ARISE Technologies Reports 2011 First Quarter Results

WATERLOO, ON, June 14, 2011 /CNW/ - ARISE Technologies Corporation (TSX: APV) (Frankfurt: A3T), which is a leader in high-performance, high-quality, cost-effective solar technology, today reported its financial results for the three months ended March 31, 2011.

Please note:  Mandatory new accounting requirements came into effect on January 1, 2011, for all publicly-listed Canadian companies. ARISE therefore implemented International Financial Reporting Standards (IFRS) in its 2011 first quarter financial statements and Management Discussion and Analysis. These documents are available on ARISE's website and filed with SEDAR. IFRS standards will be adopted for subsequent financial results and filings. 

Q1 2011 Highlights: 

  • Total revenue of $10.9 million, compared with $16.2 million in Q1 2010
  • Gross profit of $6.7 million, compared with a gross loss of $0.2 million in Q1 2010
  • Sales from Systems Division increased to $1.0 million from $0.6 million in Q1 2010

"In the first quarter of 2011, uncertainty in the European markets negatively impacted the solar industry as key supporters such as Italy and Germany re-evaluated their incentive programs," said Dan Shea, CEO of ARISE. "We believe some of this uncertainty has been removed by Italy's recent re-instatement of their feed-in tariff program and the introduction of new European content requirements. We await Germany's announcement regarding its support of the solar industry. Certain industry analysts are predicting demand to improve during the second half of 2011. We are monitoring demand levels closely so we can continue to respond quickly."

"During the quarter we continued to advance each of our three divisions. We were particularly pleased to have recently announced that we have begun commissioning our silicon facility in Kitchener, Ontario," continued Mr. Shea. "This development follows our attainment of the fifth milestone related to our agreement with Sustainable Development Technology Canada (SDTC) and moves us closer to the commercialization of our proprietary high-purity silicon technology. We believe our silicon technology has the potential to be a key differentiator for our business and we look forward to continuing to build the program while exploring partnership opportunities with numerous parties."

Q1 2011 Financial Overview

Sales for the quarter ended March 31, 2011 amounted to $10.9 million, compared with $16.2 in the first quarter of 2010. PV cells accounted for 90.5% of sales during the quarter with the balance generated by the company's Systems Division. The decrease in sales during the quarter reflects the impacts of a number of factors, including downward pressures on PV cell prices, unusually bad weather conditions in Europe, and market uncertainty relating to possible changes to European Feed In Tariff ("FIT") programs.

Gross profit for the first quarter of 2011 was $6.7 million, compared with a gross loss of $0.2 million in the first quarter of 2010. The improved gross profit is largely attributable to the renegotiation of an amendment to an existing long-term wafer contract with a major silicon wafer supplier. ARISE had previously recorded an US $9.1 million impairment charge against the prepayments to the vendor.

Operating expenses for the quarter ended March 31, 2011 decreased by 14.2% to to $3.6 million, from $4.2 million during the same period in 2010. The decrease was mainly the result of a reduction in Research and Development expenses, offset somewhat by a slight increase in General and Administrative expenses.

Liquidity and Capital Resources
As at March 31, 2011, the Company had a working capital liability of $29.7 million consisting of current assets of $22.5 million less current liabilities of $52.2 million. This compares with negative working capital at March 31, 2010 of $27.9 million, consisting of current assets of $28.2 million less current liabilities of $56.1 million. The decrease in working capital deficiency reflects the cash raised from the issuance of shares in the period.

Cash and cash equivalents at March 31, 2011 totaled $0.2 million ($0.1 million at March 31, 2010) an increase of $0.1 million.

Conference Call and Webcast 

ARISE will hold a conference call for analysts and investors at 8:30 a.m. (Eastern) on June 14, 2011.  Dan Shea, 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: 71987188) from 11:30 a.m. on June 14, 2011, to 11:59 p.m. on June 21, 2011. (ET)

About ARISE Technologies
ARISE Technologies Corporation, based in Waterloo, Ontario, is 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 has been providing rooftop and ground-mounted PV solutions since 1996. ARISE is planning to expand its systems business in Ontario under the Ontario FIT (Feed-In Tariff) 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
Condensed Consolidated Statement of Financial Position
Unaudited

(In '000's of CAD)

 
 
 
  As at
March 31,
2011
   As at 
December 31,
2010
 
 
 
As at
January 1,
2010
             
Assets
Current assets            
  Cash and cash equivalents  $   239 $  6,857 $   402
  Accounts receivable    3,308   4,688   1,789
  Inventories    8,875   4,848   9,256
  Government assistance receivable    -   -   5,508
  Other receivables    1,935   2,681   148
  Prepaid expenses   8,150   9,147   6,296
    22,507   28,221   23,399
Non-current assets            
  Restricted cash    251   251   250
  Long-term government assistance receivable    1,134   1,096   -
  Property, plant and equipment    38,098   38,380   47,637
  Long-term deposits    23,651   16,101   23,358
  Intangible assets    245   248   164
  $   85,886 $   84,297 $   94,808
             
Liabilities
Current liabilities             
  Bank loans  $ 14,526 $  14,459 $ 19,595
  Current portion of long-term debt    11,389   12,065   17,577
  Trade and other payables    18,202   21,272   23,105
  Provisions    260   243   215
  Deferred revenue    5,975   5,552   5,571
  Unearned government assistance    -   872   872
  Current portion of capital lease payable    1,888   1,622   913
    52,240   56,085   67,848
Non-current liabilities            
  Long-term deferred revenue    1,985   2,557   5,074
  Long-term capital lease    5,690   5,525   6,322
    7,675   8,082   11,396
             
Equity
Capital stock    138,757   136,736   120,987
Warrants issued    10,313   9,458   685
Share based payment reserve    11,566   11,373   10,532
Foreign currency translation reserve    3,246   2,905   -
Deficit    (137,911)   (140,342)   (116,640)
Total equity    25,971   20,130   15,564
             
Total liabilities and equity  $  85,886 $  84,297 $ 94,808

 

ARISE Technologies Corporation
Condensed Consolidated Statement of Comprehensive Profit (Loss)
Unaudited

(In '000's of CAD)

    3 months ended March 31,
    2011   2010
         
Revenue $ 10,912 $ 16,156
Cost of goods sold   12,047   16,175
Other cost of goods sold   (7,832)   228
Gross profit (loss)   6,697   (247)
         
Expenses        
  Research and development    527   1,365
  Sales, general and administrative   3,060   2,819
    3,587   4,184
         
Operating profit (loss)   3,110   (4,431)
         
Other expenses (income)        
  Financing costs   734   647
  Foreign exchange loss (gain)    (55)   (41)
  Loss on disposal of assets   -   978
  Other income   -   (83)
    679   1,501
Profit (loss)   2,431   (5,932)
         
Other comprehensive profit (loss), net of tax of $nil        
  Foreign currency translation adjustment   341   (657)
Total comprehensive profit (loss)   2,772   (6,589)
         
         
Profit (loss) per common share         
  Basic $ 0.01 $ (0.04)
  Diluted $ 0.01 $ (0.04)
         
Weighted average number of shares         
  Basic   272,681,784   138,315,962
  Diluted   272,681,784   138,315,962

 

ARISE Technologies Corporation
Condensed Consolidated Statement of Changes in Equity
Unaudited

(In '000's of CAD)

    Share capital   Share based
payment
reserve
  Warrants issued   Deficit   Foreign
currency
translation
reserve
  Total
    $ Shares       $ #            
Balance at January 1, 2010 $ 120,987 134,447,537 $ 10,532 $ 685 6,666,666 $ (116,640) $ - $ 15,564
Activity for the quarter ended March 31, 2010                            
Issued pursuant to Haverstock CEF   1,650 8,089,418   -   - -   -   -   1,650
Share issuance costs   (135) -   -   - -   -   -   (135)
Comprehensive loss   - -   -   - -   (5,932)   (657)   (6,589)
Stock-based compensation   - -   78   - -   -   -   78
Balance at March 31, 2010 $ 122,502 142,536,955 $ 10,610 $ 685 6,666,666 $ (122,572) $ (657) $ 10,568
Activity from April 1, 2010 to December 31, 2010                            
Issued pursuant to Haverstock CEF   730 4,206,879   -   - -   -   -   730
Exercise of stock options   19 75,000   -   - -   -   -   19
Issued as payment of services   218 1,379,743   -   - -   -   -   218
Issued pursuant to prospectus offering   15,500 110,038,764   -   - -   -   -   15,500
Share issuance costs   (2,233) -   -   - -   -   -   (2,233)
Comprehensive profit (loss)   - -       - -   (17,770)   3,562   (14,208)
Stock-based compensation   - -   763   - -   -   -   763
Warrants issued   - -   -   8,773 111,538,764   -   -   8,773
Balance at December 31, 2010   136,736 258,237,341   11,373   9,458 118,205,430   (140,342)   2,905   20,130
Activity for the quarter ended March 31, 2011                            
Comprehensive profit (loss)   - -   -   - -   2,431   341   2,772
Issued pursuant to prospectus offering   2,395 17,105,262   -   855 17,105,262   -   -   3,250
Share issuance costs   (374) -   -   - -   -   -   (374)
Stock-based compensation   - -   193   - -   -   -   193
Balance at March 31, 2011   $ 138,757 275,342,603 $ 11,566 $ 10,313 135,310,692 $ (137,911) $ 3,246 $ 25,971

 

ARISE Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Unaudited

(In '000's of CAD)

  3 months ended March 31,
    2011   2010
Cash flows from operating activities        
  Profit (loss) for the period  $ 2,431 $  (5,932)
  Items which do not involve cash:        
    Valuation write-down (recovery) of inventory related assets   (7,832)   228
    Depreciation and amortization   944   1,277
    Accrued interest   183   125
    Financing costs paid   555   647
    Unrealized government assistance   (497)   -
    Loss on disposal of assets   -   978
    Unrealized foreign exchange   (629)   (574)
    Employee stock option compensation   186   66
    Non-employee stock option compensation    7   12
    (4,652)   (3,173)
Changes in working capital items from operations        
    Accounts receivable   1,467   (3,071)
    Inventory   (3,796)   3,971
    Other receivables   784   67
    Prepaid expenses   (4)   458
    Accounts payable and accrued liabilities   (791)   2,255
    Deferred revenue   (407)   (518)
    (7,399)   (11)
         
Cash flows from financing activities        
  Issuance of Units for cash   3,250   -
  Issuance of capital stock for cash   -   1,650
  Share issuance costs   (374)   (135)
  Financing costs paid   (555)   (647)
  Repayment of bank loans   (421)   (435)
  Repayment of capital lease payable   -   (27)
  Repayment of long term debt   (1,059)    - 
    841   406
         
Cash flows from investing activities        
  Purchase of capital assets   (68)   (655)
  Purchase of intangible assets   (3)   (31)
    (71)   (686)
Net cash flow   (6,629)   (291)
Effect of foreign exchange on cash   11   -
Cash and cash equivalents, beginning of period   6,857   402
         
Cash and cash equivalents, end of period  $ 239 $ 11

 

SOURCE ARISE Technologies Corporation

For further information:

ARISE Technologies Corporation
65 Northland Road, Waterloo, Ontario, Canada N2V 1Y8
Doug McCollam, Chief Financial Officer, (519) 772-5706
www.arisetech.com

Investor Relations:
Glen Williams
The Equicom Group
(416) 815-0700 x272

Profil de l'entreprise

ARISE Technologies Corporation

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