ARISE Technologies Reports Fourth-Quarter and Year-End 2009 Results
On January 12, 2010, ARISE issued a release commenting on preliminary fourth-quarter and 2009 year-end results. The release is available at www.sedar.com or www.arisetech.com
WATERLOO, ON, March 25 /CNW/ - ARISE Technologies Corporation (TSX: APV and Frankfurt: A3T), which is dedicated to becoming a leader in high-performance, high-quality, cost-effective solar technology, today reported its financial results for the fourth quarter and 12-months ended December 31, 2009. Financial results conform to Canadian generally accepted accounting principles ("GAAP") and all currency amounts are in Canadian dollars unless otherwise noted.
2009 Highlights:
- Total revenue of $31.7 million, compared with $35.7 million in 2008
- Shipped 15.7MW of PV Cells, an increase of 40% from 11.2MW in 2008
- Announced creation of ARISE Technology Centre
- Ranked 15th on the Deloitte Technology Fast 50(TM) list of Canadian
companies
- Produced first PV cells using ARISE 7N+ silicon
- Secured access to committed equity facility
Q4 2009 Highlights:
- Total revenue of $11.3 million, compared with $18.9 million in Q4
2008
- Net loss decreased to $7.5 million, compared with $22.3 million in Q4
2008
- Shipped 7.0MW of PV cells, an increase of 13% from 6.2MW in Q4 2008
- Completed $2.0 million non-brokered offering
Subsequent to Year End Highlights:
- Shipped approximately 10MW to date in 2010
- Signed Letter of Engagement with syndicate led by Sandfire Securities
for $10 million financing
- Subject to satisfaction of certain Conditions Precedent, agreed with
Commerzbank AG to extend credit facilities
"2009 was a challenging year for ARISE, as the impacts of the global financial crisis took a toll on both our company and the solar industry as a whole," said Vern Heinrichs, ARISE's President and Chief Executive Officer. "However, market conditions improved towards the end of year as we saw a significant increase in demand in the German marketplace. Our PV cell shipments during the fourth quarter of 2009 were 7.0MW, nearly equal to our total shipments for the first nine months of the year. By the end of 2009, Line 1 at our German PV cell plant was running at close to 100% capacity. We expect to activate Line 2 to meet customer demand during the first half of 2010."
"In Ontario, we are very optimistic about the prospects offered by the Ontario Green Energy Act's Feed-in Tariff ("FIT") program and expect it to be the source of significant growth for our Systems Division," continued Mr. Heinrichs. "We are seeing strong interest from across Ontario and, to date in 2010, we have more than $5 million worth of projects planned."
Financial Overview
Sales for the year ended December 31, 2009 amounted to $31.7 million, compared with $35.7 million in 2008. PV cells accounted for 97.9% of 2009 sales with the balance being generated by the Company's Systems Division.
Gross loss for the year ended December 31, 2009 was $25.0 million, compared with a loss of $15.8 million in 2008.
Operating expenses for the year ended December 31, 2009 were $20.4 million, compared with $21.1 million the previous year.
R&D expenses increased by 11% during the year ended December 31, 2009 to $7.1 million from $6.4 million (net of Government Funding) in 2008.
General and administrative ("G&A") expenses declined to $10.0 million in 2009, from $11.6 million for the year ended December 31, 2008.
Selling and marketing expenses for the year ended December 31, 2009 were $1.6 million, compared with $2.0 million in 2008.
Net interest expense for the year ended December 31, 2009 was $2.4 million, compared with $1.3 million the prior year.
Other income and expenses for the year ended December 31, 2009, included a foreign exchange gain of $5.6 million, compared with a foreign exchange loss of $3.9 million in 2008.
Fourth Quarter of 2009
Sales for the fourth quarter ended December 31, 2009 were $11.3 million, compared with $18.9 million in the fourth quarter of 2008. Gross loss for the three months ended December 31, 2009 was $4.7 million compared with $11.9 million in the fourth quarter of 2008. Operating expenses were $5.1 million in the fourth quarter of 2009, virtually unchanged from $5.1 million in the prior year period. ARISE recorded a net loss for the fourth quarter 2009 of $7.5 million (a loss of $0.05 per basic and diluted share), compared with a net loss $22.3 million (a loss of $0.19 per basic and diluted share) in the 2008 quarter.
Liquidity and Capital Resources
As at December 31, 2009, the Company had a working capital deficiency of $43.8 million consisting of current assets of $24.4 million less current liabilities of $68.2 million. This compares with negative working capital at September 30, 2009 of $38.9 million consisting of current assets of $25.3 million less current liabilities of $64.2 million.
Cash and cash equivalents and restricted cash at December 31, 2009 totaled $651,985, an increase of $191,065 since September 30, 2009.
Conference Call and Webcast
ARISE will hold a conference call for analysts and investors at 10:00 a.m. (Eastern) on Thursday, March 25, 2010. The company will file its financial statements, and Management Discussion and Analysis with SEDAR and these documents will be available on ARISE's website prior to the conference call. Vern Heinrichs, President and Chief Executive Officer, and Doug McCollam, Chief Financial Officer, will be available to answer questions during the call.
To participate in the call, please dial (647) 427-7450 or 1-888-231-8191 (Canada and the U.S. only) at least five minutes prior to the start of the call.
A live audio webcast of the conference call will be available at www.newswire.ca and www.arisetech.com.
An archived recording of the call will be available at 416-849-0833 or 1-800-642-1687 (Canada and the U.S. only) (Pass code: 59453933) from 1:00 p.m. on March 25, to 11:59 p.m. on March 31, 2010.
About ARISE Technologies
ARISE Technologies Corporation, based in Waterloo, Ontario, is dedicated to becoming a leader in high-performance, cost-effective solar technology. The company operates through three divisions. The PV Cell Division manufactures PV (photovoltaic) cells at its first manufacturing plant opened in April 2008 in Bischofswerda, Germany. The division is developing proprietary technology with a target of achieving a step-by-step progression to a high-efficiency level of greater than 20%. The PV Silicon Division is using a proprietary method to produce silicon at 7N+ high-purity (99.99999% purity) for PV cell applications, based on a simplified chemical vapor deposition process. The division is focusing on scaling up its process to provide ARISE with control over its supply, costs, and quality. The PV Systems Division provides complete turnkey PV solutions for solar farms and rooftop installations under the Ontario standard offer program.
The company's shares are listed on the Toronto Stock Exchange under the symbol APV and on the Frankfurt Open Market Exchange under the symbol A3T. Additional information is available at www.arisetech.com and www.sedar.com.
Forward-Looking Statements and Risk Factors
Certain statements in this news release may be considered to be forward-looking. Such statements are based on management's current expectations, estimations, and assumptions based on experience, trends, and other factors that are subject to the significant risks and uncertainties described in our regulatory filings. Please refer to these. Such risks and uncertainties may include, but are not limited to, the effects of general economic conditions, changing foreign exchange rates, actions by government authorities, the requirement for additional capital, risks associated with manufacturing, , industry supply levels, competitive pricing pressures and misjudgements in the course of preparing forward-looking statements.
Risk factors relating to ARISE are discussed in the Risk Factors section of ARISE's Annual Information Form and under the headings Liquidity and Capital Resources and Risk and Uncertainties in ARISE's year-end Management's Discussion and Analysis which are or will be available at www.sedar.com. These factors should be considered carefully, and readers should not place undue reliance on ARISE's forward-looking statements.
ARISE assumes no obligation to update any forward-looking statements or to update the reasons why actual results could differ from those reflected in the forward-looking statements.
ARISE Technologies Corporation
65 Northland Road, Waterloo, Ontario, Canada N2V 1Y8
Doug McCollam, Chief Financial Officer, (519) 772-5706
www.arisetech.com
ARISE Technologies Corporation
Consolidated Balance Sheets
As at As at
December 31, December 31,
2009 2008
-------------- -------------
Assets
Current assets
Cash and cash equivalents $ 401,565 $21,119,152
Restricted cash 250,420 1,508,671
Accounts receivable 1,788,991 7,591,738
Inventories 9,721,399 13,344,927
Government assistance receivable 5,508,171 10,189,721
Other receivables 148,297 529,333
Prepaid expenses 6,615,125 5,013,496
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24,433,968 59,297,038
Property, plant and equipment, net 56,161,103 40,914,106
Long term deposits 24,268,617 32,951,968
Intangible assets, net 163,814 168,382
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$105,027,502 $133,331,494
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Liabilities
Current liabilities
Bank loans $ 19,594,697 $ 22,618,283
Accounts payable and accrued liabilities 23,319,955 21,311,303
Deferred revenue 5,965,723 8,223,066
Unearned government assistance 872,325 632,325
Current portion of long term debt 17,577,129 4,278,546
Current portion of capital lease payable 913,428 -
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68,243,257 57,063,523
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Long term deferred revenue 5,556,409 4,727,912
Long term debt - 9,822,298
Long term capital lease payable 6,321,971 -
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11,878,380 14,550,210
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Shareholders' Equity
Capital stock 120,986,619 119,127,644
Contributed surplus 10,687,834 8,085,301
Deficit (106,768,588) (65,495,184)
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24,905,865 61,717,761
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$105,027,502 $133,331,494
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ARISE Technologies Corporation
Consolidated Statements of Loss and Comprehensive Loss
Quarters ended Years ended
December 31, December 31,
2009 2008 2009 2008
------------------------- -----------------------------
Sales $ 11,298,585 $ 18,938,251 $ 31,729,057 $ 35,730,734
Cost of goods
sold 11,547,565 21,815,164 37,342,901 42,536,545
Valuation
write-down
of inventory
related assets 4,456,053 8,978,726 19,343,210 8,978,726
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Gross (loss) (4,705,033) (11,855,639) (24,957,054) (15,784,537)
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Expenses
Research and
development 1,358,176 1,863,815 7,105,868 6,401,587
General and
adminis-
trative 2,928,044 2,557,750 9,965,046 11,643,599
Selling and
marketing 420,671 423,338 1,589,425 2,031,686
Depreciation
and
amortization 397,952 270,097 1,752,042 1,072,959
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5,104,843 5,115,000 20,412,381 21,149,831
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(9,809,876) (16,970,639) (45,369,435) (36,934,368)
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Other expenses
(income)
Interest
expense, net 678,163 590,666 2,370,182 1,339,194
Foreign
exchange
(gain) loss (2,623,017) 4,668,324 (5,566,813) 3,954,898
Other (income)
expense (353,589) 22,866 (899,400) 80,413
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(2,298,443) 5,281,856 (4,096,031) 5,374,505
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Net loss and
comprehensive
loss (7,511,433) (22,252,495) (41,273,404) (42,308,873)
Deficit,
beginning
of year (99,257,155) (43,242,689) (65,495,184) (23,186,311)
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Deficit, end
of year $(106,768,588) $(65,495,184) $(106,768,588) $(65,495,184)
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Loss per share
- basic
and diluted $ (0.05) $ (0.19) $ (0.32) $ (0.36)
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ARISE Technologies Corporation
Consolidated Statements of Cash Flows
Quarters ended Years ended
December 31, December 31,
2009 2008 2009 2008
------------------------- -----------------------------
Cash flows
(used in) from
operating
activities
Net loss for
the year $ (7,511,433) $(22,252,495) $(41,273,404) $(42,308,873)
Items which
do not
involve cash:
Valuation
write-down
of inventory
related
assets 4,456,053 8,978,726 19,343,210 8,978,726
Foreign
exchange (1,872,688) (4,247,689) (5,339,628) (3,473,816)
Depreciation
and
amortization 1,554,146 988,550 5,483,383 2,458,352
Employee
stock based
compensation 162,827 669,568 1,964,337 4,552,531
Non-employee
stock based
compensation 13,566 96,449 127,965 276,091
Fair value
of warrants
issued 684,771 - 684,771 -
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(2,512,758) (15,766,891) (19,009,366) (29,516,989)
Changes in working
capital items
from operations
Decrease
(increase)
in accounts
receivable (178,321) 1,040,899 5,802,747 (7,337,713)
Decrease
(increase)
in
inventories (3,292,619) 633,395 (9,707,692) (16,372,428)
Decrease
(increase)
in other
receivables (114,294) (262,755) 381,036 948,251
Decrease
(increase)
in prepaid
expenses (533,499) (1,993,345) (4,802,620) (8,977,057)
Decrease
(increase)
in other
assets 174,236 - - -
(Decrease)
increase
in accounts
payable
and accrued
liabilities 3,912,008 7,115,889 1,834,111 12,330,507
(Decrease)
increase in
deferred
revenue (392,675) 5,680,432 (1,294,053) 12,903,715
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(2,937,922) (3,552,376) (26,795,837) (36,021,714)
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Cash flows
(used in) from
financing
activities
Issuance of
capital
stock for
cash 2,250,000 182,860 2,250,000 45,280,904
Share
issuance
costs (391,025) (1,956) (391,025) (2,520,608)
Exercise of
warrants
and options - - - 2,625,622
Net proceeds
(repayment)
of bank loans (121,369) 3,538,848 (350,869) 25,004,263
Proceeds of
long term debt 808,879 5,383,630 6,896,462 14,100,844
Repayment of
long term
debt - - (1,022,637) -
Increase in
capital lease 7,369,977 - 7,369,977 -
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9,916,462 9,103,382 14,751,908 84,491,025
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Cash flows from
(used in)
investing
activities
Decrease
(increase)
in restricted
cash - (1,508,671) 1,258,251 (1,508,671)
Government
assistance 252,829 4,499,962 13,248,953 10,830,312
Change in
long term
deposits 711,197 (1,046,557) 5,872,353 (28,490,426)
Purchase of
capital
assets (7,736,870) (8,109,962) (29,017,735) (45,954,392)
Purchase of
intangible
assets (14,631) (96,326) (35,480) (135,412)
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(6,787,475) (6,261,554) (8,673,658) (65,258,589)
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Net cash
outflow 191,065 (710,548) (20,717,587) (16,789,278)
Cash and cash
equivalents,
beginning of
year 210,500 21,829,700 21,119,152 37,908,430
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Cash and cash
equivalents,
end of year $ 401,565 $ 21,119,152 $ 401,565 $ 21,119,152
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Supplemental
disclosures
of cash flows:
Interest and
stand-by fees
paid $ 678,502 $ 296,588 $ 2,418,302 $ 1,624,966
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Income taxes
paid $ - $ - $ - $ -
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%SEDAR: 00017494E
For further information: Investor Relations: Glen Williams, The Equicom Group, (416) 815-0700 x272
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