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ReneSola Announces First Quarter 2013 Results

May 16, 2013

Exceeds guidance with record quarterly solar module shipments of 327 MW

JIASHAN, China, May 16, 2013 /PRNewswire/ — ReneSola Ltd (“ReneSola” or the “Company”) (NYSE: SOL), a leading brand and technology provider of solar photovoltaic (“PV”) products, today announced its unaudited financial results for the first quarter ended March 31, 2013.

(Logo: http://photos.prnewswire.com/prnh/20080506/CNTU030 )

First Quarter 2013 Financial and Operating Highlights

  • Total solar wafer and module shipments in Q1 2013 were 662.1 megawatts (“MW”), in line with the Company’s guidance and representing a decrease of 7.2% from 713.2 MW in Q4 2012.
  • Q1 2013 net revenues were US$284.2 million, exceeding Company guidance and representing a decrease of 7.3% from US$306.5 million in Q4 2012.
  • Q1 2013 gross loss was US$5.6 million with a gross margin of negative 2.0%, compared to a gross profit of US$10.3 million with a gross margin of 3.3% in Q4 2012.
  • Q1 2013 operating loss was US$33.4 million with an operating margin of negative 11.8%, compared to an operating loss of US$23.8 million with an operating margin of negative 7.8% in Q4 2012.
  • Q1 2013 net loss was US$39.0 million, representing basic and diluted loss per share of US$0.23 and basic and diluted loss per American depositary share (“ADS”) of US$0.45.
  • Cash and cash equivalents plus restricted cash were $442.7 million as of the end of Q1 2013, an increase from US$268.1 million as of the end of Q4 2012.
  • Q1 2013 net cash inflow from operating activities was US$4.2 million, compared to net cash inflow of US$25.8 million in Q4 2012.

“Over the past year, we have worked hard to transform our company into a leading global solar brand and technology leader,” said Mr. Xianshou Li, ReneSola’s chief executive officer. “With vigorous sales and marketing efforts, we have expanded our module business in several key markets, including the United Kingdom, Germany, France, the United States, Australia, India and Japan. Additionally, we continue to push our R&D with downstream products like our AC module and small-scale storage system, and we plan to offer residential PV solutions soon. Although we are seeing the solar market stabilize, a persistent demand-supply imbalance, coupled with competitive pricing, continues to impact our business and the overall industry. Despite this challenging macro environment, we will continue to invest in technologies that help reduce cost and improve efficiency in order to grow our business and gain new global market share.”

First Quarter 2013 Results

Solar Wafer and Module Shipments

                          1Q13       4Q12       1Q12       Q-o-Q%  Y-o-Y%
                          ----       ----       ----        -----    -----

    Total Solar Wafer and
     Module                    662.1      713.2      466.0  (7.2%)    42.1%
    Shipments (MW)
    -------------

    Wafer Shipments (MW)       335.5      392.7      375.1 (14.6%)  (10.6%)
    -------------------        -----      -----      ----- ------   ------

    Module Shipments (MW)      326.6      320.5       90.9    1.9%   259.3%
    --------------------       -----      -----       ----    ---    -----

The sequential decrease in solar product shipments was mainly the result of a decrease in sales of the Company’s wafer business due to additional wafers being used to produce ReneSola-branded modules, partially offset by increased demand for the Company’s solar modules across a number of geographic regions and the increasing competitiveness of solar power as a viable power source.

Net Revenues

                          1Q13        4Q12        1Q12        Q-o-Q%  Y-o-Y%
                          ----        ----        ----         -----    -----

    Net Revenues (US$mln)      $284.2      $306.5      $211.5  (7.3%)    34.4%
    --------------------       ------      ------      ------  -----     ----

Revenues in Q1 2013 decreased quarter over quarter due to a decrease in the average selling prices (“ASPs”) of solar wafers and modules from US$0.24 per watt (“W”) and US$0.63/W, respectively, to US$0.22/W and US$0.61/W, respectively, as well the decrease in wafer shipments.

Gross Profit (Loss)

                        1Q13        4Q12        1Q12         Q-o-Q%  Y-o-Y%
                        ----        ----        ----          -----    -----

    Gross Profit (Loss)
     (US$mln)                ($5.6)      $10.3       ($8.0) (154.4%)       -
    -------------------      -----       -----       -----  -------      ---

    Gross Margin             (2.0%)        3.3%      (3.8%)       -        -
    ------------             -----         ---       -----      ---      ---

The decrease in gross profit was due to the significant decline in ASPs and the decrease in wafer shipments, as well as the temporary halt in production at the Company’s Sichuan polysilicon plant to upgrade its facilities and equipment.

Operating Loss

                   1Q13         4Q12         1Q12          Q-o-Q%  Y-o-Y%
                   ----         ----         ----           -----    -----

    Operating
     Expenses
     (US$mln)            $27.8        $34.0         $29.8  (18.2%)   (6.7%)
    ---------            -----        -----         -----  ------    -----

    Operating Loss
     (US$mln)           ($33.4)      ($23.8)       ($37.8) (40.3%)       -
    --------------      ------       ------        ------  ------      ---

    Operating
     Margin             (11.8%)       (7.8%)      (17.9 %)      -        -
    ---------           ------        -----       -------     ---      ---

The decrease in operating expenses was primarily due to a reduction in the Company’s research and development (“R&D”) expenses in Q1 2013.

Foreign Exchange Gain (Loss)

The Company had a foreign exchange loss of US$3.0 million in Q1 2013, primarily due to the depreciation of the euro against the renminbi (“RMB”), compared to a gain of US$3.1 million in Q4 2012. The Company also recognized a US$3.9 million gain on foreign currency derivatives, compared to a gain of US$0.9 million in Q4 2012.

Net Loss Attributable to Holders of Ordinary Shares

                           1Q13         4Q12         1Q12
                           ----         ----         ----

    Net Loss (US$mln)           ($39.0)      ($88.9)      ($40.2)
    ----------------            ------       ------       ------

    Diluted Loss per Share      ($0.23)      ($0.51)      ($0.23)
    ----------------------      ------       ------       ------

    Diluted Loss per ADS        ($0.45)      ($1.03)      ($0.47)
    --------------------        ------       ------       ------

Business Highlights

Research and Development

ReneSola continued to invest in R&D in Q1 2013 to improve the technology behind its brand, products and manufacturing processes. With regard to solar wafers, the Company’s next generation Virtus A+++ wafer, with an average efficiency of 0.15% to 0.20% higher than that of Virtus A++, will begin mass production in Q2 2013.

With regard to solar modules, the Company’s 210 W monocrystalline and 260 W multicrystalline modules are now in full production. The Company’s full line of solar module products has achieved potential induced degradation (“PID”) free status, further substantiating their reliability. Recently, the Company’s solar modules have been accredited by TUV NORD, a leading German industry-certification body, demonstrating that ReneSola products can withstand difficult desert-like and dusty conditions.

ReneSola is developing a proprietary, second-generation Micro Replus microinverter, which will reduce the cost to customers by 20% compared to the first generation model. ReneSola is also developing an AC module that combines a solar module with Micro Replus. At the same time, a specialized, small-scale storage research team has been established to develop a series of systems that would largely increase the efficiency of ReneSola’s products.

Recent Business Developments

  • In May 2013, ReneSola announced it had provided solar modules to solar tracker manufacturer and project developer AllEarth Renewables, Inc. for use in three community-scale solar power projects in Vermont.
  • In April 2013, ReneSola announced its 125-square monocrystalline module had been listed by the Japan Photovoltaic Expansion Center (“JPEC”) as qualified for the Japan market.
  • In April 2013, ReneSola announced that following its participation at the World Future Energy Summit (“WFES”) in Abu Dhabi earlier in the year, a range of its PV modules had been accredited by TUV NORD.
  • In April 2013, ReneSola announced it had agreed to provide Enerparc AG, an internationally oriented and dynamically growing provider of solar power plant installation and operation services, with 43.6 MW of solar modules, 35 MW of which will be delivered through original equipment manufacturers in Poland and India.
  • In April 2013, ReneSola announced it had signed a sales contract to supply 2 MW of its highest-efficiency polysilicon module, 260 W Virtus II, to a mega solar project in Uenohara-shi, Yamanashi Prefecture, Japan.
  • In April 2013, ReneSola announced it had been contracted to provide 7,200 of its 250 W high-efficiency polycrystalline solar PV modules for a solar project to be built by S&C Electric Company, a Chicago-based provider of equipment and services for electric power systems, in Roswell, New Mexico in 2013.
  • In April 2013, ReneSola announced it had agreed to provide more than 108,000 of its 300 W high-efficiency Virtus II 72-cell polycrystalline solar modules to Strata Solar, LLC, one of the top solar developers and EPCs in the United States, for use in five 6.5 MW solar farms in North Carolina.
  • In March 2013, ReneSola announced it had signed a RMB320 million (approximately US$50.9 million) 15-year loan agreement with China Development Bank.
  • In March 2013, ReneSola announced it had been contracted to provide 460 kilowatts (“kW”) of its high-efficiency solar modules to Cummings Properties, one of the most prominent full-service commercial real estate development and property management organizations in Massachusetts.

Liquidity and Capital Resources

Net cash inflow from operating activities was US$4.2 million in Q1 2013, compared to net cash inflow from operating activities of US$25.8 million in Q4 2012. Net cash and cash equivalents plus restricted cash improved to US$442.7 million at the end of Q1 2013, compared to US$268.1 million at the end of Q4 2012.

Total debt was US$958.6 million at the end of Q1 2013, compared to US$790.2 million at the end of Q4 2012, excluding US$111.6 million of convertible notes due March 15, 2018, unless repurchased or converted at an earlier date. Short-term borrowings were US$832.8 million in Q1 2013, compared to US$733.6 million in Q4 2012.

Capital expenditures were US$5.7 million in Q1 2013, primarily to expand the Company’s polysilicon production capacity and integrate Phase II of its Sichuan polysilicon production plant.

Outlook

For Q2 2013, the Company expects total solar wafer and module shipments to be in the range of 700 MW to 720 MW, with solar module shipments expected to be in the range of 400 MW to 420 MW. Revenues are expected to be in the range of US$310 million to US$330 million and gross margin is expected to be in the range of 3% to 5%. Operating cash flow is expected to exceed US$40 million.

For the full year 2013, the Company expects total solar wafer and module shipments to be in the range of 2.7 GW to 2.9 GW, with solar module shipments expected to be in the range of 1.4 GW to 1.6 GW.

Conference Call Information

ReneSola’s management will host an earnings conference call on Thursday, May 16, 2013 at 8 am U.S. Eastern Time (8 pm Beijing/Hong Kong time).

Dial-in details for the earnings conference call are as follows:

    U.S. / International:             +1-718-354-1231

    Hong Kong:                        +852-2475-0994

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is “ReneSola Call”.

A replay of the conference call may be accessed by phone at the following number until May 23, 2013:

    International:                    +1-646-254-3697

    Passcode:                                           51826642

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of ReneSola’s website at www.renesola.com.

About ReneSola

Founded in 2005, ReneSola (NYSE:SOL) is a leading brand and technology provider of solar PV products. Leveraging its proprietary technologies, economies of scale and technical expertise, ReneSola uses in-house virgin polysilicon and a vertically integrated business model to provide customers with high-quality, cost-competitive products. ReneSola solar modules have scored top PVUSA Test Conditions (PTC) ratings with high annual kilowatt-hour output, according to the California Energy Commission (CEC). ReneSola solar PV modules can be found in projects ranging in size from a few kilowatts to multi-megawatts in markets around the world, including the United States, Germany, Italy, Belgium, China, Greece, Spain and Australia. For more information, please visit www.renesola.com.

Safe Harbor Statement

This press release contains statements that constitute ”forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when the Company describes what it “believes,” “expects” or “anticipates” will occur, what “will” or “could” happen, and other similar statements), you must remember that the Company’s expectations may not be correct, even though it believes that they are reasonable. The Company does not guarantee that the forward-looking statements will happen as described or that they will happen at all. Further information regarding risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements is included in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s annual report on Form 20-F. The Company undertakes no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though the Company’s situation may change in the future.

For investor and media inquiries, please contact:

In China:

Mr. Tony Hung
ReneSola Ltd
Tel: +86-573-8473-9011
Email: ir@renesola.com

Mr. Derek Mitchell
Ogilvy Financial, Beijing
Tel: +86-10-8520-3073
Email: sol@ogilvy.com

In the United States:

Ms. Jessica Barist Cohen
Ogilvy Financial, New York
Tel: +1-646-460-9989
Email: sol@ogilvy.com

                                                                              RENESOLA LTD

                                                                  Unaudited Consolidated Balance Sheet

                                                                        (US dollars in thousands)

                                                                                                       Mar 31,            Dec 31,            Mar 31,

                                                                                                                    2013               2012              2012
                                                                                                                    ----               ----              ----

     ASSETS

     Current assets:

     Cash and cash equivalents                                                                                   142,983             93,283           338,899

     Restricted cash                                                                                             299,681            174,828            49,392

     Accounts receivable, net of allowances for doubtful accounts                                                263,737            216,835           170,817

     Inventories                                                                                                 292,767            254,880           176,410

     Advances to suppliers-current                                                                                10,355             23,614            25,449

     Amounts due from related parties                                                                              9,133             10,804            22,807

     Value added tax recoverable                                                                                  35,271             34,962            55,369

     Income tax recoverable                                                                                        3,011              2,753             8,308

     Prepaid expenses and other current assets                                                                    27,748             32,799            26,408

     Project assets                                                                                               30,572             25,802                 -

     Deferred convertible bond issue costs-current                                                                   784                784               784

     Derivative assets                                                                                             3,417                660               826

     Assets held-for-sale                                                                                              -                  -             6,449

     Deferred tax assets-current                                                                                   2,856              1,773            15,770
                                                                                                                   -----              -----            ------

     Total current assets                                                                                      1,122,315            873,777           897,688

     Property, plant and equipment, net                                                                        1,123,584          1,102,562           985,977

     Prepaid land use right                                                                                       47,250             49,937            49,120

     Deferred tax assets-non-current                                                                              17,325             13,530            28,805

     Deferred convertible bond issue costs-non-current                                                             1,530              1,726             2,314

     Advances to suppliers-non-current                                                                             5,928              5,928            15,604

     Advances for purchases of property, plant and equipment                                                       6,985              8,317            51,123

     Other long-term assets                                                                                        2,365              2,546            10,942

     Goodwill                                                                                                          -                  -             6,095

     Total assets                                                                                              2,327,282          2,058,323         2,047,668
                                                                                                               =========          =========         =========

     LIABILITIES AND SHAREHOLDERS' EQUITY

     Current liabilities:

     Short-term borrowings                                                                                       832,766            733,618           662,605

     Accounts payable                                                                                            569,391            483,025           283,067

     Advances from customers-current                                                                              70,067             40,384            55,603

     Amounts due to related parties                                                                               24,886             18,826            26,147

     Other current liabilities                                                                                   199,620            162,849            99,876

     Income tax payable                                                                                            2,680              2,552             4,111

     Derivative liabilities                                                                                          131                975               150
                                                                                                                     ---                ---               ---

     Total current liabilities                                                                                 1,699,541          1,442,229         1,131,559

     Convertible bond payable-non-current                                                                        111,616            111,616           111,616

     Long-term borrowings                                                                                        125,883             56,580           138,198

     Advances from customers-non-current                                                                           6,168             32,271            49,039

     Warranty                                                                                                     12,317             10,317            13,816

     Deferred gain                                                                                                36,527             29,894            29,527

     Other long-term liabilities                                                                                   8,042             11,014            12,339

     Total liabilities                                                                                         2,000,094          1,693,921         1,486,094
                                                                                                               ---------          ---------         ---------

     Shareholders' equity

       Common shares                                                                                             421,461            421,461           420,370

       Additional paid-in capital                                                                                  5,525              5,250             5,106

       Retained earnings/(Accumulated losses)                                                                   (176,660)          (137,656)           64,650

       Accumulated other comprehensive income                                                                     76,376             74,835            71,176
                                                                                                                  ------             ------            ------

     Total equity attribute to ReneSola Ltd                                                                      326,702            363,890           561,302

     Non-controlling interest                                                                                        486                512               272

     Total shareholders' equity                                                                                  327,188            364,402           561,574
                                                                                                                 -------            -------           -------

     Total liabilities and shareholders' equity                                                                2,327,282          2,058,323         2,047,668
                                                                                                               =========          =========         =========

                                                                                              RENESOLA LTD

                                                                               Unaudited Consolidated Statements of Income

                                                                           (US dollar in thousands, except ADS and share data)

                                                                                                                    Three Months Ended
                                                                                                                    ------------------

                                                                                                     Mar 31, 2013                        Dec 31, 2012              Mar 31, 2012

    Net revenues                                                                                                                284,165                   306,454                   211,485

    Cost of revenues                                                                                                           (289,771)                 (296,193)                 (219,518)

    Gross profit (loss)                                                                                                          (5,606)                   10,261                    (8,033)
                                                                                                                                 ------                    ------                    ------

    GP%                                                                                                                          (2.0%)                      3.3%                    (3.8%)

    Operating (expenses) income:

    Sales and marketing                                                                                                         (12,223)                  (11,097)                   (5,639)

    General and administrative                                                                                                  (15,136)                  (12,074)                  (12,562)

    Research and development                                                                                                     (5,982)                  (10,612)                  (11,713)

    Other operating  income, net                                                                                                  5,522                     3,894                       143

    Goodwill impairment                                                                                                               -                      (378)                        -

    Intangible asset impairment                                                                                                       -                    (3,764)                        -

    Total operating expenses                                                                                                    (27,819)                  (34,031)                  (29,771)
                                                                                                                                -------                   -------                   -------

    Loss from operations                                                                                                        (33,425)                  (23,770)                  (37,804)
                                                                                                                                -------                   -------                   -------

    Non-operating (expenses) income:

    Interest income                                                                                                               1,548                     1,380                     2,806

    Interest expense                                                                                                            (13,118)                  (12,950)                  (12,308)

    Foreign exchange gain (loss)                                                                                                 (3,011)                    3,054                       801

    Gain on derivatives, net                                                                                                      3,865                       881                        36

    Total non-operating expenses                                                                                                (10,716)                   (7,635)                   (8,665)
                                                                                                                                -------                    ------                    ------

    Loss before income tax, non-controlling interests                                                                           (44,141)                  (31,405)                  (46,469)
                                                                                                                                -------                   -------                   -------

    Income tax benefit (expense)                                                                                                  5,131                   (57,508)                    6,249
                                                                                                                                  -----                   -------                     -----

    Net loss                                                                                                                    (39,010)                  (88,913)                  (40,220)
                                                                                                                                -------                   -------                   -------

    Less: Net loss attributed to non-controlling interests                                                                           (6)                       (2)                      (11)
                                                                                                                                    ---                       ---                       ---

    Net loss attributed to holders of ordinary shares                                                                           (39,004)                  (88,911)                  (40,209)
                                                                                                                                =======                   =======                   =======

    Earnings per share

      Basic                                                                                                                       (0.23)                    (0.51)                    (0.23)

      Diluted                                                                                                                     (0.23)                    (0.51)                    (0.23)

    Earnings per ADS

      Basic                                                                                                                       (0.45)                    (1.03)                    (0.47)

      Diluted                                                                                                                     (0.45)                    (1.03)                    (0.47)

    Weighted average number of shares used in computing earnings per share

      Basic                                                                                                                 172,773,664               172,773,664               172,613,664

      Diluted                                                                                                               172,773,664               172,773,664               172,613,664

                                                                                                                  Three Months ended
                                                                                                                  ------------------

                                                                                                     Mar 31, 2013                        Dec 31, 2012              Mar 31, 2012

    Net loss                                                                                                                    (39,010)                  (88,913)                  (40,220)

    Other comprehensive income

    Foreign exchange translation adjustment                                                                                       1,541                     4,129                      (470)

    Other comprehensive income                                                                                                    1,541                     4,129                      (470)
                                                                                                                                  -----                     -----                      ----

    Comprehensive loss                                                                                                          (37,469)                  (84,784)                  (40,690)

    Less: comprehensive loss attributable to non-controlling                                                                         (6)                       (2)                      (11)
    interest

    Comprehensive loss attributable to ReneSola                                                                                 (37,463)                  (84,782)                  (40,679)
                                                                                                                                =======                   =======                   =======

                                                                                                  RENESOLA LTD

                                                                                 Unaudited Consolidated Statements of Cash Flow

                                                                                            (US dollar in thousands)

                                                                                                                                Three Months Ended
                                                                                                                                ------------------

                                                                                                                                   Mar 31, 2013            Mar 31, 2012

    Cash flow from operating activities:

    Net loss                                                                                                                                      (39,010)               (40,220)

    Adjustment to reconcile net loss to net cash (used in) provided by operating
    activity:

      Gain on disposal of subsidiary                                                                                                                    -                    (55)

      Inventory write-down                                                                                                                            402                 12,201

      Depreciation and amortization                                                                                                                24,882                 22,897

      Amortization of deferred convertible bond issuances costs and premium                                                                           196                    196

      Allowance of doubtful receivables and advance to suppliers                                                                                    2,613                     90

      Gains on derivatives                                                                                                                         (3,865)                   (36)

      Share-based compensation                                                                                                                        275                    995

      Loss on disposal of long-lived assets                                                                                                            31                    115

      Gain on disposal of land use right                                                                                                           (4,694)                     -

    Changes in assets and liabilities:

      Accounts receivables                                                                                                                        (56,437)               (63,987)

      Inventories                                                                                                                                 (38,422)               (34,740)

      Advances to suppliers                                                                                                                        13,307                 (7,255)

      Amounts due from related parties                                                                                                              7,679                  4,626

      Value added tax recoverable                                                                                                                    (202)               (13,512)

      Prepaid expenses and other current assets                                                                                                     7,165                 (6,274)

      Prepaid land use rights                                                                                                                       7,531                   (127)

      Accounts payable                                                                                                                             84,838                 47,311

      Advances from customers                                                                                                                       3,882                 (1,613)

      Income tax payable                                                                                                                           (7,713)                  (356)

      Other current liabilities                                                                                                                     8,164                 (2,369)

      Other long-term liabilities                                                                                                                  (3,248)                  (241)

      Accrued warranty cost                                                                                                                         1,964                    986

      Deferred taxes assets                                                                                                                         2,502                 (6,249)

      Project assets                                                                                                                               (5,681)                     -

      Provision for litigation                                                                                                                     (1,941)                     -

    Net cash provided by (used in) operating activities                                                                                             4,218                (87,617)

    Cash flow from investing activities:

      Purchases of property, plant and equipment                                                                                                   (5,730)               (45,020)

      Cash received from government subsidy                                                                                                         6,741                    634

      Proceeds from disposal of property, plant and equipment                                                                                           -                     22

      Changes in restricted cash                                                                                                                 (124,070)                 8,895

      Net proceeds from settlement of derivatives                                                                                                     265                    115

      Prepayment for investment                                                                                                                         -                 (1,912)

    Net cash used in investing activities                                                                                                        (122,794)               (37,266)

    Cash flow from financing activities:

      Proceeds from bank borrowings                                                                                                               488,567                278,764

      Repayment of bank borrowings                                                                                                               (320,325)              (193,253)

      Contribution from non-controlling interests                                                                                                     (21)                   127

    Net cash provided by financing activities                                                                                                     168,221                 85,638

    Effect of exchange rate changes                                                                                                                    55                   (895)

    Net increase (decrease) in cash and cash equivalent                                                                                            49,700                (40,140)

    Cash and cash equivalent, beginning of year                                                                                                    93,283                379,039

    Cash and cash equivalent, end of year                                                                                                         142,983                338,899

SOURCE ReneSola Ltd.


Source: PR Newswire