Evergreen Solar, Inc. (Nasdaq: ESLR), has announced financial results for the fourth quarter and full year ended December 31, 2005.
Fourth-Quarter 2005 Financial Results
For the fourth quarter of 2005, product revenues increased 25 percent to $11.6 million from $9.3 million for the fourth quarter of 2004 and rose four percent from $11.1 million for the third quarter of 2005. Evergreen Solar improved product gross margin to 13.0 percent for the fourth quarter of 2005 from 10.4 percent from the third quarter of 2005.
Net loss attributable to common stockholders for the fourth quarter of 2005 was $5.0 million, or $0.08 per share. This figure includes approximately $1.4 million in net losses associated with the EverQ start-up. This compares with a net loss of $3.8 million, or $0.08 per share, for the fourth quarter of 2004 and a net loss of $4.6 million, or $0.07 per share, for the third quarter of 2005. Approximately 61.5 million and 47.5 million weighted average shares were outstanding for the fourth quarter of 2005 and 2004, respectively, and approximately 61.2 million weighted average shares were outstanding for the third quarter of 2005.
“During the fourth quarter, Evergreen Solar continued to execute on plan as the Company delivered record financial results, began the conversion of its Marlboro factory to thin-wafer production and made significant progress with its EverQ venture,” said Richard M. Feldt, President and Chief Executive Officer. “We recently obtained product certification for our thin-wafer modules and are now in the process of converting the remainder of our Marlboro facility to this next-generation String Ribbon technology platform. Also, our continued improvement of yields, cell efficiency and output enabled us to post record product revenues and gross margins in the fourth quarter.
“During the quarter, we took steps to advance our EverQ strategic partnership as it enters its production phase,” Feldt continued. “In November, Renewable Energy Corporation (REC) joined Evergreen Solar and Q-Cells in this joint venture. At a time when silicon remains scarce, REC has agreed to provide Evergreen Solar and EverQ with the supply we need to facilitate our current capacity expansion. We expect to sign additional contracts to secure our longer-term supply needs.
“In Thalheim, Germany, EverQ remains on schedule as we began installing equipment at our 30MW facility in November and moved forward aggressively with our hiring plans. We currently have about 100 EverQ employees and have given start dates to about 100 more. This aggressive hiring should enable us to ramp production quickly over the next several months.”
2005 Financial Results
For the twelve months ended December 31, 2005, product revenues were a record $43.6 million, nearly double the $22.2 million reported in 2004. For the year, the Company improved its product gross margin to a positive 8.4 percent compared with a negative 34 percent in 2004.
Net loss attributable to common stockholders for 2005 was $17.3 million, or $0.29 per share, compared with $22.3 million, or $0.67 per share, in 2004. Approximately 59.6 million and 33.2 million weighted average shares were outstanding for the years ended December 31, 2005 and 2004, respectively.
Business Outlook
“Evergreen Solar enters 2006 in a strong position both financially and operationally,” Feldt said. “With more than $116 million in cash, cash equivalents and marketable securities, our balance sheet affords us significant flexibility to pursue our R&D initiatives and proceed with the EverQ launch. In Marlboro, we expect to complete our conversion to thin wafer in the second quarter. We expect this technology to reduce the amount of silicon in our solar panels by about half and move us closer to our ultimate goal of achieving parity with retail electricity. At the same time, we will be working to advance our Quad technology platform, which may eventually enable us to create a virtually ‘lights-out’ crystal growth operation.
“In Thalheim, EverQ will commence production in March. We anticipate that the first two quarters of this year will be a period of significant investment for us and our EverQ partners as we work toward a full production ramp by mid-summer 2006. We expect gross margin at our Marlboro operations will remain in the 5 percent to 10 percent range in the first half of the year and will increase slightly in the second half as we benefit from our thin conversion. Overall, we anticipate consolidated gross margin to be negative in Q1 and Q2, before improving significantly in the second half of 2006. We expect gross margin at EverQ to be between 30% and 35% by the fourth quarter. We also expect revenue for full-year 2006 to more than double from 2005 levels and to increase throughout the year as our EverQ operation ramps production.”