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ARISE Technologies Reports 2011 Second Quarter Results

^{Published on 2011-08-11 04:10:43 - Market Wire}
 

WATERLOO, ON, Aug. 11, 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 and six months ended June 30, 2011.

Q2 2011 Highlights: 

• Commissioning of the Silicon facility has commenced
• Sales from Systems Division increased to $1.8 million from $1.0 million in Q2 2010
• Net loss of $4.6 million; an improvement of $9.2 million compared with Q2 2010
• Total revenue of $9.1 million, compared with $15.3 million in Q2 2010

"Market conditions remained challenging during the second quarter, particularly in Europe, where there is uncertainty over the future of Feed-in Tariff programs," said Dan Shea, CEO of ARISE. "We also continued to experience sustained downward pressure on PV cell prices, which had a negative impact on our revenues and margins."

"Earlier this week we announced that we have retained Canaccord Genuity to advise us as we conduct a review of strategic alternatives," continued Mr. Shea. "We are currently engaged in discussions with a number of parties, as we evaluate opportunities to realize the value we have built within our company."

Commissioning of the ARISE Silicon Refining Furnace (SiRF 4.1™) has begun. The furnace is expected to be fully operational in the fourth quarter of 2011.  This particular furnace will be used to test and validate the design and fabrication for future commercial furnaces.

The Systems business continues to grow as solar gains momentum across all segments in Ontario.  Notable wins in the quarter included Del Ridge Homes and the University of Waterloo.   A number of other contracts and proposals are underway.  Strategic contracts will be announced in due course.

Q2 2011 Financial Overview

Sales for the quarter ended June 30, 2011 amounted to $9.1 million, compared with $15.3 million in the second quarter of 2010. PV cells accounted for 79.7% 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 PV cell oversupply which caused continued downward pressure on cell prices, and market uncertainty relating to possible changes to European Feed In Tariff ("FIT") programs.

Gross loss for the second quarter of 2011 was $2.3 million, compared with a gross loss of $0.1 million in the second quarter of 2010. This is mainly due to the lower volumes and pricing pressure on PV cells.

Operating expenses for the quarter ended June 30, 2011 decreased by 74.3% to $1.8 million, from $7.0 million during the same period in 2010. The decrease was mainly the result of a reduction in research and development, sales and general and administrative expenses.  As a result, the 2011 second quarter net loss decreased to $4.6 million from $13.8 million in 2010 second quarter.

For the six months ended June 30, 2011, sales decreased to $20.0 million from $31.5 million in the first half of 2010. Gross profit increased to $4.4 million from a loss of $0.4 million in the six month period ended June 30, 2010. The increased gross profit was attributable to the $8.4 million revaluation of impairment charges realized in the first quarter of 2011. Operating expenses decreased by 51.8% to $5.4 million from $11.2 million in the first half of 2010.

Liquidity and Capital Resources

As at June 30, 2011, the Company had a working capital liability of $32.0 million consisting of current assets of $16.3 million less current liabilities of $48.3 million. This compares with negative working capital at June 30, 2010 of $34.8 million, consisting of current assets of $24.0 million less current liabilities of $58.8 million. The decrease in working capital deficiency reflects the cash raised from the issuance of shares in the period, as well as lower operating costs.

Cash and cash equivalents at June 30, 2011 totaled $0.3 million ($1.6 million at June 30, 2010) an increase of $1.3 million.

Conference Call and Webcast 

ARISE will hold a conference call for analysts and investors at 8:30 a.m. (Eastern) on August 11, 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 1.855.859.2056 (Canada and the U.S. only) (Pass code: 85283128) from 11:30 a.m. on August 11, to 11:59 p.m. on August 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.