MARLBORO, USA: Evergreen Solar Inc., a manufacturer of String Ribbon solar power products with its proprietary, low-cost silicon wafer technology, announced financial results for the third quarter ended October 3, 2009.
Key accomplishments during the quarter were:
* Shipped 31.3 MW from our Devens facility, an increase of 35 percent over second quarter shipments of 23.2 MW;
* Reduced total manufacturing cost to $2.24 per watt, down 17 percent from $2.70 per watt for the second quarter. Wafer manufacturing cost was approximately $0.75 per watt, down from $0.85 per watt in the second quarter;
* Generated EBITDA of $6.3 million, compared to $1.4 million in the second quarter;
* Finalized agreements with Jiawei Solar and the Wuhan, China Government’s Hubei Science & Technology Investment Co., Ltd. (“HSTIC”), under which:
-- Evergreen Solar will manufacture String Ribbon wafers using our state-of-the-art Quad furnaces at a leased facility currently being built by Jiawei in Wuhan, China on Jiawei’s campus;
-- Jiawei will convert the String Ribbon wafers into Evergreen Solar-branded panels on a contract manufacturing basis beginning in the spring 2010; and
-- HSTIC provided $33 million of 7.5 percent financing, which Evergreen Solar must repay no later than July 2014, all of which has been received.
* Hired our Chinese executive team, including Henry Ng, former General Manager of Suntech Power Company Ltd.’s factory in Wuxi, China;
* Began pilot production at our Michigan high-temperature filament plant.
“Due to strong demand from our customers, we were able to increase our sequential production substantially and sell everything we produced,” stated Richard M. Feldt, Chairman, CEO and President. “While demand continues to be solid early in the fourth quarter, we expect to experience some of the typical seasonal moderation in December which we expect will extend into the first quarter.
“Our Devens facility has continuously met its key operational goals of rapid sequential production increases and significantly reduced manufacturing costs since opening in mid-2008. In particular, we are especially pleased with the success of our Quad wafer production performance, which has met or exceeded our expectations to date.
"However, panel prices have fallen over 30 percent since mid-2008 making it very difficult for manufacturers located in high-cost regions to remain price competitive. Therefore, we are accelerating our strategic initiative of increasing the focus on our unique wafer manufacturing technology; and we will begin to transition our Devens-based panel assembly to China in mid-2010,” continued Feldt.
“Until we begin this transition, we expect to produce approximately 30 to 35 megawatts each quarter at our Devens facility. After the transition is complete, we will continue to produce wafers and cells at our Devens facility and may increase capacity if market demand warrants. If long-term demand for panels manufactured in the United States significantly increases, we will be well-positioned to quickly reintroduce panel assembly again at Devens,” Feldt concluded.
Q3 2009 financial results
Revenues for the third quarter of 2009 were $77.7 million, including $2.2 million of fees from our Sovello joint venture, compared to $63.8 million for the second quarter of 2009, including $1.1 million of fees and $22.1 million for the third quarter of 2008, including $4.3 million of fees.
Gross margin for the third quarter of 2009 was 9.7 percent, compared to 1.9 percent for the second quarter of 2009 and 5.7 percent for the third quarter of 2008.
Operating loss for the third quarter was $6.0 million, compared to $11.5 million for the second quarter of 2009 and $22.1 million for the third quarter of 2008. Net loss for the third quarter of 2009 was $82.4 million compared to $20.3 million in the second quarter of 2009 and $24.6 million for the third quarter 2008.
Net loss for the third quarter 2009 includes a charge of approximately $70 million reflecting the write-down of our investment in Sovello to its estimated fair value. In making the assessment, we considered Sovello’s cash position, projected cash flow, comparable market data, the current investing environment, management changes and competition.
If Sovello is not able to restructure the terms of its loan agreements or its operations continue to deteriorate, the carrying value of this investment could be further impaired in the future.