N@N

ARISE Technologies Reports 2011 First Quarter Results

^{Published on 2011-06-14 04:10:42 - Market Wire}
 

WATERLOO, ON, June 14, 2011 /CNW/ - ARISE Technologies Corporation (TSX: APV) (Frankfurt: A3T), which is a leader in high-performance, high-quality, cost-effective solar technology, today reported its financial results for the three months ended March 31, 2011.

Please note:  Mandatory new accounting requirements came into effect on January 1, 2011, for all publicly-listed Canadian companies. ARISE therefore implemented International Financial Reporting Standards (IFRS) in its 2011 first quarter financial statements and Management Discussion and Analysis. These documents are available on ARISE's website and filed with SEDAR. IFRS standards will be adopted for subsequent financial results and filings. 

Q1 2011 Highlights: 

• Total revenue of $10.9 million, compared with $16.2 million in Q1 2010
• Gross profit of $6.7 million, compared with a gross loss of $0.2 million in Q1 2010
• Sales from Systems Division increased to $1.0 million from $0.6 million in Q1 2010

"In the first quarter of 2011, uncertainty in the European markets negatively impacted the solar industry as key supporters such as Italy and Germany re-evaluated their incentive programs," said Dan Shea, CEO of ARISE. "We believe some of this uncertainty has been removed by Italy's recent re-instatement of their feed-in tariff program and the introduction of new European content requirements. We await Germany's announcement regarding its support of the solar industry. Certain industry analysts are predicting demand to improve during the second half of 2011. We are monitoring demand levels closely so we can continue to respond quickly."

"During the quarter we continued to advance each of our three divisions. We were particularly pleased to have recently announced that we have begun commissioning our silicon facility in Kitchener, Ontario," continued Mr. Shea. "This development follows our attainment of the fifth milestone related to our agreement with Sustainable Development Technology Canada (SDTC) and moves us closer to the commercialization of our proprietary high-purity silicon technology. We believe our silicon technology has the potential to be a key differentiator for our business and we look forward to continuing to build the program while exploring partnership opportunities with numerous parties."

Q1 2011 Financial Overview

Sales for the quarter ended March 31, 2011 amounted to $10.9 million, compared with $16.2 in the first quarter of 2010. PV cells accounted for 90.5% of sales during the quarter with the balance generated by the company's Systems Division. The decrease in sales during the quarter reflects the impacts of a number of factors, including downward pressures on PV cell prices, unusually bad weather conditions in Europe, and market uncertainty relating to possible changes to European Feed In Tariff ("FIT") programs.

Gross profit for the first quarter of 2011 was $6.7 million, compared with a gross loss of $0.2 million in the first quarter of 2010. The improved gross profit is largely attributable to the renegotiation of an amendment to an existing long-term wafer contract with a major silicon wafer supplier. ARISE had previously recorded an US $9.1 million impairment charge against the prepayments to the vendor.

Operating expenses for the quarter ended March 31, 2011 decreased by 14.2% to to $3.6 million, from $4.2 million during the same period in 2010. The decrease was mainly the result of a reduction in Research and Development expenses, offset somewhat by a slight increase in General and Administrative expenses.

Liquidity and Capital Resources
As at March 31, 2011, the Company had a working capital liability of $29.7 million consisting of current assets of $22.5 million less current liabilities of $52.2 million. This compares with negative working capital at March 31, 2010 of $27.9 million, consisting of current assets of $28.2 million less current liabilities of $56.1 million. The decrease in working capital deficiency reflects the cash raised from the issuance of shares in the period.

Cash and cash equivalents at March 31, 2011 totaled $0.2 million ($0.1 million at March 31, 2010) an increase of $0.1 million.

Conference Call and Webcast 

ARISE will hold a conference call for analysts and investors at 8:30 a.m. (Eastern) on June 14, 2011.  Dan Shea, President and Chief Executive Officer, and Doug McCollam, Chief Financial Officer, will be available to answer questions during the call.

To participate in the call, please dial (647) 427 - 7450 or 1-888 - 231 - 8191 (Canada and the U.S. only) at least five minutes prior to the start of the call. 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 416-849-0833 or 1-800-642-1687 (Canada and the U.S. only) (Pass code: 71987188) from 11:30 a.m. on June 14, 2011, to 11:59 p.m. on June 21, 2011. (ET)

About ARISE Technologies
ARISE Technologies Corporation, based in Waterloo, Ontario, is 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 April 2008 in Bischofswerda, Germany.  The division is developing proprietary technology with a target of achieving a step-by-step progression to a high-efficiency level of greater than 20%.  The PV Silicon Division is using a proprietary method to produce silicon at 7N+ high-purity (99.99999% purity) for PV cell applications, based on a simplified chemical vapor deposition process.  The division is focusing on scaling up its process to provide ARISE with control over its supply, costs, and quality. The PV Systems Division has been providing rooftop and ground-mounted PV solutions since 1996. ARISE is planning to expand its systems business in Ontario under the Ontario FIT (Feed-In Tariff) program.

The company's shares are listed on the Toronto Stock Exchange under the symbol APV and on the Frankfurt Open Market Exchange under the symbol A3T.  Additional information is available at [ www.arisetech.com ] and [ www.sedar.com ].

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
Condensed Consolidated Statement of Financial Position
Unaudited

(In '000's of CAD)

ARISE Technologies Corporation
Condensed Consolidated Statement of Comprehensive Profit (Loss)
Unaudited

(In '000's of CAD)

ARISE Technologies Corporation
Condensed Consolidated Statement of Changes in Equity
Unaudited

(In '000's of CAD)

ARISE Technologies Corporation
Condensed Consolidated Statement of Cash Flows
Unaudited

(In '000's of CAD)