
announced it sold 80% of the interests in its 115 MWp Pirapora II
solar energy project in Brazil to
EDF EN do Brasil.
Conference Call Information
The Company will hold a conference call today, Monday, August 14, 2017 at 8:00 a.m. U.S. Eastern Daylight Time
(8:00 p.m., August 14, 2017
in Hong Kong) to discuss the Company's second quarter 2017
results and business outlook. The dial-in phone number for the live
audio call is +1 866 519 4004 (toll-free from the U.S.), +852 3018
6771 (local dial-in from HK) or +1 845 675 0437 from international
locations. The passcode for the call is 59745217. A live webcast of
the conference call will also be available on the investor
relations section of Canadian Solar's website at
www.canadiansolar.com.
A replay of the call will be available 4 hours after the
conclusion of the call until 10:00
a.m. on Tuesday, August 22,
2017, U.S. Eastern Daylight Time (10:00 p.m., August 22,
2017 in Hong Kong) and can
be accessed by dialing +1 855 452 5696 (toll-free from the U.S.),
+852 3051 2780 (local dial-in from HK) or +1 646 254 3697 from
international locations, with passcode 59745217. A webcast replay
will also be available on the investor relations section of
Canadian Solar's at www.canadiansolar.com.
About Canadian Solar Inc.
Founded in 2001 in Canada,
Canadian Solar is one of the world's largest and foremost solar
power companies. As a leading manufacturer of solar photovoltaic
modules and provider of solar energy solutions, Canadian Solar also
has a geographically diversified pipeline of utility-scale power
projects in various stages of development. In the past 16 years,
Canadian Solar has successfully delivered over 22 GW of premium
quality modules to over 100 countries around the world.
Furthermore, Canadian Solar is one of the most bankable companies
in the solar industry, having been publicly listed on NASDAQ since
2006. For additional information about the Company, follow Canadian
Solar on LinkedIn or
visit www.canadiansolar.com.
Safe Harbor/Forward-Looking Statements
Certain statements in this press release regarding the Company's
expected future shipment volumes, gross margins, business prospects
and future quarterly or annual results, particularly the management
quotations and the statements in the "Business Outlook" section,
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 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 Japan, the U.S., India and China; 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; delays in utility-scale project approval
process; delays in utility-scale project construction; 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 April 27, 2017. 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. Investors
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.
FINANCIAL TABLES FOLLOW
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Statement of Operations
|
(In Thousands of
US Dollars, Except Share And Per Share Data And Unless Otherwise
Stated)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 30
|
|
March 31
|
|
June 30
|
|
June 30
|
|
June 30
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
692,366
|
|
$
677,042
|
|
$
805,906
|
|
$1,369,407
|
|
$1,527,328
|
Cost of
revenues
|
524,527
|
|
585,636
|
|
667,437
|
|
1,110,162
|
|
1,276,388
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
167,839
|
|
91,406
|
|
138,469
|
|
259,245
|
|
250,940
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
39,324
|
|
33,941
|
|
33,864
|
|
73,265
|
|
68,654
|
|
General and
administrative
expenses
|
52,950
|
|
55,070
|
|
52,922
|
|
108,020
|
|
88,442
|
|
Research and
development
expenses
|
7,318
|
|
5,624
|
|
5,052
|
|
12,942
|
|
9,557
|
|
Other operating
(income) loss
|
(15,502)
|
|
(898)
|
|
7,052
|
|
(16,400)
|
|
6,332
|
Total operating
expenses
|
84,090
|
|
93,737
|
|
98,890
|
|
177,827
|
|
172,985
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
83,749
|
|
(2,331)
|
|
39,579
|
|
81,418
|
|
77,955
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(26,717)
|
|
(24,111)
|
|
(11,889)
|
|
(50,828)
|
|
(28,019)
|
|
Interest
income
|
1,393
|
|
2,522
|
|
2,392
|
|
3,915
|
|
5,778
|
|
Gain (loss) on change
in fair value
of derivatives
|
(1,849)
|
|
(7,752)
|
|
(1,632)
|
|
(9,601)
|
|
1,032
|
|
Foreign exchange gain
(loss)
|
(11,648)
|
|
14,214
|
|
24,936
|
|
2,566
|
|
33,447
|
|
Investment
income
|
-
|
|
-
|
|
1,070
|
|
-
|
|
1,158
|
|
Gain on repurchase of
convertible
notes
|
-
|
|
-
|
|
551
|
|
-
|
|
2,460
|
Other income (expenses), net
|
(38,821)
|
|
(15,127)
|
|
15,428
|
|
(53,948)
|
|
15,856
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
before income taxes
and equity in earnings (loss) of
unconsolidated investees
|
44,928
|
|
(17,458)
|
|
55,007
|
|
27,470
|
|
93,811
|
Income tax (expense)
benefit
|
(8,958)
|
|
3,109
|
|
(16,304)
|
|
(5,849)
|
|
(28,557)
|
Equity in earnings
(loss) of
unconsolidated investees
|
4,384
|
|
606
|
|
1,374
|
|
4,990
|
|
(1,388)
|
Net income
(loss)
|
40,354
|
|
(13,743)
|
|
40,077
|
|
26,611
|
|
63,866
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
(loss)
attributable to non-controlling
interests
|
2,142
|
|
(408)
|
|
(302)
|
|
1,734
|
|
903
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to
Canadian Solar Inc.
|
$
38,212
|
|
$
(13,335)
|
|
$
40,379
|
|
$
24,877
|
|
$
62,963
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic
|
$
0.66
|
|
$
(0.23)
|
|
$
0.70
|
|
$
0.43
|
|
$
1.10
|
Shares used in
computation - basic
|
57,947,324
|
|
57,832,572
|
|
57,605,169
|
|
57,890,265
|
|
57,253,259
|
Earnings (loss) per
share - diluted
|
$
0.63
|
|
$
(0.23)
|
|
$
0.68
|
|
$
0.42
|
|
$
1.07
|
Shares used in
computation - diluted
|
62,049,899
|
|
57,832,572
|
|
61,040,478
|
|
58,647,785
|
|
60,996,903
|
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Statement of Comprehensive
Income
|
(In Thousands of
US Dollars)
|
|
|
Three Months
Ended
|
|
For six months
ended
|
|
June
30
|
|
March
31
|
|
June
30
|
|
June
30
|
|
June
30
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net Income
(loss)
|
40,354
|
|
(13,743)
|
|
40,077
|
|
26,611
|
|
63,866
|
Other
comprehensive income (net of tax
of nil):
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
3,833
|
|
8,929
|
|
(10,680)
|
|
12,762
|
|
11,995
|
Gain (loss) on
changes in fair value of
derivatives
|
(3,611)
|
|
1,681
|
|
(5,457)
|
|
(1,930)
|
|
(3,825)
|
Comprehensive
income (loss)
|
40,576
|
|
(3,133)
|
|
23,940
|
|
37,443
|
|
72,036
|
Less: comprehensive
income (loss)
attributable to non-controlling interests
|
3,153
|
|
(2,438)
|
|
103
|
|
715
|
|
2,149
|
Comprehensive
income (loss)
attributable to Canadian Solar Inc.
|
37,423
|
|
(695)
|
|
23,837
|
|
36,728
|
|
69,887
|
Canadian Solar
Inc.
|
Unaudited
Condensed Consolidated Balance Sheet
|
(In Thousands of
US Dollars)
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
496,618
|
|
$
511,039
|
|
Restricted cash -
current
|
456,798
|
|
487,516
|
|
Accounts receivable
trade, net
|
367,559
|
|
400,251
|
|
Accounts receivable,
unbilled
|
1,309
|
|
3,425
|
|
Amounts due from
related parties
|
26,952
|
|
19,082
|
|
Inventories
|
283,184
|
|
295,371
|
|
Value added tax
recoverable
|
76,748
|
|
55,680
|
|
Advances to suppliers
- current
|
40,941
|
|
29,312
|
|
Derivative assets -
current
|
12,420
|
|
12,270
|
|
Project assets -
current
|
1,684,955
|
|
1,317,902
|
|
Assets
held-for-sale
|
220,830
|
|
392,089
|
|
Prepaid expenses and
other current assets
|
240,532
|
|
266,826
|
Total current
assets
|
3,908,846
|
|
3,790,763
|
Restricted cash -
non-current
|
8,139
|
|
9,145
|
Property, plant and
equipment, net
|
595,563
|
|
462,345
|
Solar power systems,
net
|
65,849
|
|
112,062
|
Deferred tax assets,
net
|
245,397
|
|
229,980
|
Advances to suppliers
–non-current
|
87,851
|
|
54,080
|
Prepaid land use
right
|
55,359
|
|
48,651
|
Investments in
affiliates
|
408,092
|
|
368,459
|
Intangible assets,
net
|
8,640
|
|
8,422
|
Goodwill
|
7,617
|
|
7,617
|
Derivatives assets -
non-current
|
10,800
|
|
15,446
|
Project assets -
non-current
|
147,127
|
|
182,391
|
Other non-current
assets
|
125,734
|
|
117,245
|
TOTAL
ASSETS
|
$
5,675,014
|
|
$
5,406,606
|
Current
liabilities:
|
|
|
|
|
Short-term
borrowings
|
$
2,044,755
|
|
$
1,600,033
|
|
Accounts and notes
payable
|
899,544
|
|
736,779
|
|
Amounts due to
related parties
|
10,172
|
|
19,912
|
|
Other
payables
|
239,517
|
|
223,584
|
|
Short-term commercial
paper
|
61,615
|
|
131,432
|
|
Advances from
customers
|
72,892
|
|
90,101
|
|
Derivative
liabilities - current
|
8,198
|
|
9,625
|
|
Liabilities
held-for-sale
|
211,415
|
|
279,272
|
|
Financing
liability
|
412,200
|
|
459,258
|
|
Other current
liabilities
|
164,541
|
|
171,070
|
Total current
liabilities
|
4,124,849
|
|
3,721,066
|
Accrued warranty
costs
|
62,105
|
|
61,139
|
Convertible
notes
|
126,017
|
|
125,569
|
Long-term
borrowings
|
273,020
|
|
493,455
|
Derivatives
liabilities - non-current
|
617
|
|
-
|
Liability for
uncertain tax positions
|
8,797
|
|
8,431
|
Deferred tax
liabilities - non-current
|
23,972
|
|
23,348
|
Loss contingency
accruals
|
26,591
|
|
22,654
|
Other non-current
liabilities
|
76,692
|
|
51,554
|
Total
LIABILITIES
|
4,722,660
|
|
4,507,216
|
Equity:
|
|
|
|
|
Common
shares
|
701,774
|
|
701,283
|
|
Additional paid-in
capital
|
(3,861)
|
|
(8,897)
|
|
Retained
earnings
|
308,986
|
|
284,109
|
|
Accumulated other
comprehensive loss
|
(79,963)
|
|
(91,814)
|
Total Canadian
Solar Inc. shareholders' equity
|
926,936
|
|
884,681
|
|
Non-controlling
interests in subsidiaries
|
25,418
|
|
14,709
|
TOTAL
EQUITY
|
952,354
|
|
899,390
|
TOTAL LIABILITIES
AND EQUITY
|
$
5,675,014
|
|
$
5,406,606
|
About Non-GAAP Financial Measures
To supplement its financial disclosures presented in accordance
with GAAP, the Company uses non-GAAP measures which are adjusted
from the most comparable GAAP measures for certain items as
described below. The Company presents non-GAAP net income and
diluted earnings per share so that readers can better understand
the underlying operating performance of the business before the
impact of AD/CVD true-up provisions and gain from insurance
compensation in the second quarter of 2017, LDK provision in the
first quarter of 2017 and AD/CVD true-up provision in the fourth
quarter of 2016. The non-GAAP numbers are not measures of financial
performance under U.S. GAAP, and should not be considered in
isolation or as an alternative to other measures determined in
accordance with GAAP. These non-GAAP measures may differ from
non-GAAP measures used by other companies, and therefore their
comparability may be limited.
Reconciliation of
U.S. GAAP to Non-GAAP financial measures
|
Statement of
Operations Data:
|
(In Thousands,
except per share amounts)
|
|
|
|
|
Three months
ended
|
|
|
June
30,
2017
|
|
March 31,
2017
|
|
December 31,
2016
|
|
|
|
|
|
|
|
GAAP net income
(loss) attributable to Canadian Solar Inc.
|
$
38,212
|
|
$
(13,335)
|
|
$
(13,328)
|
Non-GAAP income
adjustment items:
|
|
|
|
|
|
|
LDK
provision
|
-
|
|
8,615
|
|
-
|
|
AD/CVD true-up
provision
|
(57,602)
|
|
-
|
|
44,126
|
|
Gain from insurance
compensation
|
(15,238)
|
|
-
|
|
-
|
|
Income tax
effect
|
25,519
|
|
(1,292)
|
|
(16,631)
|
Non-GAAP net income
(loss) attributable to Canadian
Solar Inc.
|
(9,109)
|
|
(6,012)
|
|
14,167
|
|
|
|
|
|
|
|
|
Shares used in
computation -diluted
|
59,216,566
|
|
57,832,572
|
|
58,092,689
|
|
GAAP income (loss)
per share-diluted
|
0.63
|
|
(0.23)
|
|
(0.23)
|
|
Non-GAAP income
(loss) per share-diluted
|
(0.15)
|
|
(0.10)
|
|
0.24
|
View original
content:http://www.prnewswire.com/news-releases/canadian-solar-reports-second-quarter-2017-results-300503629.html
SOURCE Canadian Solar Inc.