Solar Enertech Corp (PINK:SOEN)

From August 15 2011:

MOUNTAIN VIEW, Calif., Aug. 15, 2011 /PRNewswire-Asia-FirstCall/ -- Solar EnerTech Corp. (OTCQB: SOEN) (the "Company") today announced unaudited financial results for the third quarter ended June 30, 2011.

Third Quarter 2011 Highlights:

• Revenue for the third quarter 2011 was $12.2 million, composed entirely of solar module sales. In comparison, revenue for the third quarter 2010 was $16.4 million, composed of $15.8 million in solar module sales, $0.2 million in solar cell sales and $0.4 million in resale of raw materials.
• Gross loss for the third quarter 2011 was of $0.6 million compared to a gross profit of $1.3 million in the third quarter 2010.

Leo Shi Young, the Company's Chief Executive Officer, stated, "Our shipments decreased during the third fiscal quarter after the European market was hit by a downturn for the first time in two years and average selling prices continued to decrease. At the same time, although our customers in Australia have recovered from the aftermath of the country's flood earlier this year, they are still slow in ordering solar modules."

"In spite of the temporary market downturn, we continue to be committed in maintaining our product quality at lower selling prices. We will continue to ship quality products and provide excellent services to support our customers as we believe that quality has become more critical in the current market in order to differentiate us from our competitors."

"In response to the challenging markets we face, the Company will reassess its focus and strategy to optimize channel positioning, vertical integration, and geographical diversification. The Company has recently commenced market exploration in Africa, where the Company will be building a pilot project as a showcase to open the African market, and China, where the Company looks forward to participating in the increased market opportunities in large PV installations." concluded Mr. Young.

Second Quarter Results:

• Revenue for the second quarter of fiscal year 2011 decreased 40% to $10.7 million compared to $17.8 million in the second quarter a year ago.
• Gross profit for the second quarter of fiscal year 2011 decreased to a loss of $0.2 million compared to $0.9 million in the second quarter of fiscal year 2010.

• Net loss for the second quarter of fiscal year 2011 was $3.1 million, or $0.02 per basic and diluted share, compared to a net loss of $19.2 million, or $0.14 per basic and diluted share, for the same period in fiscal year 2010.

Leo Shi Young, the Company's Chief Executive Officer, stated, "Our volume decreased during this period mainly because reduced output due to the floods in Australia caused our customers to slow down their intake, as well as a low season during theChinese New Year break, combined with the halt in our production while we installed and calibrated a new PECVD machine. While this caused our performance for our second quarter to fall short, this was a necessary investment in our future productivity to address our production bottle neck caused by the lack of a high quality PECVD."

The Company is pleased to announce the appointment of Susan Yao as its new Chief Financial Officer, effective May 16, 2011. Ms. Yao will be responsible for the Company's worldwide finance and accounting functions. Ms. Yao has over 14 years of work experience in accounting and finance in multinational corporations. Prior to joining the Company, Ms. Yao served as Financial Controller at Shanghai Shen-Mei Beverage & Food Co., Ltd., a Coca-Cola subsidiary in China from May 2010 to May 2011. Prior to her position at Coco-Cola, Ms. Yao was Deputy Finance Chief at Shanghai SVA-NEC Liquid Crystal Display Co., Ltd. for six years and previous to that worked at Shanghai Hewlett-Packard Co., Ltd. as a costing supervisor.

First Quarter Results:

• Revenue for the first quarter 2011 was $15.5 million, composed of $15.3 million in solar module sales and $0.2 million in solar cell sales. This compares to $17.7 million of sales in the same quarter a year ago, composed of $15.3 million in solar module sales, $1.2 million in solar cell sales and $1.2 million in resale of raw materials.
  
• Net income for the first quarter of fiscal year 2011 was $5.0 million, or $0.03 per basic and diluted share, compared to a net loss of $3.9 million, or $0.04 per basic and diluted share, for the same period in fiscal 2010. The net income in the first quarter of fiscal year 2011 primarily resulted from the reversal of payroll related tax accrual.

Leo Shi Young, the Company’s Chief Executive Officer, stated, "We continued to experience strong demand from our customer base for SolarE products during the first quarter of fiscal year 2011. Financial results of this quarter demonstrate the management’s confidence to steer the company towards profitability at a challenging time when market selling prices are falling while material costs continue to rise. The key is the quality that we have maintained and continued to improve for our products, and the capability to meet the increasing demands from our customers in Europe, Australia and the United States."

"For the quarters to come, we expect to see stronger demand in high-efficiency, high quality products as the solar industry continues to grow more sophisticated. At the same time we are striving to streamline our operations, reduce our costs, and increase our market share," concluded Mr. Young.

Fourth Quarter 2010 Highlights:

• Shipments for the fourth quarter 2010 increased 87% to 9.86MW from 5.26MW in the fourth quarter of the prior year.
• Revenue for the fourth quarter 2010 was $18.2 million, representing an increase of 38% over the $13.2 million of revenue booked in the fourth quarter of the prior year.

Fiscal Year 2010 Highlights:

• Shipments for fiscal year 2010 increased 233% to 34.92MW from 10.50MW in the prior year.
• Revenue for fiscal year 2010 was $70.0 million, representing an increase of 113% over the prior year.
• Gross Profit for fiscal year 2010 was $5.2 million, compared to a loss of $1.0 million in the prior year.

SOEN is losing money.

"During the fourth quarter, demand remained robust, resulting in the strong preliminary volumes and revenues that we are announcing today. Given our fourth quarter forecast, quarterly revenue will have grown 32.5% over the prior year’s quarter, while full fiscal year revenue growth would be in excess of 111% compared to the previous fiscal year," noted Mr. Leo Young, Chief Executive Officer of Solar EnerTech. “If we continue to diligently execute on the strategic and operational objectives of our business plan, we should be well positioned to expand our customer base by leveraging our solar energy cell manufacturing expertise to penetrate new markets in higher growth regions, thereby expanding our geographic footprint, while also achieving organic growth by maintaining our commitment of providing superior customer service which will fortify our presence in existing markets. Overall, we are pleased with the growth in volumes and revenues and look forward to reporting our full financial results.”

The Company has incurred significant net losses and has had negative cash flows from operations during each period from inception through December 31, 2009 and has an accumulated deficit of approximately $72.2 million at December 31, 2009. For the three months ended December 31, 2009, the Company had operating cash flows of approximately $0.1 million and incurred a net loss of approximately $3.9 million.

The Company’s consolidated financial statements have been prepared on the assumption that it will continue as a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

Since April 2009, significant steps were taken to reach operational profitability including securing key new contracts, which has generated increased sales volumes. In addition, the Company engaged in various cost cutting programs and renegotiated most of the contracts to reduce operating expenses. Due to the above and the decrease in raw material prices, specifically silicon wafer prices, the Company has been generating positive gross margins starting in the third quarter of fiscal year 2009.

The Company believes that if the Company is able to execute on its business plan, the successful completion of the conversion, along with our existing cash resources and the cash expected to be generated from operations during fiscal year 2010 will be sufficient to meet the Company’s projected operating requirements at least through September 30, 2010 and enable it to continue as a going concern.

Source: For the quarterly period ended December 31, 2009