Friday, October 17, 2008

Evergreen Solar Q3 sales up, as is loss; signs two new sales deals

The cost of ramping up its production facility in Devens and planning for a new facility there has led to a greater loss in the third quarter of this year versus Q3 last year for Evergreen Solar Inc., the Devens-based manufacturer of solar panels.

While the company’s net loss jumped to $23.8 million for the quarter ending Sept. 27, up from $3.7 million in the same quarter last year, the total revenue for the quarter increased from $18.2 million in 2007 to $22.1 million this year. For the year to date, Evergreen Solar (Nasdaq: ESLR) is reporting $54.2 million in product revenue, up from $41.4 million for the first three quarters of 2007.

The company also said it expects fourth quarter revenue to range from $45 million to $55 million, with a net loss of $13 million to $19 million because of startup and rampdown costs.

A number of large contract wins have helped drive the increase, including the latest, two new long-term sales contracts for more than 160 megawatts (MW) worth of solar panels. Previous customer AEE Solar Inc., a wholesale solar technology distributor in North America, inked the first of the new contracts. The second contract is with an unnamed “top-tier general trading” company in Japan. Evergreen will start shipping product under the deals in 2009 and will continue to deliver through 2012.

All of the solar panels under the two contracts will be manufactured at the company’s Devens facility, as well as at the company’s next factory, currently under development in Devens. According to Evergreen officials, the Devens facility has sold 100 percent of its 160 MW manufacturing capacity from 2010 and beyond with the two new contracts.

In July, Evergreen Solar signed a long-term sales contract valued at approximately $1.2 billion with Germany-based IBC Solar AG. According to Evergreen Solar president and CEO Richard Feldt, the contract with IBC Solar represents the largest single order in the history of the company.

Evergreen Solar makes solar panels based on its proprietary String Ribbon technology, which executives say uses fewer materials and reduces the cost of production. The company reported a 2007 net loss of $16.6 million on revenue of $69.9 million.