Tuesday, August 14, 2007

Deli Solar (USA), Inc. Announces Record Second Quarter 2007 Financial Results

LOS ANGELES and BEIJING, Aug. 13 /Xinhua-PRNewswire-FirstCall/ -- Deli Solar (USA), Inc. (OTC Bulletin Board: DLSL), an established significant seller of solar water heaters and space heating devices in the People's Republic of China (the "PRC"), announced its results for the second quarter which ended June 30, 2007.

Sales for the second quarter of 2007 increased 33% to $9.4 million compared to $7.1 million for the same quarter in 2006. Revenues were comprised of over 63,000 solar water heaters and 37,000 boilers sold during the quarter. Gross profit for the three months ended June 30, 2007 was $1.9 million, an increase of approximately 30% from the second quarter of 2006. Gross margins were 20.5% to 21.1% for the second quarter of 2007 and 2006 respectively.

Operating expenses for the three months ended June 30, 2007 decreased 4% to $1.1 million compared to the same period in 2006 and a result of prudent management of general and administrative expenses despite a 32% increase in advertising expenses focused on gaining market share.

Operating income for the second quarter of 2007 totaled $0.8 million compared to $0.3 million for the same period in 2006, representing a 163% increase. Net income for the 2007 second quarter increased 113% to $0.6 million, representing earnings per share of $.10, from $0.3 million in net income, or $.04 per share during the second quarter of 2006. Calculations were based upon 6.6 million and 8 million shares outstanding respectively.

"Revenue growth was driven by higher unit sales of solar water heaters and residential boilers which benefited from continued investment in brand marketing, sales promotions and further expansion of our sales distribution network," commented Mr. Deli Du, President and Chief Executive Officer. ''While margins were slightly impacted by competition and pricing pressure, our ability to prudently manage raw material and organizational costs enabled us to dramatically increase operating profitability. In addition, we made further progress installing our new flat plate collector production and water assembly line, which we expect to be fully operational during September 2007. We expect this to enhance our production efficiencies and improve the quality of our products while contributing a positive impact on future operating margins,'' continued Mr. Du.

Six Month Results

Sales increased approximately 32% to $12.4 million for six months ended June 30, 2007 as compared to $9.4 million for the same period last year resulting from continued investment in brand marketing, sales promotion and development of a sales distribution network. Operating expenses for the six months ended June 30, 2007 were $1.6 million as compared to $1.5 million for the same period in 2006, an increase of 4%. Operating income for the six months ended June 30, 2007 was $1.1 million, increased 109% as compared to $0.5 million for the six months ended June 30, 2006.

Net income was $0.9 million in the six months ended June 30, 2007, compared with $0.5 million in the same period last year, an increase of $0.4 million, or approximately 84%. This equated to earnings of $.14 per share compared to $.06 per share for the first six months of 2006 based on 6.4 million and 8 million fully diluted shares respectively.

Balance Sheet and Cash Flow Discussion

The Company reported $5.7 million in cash and equivalents on June 30, 2007, a current ratio of 12.3 to 1 and was debt free. The Company completed a $2.5 million financing in June 2007. Net cash flow from operations was $0.3 million for the six months ended June 30, 2007, a slight increase from the same year ago period. In addition, the Company incurred approximately $0.4 million in capital expenditures on new facilities and assembly lines at its Bazhou factory during the first six months of 2007.

"We continue to make further progress on our acquisition strategy as we signed a purchase agreement on May 18, 2007 to buy 51% of Tianjin Huaneng Energy Equipment Company, which manufactures energy saving boilers and environmental protection equipment for industrial customers. As part of the acquisition we paid approximately $1.6 million in July 2007 with approximately $100,000 balance due and a separate finders' fee. We also agreed to invest approximately $2.5 million into the new company to expand production capabilities and operations. With an effective accounting date of July 1, 2007, we anticipate this purchase will contribute to both revenues and profitability during the balance of this year. Separately, we continue to pursue the purchase of a 60% equity stake in Shenzhen Xiongri Solar Power Co., Ltd., which provides solar water heaters for commercial customers and multi-family developers throughout Shenzhen,'' Mr. Du concluded.

About Deli Solar (USA), Inc.

Deli Solar (USA) Inc. operates through its wholly owned subsidiaries Bazhou Deli Solar Energy Heating Co. Ltd. ("Deli Solar (Bazhou)") and Beijing Deli Solar Technology Development Co., Ltd. ("Deli Solar (Beijing)"), both located in the PRC. The Company sells and distributes hot water and space heating devices to customers in the PRC. For more information, please visit http://www.delisolar.com .

Suntech Reports Second Quarter 2007 Financial Results

WUXI, China, Aug. 9 /Xinhua-PRNewswire/ -- Suntech Power Holdings Co.,
Ltd. (NYSE: STP), one of the world's leading manufacturers of photovoltaic
(PV) cells and modules, today announced second quarter 2007 financial

Second Quarter 2007 Highlights(1)
-- Exceeding guidance, total production output was over 80MW and total net revenues grew 147.7% year-over-year to $317.4 million.

-- On a non-GAAP(2) basis, Suntech group's net income was $48.9 million. Excluding the impact of MSK, net income was $50.8 million or $0.30 per diluted American Depository Share (ADS). Each ADS represents one ordinary share.

-- Suntech group's non-GAAP gross margin in its core Wafer to Module business was 23.9% and blended non-GAAP gross margin was 21.1%. Margin improvement was primarily due to the increase in delivery of lower priced wafers from long-term contract wafer suppliers.

-- Annualized PV cell production capacity expansion is on track to reach 480MW by the end of 2007.

"I am pleased to report excellent results for the second quarter," said Dr. Zhengrong Shi, Suntech's Chairman and CEO. "We once again exceeded our output target as we saw unprecedented demand for Suntech's high quality solar panels across a range of international markets. In fact, our sales demand has been so strong that we have already signed contracts to deliver over 150MW of our PV modules in 2008. To put that in perspective, that is nearly equal to Suntech's entire output in 2006. As we deepen our sales channels and networks in key geographies, we believe we will continue to grow faster than our competitors as well as the underlying markets."

"In the second quarter, our margins improved as ASPs remained in line with our expectations and silicon deliveries from our long-term suppliers returned to schedule." Dr. Shi added, "Our MSK integration efforts combined with the strategic refocus on building-integrated photovoltaic products (BIPV) has also led to greater global sales traction and improvements in the margin impact of our MSK products."

Commenting on Suntech's technology, Dr. Shi said, "We are pleased with the progress of our solar innovation initiatives. Despite the success of our high performance semi-conductor finger technology, our ground-breaking 20% efficiency Pluto technology is demonstrating even more impressive results in pilot production and we are on track to commence commercial production using this technology in 2008."

Dr. Shi continued, "Through this period of dynamic growth, we are determined to expand production capacity and increase our competitiveness by leveraging our manufacturing efficiency, technology advantages, and balanced silicon sourcing strategy."

Recent Business Highlights

-- Demand for Suntech's PV products in Spain continued to grow in the second quarter particularly through collaborations with key customers on multi-megawatt projects. Suntech is on track to become one of the largest suppliers of PV products to Spain.

-- Suntech began shipping PV modules for the 8.2MW Alamosa solar power plant project in Colorado which is one of the largest PV projects in the United States to date.

-- Suntech recently improved its long-term silicon position by signing a contract with Hoku Materials to purchase up to $678 million of polysilicon over a ten-year period. Shipments of set volumes of polysilicon at fixed prices are scheduled to begin in 2009.

-- Suntech's MSK branded BIPV system was a key component of Kingspan Off - Site's "Lighthouse" net-zero carbon home, which is the first house designed to comply with the British government's Code for Sustainable Homes Level 6. By 2016, all new homes built in the United Kingdom will be required to be designed and constructed to meet the Code for Sustainable Homes Level 6.

-- The Company recently completed phase 1 of an 800kW BIPV curtain wall project at Wuxi Airport in China. The installation showcases Suntech's BIPV capabilities and serves as a model project for other potential solar installations in China.

-- Suntech successfully met the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") regarding internal controls over financial reporting. The internal control systems have helped Suntech improve operating efficiency and manage rapid production and sales growth.

Second Quarter 2007 Results
Net Revenues % of Net Gross Profit Gross
(in $ millions) Revenues (in $ millions) Margin (%)

Standard PV Modules $313.5 98.8 % $66.3 21.2 %
-- Wafer to Modules 274.6 86.5 65.5 23.9
-- Cell to Modules* 38.9 12.3 0.8 2.0

Others 3.9 1.2 0.6 15.6
Total (consolidated) $317.4 100 % $66.9 21.1 %

Total (excluding MSK) $297.5 -- $67.5 22.7 %

* The Cell to Modules segment includes both Suntech modules produced from
third-party cells and MSK's slow moving module inventory.
On a GAAP basis, gross profit was $64.3 million and gross margin was
20.3%, operating income was $38.1 million, and net income was $41.3 million
or $0.25 per diluted ADS.
Non-GAAP operating expenses in the second quarter of 2007 were $21.4
million and accounted for 6.7% of net revenues.
Non-GAAP income from operations for the second quarter of 2007 was
$45.6 million and non-GAAP operating margin was 14.4%.
Non-GAAP net income attributable to holders of ordinary shares for the
second quarter of 2007 was $48.9 million, or $0.29 per non-GAAP diluted
In the second quarter of 2007, capital expenditures, which were
primarily related to production capacity expansion and the construction of
the Wuxi and Luoyang production facilities, were $51.7 million and
depreciation and amortization expenses were $4.2 million.
During the second quarter of 2007, the total number of diluted ADSs
outstanding increased from 164.1 million to 168.9 million, primarily due to
an increase of 4.8 million ADSs on an "as converted" basis. The additional
ADSs represent the final portion of the 10.3 million ADSs that may be
issued in the future as a result of the February 2007 convertible note
offering of $500 million.
Suntech's results for the second quarter of 2007 excluding MSK were as
Non-GAAP operating expenses as a percentage of net revenues were 6.4%,
non-GAAP income from operations was $48.5 million and non-GAAP operating
margin was 16.3%, and non-GAAP net income was $50.8 million. Suntech's
successful execution of its integration initiatives was reflected in this
quarter's results as Suntech reduced its loss from MSK operations by
approximately 40% from the first quarter of 2007 to $1.9 million.
Senior Management Hires and Promotions
Suntech announced the following key promotions and new hires:
Mr. Steven Chan who was previously the Vice President of Business
Development has been promoted to the position of Chief Strategy Officer.
Mr. Chan will be focused on enhancing and solidifying Suntech's long term
focus to be a leading solar energy company. In addition to strategy and
business development, he will also be responsible for the investor
relations and marketing function. His near term focus will be to head new
business initiatives in North America as well as to foster key
relationships with partners and suppliers.
Mr. Hao Zhi who was previously the Investment Controller has been
promoted to the position of Investment Director. Mr. Hao will head the
company's investment initiatives including mergers and acquisitions,
strategic ventures and alliances.
Dr. Frank Zhang and Mr. Henry Ng are newly hired general managers who
will manage Suntech's key production facilities. Dr. Zhang will oversee
Suntech's thin film manufacturing facility in Shanghai and Mr. Ng will
oversee Suntech's core PV manufacturing facility in Wuxi including its new
one Gigawatt facility. Both Dr. Zhang and Mr. Ng have extensive experience
in the related semiconductor manufacturing industry.
Prior to joining Suntech, Dr. Zhang was the Chief Operating Officer at
China Resources Semiconductor Wafer & Chip Company, a semiconductor foundry
in China. He also held a number of senior positions at Honeywell in
California. Dr. Zhang received his MBA from the China Europe International
Business School, Shanghai, and his Ph.D. in Mechanical and Materials
Engineering from Clarkson University, New York.
Mr. Ng previously worked for over 10 years at Sony's manufacturing
facilities in Singapore and China. Most recently he served as senior
general manager of Sony's Huizhou facility that manufactures specialty LLCD
chips. Prior to that, Mr. Ng acted as general manager at MI Wuxi Co., Ltd,
a precision plastic molding company, Volex Cable Assembly (Suzhou), a first
tier telecom and automotive supplier, and at Seagate Technology. Mr. Ng
received a B.Sc degree from the National University of Singapore in Applied
Mr. Jason Somer was hired as the Senior Director of Business
Development to be based in the United States. Mr. Somer was previously the
Director of Legal Affairs at IronPort Systems, an e-mail and Web security
appliance company in San Francisco that was acquired by Cisco Systems.
Prior to that he held legal and business development positions at Neoforma,
a Nasdaq-listed healthcare technology company in San Jose. Mr. Somer had
previously worked as a corporate/securities associate for law firms in New
York City, most recently Morrison & Foerster. Mr. Somer received an LL.M.
from Boston University, an LL.B. from the University of British Columbia,
and a B.Sc. from the University of Western Ontario.
Outlook for Third Quarter and Full Year 2007
Based on current operating and other conditions, Suntech expects its
third quarter 2007 total production output to be in the estimated range of
94MW to 96MW.
Conference Call Information
Suntech's earnings announcement conference call will take place on
August 9, 2007 at 8:00a.m., Eastern Time, which corresponds to August 9,
2007 at 8:00p.m., Beijing/Hong Kong time.
To access the conference call, please dial +1-617-597-5344 (for U.S.
callers) or +852-3002-1672 (for international callers) and ask to be
connected to the Suntech earnings conference call. A live and archived
webcast of the conference call will be available on the Investors section
of Suntech's website at http://www.suntech-power.com .
A replay of the conference call will be available until August 20, 2007
by dialing +1 617-801-6888 (passcode: 14519969).
About Suntech
Suntech Power Holdings Co., Ltd. is a leading solar energy company in
the world as measured by both production output and capacity of solar cells
and modules. Suntech provides solar solutions for a green future. Suntech
designs, develops, manufactures, and markets a variety of high quality,
cost effective and environmentally friendly PV cells and modules for
electric power applications in the residential, commercial, industrial, and
public utility sectors. Suntech's majority-owned subsidiary, MSK
Corporation is one of the top-ranked companies in the building-integrated
photovoltaics (BIPV) space. Suntech's customers are located in various
markets worldwide, including key markets throughout Europe, North America,
Japan and China. For more information, please visit
http://www.suntech-power.com .