Wednesday, April 27, 2011

Evergreen Solar panel shipments plummet, cash dwindles post-Devens closure

By Kyle Alspach

Evergreen Solar Inc. (Nasdaq: ESLR) said Wednesday that shipments of solar panels for the first quarter dropped 62 percent from the fourth quarter amid slowing demand and increased supplies globally.

As a result, the Marlborough-based solar power technologies firm said its cash position is worse than expected following the shuttering of its factory in Devens, and noted that sales of solar panels are expected to be slow for the remainder of the year.

Evergreen reported that shipments for the first quarter were approximately 18 megawatts, compared to fourth-quarter shipments of approximately 47 megawatts.

Evergreen closed its $430 million Devens plant at the end of March and cut 800 of its 925 Massachusetts jobs, citing an inability to compete with low-cost Chinese manufacturers.  The move came as the company ramped up production of photovoltaic wafers at a company-owned facility in China and outsourced panel assembly to the country.

Uncertainty around subsidies in Europe has hurt demand in recent months, and the “sluggish demand has unexpectedly continued early into the second quarter,” company CEO Michael El-Hillow said in a statement.

The problem is compounded by increased panel supplies due to a worldwide capacity expansion, Evergreen said. Cash that the company had previously expected to realize, through the reduction in accounts receivable and inventory from the Devens facility, “will be less than expected and will take longer than expected to realize,” El-Hillow said.

“Our near-term liquidity has been negatively impacted and may require us to secure additional sources of cash sooner than expected,” he said.