Trina Solar Announces Third Quarter 2012 Results

               Trina Solar Announces Third Quarter 2012 Results

PR Newswire

CHANGZHOU, China, Nov. 20, 2012

CHANGZHOU, China, Nov. 20, 2012 /PRNewswire/ -- Trina Solar Limited (TSL)
("Trina Solar" or the "Company"), a leading integrated manufacturer of solar
photovoltaic ("PV") products, today announced its financial results for the
third quarter of 2012.

Third Quarter 2012 Financial and Operating Highlights

  oSolar module shipments were approximately 380 MW during the third quarter
    of 2012, representing a decrease of 9.2% from the second quarter of 2012
  oNet revenues were $298.0 million, a decrease of 13.9% from the second
    quarter of 2012
  oGross profit was $2.4 million, a decrease of 91.9% from the second quarter
    of 2012
  oGross margin was 0.8%, compared to 8.4% in the second quarter of 2012, and
    included a non-cash inventory write-down totaling $13.3 million and a
    reversal of prior provision for anti-dumping and countervailing duties
    (AD/CVD) in the United States totaling $25.8 million
  oThe Company had no incremental accounts receivables provision, compared to
    $44.1 million in the second quarter of 2012
  oOperating loss, including one-time tax and organization restructuring
    charges totaling $15.2 million, was $76.0 million, compared to $78.6
    million in the second quarter of 2012
  oOperating margin was negative 25.5%, compared to negative 22.7% in the
    second quarter of 2012
  oNet loss was $57.5 million, compared to $92.1 million in the second
    quarter of 2012
  oLoss per fully diluted American Depositary Share ("ADS") were $0.81,
    compared to $1.30 in the second quarter  of 2012 (each ADS represents 50
    ordinary shares)

"Our third quarter sales were adversely impacted by the ongoing supply-demand
imbalance in the global PV industry, high inventories and the irrational
pricing practices by some competitors in the market," said Mr. Jifan Gao,
Chairman and CEO of Trina Solar. "These factors contributed to declines in our
average selling prices, despite cost improvements of our key materials. Higher
historical costs of our inventory also contributed to the low gross margin and
net loss in the third quarter. In response to this challenging operating
environment, we focused our efforts on retaining quality customers and
maximizing operating cash flow, which resulted in improvements in trade
receivables and inventory balance from the previous quarter.

"As recently announced, we have also successfullyimplemented two major
initiatives. During the third quarter, we conducted the restructuring of our
global business into distinct modules and systems business units. We believe
this will allow us to more efficiently manage operating costs for product
development to address increasing PV solar end-use applications and geographic
expansion, as well as to grow our project systems as a percentage of our total
business. In conjunction with this restructuring, weperformed a top-down
review of our operations to reallocate and reduce our headcount and other
operating expenses. These initiatives address current industry conditions as
well as the shift in regional demand and changes to our customers' business
models as a result of the increasingly attractive economics of solar energy
for utility scale applications.

"We remain committed to improving the quality of our products, as well as our
manufacturing process and performance. In the third quarter, we received the
Carbon Footprint Verification from the British Standards Institute, which
affirms that we comply with international best practices in carbon accounting,
demonstrating our commitment to sustainable development. More recently, our
commitment to quality was reflected by a certification from Underwriters
Laboratories' ("UL") Client Test Data Program, which will allow Trina Solar to
conduct UL-standard testing to accelerate market delivery of our latest
technology-driven innovations and products."

Recent Business Highlights

During the third quarter of 2012, the Company:

  oAnnounced the appointment of Mr. Henry Chow to its board of directors.
    Prior to his retirement from IBM in 2009, Mr. Chow served in numerous
    executive positions in the Asia Pacific region, and was most recently
    general manager and then chairman of the IBM Greater China Group. He also
    served on IBM's Worldwide Management Council and its Strategy Team, a
    group of senior IBM executives responsible for advising, reviewing, and
    formulating IBM's business strategy. Mr. Chow currently serves as a
    non-executive director to AMD, a semiconductor company based inthe United
    States.
  oAnnounced the availability of its newest line of high performance
    solutions, Trinasmart. Trinasmart combines the Company's award-winning
    high performance modules with new optimizing and monitoring technologies
    to deliver a comprehensive solution to maximize roof space and overall
    power output, resulting in better project economics for both customers and
    installers.
  oAnnounced a new Ontario, Canada sales and business development office as
    the Company also announced a partnership with Silfab Ontario, enabling
    Trina Solar to offer world-class modules that are locally-manufactured to
    the Canadian market.
  oAnnounced the completion of the first large-scale rooftop PV system in
    Switzerland to use the Company's high-performance Honey modules. The
    system, deployed on the roofs of Sagewerke Christen AG's production and
    storage buildings in Luthern in the canton of Lucerne, has an installed
    capacity of 900kWp and produces up to 6,000kWh of solar energy per day.
    This installation makes the company the first self-sufficient and carbon
    neutral sawmill in Switzerland.
  oAnnounced a new sales and business development presence in Santiago,
    Chile. The Company's coverage now encompasses all of the Americas,
    including the United States, Canada, Mexico, the Caribbean, Central and
    South America.
  oHeld its 2012 annual general meeting of shareholders on September 7, 2012.
  oAnnounced the U.S. launch of Trina Solar Partner Plus, a partnership
    loyalty and incentive program that provides tools to help solar installers
    grow their businesses.
  oAnnounced its plans to streamline its organizational structure to manage
    its business operations more efficiently. The initiatives include
    separating the Company's PV module and systems business units and adopting
    an operating expense reduction program.
  oAnnounced that it has published its 2011 Corporate Social Responsibility
    (CSR) Report.

Subsequent Events

Subsequent to the third quarter of 2012, the Company:

  oAnnounced that its APMEA (Asia Pacific, Middle East and Africa)
    headquarters in Singapore had began formal operations.
  oAnnounced it obtained Carbon Footprint Verification for the Company's
    solar PV modules from the British Standards Institution (BSI), a leading
    international standards and certification body. The verification process
    involved assessing the Company's carbon footprint throughout various
    stages of the of the life cycles of our products, suggesting the carbon
    payback time for our products given reasonable assumptions on the carbon
    offset potential of the modules during their usage period.
  oAnnounced the duty rates determined by theU.S. Department of Commercein
    the AD/CVD investigations oncrystalline silicon photovoltaic cells,
    whether or not assembled into modules, fromChina, and that theU.S.
    International Trade Commission (the "ITC")also made negative findings
    with regard to critical circumstances in this investigation, such that no
    retroactive duties would be imposed onTrina Solar. The Company also
    announced that it is currently evaluating whether it is necessary and
    prudent to appeal these final determinations issued by the ITC.
  oAnnounced that  it obtained the Client Test Data Program certification
    from UL. The Company is the first global solar PV company to receive this
    certification, which will allow it to independently conduct testing
    programs and issue UL-recognized test data without the on-site presence of
    UL-dispatched engineers.

Third Quarter 2012 Results

Net Revenues

Net revenues in the third quarter of 2012 were $298.0 million, a decrease of
13.9% sequentially and 38.2% year-over-year. Total shipments were 380.3 MW,
compared to 418.8 MW in the second quarter of 2012 and 370.1 MW in the third
quarter of 2011. The sequential decrease in shipments was caused by a
continued supply-demand imbalance and the decrease in revenue resulted from
the effect of this imbalance on market pricing and commercial terms.

Gross Profit and Margin

Gross profit in the third quarter of 2012 was $2.4 million, compared to a
gross profit of $29.0 million in the second quarter of 2012 and $52.0 million
in the third quarter of 2011. Gross profit during the third quarter of 2012
includes a $25.8 million reversal of prior provisions for AD/CVD in the United
States, relating to the ITC's decision to not impose duties retroactively due
to the lack of evidence for critical circumstances.Gross profit during the
third quarter of 2012 includes a provision of $13.3 million for non-cash
inventory write-down.

Gross margin was 0.8% in the third quarter of 2012, compared to 8.4% in the
second quarter of 2012 and 10.8% in the third quarter of 2011. The sequential
decrease in gross margin was due primarily to higher inventory carrying costs
and inventory write-down in connection with decreasing average selling price
of modules; the year-on-year decrease in gross margin was due primarily to
declines in the average selling price of modules that exceed reductions in
cost.

The impact of the inventory write-down on the Company's gross margin was 4.5%
in the third quarter of 2012.

Operating Expense, Income and Margin

Operating expenses in the third quarter of 2012 were $78.3 million, a decrease
of 27.2% sequentially and an increase of 3.8% year-over-year. The Company's
operating expenses, which included one-time tax and organization restructuring
charges totaling $15.2 million, represented 26.3% of its third quarter net
revenues, a decrease from 31.1% in the second quarter of 2012 and an increase
from 15.7% in the third quarter of 2011. The sequential percentage decrease
was primarily due to decrease in provision made to account receivables in the
third quarter of 2012 while the year-to-year percentage increase was primarily
due to the decrease in net revenues. Operating expenses in the third quarter
of 2012 included $1.1 million in share-based compensation expenses, compared
to $2.7 million in the second quarter of 2012 and $2.0 million in the third
quarter of 2011.

As a result of the foregoing, operating loss in the third quarter of 2012 was
$76.0 million, compared to an operating loss of $78.6 million in the second
quarter of 2012 and an operating loss of $23.5 million in the third quarter of
2011. Operating margin was negative 25.5% in the third quarter of 2012,
compared to negative 22.7% in the second quarter of 2012 and negative 4.9% in
the third quarter of 2011.

Net Interest Expense

Net interest expense in the third quarter of 2012 was $13.8 million, compared
to $9.3 million in the second quarter of 2012 and $9.7 million in the third
quarter of 2011. The sequential increase in net interest expense was primarily
due to an increase in average bank borrowings in the third quarter of 2012.

Foreign Currency Exchange

The Company had a foreign currency exchange gain of $18.2 million in the third
quarter of 2012, which included changes in fair value of derivative
instruments, compared to a net loss of $22.5 million in the second quarter of
2012 and a net gain of $0.4 million in the third quarter of 2011. This net
gain was primarily due to the appreciation of the Euro against the U.S. dollar
during the third quarter of 2012, augmented by gains from foreign currency
hedging contracts used by the Company to mitigate its foreign currency risk
exposure.

The Company continued to mitigate the effects of foreign exchange rate
volatility during the third quarter of 2012 by using hedging contracts
involving the Euro, Renminbi, and U.S. dollar.

Income Tax Benefit and Expense

Income tax benefit was $11.7 million in the third quarter of 2012, compared to
income tax benefit of $16.1 million in the second quarter of 2012 and $2.9
million in the third quarter of 2011. The income tax benefit in the third
quarter of 2012 was primarily the result of a deferred tax benefit recognized
in connection with the net operating losses incurred in the quarter.

Net Loss and EPS

As a result of the foregoing, net loss was $57.5 million in the third quarter
of 2012, compared to net loss of $92.1 million in the second quarter of 2012
and $31.5 million in the third quarter of 2011.

Net margin was negative 19.3% in the third quarter of 2012, compared to
negative 26.6% in the second quarter of 2012 and negative 6.5% in the third
quarter of 2011.

Loss per fully diluted ADS were $0.81 in the third quarter of 2012. The impact
of the third quarter provision for non-cash inventory write-down was
approximately negative $0.19, while the effect of the foreign currency
exchange net gain was approximately $0.26, per ADS.

Financial Condition

As of September 30, 2012, the Company had $703.4 million in cash and cash
equivalents and restricted cash, and a working capital balance of $360.6
million. Total bank borrowings were $1,120.8 million, of which $431.0 million
were long-term borrowings.The Company decreased its short-term borrowings by
$44.0 million to approximately $689.7 million as of September 30, 2012.

During the third quarter of 2012, the Company also repurchased $14.9 million
of its senior convertible notes due July 2013, which resulted in a gain of
$1.8 million.

Shareholders' equity was $969 million as of September 30, 2012, a decrease
from $1.02 billion at the end of the second quarter of 2012.

Fourth Quarter and Fiscal Year 2012 Guidance

During the fourth quarter of 2012, the Company expects to ship between 380 MW
to 400 MW of PV modules.

The Company believes its overall gross margin for the fourth quarter, taking
into account wafer and cell quantities outsourced from third party suppliers
to meet demand in excess of its internal capacity and other needs, will be
approximately similar to that in the third quarter of 2012. Such guidance is
based on the exchange rate between the Euro and U.S. dollar as of November 22,
2012. For the full year 2012, the Company revises its expectations for total
PV module shipments to be between 1.55 GW to 1.6 GW, compared to its previous
guidance of 1.75 to 1.8 GW.

Operations and Business Outlook

Non-Silicon Cost

In the third quarter of 2012, the Company continued its efforts to reduce
non-silicon manufacturing costs in order to meet its previously announced 2012
target of below $0.50 per watt. Non-silicon manufacturing costs in the third
quarter of 2012 were $0.54 per watt, compared to $0.52 per watt in the second
quarter of 2012. The sequential increase in non-silicon manufacturing costs
were primarily due to under-utilization of the Company's in-house
manufacturing capacities, which were partially offset by improved supply chain
costs, as well as from increases in the Company's module efficiencies and
improvements in its manufacturing processes.

Silicon Procurement

Through its diversified range of short, medium and long-term supply
agreements, the Company will continue to maintain competitive silicon costs
relative to current market prices.

As a result of renegotiating a significant portion of its long-term silicon
supply agreements, the Company continues to expect a sequential reduction in
its manufacturing costs in the fourth quarter of 2012.

2012 Manufacturing Capacity

As of September 30, 2012, the Company's annualized in-house ingot and wafer
production capacity remained approximately 1.2 GW and its PV cell and module
production capacity remained approximately 2.4 GW.

Geographical Presence

The Company has established new sales and business development offices in
Ontario, Canada, to serve the Canadian market, and in Santiago, Chile, to
cover Central and South America. In addition, the Company's APMEA (Asia
Pacific, Middle East and Africa) headquarters in Singapore has begun formal
operations.

Project Development

The Company  has entered into framework agreements with local municipal
governments for multi-year power plant development projects in all four of its
commercial operating regions. Commencement of the projects is expected in 2013
and 2014, but is conditional upon a number of factors, some of which are
beyond the Company's control, such as the availability of network transmission
and interconnection facilities, and the attainment of certain project rights,
including land use rights and the right to access local manufacturing
facilities.

Further, the Company has recently entered into a long-term land use rights
lease agreement with authorities in Eastern China, for the development of a
large-scale, multi-phase utility project, which is expected to commence in
2013.

Organizational Streamlining

To overcome the challenges of the increasingly competitive operating
environment in today's PV industry and achieve sustainable development, the
Company recently conducted initiatives across its global operations to
streamline its organizational and management structure. These initiatives
include the reorganization of its module and projects systems operations into
separate business units, while adopting an operating expense reduction
program, which included company-wide headcount reductions.

Conference Call

The Company will host a conference call at 6:30 a.m. ET on November 20, 2012,
to discuss the results for the quarter ended September 30, 2012. Joining Jifan
Gao, Chairman and CEO of Trina Solar, will be Terry Wang, Chief Financial
Officer, Zhiguo Zhu, Senior Vice President and President ofTrina Solar's
Module Business Unit, and Thomas Young, Vice President, Investor Relations.
Supplemental information will be made available on the Investors Section of
the Trina Solar's website at www.trinasolar.com. To participate in the
conference call, please dial the following number five to ten minutes prior to
the scheduled conference call time: 1 (800) 884-2382. International callers
should dial +1 (660) 422-4933. The conference ID for the call is 6846-2640.

If you are unable to participate in the call at this time, a replay will be
available on November 20 at 10:00 a.m. ET, through December 4, at 11:59 p.m.
ET. To access the replay, dial 1 (855) 859-2056, international callers should
dial +1 (404) 537-3406, and enter the conference ID 6846-2640.

This conference call will be broadcast live over the Internet and can be
accessed by all interested parties on Trina Solar's website at
www.trinasolar.com. To listen to the live webcast, please go to Trina Solar's
website at least fifteen minutes prior to the start of the call to register,
download, and install any necessary audio software. For those unable to
participate during the live broadcast, a replay will be available shortly
after the call on Trina Solar's website for 90 days.

About Trina Solar Limited

Trina Solar Limited (NYSE: TSL) is a leading manufacturer of high quality
modules and has a long history as a solar PV pioneer since it was founded in
1997 as a system installation company. Trina Solar is one of the few PV
manufacturers to have developed a vertically integrated business model that
extends from the production of monocrystalline and multicrystalline ingots,
wafers and cells to the assembly of high quality modules. Trina Solar's
products provide reliable and environmentally-friendly electric power for a
growing variety of end-user applications worldwide. For further information,
please visit Trina Solar's website at www.trinasolar.com.

Safe Harbor Statement

This announcement contains forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact in this
announcement are forward-looking statements, including but not limited to, the
Company's ability to raise additional capital to finance its activities; the
effectiveness, profitability and marketability of its products; the future
trading of the securities of the Company; the Company's ability to operate as
a public company; the period of time for which the Company's current liquidity
will enable the Company to fund its operations; general economic and business
conditions; demand in various markets for solar products; the volatility of
the Company's operating results and financial condition; the Company's ability
to attract or retain qualified senior management personnel and research and
development staff; and other risks detailed in the Company's filings with the
Securities and Exchange Commission. These forward-looking statements involve
known and unknown risks and uncertainties and are based on current
expectations, assumptions, estimates and projections about the Company and the
industry in which the Company operates. The Company undertakes no obligation
to update forward-looking statements to reflect subsequent occurring events or
circumstances, or changes in its expectations, except as may be required by
law. Although the Company believes that the expectations expressed in these
forward looking statements are reasonable, it cannot assure you that such
expectations will turn out to be correct, and the Company cautions investors
that actual results may differ materially from the anticipated results.



Trina Solar Limited
Unaudited Condensed Consolidated Statements of Operations
(US dollars in thousands, except ADS and share data)
                                   For the Three Months Ended
                                   Sep. 30,         Jun. 30,      Sep. 30,
                                   2012             2012          2011
Net revenues                       $           $        $     
                                   297,974         346,054       481,900
Cost of revenues                   295,618          317,062       429,885
Gross profit                       2,356            28,992        52,015
Operating expenses
Selling expenses                   32,217           28,937        25,440
General and administrative         38,156           72,162        37,451
expenses
Research and development           7,934            6,500         12,577
expenses
Total operating expenses           78,307           107,599       75,468
Operating loss                     (75,951)         (78,607)      (23,453)
Foreign exchange gain (loss)       16,638           (24,784)      (37,635)
Interest expenses                  (15,597)         (12,097)      (10,141)
Interest income                    1,808            2,766         436
Gain on change in fair value       1,558            2,311         37,993
of derivative
Other income (expenses), net       2,353            2,206         (1,573)
Loss before income taxes           (69,191)         (108,205)     (34,373)
Income tax benefit                 11,736           16,103        2,911
Net loss                           (57,455)         (92,102)      (31,462)
(Gain) loss attributable to        (5)              5             1
the noncontrolling interest
Net loss attributable to           $          $        $     
Trina Solar Limited                (57,460)         (92,097)      (31,461)
Loss per ADS*
Basic                              (0.81)           (1.30)        (0.45)
Diluted                            (0.81)           (1.30)        (0.45)
Weighted average ADS
outstanding*
Basic                              70,751,231       70,678,990    70,441,104
Diluted                            70,751,231       70,678,990    70,441,104
* "ADS" refers to any of our American depository shares, each representing 50
ordinary shares.






Unaudited Condensed Consolidated Statements of Comprehensive Income
Net loss                           $          $        $     
                                   (57,455)         (92,102)      (31,462)
Other comprehensive income:
Foreign currency translation       1,263            504           671
adjustments
Comprehensive loss                 (56,192)         (91,598)      (30,791)
(Gain) loss attributable to        (5)              5             1
non-controlling interest
Comprehensive loss                 $          $        $     
attributable to Trina Solar        (56,197)         (91,593)      (30,790)
Limited



Trina Solar Limited
Unaudited Condensed Consolidated Balance Sheets
(US dollars in thousands)
                                                                                                  Sep. 30    Jun. 30    Sep. 30
                                                                                                  2012       2012       2011
ASSETS
Current assets:
                                                                                                  $      $       $    
Cash and cash equivalents                                                                                   660,335   674,860
                                                                                                  599,887
Restricted cash                                                                                   103,487    180,658    58,251
Marketable Securities                                                                             -          -          165
Inventories                                                                                       367,126    463,285    335,271
Project assets                                                                                    6,660      104        23,103
Accounts receivable, net                                                                          469,300    530,952    569,330
Advances to suppliers                                                                             70,046     69,458     65,167
Prepaid expenses and other current assets, net                                                    120,353    125,411    101,042
Total current assets                                                                              1,736,859  2,030,203  1,827,189
Property, plant and equipment                                                                     903,083    918,643    783,328
Project assets- long term                                                                         30,077     18,978     2,416
Land use rights                                                                                   42,130     42,372     36,468
Advances to suppliers - long-term                                                                 98,739     110,302    138,268
Investment in affiliates                                                                          14,618     14,628     1,576
Deferred tax assets                                                                               33,130     23,560     14,667
Other noncurrent assets                                                                           1,878      2,087      -
TOTALASSETS $      $        $   
                                                                                                  2,860,514  3,160,773  2,803,912
LIABILITIES AND EQUITY
Current liabilities:
Short-term borrowings, including current portion                                                  $      $       $    
 of long-term debt                                                                               733,722   411,463
                                                                                                  689,742
Accounts payable                                                                                  474,972    620,577    422,349
Convertible note payable                                                                          88,582     -          -
Accrued expenses and other current liabilities                                                    122,985    130,642    88,742
Total current liabilities                                                                         1,376,281  1,484,941  922,554
Long-term bank borrowings                                                                         431,023    465,605    458,046
Convertible note payable                                                                          -          103,461    137,680
Accrued warranty costs                                                                            67,550     65,383     55,503
Other noncurrent liabilities                                                                      15,963     16,585     15,992
Total liabilities                                                                                 1,890,817  2,135,975  1,589,775
Ordinary shares                                                                                   40         39         40
Additional paid-in capital                                                                        656,801    655,710    648,905
Retained earnings                                                                                 302,573    360,034    547,721
Accumulated other comprehensive income                                                            10,083     8,820      17,272
Total Trina Solar Limited shareholders' equity                                                    969,497    1,024,603  1,213,938
Non-controlling interest                                                                          200        195        199
Total equity                                                                                      969,697    1,024,798  1,214,137
TOTAL LIABILITIES AND EQUITY                                                                      $      $        $   
                                                                                                  2,860,514  3,160,773  2,803,912

For further information, please contact:

Trina Solar Limited  
Terry Wang, CFO              
Phone: +  (86) 519-8548-2009 (Changzhou)               Michael
Thomas Young, Vice President, Investor Relations         Fuchs
Phone: + (86) 138-6118-3779 (Changzhou)     Phone: + (86) 10-6566-2256
Email:                                                      Email: trina@brunswickgroup.com
ir@trinasolar.com


SOURCE Trina Solar Limited

Website: http://www.trinasolar.com
 
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