Fiscal 3Q09 Module Shipments Increased 39% Compared to 3Q08 3Q09
Gross Margin Turned Positive 5% Compared to Flat in 3Q08 MOUNTAIN
VIEW, Calif., Aug. 14 /PRNewswire-Asia-FirstCall/ -- Solar EnerTech
Corp. (OTC:SOEN) (BULLETIN BOARD: SOEN) (the "Company") today
announced financial results for the fiscal third quarter ended June
30, 2009. In the 2009 third quarter, total module shipments
increased 39% compared to the third quarter of the prior year
period. Revenue decreased 1% to $10.1 million compared to $10.3
million in the third quarter of the prior year period. Revenue for
the third quarter was comprised of approximately $6.6 million in
solar modules sales, of which more than 95% were sold to Europe and
Australia and $3.5 million in solar cell sales. Third quarter 2009
gross profit increased to $486,000 compared to $37,000 in the third
quarter in the prior year period as well as increased sequentially
from a gross loss of $1.3 million for the 2009 second quarter.
Third quarter 2009 gross margin was 5% of total sales compared to
0% of total sales in the prior year period. The improvement in
gross margin was a result of recent cost restructuring and
management focus on procurement. Total operating expense for the
fiscal 2009 third quarter was $3.1 million, or 30% of total net
sales, which included a $1.5 million non-cash stock compensation
charge related to the retention of the management team and a
$36,000 non-cash charge for loss on debt extinguishment. Excluding
these non-cash items, the operating expense for the quarter was
$1.6 million, or 16% of total net sales. This compares to total
operating expense for the fiscal 2008 third quarter of $3.3
million, or 32% of total net sales. Net loss for the third quarter
of fiscal 2009 was $6.8 million, or ($0.08) per basic and diluted
share, compared to a net loss of $3.5 million, or ($0.03) per basic
and diluted share in the same period in fiscal 2008. In the third
quarter of fiscal 2009, the Company recorded a non-cash loss
totaling $3.4 million associated with a change in the fair market
value of compound embedded derivative liability and a change in the
fair market value of warrant liability compared to a total non-cash
gain of $0.1 million for these two same items in the third quarter
of fiscal 2008. Excluding non-cash items, on a non-GAAP basis, the
third quarter 2009 net loss was $3.4 million compared to a net loss
of $3.6 million in 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, "Our recently completed third quarter
marks a turning point for Solar EnerTech. We are seeing steady
demand for our products in the regions in which we operate as
evidenced by the 39% module shipment increase compared to the prior
year period. We were also quite pleased to see a monthly
improvement to our gross margin that turned positive in the third
quarter. Further, our overall performance would have improved even
more had we not endured a $3.4 million non-cash accounting charge.
We believe the third quarter marks an inflection point in our
business with improved operational and financial results from
steady customer orders, improved sourcing, a reduction in
non-essential expenditures, and leaner production schedule, all of
which improves our competitive position as order demand for solar
modules accelerates. We expect to see continued module volume and
gross margin improvement for the remainder of our calendar year.
"While we have experienced volatile market conditions for the last
several months, our focus on product quality coupled with our
efforts in sales and support services has provided satisfaction
among our major customers in Europe and Australia. To meet the
increasing demand for higher output modules from existing and new
customers, our R&D and technical teams are acutely focused on
producing higher-efficiency cells to generate increased product
demand. "Although we are encouraged with our improved results, we
still have a lot of room for improvement. For the remainder of the
calendar year, our focus will be on improving our productivity,
maximizing our financial performance and profitability, and
enhancing the conversion rate of our solar cells. Additionally, we
continue to support our new Joint Venture company, Shunda-SolarE
Technologies, Inc., in the U.S. with its efforts to develop a
strong base of customers and build up its local supply chain and
support team. We believe the quality of our products and the strong
customized support that we provide to our customers differentiates
Solar EnerTech from many of the other key players in the worldwide
PV industry. We look forward to further increasing the awareness of
our solar products and expanding our presence in the market."
Financial Position As of June 30, 2009, the Company had $3.3
million in cash, $6.4 million of accounts receivables, $0.9 million
of prepayment primarily for purchase of raw materials and $4.6
million of inventories on hand. Additionally, as of June 30, 2009,
the Company had $10.4 million of accounts payable, customer advance
payment and accrued liabilities, $5.6 million of accrued liability
due to related party, $0.6 million of derivative liabilities, $4.8
million of warrant liabilities and $11.6 million in principal of
convertible notes due March 2010 outstanding, which are recorded at
carrying value at $1.4 million. About Solar EnerTech Corp. Solar
EnerTech is a photovoltaic solar energy cell manufacturing
enterprise incorporated in the United States with its corporate
office in Mountain View, 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. Solar EnerTech Corp Unaudited
Consolidated Statements of Operations Three Months Ended June 30,
Nine Months Ended June 30, 2009 2008 2009 2008 Net sales
$10,143,000 $10,272,000 $19,639,000 $18,582,000 Cost of sales
(9,657,000) (10,235,000) (22,791,000) (19,680,000) Gross profit
(loss) 486,000 37,000 (3,152,000) (1,098,000) Operating expenses:
Selling, general and administrative 2,577,000 1,606,000 8,224,000
8,185,000 Research and development 463,000 198,000 1,234,000
483,000 Loss on debt extinguishment 36,000 1,529,000 527,000
3,996,000 Total operating expenses 3,076,000 3,333,000 9,985,000
12,664,000 Operating loss (2,590,000) (3,296,000) (13,137,000)
(13,762,000) Other income (expense): Interest income 3,000 24,000
13,000 80,000 Interest expense (1,015,000) (238,000) (1,938,000)
(814,000) Gain (loss) on change in fair market value of compound
embedded derivative (238,000) (22,000) 350,000 12,267,000 Gain
(loss) on change in fair market value of warrant liability
(3,158,000) 107,000 (1,415,000) 11,030,000 Other income (expense)
217,000 (107,000) 3,000 (435,000) Net income (loss) $(6,781,000)
$(3,532,000) $(16,124,000) $8,366,000 Net income (loss) per share -
basic $(0.08) $(0.03) $(0.18) $0.09 Net income (loss) per share -
diluted $(0.08) $(0.03) $(0.18) $(0.10) Weighted average shares
outstanding - basic 88,256,706 104,528,145 87,669,839 97,518,130
Weighted average shares outstanding - diluted 88,256,706
104,528,145 87,669,839 120,531,481 Solar EnerTech Corp Consolidated
Balance Sheets June 30, September 30, 2009 2008 (Unaudited)
(Audited) ASSETS Current assets: Cash and cash equivalents
$3,323,000 $3,238,000 Accounts receivable, net 6,372,000 1,875,000
Advance payments and other 880,000 3,175,000 Inventories, net
4,609,000 4,886,000 VAT receivable 1,597,000 2,436,000 Other
receivable 290,000 730,000 Total current assets 17,071,000
16,340,000 Property and equipment, net 11,962,000 12,934,000
Investment 1,000,000 1,000,000 Deferred financing costs, net of
accumulated amortization 1,491,000 1,812,000 Deposits 218,000
701,000 Total assets $31,742,000 $32,787,000 LIABILITIES AND
STOCKHOLDER'S EQUITY Current liabilities: Accounts payable
$8,986,000 $1,771,000 Customer advance payment 490,000 96,000
Accrued expenses 890,000 910,000 Accounts payable and accrued
liabilities, related parties 5,604,000 5,450,000 Derivative
liabilities 598,000 980,000 Warrant liabilities 4,827,000 3,412,000
Convertible notes, net of discount 1,417,000 85,000 Total current
liabilities 22,812,000 12,704,000 STOCKHOLDER'S EQUITY: Common
stock - 400,000,000 shares authorized at $0.001 par value
113,506,69 and 112,052,012 shares issued and outstanding at June
30, 2009 and September 30, 2008, respectively 113,000 112,000
Additional paid in capital 76,630,000 71,627,000 Other
comprehensive income 2,452,000 2,485,000 Accumulated deficit
(70,265,000) (54,141,000) Total stockholders' equity 8,930,000
20,083,000 Total liabilities and stockholders' equity $31,742,000
$32,787,000 DATASOURCE: Solar EnerTech Corp. CONTACT: Bill Zima of
ICR Inc. at +1-203-682-8200 (Investor Relations), for Solar
EnerTech Corp.
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