Canadian Solar Reports Fourth Quarter and Full Year 2013 Results



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[STK] NASDAQ-NMS:CSIQ

[IN] OIL UTI ENV ALT GRE

[SU] CCA ERN ERP

TO BUSINESS, ENERGY, AND ENVIRONMENTAL EDITORS:

Canadian Solar Reports Fourth Quarter and Full Year 2013 Results

GUELPH, Ontario, March 5, 2014 /PRNewswire-FirstCall/ -- 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 fourth quarter and full year ended December

31, 2013.

Fourth Quarter 2013 Highlights

-- Solar module shipments were 621 MW, compared to 478 MW in the third

quarter of 2013.

-- Net revenue was $519.5 million, compared to $490.9 million in the

third quarter of 2013.

-- Net revenue from the total solutions business was 23.4% of total

net revenue, compared to 41.1% in the third quarter of 2013.

-- Gross margin was 19.5%, compared to 20.4% in the third quarter of

2013.

-- Diluted earnings per share was $0.39, compared to diluted earnings

per share of $0.56 in the third quarter of 2013.

-- Cash, cash equivalents and restricted cash balances at the end of

the quarter totaled $679.4 million, compared to $681.7 million at the

end of the third quarter of 2013.

-- Cash flow from operations was approximately $73.2 million, compared

to $152.0 million in the third quarter of 2013.

-- Closed the sale of one solar power plant in Ontario, Canada valued

at over C$61 million to TransCanada Corporation (TSX, NYSE: TRP)

("TransCanada").

-- Increased the total late-stage solar project pipeline to

approximately 1.3 GW, with geographic diversification in Canada,

Japan, the U.S. and China.

Full Year 2013 Highlights

-- Solar module shipments were 1,894 MW, compared to 1,543 MW in 2012.

-- Net revenue was $1,654.4 million, compared to $1,294.8 million in

2012.

-- Net revenue from the total solutions business was 28.6% of total

net revenue, compared to 11.5% in 2012.

-- Diluted earnings per share was $0.63, compared to diluted loss per

share of $4.53 in 2012.

-- Cash flow from operations was approximately $229.5 million,

compared to negative $147.8 million in 2012.

Fourth Quarter 2013 Results

Net revenue for the fourth quarter of 2013 was $519.5 million, up 5.8%

from $490.9 million in the third quarter of 2013 and up 76.2% from

$294.8 million in the fourth quarter of 2012. Total solar module

shipments in the fourth quarter of 2013 were 621 MW, compared to 478

MW in the third quarter of 2013 and 404 MW in the fourth quarter of

2012. Solar module shipments to the Chinese market represented 42.9%

of total shipments in the fourth quarter of 2013, compared to less

than 1% in the third quarter of 2013, and 9.9% in the fourth quarter

of 2012. Solar module shipments to the Japanese market represented

19.7% of total shipments in the fourth quarter of 2013, compared to

29.5% in the third quarter of 2013 and 11.7% in the fourth quarter of

2012. Solar module shipments in the fourth quarter of 2013 included 41

MW used in the Company's total solutions business, compared to 60 MW

in the third quarter of 2013 and 16 MW in the fourth quarter of 2012.

By geography, in the fourth quarter of 2013, sales to the European

markets represented 5.5% of net revenue, sales to the Americas

represented 32.1% of net revenue, and sales to Asia and all other

markets represented 62.4% of net revenue, compared to 9.5%, 46.9% and

43.6%, respectively, in the third quarter of 2013 and 40.6%, 20.0% and

39.4%, respectively, in the fourth quarter of 2012.

Q4 2013 Q3 2013 Q4 2012

US$M % US$M % US$M %

Europe 28.7 5.5 46.4 9.5 119.7 40.6

Americas 167.0 32.1 230.3 46.9 58.8 20.0

Asia and others 323.8 62.4 214.2 43.6 116.3 39.4

Total 519.5 100.0 490.9 100.0 294.8 100.0

Gross profit in the fourth quarter of 2013 was $101.3 million,

compared to $100.2 million in the third quarter of 2013 and $14.9

million in the fourth quarter of 2012. The slight sequential increase

in gross profit was primarily due to higher module shipments and a $14

million reduction in warranty cost to reflect the general decline in

module prices, which more than off-set the lower contribution from the

Company's total solutions business in the fourth quarter of 2013. The

year-over-year increase in gross profit was primarily due to the

increase in revenue contribution from the Company's higher margin

total solutions business, as well as higher module shipments and lower

module manufacturing cost, which was partially off-set by a slight

decline in module average selling price. Gross margin in the fourth

quarter of 2013 was 19.5%, compared to 20.4% in the third quarter of

2013 and 5.0% in the fourth quarter of 2012.

Total operating expenses were $56.0 million in the fourth quarter of

2013, up 24.5% from $44.9 million in the third quarter of 2013 and

down 47.4% from $106.4 million in the fourth quarter of 2012.

Selling expenses were $28.5 million in the fourth quarter of 2013, up

33.9% from $21.2 million in the third quarter of 2013 and 14.0% from

$25.0 million in the fourth quarter of 2012. The sequential quarterly

increase in selling expenses was primarily due to higher shipping,

salary and credit insurance expenses. The year-over-year increase in

selling expenses was primarily due to higher salary and bonus as well

as higher shipping, credit insurance and rental expenses, partially

offset by lower marketing expenses.

General and administrative expenses were $24.3 million in the fourth

quarter of 2013, up 17.1% from $20.7 million in the third quarter of

2013 and down 69.0% from $78.3 million in the fourth quarter of

2012. The sequential increase in general and administrative expenses

was primarily due to an asset impairment charge of $3.7 million

related to the write-down of the Company's mono-crystalline ingot

furnaces, as well as increased salary expenses, partially off-set by a

$2.2 million decrease in bad debt expenses. The year-over-year

decrease in general and administrative expenses was primarily due to

provisions for bad debt and for an arbitration decision against the

Company totaled approximately $61.2 million in the fourth quarter of

2012.

Research and development expenses were $3.2 million in the fourth

quarter of 2013, compared to $3.0 million in the third quarter of 2013

and $3.1 million in the fourth quarter of 2012.

Operating margin was 8.7% in the fourth quarter of 2013, compared to

11.3% in the third quarter of 2013 and negative 31.0% in the fourth

quarter of 2012. The sequential decline in operating margin was

primarily due to the higher selling expenses, decline in gross margin

as well as the asset impairment charge in the fourth quarter of

2013. The year-over-year increase in operating margin was primarily

due to higher gross margin and lower operating expenses in the fourth

quarter of 2013 compared to the same period in 2012.

Interest expense in the fourth quarter of 2013 was $9.9 million,

compared to $11.8 million in the third quarter of 2013 and $9.9

million in the fourth quarter of 2012. The sequential decrease in

interest expense was primarily due to lower bank charges in the fourth

quarter of 2013.

Interest income in the fourth quarter of 2013 was $2.8 million,

compared to $2.7 million in the third quarter of 2013 and $3.7 million

in the fourth quarter of 2012.

The Company recorded a gain on change in fair value of derivatives of

$8.9 million in the fourth quarter of 2013, compared to a loss of $1.6

million in the third quarter of 2013 and a gain of $2.3 million in the

fourth quarter of 2012. Net foreign exchange loss in the fourth

quarter of 2013 was $18.5 million compared to a net foreign exchange

gain of $2.3 million in the third quarter of 2013 and a net foreign

exchange loss of $10.8 million in the fourth quarter of 2012.

Income tax expense in the fourth quarter of 2013 was $3.7million,

compared to income tax expense of $12.4 million in the third quarter

of 2013 and income tax benefit of $3.3 million in the fourth quarter

of 2012.

Net income attributable to Canadian Solar in the fourth quarter of

2013 was $20.9 million, or $0.39 per diluted share, compared to net

income of $27.7 million, or $0.56 per diluted share, in the third

quarter of 2013, and net loss of $105.0 million, or $2.43 per diluted

share, in the fourth quarter of 2012.

Management's expectations in respect to profitability in the fourth

quarter and the fiscal year 2013 are subject to the final ruling by

the Suzhou Intermediate Court on a contract dispute between Canadian

Solar and LDK as previously disclosed. If the court was to rule

against Canadian Solar and order the Company to pay the award to LDK,

before the company files its Annual Report on Form 20-F in April of

2014, Canadian Solar may have to make a provision for the fourth

quarter of 2013 and the full year of 2013, which would impact the

Company's profitability.

Financial Condition

As of December 31, 2013, the Company had $679.4 million of cash, cash

equivalents and restricted cash, compared to $681.7million as of

September 30, 2013.

On February 18, 2014, the Company closed a concurrent offering of

3,194,700 common shares and US$150 million in aggregate principal

amount of 4.25% convertible senior notes due 2019 and received

aggregate net proceeds of approximately US$255.7 million after

deducting discounts and commissions but before offering expenses.

Accounts receivable, net of allowance for doubtful accounts, at the

end of the fourth quarter of 2013 were $280.7 million, compared to

$271.8 million at the end of the third quarter of 2013. Accounts

receivable turnover was 59 days in the fourth quarter of 2013,

compared to 62 days in the third quarter of 2013.

Inventories at the end of the fourth quarter of 2013 were $231.2

million, compared to $220.6 million at the end of the third quarter of

2013. Inventory turnover was 53 days in the fourth quarter of 2013,

compared to 55 days in the third quarter of 2013.

Accounts and notes payable at the end of the fourth quarter of 2013

were $639.4 million, compared to $589.7 million at the end of the

third quarter of 2013.

Short-term borrowings at the end of the fourth quarter of 2013 were

$778.5 million, compared to $801.6 million at the end of the third

quarter of 2013. Long-term debt at the end of the fourth quarter of

2013 was $151.4 million, compared to $190.5 million at the end of the

third quarter of 2013. Short-term borrowings and long-term debt

directly related to utility-scale solar power projects totaled $201.9

million at the end of fourth quarter of 2013.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,

remarked: "We are very pleased to have achieved our goal to return the

Company to profitability in 2013, underscoring the successful

execution of our strategy of expanding our higher margin total

solutions business, and seeking profitable growth in our module

business, rather than simply competing on MW volume and price. We

continue to capitalize on our high-visibility contracted late-stage

solar project pipeline, which increased to 1.3 GW DC, even after

completing construction of over 200 MW in 2013. Reflecting our

geographic diversity, our late-stage solar project pipeline, including

those projects currently in construction comprises approximately 477

MW DC in Canada, 329 MW DC in Japan, 164 MW DC in the U.S. and 290 MW

DC in China. We also have confidence in the ongoing development of our

early to mid-state project pipeline, which now exceeds 3.2 GW DC, and

we hope many of these opportunities will be converted into real

projects in the next 2-3 years. Finally, while our growth in 2013 was

led by our total solutions business, we had a positive contribution

from our solar module business due to global capacity rationalization,

stable average selling prices and robust demand across many key

geographies."

Michael G. Potter, Senior Vice President and Chief Financial Officer

of Canadian Solar, commented: "We achieved a 19.5% gross margin in the

fourth quarter of 2013, exceeding our previously upwardly revised

guidance of 16% to 18%, with total solar module shipments of 621

MW. We remain focused on driving profitable growth, while prudently

investing in support of our solar project pipeline growth. We exited

the fourth quarter of 2013 with one of the industry's strongest and

most flexible balance sheets. We have taken advantage of the favorable

financing environment to raise funds and lay the foundation for future

sustained, long-term profitable growth. Our strong cash position helps

us to fund the development of our existing project pipeline and to

take advantage of numerous other actionable project opportunities."

Utility Scale Project Pipeline Update

At the end of January of 2014, the Company had a pipeline of late

stage utility-scale solar projects totaling approximately 1.3 GW

DC. These projects include owned and joint-venture projects as well as

projects where we provide engineering, procurement and construction

(EPC) services.

In Canada, during the fourth quarter of 2013, the Company closed the

sale of the Mississippi Mills project in Ontario, Canada to

TransCanada for over C$61.0 million. In addition, one project, William

Rutley is in commercial operation pending completion of the sale to an

investor. The Company's late stage solar project pipeline in Ontario,

Canada, including those in construction now stands at, approximately

477 MW DC, including owned projects and EPC service contracts, which

combined represent a revenue opportunity of over C$1.7 billion once

the projects are built and connected to the grid.

The following table summarizes the status of the Company's Ontario,

Canada solar projects:

Canada Owned Projects MW DC Status Expected COD1 End Buyer

Liskeard 1, 3 and 4 39.6 In Construction 2014 Q2 TransCanada

William Rutley 13.9 Commercial Operation 2012 Q4 TransCanada

Alfred 13.6 Permitting 2015 Q2 TransCanada

Foto Light LP 14.0 Engineering 2014 Q4 TBD

Illumination LP 14.0 Engineering 2014 Q4 DIF

Little Creek 11.9 In Construction 2014 Q1 BluEarth

Gold Light LP 14.0 Engineering 2014 Q4 DIF

Beam Light LP 14.0 Engineering 2014 Q4 DIF

Earth Light LP 14.0 Permitting 2015 Q1 Concord

Lunar Light LP 14.0 Permitting 2015 Q2 BluEarth

Discovery Light LP 11.6 Engineering 2014 Q4 TBD

Sparkle Light LP 14.0 In Construction 2014 Q3 BluEarth

GlenArm LP 14.0 Engineering 2014 Q4 DIF

Good Light LP 14.0 In Construction 2014 Q2 BluEarth

Aria LP 12.6 Permitting 2015 Q1 Concord

Ray Light LP 14.0 In Construction 2014 Q3 Concord

Mighty Solar LP 14.0 In Construction 2014 Q2 Concord

City Lights LP 14.0 Permitting 2014 Q4 TBD

Highlight (Val Caron) 14.0 In Construction 2014 Q2 Concord

Oro-Medonte 4 11.5 Engineering 2014 Q4 BlackRock

Taylor Kidd 14.0 In Construction 2014 Q2 BlackRock

Demorestville 14.0 In Construction 2014 Q1 BlackRock

Westbrook 14.0 In Construction 2014 Q2 BlackRock

Canada EPC Projects MW DC Status COD End Buyer

Penn Energy 39.0 In Construction 2014 Q2/3 Penn Energy

Grand Renewable Ph. I (Samsung) 129.8 In Construction 2015 Q1 GRSP

Gross Total: 507.5

Percent of Completion Revenue Recognized in 2013 30.2 Penn Energy, Taylor Kidd, Demorestville, Samsung

Net Total Outstanding 477.3

(1) Commercial Operation Date.

In Japan, at the end of January of 2014, the Company's late stage,

utility-scale solar power project pipeline reached 329 MW DC. The

Company expects to begin construction of its first Japanese solar

power project in the first half of 2014.

The following table summarizes the status of the Company's solar

project pipeline in Japan:

Japan Project Pipeline MW dc FiT (Yen/kWh) COD

Project 1 44.5 40 2016

Project 2 29.7 36 2015

Project 3 25.2 40 2015

Project 4 1.2 40 2014

Project 5 3.4 40 2014

Project 6 25.0 36 2015

Project 7 20.0 36 2015

Project 8 20.0 36 2015

Project 9 40.0 36.0/40.0 2016

Project 10 1.1 40 2014

Project 11 1.6 36 2014

Project 12 0.9 40 2014

Project 13 2.0 36 2014

Project 14 2.0 40 2014

Project 15 2.0 36 2014

Project 16 1.6 40 2014

Project 17 1.7 36 2014

Project 18 2.0 36 2014

Project 19 10.0 36 2015

Project 20 2.0 36 2014

Project 21 3.5 40 2014

Project 22 39.4 36 2015

Project 23 10.0 36 2015

Project 24 7.0 36 2015

Project 25 16.0 36 2015

Project 26 17.0 36 2015

Total 328.8

In the United States, during the fourth quarter of 2013, the Company

completed construction of three solar power plants totaling

approximately 24 MW DC. At the end of the fourth quarter of 2013, the

Company's utility-scale project pipeline totals approximately 164 MW

DC.

The following table represents the status of the Company's United

States solar project pipeline:

U.S. Project Pipeline MW dc State Status COD

TA Acacia LLC 28.4 CA Construction 2014-Q3

Gasna 31P LLC 19.5 CA Design and Permitting 2015-Q2

Indigo Ranch Project LLC 5.6 CA Design and Permitting 2014-Q3

New Bern Farm LLC 6.2 NC Construction 2014-Q2

Mile Farm LLC 6.2 NC Design and Permitting 2014-Q2

Roxboro Farm LLC 6.2 NC Construction 2014-Q1

Vickers Farm LLC 2.5 NC Design and Permitting 2014-Q3

CSI Project Holdco LLC - P4 6.5 NC Construction 2014-Q2

CSI Project Holdco LLC - P1 6.5 NC Construction 2014-Q1

CSI Project Holdco LLC - P3 6.5 NC Construction 2014-Q4

CSI Project Holdco LLC - P2 6.5 NC Design and Permitting 2014-Q3

SE Solarne2.4.7 4 Various Design and Permitting 2014-Q3

SH Solarne2,3,4,6,7 5.5 Various Design and Permitting 2014-Q3

Other Projects 54 Various Design and Permitting 2014-15

Total 2014-15 164.1

In China, the Company built and connected to the grid a 30 MW DC solar

power plant in the western part of China and a 10MW DC project in the

Jiangsu Province. Exiting 2013 the Company has identified a pipeline

of late stage utility -scale projects in China totaling 290 MW, as

follows:

China Project Opportunity 2014 -15

Province (MW dc) Feed In Tariff

Jiangsu 30 MW RMB 1.0/kWh and RMB 0.2/kWh (Prov.)

Shandong 40 MW RMB 1.0/kWh and RMB 0.2/kWh (Prov.)

Hebei 40 MW RMB 0.95

Shanxi 50 MW RMB 0.95

Inner Mongolia 50MW RMB 0.90

Qinghai 50 MW RMB 0.90

Xinjiang 30 MW RMB 0.90 to 0.95/kWh

Total 290 MW

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, global and local financing environment as well as

uncertainty relating to customer final demand and solar project

construction schedule. Management's views and estimates are subject to

change without notice.

For the first quarter of 2014, the Company expects module shipments to

be in the range of approximately 470 MW to 490 MW. Total revenue for

the first quarter of 2014 is expected to be in the range of $415

million to $430 million, with gross margin expected to be between 14%

and 16%.

Management continues to see strong demand for the Company's products

in the first quarter of 2014, as the seasonality in Chinese market was

more than compensated by the increase in demand from Japan and the

U.S. However, longer shipping time to these markets will push some

revenue to the second quarter of 2014. In addition, the production

output from the Company's module factories in China was low during the

Chinese New Year holiday period.

Meanwhile, the Company's revenue and gross margin in the first quarter

of 2014 are expected to be adversely affected by the severe winter

conditions in North America, which delayed construction and

recognition of approximately $100.0 million in revenue from some of

its utility-scale projects in Canada. The Company expects to recognize

this revenue in the second and third quarter of 2014. The expected

gross margin in the first quarter of 2014 is adversely impacted by

approximately 100 basis points (1.0 due to the recently reported

fire incident at the Company's cell plant in Suzhou. The Company

expects to fully recover its losses from its property and business

interruption insurance in later quarters.

For the full year 2014, the Company expects annual module shipments to

be in the range of 2.5 GW to 2.7 GW, including 400 MW to 500 MW of

project recognition. In addition, the Company expects to build and

hold up to 250MW of project assets during 2014. The Company expects

that its net revenue for 2014 will be in the range of approximately

$2.7 billion to $2.9 billion, with approximately 50% of revenue being

derived from its total solutions business.

The Company's Canadian and U.S. project revenue recognition is

expected to be back-end loaded in 2014 due to permitting and

construction schedule as well as US GAAP accounting rules which, for

most Canadian projects, only allow revenue recognition after

commercial operation date (COD) and the transfer of ownership to end

customers. The estimated COD of all of the Company's late-stage

projects is disclosed in this press release to provide

better granularity to investors.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,

remarked: "We are excited about our outlook for 2014, given the size

of our existing project pipeline, the expected growth in the broader

solar market and the industry's continued capacity rationalization. We

expect China, Japan, Canada, the U.S. and India to remain healthy

markets for us through 2014. We are incrementally more positive on

China because of its market size and improved payment terms and

pricing. In addition, we see more opportunities in South Africa, the

Middle East, and South America. Customers and investors want to

partner with us because we are one of the largest and most successful

companies in the solar space, with a strong balance sheet, a proven

track record of execution, and offering integrated total solar

solutions."

Recent Developments

On February 26, 2014, Canadian Solar announced that Natixis, New York

Branch/Norddeutsche Landesbank Girozentrale, New York

Branch/Cooperative Centrale Raiffeisen-Boerenleenbank B.A./"Rabobank

Nederland", New York Branch, will provide the Company with up to C$52

Million, in non-recourse, construction plus term financing. The loan

facility has a maturity term of construction plus 10 years and will be

used to finance the previously announced 10MW (ac) utility-scale solar

power project "Glenarm", which is being acquired by DIF Infra 3 RE

Canada (Ltd).

On February 24, 2014, Canadian Solar announced that it was awarded a

module supply agreement to provide 18 MW of photovoltaic modules to

Hitachi, Ltd. for a solar power project in Japan. The project is owned

by Eurus Energy Holdings Corporation with Hitachi as its EPC

contractor.

On February 24, 2014, Canadian Solar announced that it was selected by

Strata Solar to power five utility scale solar projects totaling 30

MW.

On February 18, 2014, Canadian Solar announced the closing of its

offering of 3,194,700 common shares including 416,700 common shares

pursuant to the full exercise by the underwriters of their

over-allotment option, and the concurrent offering of $150 million in

aggregate principal amount of 4.25% convertible senior notes due 2019

(the "Notes"), including the full exercise by purchasers of their

option to acquire $20.0 million of additional Notes. The Company

received net proceeds of approximately $255.7 million from these

offerings, after deducting discounts and commissions but before

offering expenses.

On February 6, 2014, Canadian Solar announced that its subsidiary,

Canadian Solar Solutions Inc., entered into an agreement with a fund

managed by BlackRock ("BlackRock") pursuant to which, whereby

BlackRock will acquire the Company's Oro-Medonte solar power plant

totaling 10 MW AC at a valuation comparable to other recent project

sales completed by Canadian Solar on a per megawatt basis in the

Ontario market. This transaction follows BlackRock's previous

acquisitions of the Company's Demorestville, Taylor Kidd and Westbrook

solar power plants in Ontario, Canada.

On January 30, 2014, Canadian Solar, announced that it shipped a

record of 508 MW of PV modules under its own Canadian Solar brand to

Japan thus becoming the largest foreign PV module brand in the

Japanese market with an estimated 7% market share in 2013.

On January 29, 2014, Canadian Solar announced that it has been

selected as the sole PV module supplier for a 2.1MW solar power plant

at the Delhi International Airport in India.

On January 27, 2014, Canadian Solar announced that its subsidiary,

Canadian Solar Solutions Inc., entered into an agreement with a fund

managed by BlackRock pursuant to which BlackRock will acquire the

Company's Westbrook 10MW AC utility-scale solar power plant in

Kingston, Ontario at a valuation comparable to other recent project

sales completed by Canadian Solar on a per megawatt basis in the

Ontario market.

On January 27, 2014, Canadian Solar announced it was selected by

BELECTRIC Inc. to power four new solar power projects, totaling 7.8

MW, in San Bernardino County, Southern California.

On January 22, 2014, Canadian Solar announced that its subsidiary,

Canadian Solar Solutions Inc., signed a 10 MWac module supply

agreement with Silvercreek Solar Park Inc. ("Silvercreek"), pursuant

to which the Company will supply Silvercreek with Ontario-made modules

for Silver Creek's first, ground-mounted utility-scale solar power

plant in Ontario, Canada.

On January 21, 2014, Canadian Solar announced that the Company's PV

modules achieved the highest PTC ratings amongst all major poly module

manufacturers.

On January 9, 2014, Canadian Solar announced the successful completion

and grid connection of a 10 MW ground mounted solar power project in

Sihong County of Jiangsu Province in eastern China. This project was

developed by CSI Solar Power (China) Inc., a subsidiary of Canadian

Solar, with Gaochuangte New Energy as the EPC contractor.

On January 7, 2014, Canadian Solar announced it was selected to supply

84,480 solar modules to National Renewable Energy Corporation

(NARENCO) for four utility scale solar projects totaling 25.3 MW in

Wayne and Duplin counties of North Carolina.

On January 6, 2014, Canadian Solar announced the successful completion

and grid connection of a 30 MW ground mounted solar power project in

Tumushuke City, Xinjiang Uyghur Autonomous Region in Western

China. This project was developed by CSI Solar Power (China) Inc., a

subsidiary of Canadian Solar Inc., with Gaochuangte New Energy as the

EPC contractor.

On January 2, 2014, Canadian Solar announced that its wholly owned

subsidiary, Canadian Solar Solutions Inc., completed the sale of

Mississippi Mills, a 10 megawatt AC solar power plant valued at over

C$61.0 million to TransCanada Corporation (TSX, NYSE: TRP)

("TransCanada") on December 31, 2013.

On December 23, 2013, Canadian Solar announced that its subsidiary,

CSI Holdco LLC, sold two utility-scale solar power plants totaling 4.4

MW DC (3 MW AC) to PSEG's subsidiary, PSEG Solar Source. The plants

have a 20-year electricity off-take agreement with PG&E.

On December 16, 2013, Canadian Solar announced that its modules were

selected for the Clovis Unified School District solar installation in

Clovis, California.

On December 12, 2013, Canadian Solar announced that it was awarded a

module supply agreement to provide Zhenfa New Energy Science &

Technology Co., Ltd. with PV modules totaling 100 MW for three solar

power projects located in Gansu Province and one solar project in

Inner Mongolia Autonomous Region of China.

On December 9, 2013, Canadian Solar announced that it signed a $40

million loan agreement with Harvest North Star Capital. The loan

facility will be used to finance the development of several

ground-mounted solar power projects in Japan totaling around 145.1 MW

DC, with approximately 40-50 MW DC expected to start construction

during the first half of 2014.

On December 9, 2013, Canadian Solar announced it is the supplier of

8.7 MW of its MaxPower CS6X Solar Modules to EOSOL Mexico for a ground

mounted solar project located in Durango, Mexico. The project

represents Mexico's second largest PV project to date.

On December 2, 2013, Canadian Solar announced that National Bank of

Canada will provide the Company with up to C$35 million, in short-term

construction financing. This credit facility will be used to finance

the construction of one of the Company's solar projects in Ontario,

Canada.

On November 29, 2013, Canadian Solar announced that the Jiangsu Suzhou

Intermediate Court issued a civil decision that vacated its decision

in May 2013 (the "May Decision"), which dismissed a request by LDK

Solar Co., Ltd. ("LDK") to enforce an arbitration award in LDK's

ongoing dispute with the Company and ruled that the case be

re-adjudicated. The decision was issued following a request for

re-adjudication by the Jiangsu Provincial High Court, which reviewed

the May Decision.

On November 18, 2013, Canadian Solar announced that its subsidiary,

Canadian Solar Solutions Inc., entered into a sales agreement with a

fund managed by DIF pursuant to which DIF will acquire from Canadian

Solar four utility-scale solar power plants located in Ontario,

Canada, totaling 40 MWAC at a valuation comparable to other recent

project sales completed by the Company in the Ontario market.

Conference Call Information

The Company will hold a conference call on Wednesday, March 5, 2014 at

8:00 a.m. U.S. Eastern Standard Time (9:00 p.m., March 5, 2014 in Hong

Kong) to discuss the Company's fourth quarter results and its business

outlook. The dial-in phone number for the call is +1-866-318-8615 or

+1-617-399-5134, with passcode 60564093. A webcast of the conference

call will also be available on Canadian Solar's website at

www.canadiansolar.com.

A replay of the call will be available 4 hours after the conclusion of

the live call and until 11:00 p.m. on March 12, 2014, U.S. Eastern

Standard Time (11:00 a.m., March 13, 2014 in Hong Kong) and can be

accessed by dialing +1-617-801-6888 or +1-888-286-8010 and entering

the passcode 72091072. A webcast replay will also be available at

www.canadiansolar.com.

About Canadian Solar Inc.

Founded in 2001 in Canada, Canadian Solar Inc. (NASDAQ: CSIQ) is one

of the world's largest and foremost solar power companies. As a

leading vertically integrated provider of solar modules, specialized

solar products and solar power plants with operations in North

America, South America, Europe, Africa, the Middle East, Australia and

Asia, Canadian Solar has delivered more than 6 GW of premium quality

solar modules to customers in over 70 countries. Canadian Solar is

committed to improve the environment and dedicated to provide advanced

solar energy products, solutions and services to enable sustainable

development around the world. For more information, please 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 the risks regarding the

previously disclosed SEC investigation as well as 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 Germany, Japan, the U.S. 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 26, 2013. 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. You 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 Twelve Months Ended

Item December 31 September 30 December 31 December 31 December 31

2013 2013 2012 2013 2012

Net revenues 519,469 490,897 294,839 1,654,356 1,294,829

Cost of revenues 418,213 390,686 279,969 1,378,661 1,204,468

Gross profit 101,256 100,211 14,870 275,695 90,361

Selling expenses 28,457 21,248 24,965 88,426 91,053

General and administrative expenses 24,268 20,722 78,260 44,768 128,826

Research and development expenses 3,234 2,968 3,128 11,685 12,998

Total operating expenses 55,959 44,938 106,353 144,879 232,877

Income (loss) from operations 45,297 55,273 (91,483) 130,816 (142,516)

Interest expenses (9,948) (11,769) (9,894) (46,244) (53,305)

Interest income 2,777 2,749 3,661 11,973 13,360

Gain (loss) on change in foreign currency derivatives 8,936 (1,608) 2,267 10,764 (4,369)

Foreign exchange gain (loss) (18,532) 2,279 (10,799) (51,469) (10,707)

Investment loss - - (1,082) - (1,082)

Others 428 - - 428 -

Income (loss) before income taxes 28,958 46,924 (107,330) 56,268 (198,619)

Income tax benefit (expenses) (3,687) (12,383) 3,291 (7,640) 5,433

Equity in loss of unconsolidated investees (1,216) (1,188) (826) (3,064) (1,969)

Net income (loss) 24,055 33,353 (104,865) 45,564 (195,155)

Less: Net income attributable to non-controlling interest 3,108 5,661 120 13,906 313

Net income (loss) attributable to Canadian Solar Inc. 20,947 27,692 (104,985) 31,658 (195,469)

Earnings (Loss) per share-basic $0.41 $0.58 ($2.43) $0.68 ($4.53)

Shares used in computation-basic 50,494,856 47,435,751 43,236,769 46,306,739 43,190,778

Earnings (Loss) per share-diluted $0.39 $0.56 ($2.43) $0.63 ($4.53)

Shares used in computation-diluted 53,317,482 49,567,538 43,236,769 50,388,284 43,190,778

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(In Thousands of US Dollars)

Three Months Ended Twelve Months Ended

December 31 September 30 December 31 December 31 December 31

2013 2013 2012 2013 2012

Net Income(loss) 24,055 33,353 (104,865) 45,564 (195,155)

Other comprehensive income, net of tax:

Foreign currency translation adjustments (3,420) 5,369 2,584 1,877 5,505

Comprehensive income (loss) 20,635 38,722 (102,281) 47,441 (189,650)

Less: comprehensive income attributable to non-controlling interest 2,115 5,908 168 12,667 579

Comprehensive income (loss) attributable to Canadian Solar Inc. 18,520 32,814 (102,449) 34,774 (190,229)

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheet

(In Thousands of US Dollars)

December 31, 2013 December 31, 2012

Assets

Current assets

Cash and cash equivalents 228,250 141,968

Restricted cash 451,153 422,357

Accounts receivable trade, net 280,694 254,906

Accounts receivable, unbilled 13,947 5,230

Amount due from related parties 4,689 9,977

Inventories 231,158 274,456

Value added tax recoverable 15,705 14,483

Advances to suppliers, net 42,028 28,998

Foreign currency derivative assets 7,323 1,351

Project assets -current 344,162 180,437

Prepaid expenses and other current assets 100,247 108,041

Total current assets 1,719,356 1,442,204

Property, plant and equipment, net 407,605 469,643

Deferred tax assets 62,950 39,082

Prepaid land use right 18,776 18,629

Investments in affiliates 34,070 26,728

Intangible assets, net 5,657 4,328

Project assets -non-current 160,836 218,710

Other non-current assets 44,485 39,989

TOTAL ASSETS 2,453,735 2,259,313

Current liabilities:

Short-term borrowings 778,513 858,927

Accounts and notes payable 639,376 461,631

Amounts due to related parties 19,872 5,037

Other payables 101,266 104,783

Advances from customers 75,328 18,659

Foreign currency derivative liabilities 597 365

Other current liabilities 163,407 90,848

Total current liabilities 1,778,359 1,540,250

Accrued warranty costs 40,605 58,334

Long-term borrowings 151,392 214,563

Liability for uncertain tax positions 17,192 14,804

Deferred tax liabilities - non current 24,044 56,152

Loss contingency accruals 29,698 28,461

Total liabilities 2,041,290 1,912,564

Redeemable non-controlling interest 10,948 45,166

Common shares 561,242 502,562

Additional paid-in capital (32,121) (38,296)

Accumulated deficit (192,503) (224,162)

Accumulated other comprehensive income 53,910 50,795

Total Canadian Solar Inc. shareholders' equity 390,528 290,899

Non-controlling interest 10,969 10,684

Total equity 401,497 301,583

TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS' EQUITY 2,453,735 2,259,313

SOURCE Canadian Solar Inc.

-0- 03/05/2014

/CONTACT: Ed Job, CFA, Director, Investor Relations, Canadian Solar Inc., Investors@canadiansolar.com; or David Pasquale, Global IR Partners, +1-914-337-8801, csiq@globalirpartners.com

/Web Site: http://www.canadiansolar.com

(NASDAQ-NMS:CSIQ) /

CO: Canadian Solar Inc.; TransCanada Corporation; DIF Infra 3 RE Canada (Ltd); Natixis; Norddeutsche Landesbank Girozentrale; Cooperative Centrale Raiffeisen-Boerenleenbank B.A.; Hitachi, Ltd.; Eurus Energy Holdings Corporation; Strata Solar; Canadian Solar Solutions Inc.; BlackRock; Delhi International Airport; BELECTRIC

ST: Canada Ontario

IN: OIL UTI ENV ALT GRE

SU: CCA ERN ERP

PRN

-- CN77129 --

0000 03/05/2014 11:59:00 EDT http://www.prnewswire.com

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The Associated Press

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