MENLO PARK, Calif., May 15 /PRNewswire-Asia-FirstCall/ -- Solar EnerTech
Corp. (OTC Bulletin Board: SOEN) (the "Company") today announced results for
the second quarter of fiscal year 2009.
For the fiscal 2009 second quarter ended March 31, 2009, total module
shipments increased 111% compared to the second quarter of the prior year
period. Revenue increased 27% to $4.4 million compared to $3.5 million in the
fiscal second quarter of the prior year period. Revenue for the fiscal 2009
second quarter was comprised of $4.2 million in solar module sales, of which
more than 95% were sold to Europe and Australia, and $0.2 million in solar
cell sales.
The Company incurred a negative gross margin of $1.3 million, or (29% of
total net sales), for the quarter ended March 31, 2009 compared to a negative
gross margin of $2.3 million, or (46% of total net sales), in the fiscal first
quarter ended December 31, 2008. This is a sequential gross margin
improvement of 37% mainly due to lower silicon wafer prices and cost
restructuring initiatives. The negative gross margin was primarily a result
of the Company selling modules using silicon wafers purchased in prior
quarters at a higher cost.
Total operating expense for the fiscal 2009 second quarter was $3.7
million, or 84% of total net sales, which included $1.7 million in non-cash
charges, including $1.5 million of non-cash stock compensation charge related
to the hiring and retention of key executives and a $0.2 million non-cash
charge for loss on debt extinguishment. Excluding these non-cash items, the
operating expense for the quarter was $2.0 million, or 45% of total net sales.
This compares to total operating expense for the fiscal 2008 second quarter of
$5.0 million, or 143% of total net sales, which included $3.8 million in
non-cash charges, including a $1.7 million non-cash stock compensation charge
also related to the hiring and retention of key executives and $2.1 million of
non-cash charge for loss on debt extinguishment. Excluding these non-cash
charges, the operating expense for the second quarter of 2008 was $1.2 million,
or 34% of total net sales.
Net loss for the second quarter of fiscal 2009 was $5.5 million, or ($0.06)
per basic and diluted share compared to net income of $15.8 million, or $0.03
diluted share in the same period in fiscal 2008. In the second quarter of
fiscal 2009, the Company recorded a non-cash gain of $0.1 million associated
with a change in the fair market value of compound embedded derivative
liability and a non-cash gain of $0.1 million related to the change in the
fair market value of warrant liability. Excluding these non-cash gains of
$0.2 million, on a non-GAAP basis, the Company had a net loss of $5.7 million
in the second quarter of fiscal 2009. In the second quarter of fiscal 2008,
the Company recorded a non-cash gain of $11.2 million associated with a change
in the fair market value of compound embedded derivative liability and a
non-cash gain of $10.8 million related to the change in fair market value of
warrant liability. Excluding these non-cash gains of $22.0 million, on a
non-GAAP basis, the Company had a net loss of $6.2 million in the second
fiscal quarter of the prior year period. Both the compound embedded derivative
and warrant liabilities were recorded in conjunction with the convertible
notes transaction entered into by the Company in March 2007.
Mr. Leo Young, Chief Executive Officer of Solar EnerTech, commented, "We
are pleased with the positive developments in our business during the fiscal
second quarter. Our module shipments increased 111% prompted by orders from
Europe and Australia. Despite the decrease in module selling prices in the
world market, we were encouraged to see our revenue increase by 27% compared
to Q208, fueled by orders coming from Europe and Australia. There was a
sequential improvement in our gross margin during our second quarter largely
due to a cost restructuring that entailed the aggressive promotion of leaner
production concepts, revamping our sourcing strategy and reducing unnecessary
capital expenditures. We have now utilized all raw material inventory
purchased at higher prices in previous quarters which we believe marks a
turning point toward positive gross margin moving forward.
Due to the consistent quality of our solar module products, we are
encouraged that our customers in Europe and Australia have increased their
orders for the remaining quarters of the fiscal year. We have thus decided to
add an additional shift to accommodate our growing customer demand. We are
encouraged with the demand trends we're seeing in our business and believe the
quality of our solar modules differentiate Solar EnerTech from many of other
players in the global PV business.
During the quarter, we announced a strategic joint venture with Jiangsu
Shunda, a major polysilicon manufacturer in China, which will create a U.S.
company named Shunda-SolarE Technologies, Inc. that is designed to broaden our
market presence in the U.S. by establishing a vertically integrated operation
in the U.S. market with services ranging from the production of polysilicon to
ingots and wafers, to solar cells, panels and solar system installation. We
believe this JV can allow us to more easily penetrate U.S. solar opportunities
and establish Shunda-SolarE as a leading brand recognized for high quality
solar products and service in the growing U.S. market.
For the remainder of the calendar year, we continue to focus on improving
our productivity and streamlining our operations to maximize profitability.
We have a great opportunity to further grow our global customer base by
providing them with high quality PV module products and after-sale service
support. We look forward to seeing a sequential improvement to our financial
results as we progress through the 2009 calendar year."
Financial Position
As of March 31, 2009, the Company had $3.1 million in cash, $1.3 million
of accounts receivables, $2.2 million of prepayment primarily for purchase of
raw materials and $2.4 million of inventories on hand. Additionally, the
Company had $3.3 million of accounts payable, customer advance payment and
accrued liabilities, $5.6 million of accrued liability due to related party,
$0.4 million of derivative liabilities, $1.7 million of warrant liabilities
and $0.7 million of convertible notes as of March 31, 2009.
About Solar EnerTech Corp.
Solar EnerTech is a photovoltaic ("PV") solar energy cell manufacturing
enterprise incorporated in the United States with its corporate office in
Menlo Park, California. The Company has established a sophisticated 63,000
square foot manufacturing plant located in China, in Shanghai's Jinqiao Modern
Technology Park. Currently, the Company is capable of producing 50MW of solar
cells from its existing production lines.
Solar EnerTech has also established a Joint R&D Lab at Shanghai University
to develop higher efficiency cells and to put the results of that research to
use in its manufacturing processes. Led by one of the industry's top
scientists, the Company expects its R&D program to help bring Solar EnerTech
to the forefront of advanced solar technology research and production.
Safe Harbor Statement
Statements contained in this press release, which are not historical facts,
are forward-looking statements as that term is defined in the Private
Securities Litigation Reform Act of 1995. These forward-looking statements
are based largely on current expectations and are subject to a number of known
and unknown risks, uncertainties and other factors beyond our control that
could cause actual events and results to differ materially from these
statements. These statements are not guarantees of future performance, and
readers are cautioned not to place undue reliance on these forward-looking
statements, which are relevant as of the date of the given press release and
should not be relied upon as of any subsequent date. Solar EnerTech
undertakes no obligation to update publicly any forward-looking statements.
(Unaudited Financial Statements Follow)
Solar EnerTech Corp.
Unaudited Consolidated Statements of Operations
Three Months Ended March 31, Six Months Ended March 31,
2009 2008 2009 2008
Net sales $4,412,000 $3,471,000 $9,496,000 $8,310,000
Cost of sales (5,714,000) (4,171,000) (13,134,000) (9,476,000)
Gross loss (1,302,000) (700,000) (3,638,000) (1,166,000)
Operating
expenses:
Selling, general
and administrative 3,086,000 2,797,000 5,647,000 6,682,000
Research and
development 436,000 54,000 771,000 151,000
Loss on debt
extinguishment 181,000 2,105,000 491,000 2,467,000
Total operating
expenses 3,703,000 4,956,000 6,909,000 9,300,000
Operating loss (5,005,000) (5,656,000) (10,547,000) (10,466,000)
Other income
(expense):
Interest income 3,000 46,000 10,000 56,000
Interest expense (558,000) (298,000) (923,000) (576,000)
Gain on change in
fair market
value of
compound
embedded
derivative 113,000 11,190,000 588,000 12,289,000
Gain on change in
fair market
value of
warrant
liability 99,000 10,808,000 1,743,000 10,923,000
Other expense (194,000) (290,000) (214,000) (328,000)
Net income (loss) $(5,542,000) $15,800,000 $(9,343,000) $11,898,000
Net income (loss)
per share -
basic $(0.06) $0.15 $(0.11) $0.13
Net income (loss)
per share -
diluted $(0.06) $0.03 $(0.11) $(0.04)
Weighted average
shares
outstanding -
basic 87,716,403 102,851,788 87,376,406 90,941,543
Weighted average
shares
outstanding -
diluted 87,716,403 157,954,180 87,376,406 122,086,159
Solar EnerTech Corp.
Consolidated Balance Sheets
March 31, September 30,
2009 2008
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $3,060,000 $3,238,000
Accounts receivable, net 1,280,000 1,875,000
Advance payments and other 2,195,000 3,175,000
Inventories, net 2,366,000 4,886,000
VAT receivable 1,415,000 2,436,000
Other receivable 99,000 730,000
Total current assets 10,415,000 16,340,000
Property and equipment, net 12,598,000 12,934,000
Investment 1,000,000 1,000,000
Deferred financing costs, net of
accumulated amortization 1,613,000 1,812,000
Deposits 188,000 701,000
Total assets $25,814,000 $32,787,000
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Accounts payable $890,000 $1,771,000
Customer advance payment 1,667,000 96,000
Accrued expenses 782,000 910,000
Accounts payable and accrued liabilities,
related parties 5,563,000 5,450,000
Derivative liabilities 365,000 980,000
Warrant liabilities 1,669,000 3,412,000
Convertible notes, net of discount 689,000 85,000
Total current liabilities 11,625,000 12,704,000
STOCKHOLDER'S EQUITY:
Common stock - 400,000,000 shares
authorized at $0.001 par value
113,331,257 and 112,052,012 shares
issued and outstanding at March 31,
2009 and September 30, 2008,
respectively 113,000 112,000
Additional paid in capital 75,123,000 71,627,000
Other comprehensive income 2,437,000 2,485,000
Accumulated deficit (63,484,000) (54,141,000)
Total stockholders' equity 14,189,000 20,083,000
Total liabilities and stockholders'
equity $25,814,000 $32,787,000
SOURCE Solar EnerTech Corp.