ARISE Technologies Reports Third-Quarter 2009 Results
On November 2, 2009, ARISE issued a release commenting on preliminary
third-quarter 2009 results and providing management's outlook for the
fourth quarter. The release is available at www.sedar.com or
www.arisetech.com
WATERLOO, ON,
Third Quarter Highlights:
- Received Letter of Intent from Germany's NRW for up to
(euro) 9.54 million
- Announced creation of ARISE Technology Centre
- Ranked 15th on the Deloitte Technology Fast 50(TM) list of Canadian
companies
- Welcomed the launch of Ontario's Feed-in Tariff ("FIT") program
- Produced first PV cells using ARISE 7N+ silicon
- Signed installation agreement with QuickContractors.com
- Entered agreement in respect of $10 million equity facility
- Conference call and webcast to be held Thursday, November 12,
8:30 am (ET)
"The third quarter of 2009 was an important period for ARISE. After working through the downturn in the solar industry, we began to see positive signs of increased demand in the marketplace. As we announced earlier this month in our preliminary results release, we are also beginning to see improvement across all of our businesses. Third-quarter shipments, production output, and PV cell manufacturing metrics all improved, compared with the second quarter of this year," said
"We expect fourth-quarter shipments to be about 7 MW, which should help us to exceed our target of 15 MW in shipments by the end of 2009."
"We continue to face working capital issues but have undertaken a number of initiatives in an effort to resolve them," stated
"This has been a challenging time for ARISE but we remain committed to our vision and strategy for the company. We have emerged from a nearly unprecedented period of economic turmoil and believe that the future is bright for the solar industry. We are addressing our near-term challenges and expect to begin 2010 well-positioned to reach our long-term goals," added
Financial Overview
Third quarter 2009 sales amounted to
Gross loss for the third quarter of 2009 was
ARISE continues to focus on tightly managing its costs. Operating expenses for the 2009 third quarter were
R&D expenses decreased marginally to
General and administrative (G&A) expenses declined to
Selling and marketing expenses for the 2009 third quarter were
Net interest expense for the third quarter was
Other income and expenses in the 2009 third quarter, includes a foreign exchange gain of
ARISE recorded a net loss for the third quarter 2009 of
Liquidity and Capital Resources
As at
Cash and cash equivalents and restricted cash at
Subsequent Events
As previously announced, on
On
On
On
The Company continues discussions with Commerzbank AG, ("Commerzbank") with respect to the CAPEX and Working Capital Facility Agreements for the German cell production entity, ARISE
In addition, ARISE continues to explore a number of possible small private-placement financings.
Conference Call and Webcast
ARISE will hold a conference call for analysts and investors at
To participate in the call, please dial (416) 644-3421 or 1-800-814-4861 (
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 416-640-1917 or 1-877-289-8525 (
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
The company's shares are listed on the
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
Consolidated Balance Sheets
Unaudited
3 months ended September 30,
2009 2008
As at As at
September 30, December 31,
2009 2008
-------------- -------------
Assets
Current assets
Cash and cash equivalents $ 210,500 $21,119,152
Restricted cash 250,420 1,508,671
Accounts receivable 1,610,670 7,591,738
Inventories 10,884,833 13,344,927
Government assistance receivable 6,069,985 10,189,721
Other receivables 34,003 529,333
Prepaid expenses 6,081,626 5,013,496
Other assets 174,236 -
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25,316,273 59,297,038
Property, plant and equipment, net 49,658,511 40,914,106
Long term deposits 24,979,815 32,951,968
Intangible assets, net 160,065 168,382
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$100,114,664 $133,331,494
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Liabilities
Current liabilities
Bank loans $ 20,602,514 $22,618,283
Accounts payable and accrued liabilities 19,368,230 21,311,303
Deferred revenue 5,704,353 8,223,066
Unearned government assistance 872,325 632,325
Current portion of long term debt 17,636,987 4,278,546
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64,184,409 57,063,523
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Long term deferred revenue 6,193,379 4,727,912
Long term debt - 9,822,298
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6,193,379 14,550,210
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Commitments and contingencies
Shareholders' Equity
Capital stock 119,127,644 119,127,644
Contributed surplus 9,866,387 8,085,301
Deficit (99,257,155) (65,495,184)
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29,736,876 61,717,761
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$100,114,664 $133,331,494
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Approved by the board
(signed) Vern Heinrichs .......... Director
(signed) Garry West .............. Director
ARISE Technologies Corporation
Consolidated Statements of Loss and Comprehensive Loss
Unaudited
3 months ended 9 months ended
September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Sales $ 6,586,012 $ 15,871,758 $ 20,430,472 $ 16,792,483
Cost of goods
sold 8,032,509 18,517,216 25,795,336 20,721,381
Valuation write-
down of inventory
related assets 510,453 - 14,887,157 -
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Gross profit
(loss) (1,956,950) (2,645,458) (20,252,021) (3,928,898)
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Expenses
Research and
development 1,442,140 1,525,517 5,747,692 4,537,772
General and
administrative 2,220,753 2,500,272 7,037,002 9,085,849
Selling and
marketing 425,620 569,243 1,168,754 1,608,348
Depreciation
and amortization 455,588 444,166 1,354,090 802,862
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4,544,101 5,039,198 15,307,538 16,034,831
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Operating loss (6,501,051) (7,684,656) (35,559,559) (19,963,729)
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Other expenses
(income)
Interest expense,
net 517,525 703,742 1,692,019 748,528
Foreign exchange
(gain) loss (1,589,121) (237,693) (2,943,796) (713,426)
Other (income)
expense 20,991 20,689 (545,811) 57,547
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(1,050,605) 486,738 (1,797,588) 92,649
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Net loss (5,450,446) (8,171,394) (33,761,971) (20,056,378)
Other
comprehensive
loss - - - -
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Comprehensive loss (5,450,446) (8,171,394) (33,761,971) (20,056,378)
Deficit, beginning
of period (93,806,709) (35,071,295) (65,495,184) (23,186,311)
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Deficit, end of
period $(99,257,155) $(43,242,689) $(99,257,155) $(43,242,689)
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Loss per share -
basic and
diluted $ (0.04) $ (0.06) $ (0.27) $ (0.17)
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ARISE Technologies Corporation
Consolidated Statements of Cash Flows
Unaudited
3 months ended 9 months ended
September 30, September 30,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Cash flows
(used in) from
operating
activities
Net loss for
the period $ (5,450,446) $ (8,171,394) $(33,761,971) $(20,056,378)
Items which do
not involve
cash:
Valuation
write-down
of inventory
related
assets 510,453 - 14,887,157 -
Foreign
exchange (1,340,610) (1,959,314) (3,466,940) 773,873
Depreciation
and
amortization 1,654,835 1,111,106 3,929,237 1,469,802
Employee
stock based
compensation 317,190 1,127,206 1,801,510 3,882,963
Non-employee
stock based
compensation 16,110 3,806 114,399 179,642
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(4,292,468) (7,888,590) (16,496,608) (13,750,098)
Changes in
working capital
items from
operations
Decrease
(increase)
in accounts
receivable (200,403) (7,915,465) 5,981,068 (8,378,612)
Decrease
(increase) in
inventories (551,376) 9,344,646 (6,415,073) (17,005,823)
Decrease
(increase) in
other
receivables 469,831 6,460,382 495,330 1,211,006
Decrease
(increase) in
prepaid
expenses (1,543,958) (4,884,105) (4,269,121) (6,983,712)
Decrease
(increase) in
other assets (174,236) - (174,236) -
(Decrease)
increase in
accounts
payable and
accrued
liabilities 475,929 5,106,094 (2,077,897) 5,214,618
(Decrease)
increase in
deferred
revenue 103,699 3,210,209 (901,378) 7,223,283
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(5,712,982) 3,433,171 (23,857,915) (32,469,338)
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Cash flows (used in)
from financing
activities
Issuance of
capital stock
for cash - (1,956) - 45,098,044
Share issuance
costs - - - (2,518,652)
Exercise of
warrants and
options - 90,146 - 2,625,622
Net proceeds
(repayment) of
bank loans (8,894,923) (1,893,482) (229,500) 21,465,415
Net proceeds
(repayment) of
long term debt 1,758,894 2,170,568 5,064,946 8,717,214
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(7,136,029) 365,276 4,835,446 75,387,643
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Cash flows from
(used in)
investing
activities
Decrease in
restricted cash - - 1,258,251 -
Purchase of
capital assets (1,307,962) (10,643,218) (21,280,865) (37,844,430)
Purchase of
intangible
assets (12,787) (15,446) (20,849) (39,086)
Change in long
term deposits 1,994,071 (13,526,584) 5,161,156 (27,443,869)
Government
assistance 9,592,707 32,082 12,996,124 6,330,350
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10,266,029 (24,153,166) (1,886,183) (58,997,035)
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Net cash outflow (2,582,982) (20,354,719) (20,908,652) (16,078,730)
Cash and cash
equivalents,
beginning of
period 2,793,482 42,184,419 21,119,152 37,908,430
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Cash and cash
equivalents,
end of period $ 210,500 $ 21,829,700 $ 210,500 $ 21,829,700
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Supplemental
disclosures of
cash flows:
Interest and
stand-by
fees paid $ 517,945 $ 796,512 $ 1,739,800 $ 1,328,378
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Income taxes paid $ - $ - $ - $ -
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For further information: ARISE Technologies Corporation, 65 Northland Road, Waterloo, Ontario, Canada, N2V 1Y8, Dave Chornaby, Chief Financial Officer, (519) 772-5732, [email protected], www.arisetech.com
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