Perfectenergy International Ltd., (OTCBB:PFEN), a rapidly growing
solar energy company, today announced revenues for the first fiscal
quarter ended January 31, 2008 rose 558% to $10.4 million, from $1.6
million in revenues for the first fiscal quarter ended January 31,
2007.
Net income for the first quarter ended January 31, 2008 was $1.3
million including $3 million in other income. This compares with a net
loss of approximately $210,000, including other expenses of
approximately $37,000 in the same period in 2007.
Net income on an earnings per share basis for the first fiscal
quarter of 2008 was $0.04 compared with a net loss per share of $0.01
in the same period a year ago. Note that the EPS figures for both
periods have been adjusted for the Company´s 1-for-4 reverse share
split, which became effective for corporate purposes today. Nasdaq
will implement the change and issue a new ticker symbol in the coming
weeks. Until then, all information from Nasdaq will reflect pre-split
amounts. On a pre-split basis, Perfectenergy EPS for the first fiscal
quarter was $0.01.
Perfectenergy´s President and Chief Executive Officer Jack Li,
stated, "Our tremendous growth was possible because of the recent
expansion of our production facility, which is approximately six times
the size as it was a year ago. We are very pleased that with our new
67,000-square-foot Shanghai manufacturing center, we have the capacity
for increasing our production levels and expect to complete our solar
cell production line expansion to 45 megawatts in the second half of
our fiscal year. As we previously announced, and in preparation for
continued growth in 2008 and beyond, we are in the planning process of
the build out of a new solar cell production facility in the Shanghai
Zizhu Science-Based Industrial District of Shanghai, China, which will
allow us to expand our lamination lines and our cell production lines
to 200MW of total new production capacity. Construction is expected to
begin in 2008 and be completed in 2009. Additionally, we remain
focused on ensuring the Company maintains solid relationships with our
existing raw materials suppliers and continues to forge new supplier
relationships to keep up with its growth.
"In this unsure market, we also feel quite confident about our
ability to obtain sufficient silicon material to meet our order
demands in 2008 and beyond," stated Mr. Li.
"Our management believes that as our sales increase, our profit
margins will continue to increase as we achieve economies of scale in
our new production facility, continue to improve our current products,
begin introducing new products, and expand our sales into additional
solar energy product markets in Asia, Europe, and the United States,"
concluded Mr. Li.
Cost of revenues for the quarter ended January 31, 2008 were $10.0
million, an increase of 586% from $1.5 million in the same quarter
last year, and were generally in line with the sales increase and
proportional to the increase in raw material prices, which increased
by 7% compared with the same period in 2007.
Gross profit was approximately $443,000, or 4.3% of revenues, for
the first fiscal quarter of 2008. This compares with gross profit of
$130,000, or 8.2% of revenues, for the same fiscal quarter in 2007.
The lower gross profit margin was mainly due to the impact of plant
relocation, which generates higher fixed production costs until the
facility fully scales, as well as increases in the price of raw
materials. Gross margins are expected to increase in the second fiscal
quarter as the facility achieves economics of scale.
Selling, general and administrative expenses totaled $1.7 million
for the three months ended January 31, 2008, up from approximately
$328,000 for the three months ended January 31, 2007. The increase was
due to costs of the recent financing, including $1.1 million in late
registration penalties, the facilities expansion and the fixed
headcount infrastructure build out, as well as increased consulting,
legal and other services related to being a public company in the U.S.
Research and development costs (R&D) were approximately $32,000
for the three months ended January 31, 2008. There were no R&D costs
incurred in the three months ended January 31, 2007.
As of January 31, 2008, Perfectenergy had cash and equivalents of
$5.9 million, compared with approximately $380,000 on January 31,
2007. In August 2007, the Company raised net proceeds of $15.9 million
from a private placement financing transaction.
ABOUT PERFECTENERGY
Perfectenergy International Limited designs, manufactures, and
markets customized and standard photovoltaic (PV) solar cells, modules
and systems for the worldwide solar market. Perfectenergy currently
sells its products into Europe and Asia. The Company began producing
its solar products in 2005 from its sophisticated 67,000-square-foot
manufacturing plant in Shanghai, China.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
involving known and unknown risks, delays, and uncertainties that may
cause the our actual results or performance to differ materially from
those expressed or implied by these forward-looking statements. These
risks, delays, and uncertainties include, but are not limited to:
risks associated with the uncertainty of future financial and
operating results, our reliance on our sole supplier, the limited
diversification of our product offerings, additional financing
requirements, development of new products, government approval
processes, the impact of competitive products or pricing,
technological changes, the effect of economic conditions and other
uncertainties detailed in the Company´s filings with the Securities
and Exchange Commission including without limitation, the Form 10-KSB,
as amended, for the Company´s fiscal year ended October 31, 2007. The
Company undertakes no obligation to update any forward-looking
statements.
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PERFECTENERGY INTERNATIONAL LTD. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME (LOSS)
Three Months Ended
January 31, January 31,
2008 2007
------------ ------------
REVENUES $10,411,242 $ 1,581,756
COST OF REVENUES 9,968,590 1,452,177
------------ ------------
GROSS PROFIT 442,652 129,579
------------ ------------
OPERATING EXPENSES
Selling, general and administrative 1,719,787 328,021
Stock-based compensation 391,673 1,155
Research and development 31,572 -
------------ ------------
Total operating expenses 2,143,032 329,176
------------ ------------
LOSS FROM OPERATIONS (1,700,380) (199,597)
------------ ------------
OTHER INCOME (EXPENSES)
Interest expenses and other charges (15,290) (11,513)
Interest income 64,784 563
Non-operating income 20,766 -
Change in fair value of derivative
instruments 2,963,143 -
------------ ------------
Total other income (expense), net 3,033,403 (10,950)
------------ ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES 1,333,023 (210,547)
PROVISION FOR INCOME TAXES
Current - -
Deferred 52,042 -
------------ ------------
Total provision for income taxes 52,042 -
------------ ------------
NET INCOME (LOSS) 1,280,981 (210,547)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustments 384,850 21,143
------------ ------------
COMPREHENSIVE INCOME (LOSS) $ 1,665,831 $ (189,404)
============ ============
EARNINGS PER SHARE
Basic $ 0.04 $ (0.01)
============ ============
Diluted $ 0.04 $ (0.01)
===========- ============
WEIGHTED AVERAGE NUMBER OF SHARES
Basic 29,573,254 22,301,158
============ ============
Diluted 31,260,378 22,301,158
============ ============
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CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JANUARY 31, 2008 AND OCTOBER 31, 2007
ASSETS
---------------------------------------------
January 31, October 31,
2008 2007
----------- ------------
Unaudited
----------- ------------
CURRENT ASSETS:
Cash $ 5,906,729 $ 9,701,545
Accounts receivable 2,291,387 13,834
Other receivables 21,743 14,901
Refundable deposit 318,768 -
Inventories
Raw materials 422,402 1,941,734
Work in process 1,194,933 310,192
Finished goods 2,751,039 1,854,882
Prepayments 1,987,336 1,375,401
Deferred expenses 89,783 348,993
Deferred tax assets 25,518 75,725
----------- ------------
Total current assets 15,009,638 15,637,207
----------- ------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 3,444,187 1,866,527
----------- ------------
OTHER ASSETS:
Advances on equipment purchase 859,462 1,169,616
----------- ------------
Total other assets 859,462 1,169,616
----------- ------------
Total assets $19,313,287 $18,673,350
=========== ============
LIABILITIES AND SHAREHOLDERS´ EQUITY
---------------------------------------------
CURRENT LIABILITIES:
Accounts payable and other payable $ 893,918 $ 509,077
Accrued liabilities 1,150,277 55,403
Customer deposits 1,400,906 1,348,574
Taxes payable 17,301 3,772
----------- ------------
Total current liabilities 3,462,402 1,916,826
----------- ------------
FAIR VALUE OF DERIVATIVE INSTRUMENTS 9,503,543 12,466,686
----------- ------------
COMMITMENTS AND CONTINGENCIES - -
----------- ------------
SHAREHOLDERS´ EQUITY:
Common stock, $.001 par value, 94,250,000
shares authorized, 29,573,254 shares issued
and outstanding as of January 31, 2008 and
October 31, 2007, respectively 29,573 29,573
Additional paid-in capital 5,109,182 4,717,509
Statutory reserves 110,068 110,068
Retained earnings (deficits) 521,203 (759,778)
Accumulated other comprehensive income 577,316 192,466
----------- ------------
Total shareholders´ equity 6,347,342 4,289,838
----------- ------------
Total liabilities and shareholders´ equity $19,313,287 $18,673,350
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