Canadian Solar Reports Third Quarter 2012 Financial Results

         Canadian Solar Reports Third Quarter 2012 Financial Results

PR Newswire

ONTARIO, Nov. 15, 2012

ONTARIO, Nov. 15, 2012 /PRNewswire-FirstCall/ -- Canadian Solar Inc.
("Canadian Solar" or the "Company") (NASDAQ: CSIQ), one of the world's largest
solar companies, today announced its financial results for the third quarter
ended September 30, 2012.

Third Quarter 2012 Highlights

  oSolar module shipments were 384 MW, compared to 412 MW in the second
    quarter of 2012.
  oNet revenue was $326.0 million, compared to $348.2 million in the second
    quarter of 2012.
  oRevenue derived from the Company's total solution business was 21.5% of
    total revenue, compared to 5.5% in the second quarter of 2012.
  oGross margin was 2.2%, compared to 12.4% in the second quarter of 2012.
  oDiluted loss per share was $1.01, compared to $0.59 in the second quarter
    of 2012.
  oCash, cash equivalents and restricted cash balances at the end of the
    quarter were $690.8 million, compared to $692.1 million at the end of the
    second quarter 2012.

Third Quarter 2012 Results

Net revenue for the third quarter of 2012 was $326.0 million, down 6.4% from
$348.2 million in the second quarter of 2012 and down 34.8% from $499.6
million in the third quarter of 2011. Total solar module shipments in the
third quarter of 2012 were 384 MW, compared to 412 MW in the second quarter of
2012 and 355 MW in the third quarter of 2011. Total solar module shipments in
the third quarter of 2012 included 21.1 MW used in the Company's total
solution business, up from 8.7MW in the second quarter of 2012, and up from
19.3 MW in the third quarter of 2011.

By geography, in the third quarter of 2012, sales to European markets
represented 47.9% of net revenue, sales to North America represented 24.9% of
net revenue, and sales to Asia and all other markets represented 27.2% of net
revenue, compared to 69.4%, 15.7% and 14.9%, respectively, in the second
quarter of 2012 and 61.7%, 16.1% and 22.2%, respectively, in the third quarter
of 2011.

                Q3 2012     Q2 2012     Q3 2011
                US$M  %     US$M  %     US$M  %
Europe          156.2 47.9  241.5 69.4  308.2 61.7
America         81.1  24.9  54.5  15.7  80.6  16.1
Asia and others 88.7  27.2  52.2  14.9  110.8 22.2
Total           326.0 100.0 348.2 100.0 499.6 100.0

Gross profit in the third quarter of 2012 was $7.3 million, compared to $43.2
million in the second quarter of 2012 and $11.9 million in the third quarter
of 2011. The sequential quarterly decline in gross profit was primarily due
to lower shipment volume and continued downward pressure on average selling
prices, partially offset by lower manufacturing costs. In the second quarter
of 2012 the Company's gross profit was impacted by an adjustment of $14
million primarily as result of the recognition of the benefit from the
Company's purchase of warranty insurance. The year-over-year decline in
gross profit was primarily due to the decline in average selling prices,
partially offset by lower manufacturing costs and higher shipment volume. In
the third quarter of 2012, the Company recorded an additional charge of $2.1
million, representing 0.65% of revenue, to reflect the higher countervailing
duty on the Company's products imposed by the US Department of Commerce in its
final trade investigation determination. Gross margin in the third quarter of
2012 was 2.2%, compared to 12.4% in the second quarter of 2012 and 2.4% in the
third quarter of 2011.

Total operating expenses were $41.8 million in the third quarter of 2012,
compared to $46.2 million in the second quarter of 2012 and $42.6 million in
the third quarter of 2011.

Selling expenses were $21.4 million in the third quarter of 2012, down 12.4%
from $24.4 million in the second quarter of 2012 and up 14.4% from $18.7
million in the third quarter of 2011. The sequential quarterly decline in
selling expenses was due to lower freight unit costs and lower shipment
volume. The year-over-year increase in selling expenses was due to increases
in freight and other export-related expenses as a result of higher shipment
volume, as well as increases in sales force headcount and related salary
expenses.

General and administrative expenses were $17.0 million in the third quarter of
2012, down 7.4% from $18.4 million in the second quarter of 2012 and up 6.1%
from $16.0 million in the third quarter of 2011. The sequential quarterly
decline in general and administrative expenses was due to a $1.3 million
reversal of a bad debt expense and lower bank charges, partially off-set by
higher salary expenses following the annual salary adjustment. The
year-over-year increase in general and administrative expenses was due to
higher consulting fees, increases in headcount as well as the yearly salary
adjustment.

Research and development expenses were $3.4 million in the third quarter of
2012, down 2.3% from $3.5 million in the second quarter of 2012 and down 57.1%
from $7.9 million in the third quarter of 2011. The year-over-year decline in
research and development expenses was due to a reduced level of product
development activities following the completion of several key projects at the
end of 2011.

Operating margin was negative 10.6% in the third quarter of 2012, compared to
negative 0.9% in the second quarter of 2012 and negative 6.1% in the third
quarter of 2011. The sequential quarterly and year-over-year decline in
operating margin was due to lower gross profit, partially offset by lower
operating expenses.

Interest expense in the third quarter of 2012 was $15.2 million, compared to
$15.1 million in the second quarter of 2012 and $10.8 million in the third
quarter of 2011. The sequential quarterly and year-over-year increase in
interest expense was primarily due to higher bank borrowings in the third
quarter of 2012. Interest income in the third quarter of 2012 was $3.6
million, compared to $3.4 million in the second quarter of 2012 and $3.0
million in the third quarter of 2011. The sequential quarterly and
year-over-year increase in interest income was due to higher restricted cash
balances.

The Company recorded a loss on change in fair value of derivatives of $5.3
million in the third quarter of 2012, compared to a loss of $1.1 million in
the second quarter of 2012 and a gain of $14.5 million in the third quarter of
2011. Net foreign exchange gain in the third quarter of 2012 was $7.0 million
compared to a net foreign exchange loss of $7.2 million in the second quarter
of 2012 and a net foreign exchange loss of $23.9 million in the third quarter
of 2011.

Income tax benefit in the third quarter of 2012 was $1.8 million, compared to
income tax expense of $2.1 million in the second quarter of 2012 and income
tax benefit of $3.4 million in the third quarter of 2011. In the third quarter
of 2012 the Company considered that some portion of the deferred tax assets
relating to the current year operating losses in its Chinese manufacturing
operations would not be realized based on its current forecast. Therefore, it
recorded approximately $4.4 million income tax charge as a result of including
the valuation allowance loss in the annual estimated tax expenses.

Net loss attributable to Canadian Solar in the third quarter of 2012 was $43.7
million, or $1.01 per share, compared to net loss of $25.5 million, or $0.59
per share, in the second quarter 2012,and net loss of $43.9 million, or $1.02
per share, in the third quarter of 2011.

Financial Condition

As of September 30, 2012, the Company had $690.8 million of cash, cash
equivalents and restricted cash, compared to $692.1 million as of June 30,
2012. Operating cash flow was approximately negative $57.6 million in the
third quarter of 2012, reflecting the impact of approximately $68.6 million in
cash outflows for the Company's previously disclosed acquisition of 16
projects from the former SkyPower Limited in Ontario, Canada. Excluding the
impact of this acquisition, adjusted operating cash flow, a non-GAAP measure,
was positive $11.0 million in the third quarter of 2012 compared to $0.8
million in the second quarter of 2012. A table providing a reconciliation of
non-GAAP to the nearest GAAP measure is set out at the end of this press
release.

Accounts receivable balance, net of allowance for doubtful accounts, at the
end of the third quarter of 2012 was $257.8 million compared to $262.2 million
at the end of the second quarter of 2012. Accounts receivable turnover was 79
days in the third quarter of 2012 compared to 69 days in the second quarter of
2012.

Inventories at the end of the third quarter of 2012 were $317.8 million,
compared to $343.8 million at the end of the second quarter of 2012.
Inventory turnover was 102 days in the third quarter of 2012 compared to 107
days in the second quarter of 2012.

Accounts and notes payable at the end of the third quarter of 2012 were $462.8
million, compared to $436.8 million at the end of the second quarter of 2012.
Accounts payable turnover in the third quarter of 2012 was 128 days compared
to 122 days in the second quarter of 2012.

Short-term borrowings at the end of the third quarter of 2012 totaled $890.6
million, compared to $927.7 million at the end of the second quarter of 2012.
Long-term debt at the end of the third quarter 2012 was $224.2 million,
compared to $136.3 million at the end of the second quarter of 2012. The
increase in long-term debt was primarily due to the drawdown of the long-term
credit facilities to finance the Company's acquisition of 16 projects from the
former SkyPower Limited in Ontario, Canada. The Company's unused borrowing
lines of credit totaled $761 million at the end of the third quarter of 2012.

As of September 30, 2012, the Company had $402.6 million in total
stockholders' equity, compared to $441.4 million as of June 30, 2012.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,
remarked: "Our results for the third quarter were broadly in line with our
guidance, despite continued competitive pricing pressure and demand weakness.
During the quarter, we continued to strengthen our position as one of the four
largest suppliers of photovoltaic modules in the world. But more importantly,
we did so while maintaining positive operating cash flow, net of our landmark
acquisition of highly accretive solar power projects in Canada. In the past
several weeks, we announced a series of solar power plant development
agreements, including the sale of our first solar power project in Canada to
Stonepeak Infrastructure Partners, and a significant EPC agreement with Penn
Energy Renewables Ltd., which we have since then expanded. After the end of
the third quarter, we completed construction of two TransCanada Corporation
projects, which are now connected to the grid, and we received REA approval
for six out of the remaining seven TransCanada projects, which are now in the
initial phase of construction. Clearly, we continue to make impressive headway
on the build-out of our project pipeline and the development of our total
solutions business. This is a major differentiator and diversification
strategy for Canadian Solar, which we believe will be a key driver of our
success and sustainability over the long term."

Michael G. Potter, Senior Vice President and Chief Financial Officer of
Canadian Solar commented: "Our gross margin was impacted by our lower shipment
volume and industry-wide pricing pressure. Better than expected volume in
Europe and strength in emerging markets were offset by ongoing weakness in the
U.S. We continue to actively focus on strict cost and inventory controls. We
reduced inventory by approximately $26 million during the third quarter and
expect a further improvement in the fourth quarter. Importantly, because we
have managed our inventory and our balance sheet prudently, we are not under
the pressure to sell inventory regardless of profitability that we believe
some of our competitors are facing. Our long-term debt increased in the
quarter by approximately $88 million. This is directly related to the growth
of our projects business and the drawdown of our long-term credit facility in
support of our previously announced acquisition, and the ongoing construction,
of our Ontario solar power plant projects. We remain in good standing with
our bank syndicates and we are actively managing these important
relationships. We do not currently plan to expand manufacturing capacity as
we can meet expected demand from our existing plants."

Utility Scale Project Pipeline Update

As previously announced, Canadian Solar completed the sale to Stonepeak
Infrastructure Partners of a utility-scale solar power plant for approximately
C$48.0 million (US$48.4 million) in the third quarter of 2012. Shortly after
the end of the third quarter, the Company also finished construction of two
projects: Brockville 1 and William Rutley totaling 20MW (AC), which were sold
to TransCanada Corporation. Final payment and revenue recognition for these
two projects will be determined by testing, which is currently underway. The
Company currently expects payment and revenue recognition for these two
projects in the first quarter of 2013. In addition, six of the seven
remaining solar power projects sold to TransCanada Corporation  totaling 56MW
(AC) have received Ontario Renewable Energy Approval (REA) and construction is
expected to be completed between the second quarter and the third quarter of
2013, with payment and revenue recognition expected in the following quarter
after acceptance testing is completed. The Company now expects to recognize
revenue of over $400 million for eight of the nine projects sold to
TransCanada Corporation during 2013.

Additionally, the Company has also filed REA applications for all sixteen of
the projects it acquired from the former SkyPower Limited and expects to
receive notice to proceed (NTP) with, and start construction on, these
projects during the period from first quarter to third quarter of 2013. The
Company expects to generate over $800 million in revenue from these sixteen
projects in the next 12 to 24 months.

During the third quarter, the Company entered into a turnkey engineering,
procurement and construction (EPC) contract and operations and maintenance
agreement with Penn Energy Renewables Ltd. for the construction and operation
of two new solar energy farms totaling 18.7 MW (AC) in Ontario, Canada. This
agreement has since been expanded to three solar energy farms totaling 28.7MW
(AC), with expected completion by the third quarter of 2013. The Company
expects to recognize revenue for these contracts on a percentage of completion
basis.

In the U.S. market, the Company made good progress expanding its utility-scale
project pipeline to approximately 243MW (DC) at the end of the third quarter
of 2012. Currently, the Company expects up to 5MW (DC) to be built and
recognized in the fourth quarter of 2012, including the recently announced 2.5
MW solar power plant in Laurinburg, NC. In 2013, the Company expects its U.S.
projects business to increase rapidly, with construction of up to 130MW
expected during the year.

Business Outlook

The Company's business outlook is based on management's current views with
respect to operating and market conditions, its current order book, and the
challenging global financing environment, which continues to result in
customer demand uncertainty. Management's views and estimates are subject to
change without notice.

For the fourth quarter of 2012, shipments are expected to be in the range of
approximately 380MW to 420MW, with gross margin expected to be between 1.0%
and 3.0%.

For the full year 2012, the Company is revising its shipment guidance to be in
the range of approximately 1.5GW to 1.6GW, compared to its previous guidance
of 1.8GW to 2.0GW.

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar,
remarked: "We are seeing strong demand for our PV modules in the fourth
quarter as customers around the world start to consolidate their PV module
procurement in favor of tier-one manufacturers with solid quality, proven
track record and strong bankability, with some customers also rushing to
finish projects before the year end. We still, however, face pricing pressure
as industry consolidation is not yet completed. We are taking a conservative
approach, as we have always done in the past. We are being very careful and
selective with regard to new opportunities to ensure certainty of payment.
For example, we expect to realize at least 30 MW of Golden Sun projects in
China  in the fourth quarter and could potentially realize up to 45 MW. On a
geographic basis, we have a robust pipeline in place in Canada, the U.S.,
Japan and China, with potential in India and South America, among others. We
are one of the world's largest solar companies and one of the lowest cost
suppliers of solar photovoltaic modules. We have a strong and highly bankable
global brand. So while we expect the current headwinds to continue, we are
highly confident in our long-term ability to succeed based on our
differentiated strategy, market leadership position, and balance sheet."

Recent Developments

On October 16, 2012, the Company announced that its subsidiary, Canadian Solar
Solutions Inc., expanded its relationship with Penn Energy Renewables Ltd.
with an additional 10MW (AC) turnkey engineering, procurement and construction
contract and operations and maintenance agreement for the construction and
operation of a solar power project in Ontario.

On October 16, 2012, the Company announced that its modules were installed in
a 5MW (AC) solar plant located in a dense agricultural area of Lancaster
County, Pennsylvania. The environment-friendly solar project, dubbed
Keystone, was developed by Community Energy Solar and constructed by groSolar.

On October 15, 2012, the Company announced today that it will partner with the
largest privately held roofing company in the United States,PetersenDean,on a
new roofing program, which the Company is introducing. PetersenDean has
launched a successful solar division and will actively promote the new roofing
program, capitalizing on its decades of roofing experience to improve the
installation quality and costs for installation of a residential solar system.

On October 9, 2012, the Company announced that Canadian Solar Australia, a
wholly owned subsidiary, and REDSET, a solar products distribution company
serving a network of over 1,000 licensed installers across Australia, entered
into a solar module supply agreement.

On October 2, 2012, the Company announced the delivery 26 MW of its high
quality and high-performing CS6P-P solar power modules to EPC contractor, TSK
Solar, for the "San Fermin" solar power plant installation in Puerto Rico,
co-developed by Uriel Renewables Inc. and Coqui Power LLC. The solar power
plant is located in the North Eastern town of Loiza, a region that regularly
faces adverse weather conditions such as hurricanes, tropical storms and
flooding. Due to the specific nature of the project and its location, the
project's electrical equipment was installed on structures that elevated them
two to four meters above ground and designed to withstand winds of up to 260
kilometers per hour.

On September 24, 2012, the Company announced that it provided the solar
modules for one of Europe's largest skiing halls - the alpincenter in
Hamburg-Wittenburg, Germany. The PV rooftop installation on the alpincenter
uses Canadian Solar modules with a total output of 3.6 MW. The alpincenter's
operator reaps a double benefit: using the self-produced solar power
significantly offsets energy costs while at the same time reducing the power
needed to run the cooling system thanks to the shadowing effect underneath the
solar system.

On September 11, 2012, the Company announced a new program designed to make it
even easier for commercial installers and solar developers to bring more solar
projects to completion in the U.S. market. The new financial solutions
program will include extended terms and a commercial loan offering in
partnership with De Lage Landen Financial Services, Inc. (DLL), a global
provider of financing solutions, further demonstrating Canadian Solar's
commitment to its customers' success.

On September 10, 2012, the Company launched its new ResidentialAC module, the
latest addition to the Intelligrated™ Power product family, at Solar Power
International 2012.

On September 5, 2012, the Company and Mortenson Construction, a leading
engineering, procurement and construction (EPC) Contractor, broke ground on a
2.5 MW PV solar installation in Laurinburg, N.C., an agricultural community in
Scotland county. The solar project is set to be completed in December 2012.

On September 5, 2012, the Company announced it will supply solar modules for
Turkey's first and largest governmental solar PV project which will be
installed by Gehrlicher Merk Solar, the joint venture company for the Turkish
market of Gehrlicher Solar and Merk Solar Enerji. The two companies have won
the public tendering for the Gursu municipality of Bursa in Turkey. The
milestone PV project has a total capacity of 96 kW and is supported directly
by the Turkish Prime Minister's office. Canadian Solar was selected out of 13
different module manufacturers for this project.

On August 29, 2012, the Company announced that it has supplied more than 8 MW
of solar modules to groSolar for three utility and commercial photovoltaic
(PV) projects in the United States.

On August 28, 2012, the Company announced that its subsidiary, Canadian Solar
Solutions Inc., has closed an 18.7 MW AC turnkey engineering, procurement and
construction (EPC) contract and operations and maintenance agreement for the
construction and operation of two new solar energy farms in Ontario, Canada
for Penn Energy Renewables Ltd. The construction will begin in the third
quarter of 2012, with the projects expected to be fully operational in the
summer of 2013.

On August 27, 2012, the Company announced it completed the sale to Stonepeak
Infrastructure Partners of a utility-scale solar power plant for approximately
C$48.0 million (US$48.4 million). As the developer, EPC and construction
financier, Canadian Solar built the solar power plant to provide enough clean,
renewable energy to power more than 1,200 homes in eastern Ontario near the
town of Napanee.

On August 21, 2012, the Company announced that, along with its partner
MECOSUN, a French PV integrator, it achieved the Pass'Innovation certification
from the CTSB, a French institution. The testing attests to the integration
of Canadian Solar's PV panels with MECOSUN's MV€ system.

Conference Call Details

The Company will hold a conference call on Thursday, November 15, 2012 at 8:00
a.m. U.S. Eastern Standard Time (9:00 p.m., November 15, 2012 in Hong Kong) to
discuss the Company's financial results for the third quarter ended September
30, 2012 and provide an update to its business strategy and outlook.

The dial-in phone number for the live audio call is +1-617-786-2905 or
+1-800-599-9795, with passcode 27534422. A live webcast of the conference
call will also be available on Canadian Solar's website at
www.canadiansolar.com.

A replay of the call will be available approximately two hours after the
conclusion of the live call through 10:00 a.m. on November 23, 2012, U.S.
Eastern Standard Time (11:00 p.m., November 23, 2012 in Hong Kong) by
telephone at +1-888-286-8010 or +1-617-801-6888, with passcode 83917942. A
webcast replay will also be available at www.canadiansolar.com.

About Canadian Solar Inc. (NASDAQ: CSIQ)

Canadian Solar Inc. (NASDAQ: CSIQ) is one of the world's largest solar
companies. As a leading vertically integrated provider of ingots, wafers,
solar cells, solar modules and other solar applications, Canadian Solar
designs, manufactures and delivers solar products and solar system solutions
for on-grid and off-grid use to customers worldwide. With operations in North
America, Europe, Australia and Asia, Canadian Solar provides premium quality,
cost-effective and environmentally-friendly solar solutions to support global,
sustainable development. For more information, please visit
www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements:

Certain statements in this press release including but not limited to
statements regarding our expected future shipment volumes, gross margins,
supply cost, manufacturing capacities, future market share, business prospects
and future quarterly or annual results, particularly the management quotations
and the statements in the "Business Outlook" section, are forward-looking
statements that involve a number of risks and uncertainties that could cause
actual results to differ materially. These statements are made under the "Safe
Harbor" provisions of the U.S. Private Securities Litigation Reform Act of
1995. In some cases, you can identify forward-looking statements by such terms
as "believes," "expects," "anticipates," "intends," "estimates," the negative
of these terms, or other comparable terminology. Factors that could cause
actual results to differ include the risks regarding the previously disclosed
SEC investigation as well as general business and economic conditions and the
state of the solar industry; governmental support for the deployment of solar
power; future available supplies of high-purity silicon; demand for end-use
products by consumers and inventory levels of such products in the supply
chain; changes in demand from significant customers; changes in demand from
major markets such as Germany; changes in customer order patterns; changes in
product mix; capacity utilization; level of competition; pricing pressure and
declines in average selling prices; delays in new product introduction; delays
in utility-scale project approval process; delays in utility-scale project
construction; continued success in technological innovations and delivery of
products with the features customers demand; shortage in supply of materials
or capacity requirements; availability of financing; exchange rate
fluctuations; litigation and other risks as described in the Company's SEC
filings, including its annual report on Form 20-F filed on April 27, 2012.
Although the Company believes that the expectations reflected in the forward
looking statements are reasonable, it cannot guarantee future results, level
of activity, performance, or achievements. You should not place undue reliance
on these forward-looking statements. All information provided in this press
release is as of today's date, unless otherwise stated, and Canadian Solar
undertakes no duty to update such information, except as required under
applicable law.

 FINANCIAL TABLES FOLLOW

Canadian Solar Inc.
Unaudited Condensed Consolidated Statement of Operations
(In Thousands of US Dollars, Except Share And Per Share Data And Unless Otherwise Stated)
                                                                      Three Months Ended                  Nine Months Ended
Item                                                                  September30 June 30    September30 September30 September30
                                                                      2012         2012       2011         2012         2011
Netrevenues 325,965      348,222    499,639      999,991      1,424,863
Cost of revenues                                                      318,696      305,054    487,735      924,499      1,283,964
Gross profit                                                          7,269        43,168     11,904       75,492       140,899
Selling expenses                                                      21,372       24,405     18,685       66,088       48,247
General and administrative expenses                                   17,015       18,379     16,037       50,565       49,474
Research and development expenses                                     3,380        3,459      7,885        9,870        14,827
Total operating expenses                                              41,767       46,243     42,607       126,523      112,548
Income (loss) from operations                                        (34,498)     (3,075)    (30,703)     (51,031)     28,351
Interest expenses                                                     (15,232)     (15,059)   (10,795)     (43,410)     (32,107)
Interest income                                                       3,552        3,416      3,040        9,698        6,683
Gain (loss) on change in foreign currency derivatives                 (5,328)      (1,079)    14,494       (6,636)      (8,158)
Foreign exchange gain (loss)                                          7,041        (7,226)    (23,949)     91           (25,912)
Investment income (loss)                                              (684)        (416)      309          (1,144)      91
Loss before incomes taxes                                             (45,149)     (23,439)   (47,604)     (92,432)     (31,052)
Income tax benefit (expenses)                                         1,796        (2,104)    3,379        2,142        (271)
Net loss                                                              (43,353)     (25,543)   (44,225)     (90,290)     (31,323)
Less: Net income (loss) attributable to non–controlling interest      315          (69)       (348)        194          (405)
Net loss attributable to Canadian Solar Inc.                          (43,668)     (25,474)   (43,877)     (90,484)     (30,918)
Loss per share-basic                                                  ($1.01)      ($0.59)    ($1.02)      ($2.10)      ($0.72)
Shares used in computation-basic                                      43,209,194   43,160,446 43,154,552   43,175,046   43,049,773
Loss per share-diluted                                                ($1.01)      ($0.59)    ($1.02)      ($2.10)      ($0.72)
Shares used in computation-diluted                                    43,209,194   43,160,446 43,154,552   43,175,046   43,049,773





Canadian Solar Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income
(In Thousands of US Dollars)
                                                                                Three Months Ended                Nine Months Ended
                                                                                September30 June30  September30 September30 September30
                                                                                2012         2012     2011         2012         2011
Netloss (43,353)     (25,543) (44,225)     (90,290)     (31,323)
Other comprehensive income, net of tax:
Foreign currency translation adjustments                                        2,785        (4,976)  258          2,656        9,404
Comprehensive loss                                                              (40,568)     (30,519) (43,967)     (87,634)     (21,919)
Less: comprehensive income(loss) attributable to non-controlling interest       485          (37)     51           552          5
Comprehensive loss attributable to Canadian Solar Inc.                          (41,053)     (30,482) (44,018)     (88,186)     (21,924)





Canadian Solar Inc.
Unaudited Condensed Consolidated Balance Sheet
(In Thousands of US Dollars)
                                          September30,2012 December31,2011
Assets
Current assets
Cash and cash equivalents                      318,972            343,995
Restricted cash                                371,869            178,270
Accounts receivable trade, net                 257,762            292,176
Accounts receivable, unbilled                  9,669              51,371
Amount due from related parties                5,850              19,836
Inventories                                    317,793            296,568
Value added tax recoverable                    9,351              16,974
Advances to suppliers, net                     11,636             11,309
Foreign currency derivative assets             365                2,727
Project assets-Current                         91,595             37,133
Prepaid expenses and other current assets      69,884             45,219
Total current assets                           1,464,746          1,295,578
Property, plant and equipment, net             477,118            510,069
Deferred tax assets                            28,558             23,227
Advances to suppliers, net                     563                258
Prepaid land use right                         18,566             13,805
Investments in affiliates                      12,184             11,008
Intangible assets, net                         4,379              8,516
Goodwill                                       490                2,265
Project assets-Non current                     273,860            -
Other non-current assets                       36,045             15,083
TOTAL ASSETS                                   2,316,509          1,879,809
Current liabilities:
Short-term borrowings                          890,569            743,687
Accounts and notes payable                     462,761            305,998
Amounts due to related parties                 1,727              3,008
Other payables                                 79,037             84,676
Advances from customers                        11,179             65,216
Foreign currency derivative liabilities        2,530              -
Other current liabilities                      32,870             33,862
Total current liabilities                      1,480,673          1,236,447
Accrued warranty costs                         55,835             47,021
Convertible notes                              987                950
Long-term borrowings                           224,156            88,249
Liability for uncertain tax positions          13,829             12,301
Deferred tax liabilities - non current         66,440             -
Loss contingency accruals                      27,774             27,863
Total liabilities                              1,869,694          1,412,831
Mezzanine equity                               44,197             -
Common shares                                  502,562            502,403
Additional paid-in capital                     (39,494)           (53,331)
Accumulated deficit                            (119,177)          (28,693)
Accumulated other comprehensive income         48,211             45,555
Total Canadian Solar Inc. shareholders'        392,102            465,934
equity
Non-controlling interest                       10,516             1,044
Total equity                                   402,618            466,978
TOTAL LIABILITIES, MEZZANINE EQUITY AND       2,316,509          1,879,809
SHAREHOLDERS` EQUITY

About Non-GAAP Financial Measures

To supplement its financial disclosures presented in accordance with GAAP,
Canadian Solar uses non-GAAP measures which are adjusted from the most
directly comparable GAAP results for certain items, as described below. The
Company presents the non-GAAP adjusted operating cash flow because it believes
it is important for the readers of the press release to know what the
Company's adjusted operating cash flow was before the impact of the
acquisition of 16 projects in Ontario from former SkyPower Limited. The
non-GAAP adjusted operating cash flow is not a measure of financial
performance under U.S. GAAP, and should not be considered in isolation or as
an alternative to operating cash flows and other measures determined in
accordance with GAAP.

                                     Three Months Ended
                                     September30, 2012        June 30, 2012
Non-GAAP adjusted operating cash     $11.0M                    $0.8M
inflow
Subtract consideration paid for      $68.6M                    $70.4M
acquisition
Operating cash outflow               ($57.6M)                  ($69.6M)

SOURCE Canadian Solar Inc.

Website: http://www.canadiansolar.com
Contact: Ed Job, CFA, Director, Investor Relations of Canadian Solar Inc.,
ir@canadiansolar.com; or David Pasquale of Global IR Partners,
+1-914-337-8801, or csiq@globalirpartners.com, for CSIQ
 
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