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SHANGHAI, China, Sept. 14, 2009 (GLOBE NEWSWIRE) -- Perfectenergy International Ltd., (OTCBB:PFGY), announced its financial results for the third fiscal quarter ended July 31, 2009.
Revenues decreased 48% to $9.2 million, from $17.7 million for the third fiscal quarter of 2008. On quarter-to-quarter basis, revenues increased by 85% from the second quarter's $5 million. This decrease is attributable to falling sales prices of solar module products as a result of fierce competition in the current market. Despite falling sales prices, shipments of module products continued to increase as a result of some market recovery, reaching about 70% of the amount of shipments from the same quarter in 2008.
Gross profit for the three months ended July 31, 2009 totaled $1.8 million, or 19.9% of revenues, compared with gross profit of $1.3 million, or 7.2% of revenues, for the same fiscal quarter in 2008. The increase in gross profit was mainly due to a decline in the price of silicon wafers and cost savings measures taken in the Company's production process. The impact of the high historical price of silicon wafers was fully absorbed in previous quarters.
Selling, general and administrative expenses totaled $2.9 million, or 31.9% of sales, for the three months ended July 31, 2009 compared with $1.3 million, or 7.1% of sales, for the same period last year. The increase is mainly due to a $1.9 million provision recorded to partially write off a prepayment to a silicon supplier in Germany in the third quarter of fiscal year 2009 despite continued efforts with cost-control initiatives in the areas of selling and administrative expenses. Research and development costs (R&D) were approximately $72,000 for the three months ended July 31, 2009, compared to $42,000 in the third fiscal quarter of 2008.
Net loss for the third quarter ended July 31, 2009 was $982,000, or $(0.03) per share, compared with a net income of $2.5 million, or $0.09 per share, for the same period in 2008. The decrease in net income is primarily attributable to the change in the fair value of the Company's warrants and a $1.9 million provision recorded to partially write off a prepayment to a supplier during the third quarter of fiscal year 2009.
Perfectenergy's President and CEO, Jack Li, stated: "After the volatile market situations in recent months, we are pleased with the progress made and to see the recovery in gross margin. This quarter's financial performance reflected our persistence in product quality improvements and our close-to-customer marketing strategy. We're also proud of our ability to manage working capital through turbulent times without additional capital investment. Overall, we are confident in our ability to realize continued top and bottom line expansion due to continued execution of our business plan."
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 sells its products in Europe, China and other parts of Asia. The Company is headquartered 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 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, reliance on a limited number of suppliers, the limited diversification of the Company's 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, its annual report on Form 10-K for the fiscal year ended October 31, 2008. The Company undertakes no obligation to update any forward-looking statements.
PERFECTENERGY INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 31, October 31,
2009 2008
------------ ------------
(UNAUDITED)
------------
ASSETS
------
CURRENT ASSETS:
Cash $ 1,827,023 $ 2,022,052
Accounts receivable 3,922,337 3,880,053
Other receivables 32,921 47,356
Inventories 7,478,906 6,201,743
Prepayments 2,622,818 6,225,170
Prepaid taxes credits 705,769 352,574
------------ ------------
Total current assets 16,589,774 18,728,948
------------ ------------
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net 7,469,749 8,105,990
------------ ------------
OTHER ASSETS:
Deferred tax assets - non current 492,456 17,259
Advances on long-term assets 602,219 373,873
------------ ------------
Total other assets 1,094,675 391,132
------------ ------------
Total assets $ 25,154,198 $ 27,226,070
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 8,262,886 $ 6,019,634
Accrued liabilities 1,070,787 1,062,595
Customer deposits 2,039,168 3,656,179
Other payables 1,430,306 443,145
VAT payables 1,122,149 196,690
------------ ------------
Total current liabilities 13,925,296 11,378,243
------------ ------------
FAIR VALUE OF DERIVATIVE INSTRUMENTS 45,534 729,688
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $.001 par value, 94,250,000
shares authorized, 29,626,916 shares
issued and outstanding as of July 31,
2009 and October 31, 2008 29,627 29,627
Additional paid-in capital 7,727,454 6,509,898
Statutory reserves 110,068 110,068
Retained earnings 2,248,795 7,321,412
Accumulated other comprehensive income 1,067,424 1,147,134
------------ ------------
Total shareholders' equity 11,183,368 15,118,139
------------ ------------
Total liabilities and shareholders'
equity $ 25,154,198 $ 27,226,070
------------ ------------
PERFECTENERGY INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
Three months ended Nine months ended
------------------------ ------------------------
July 31, July 31, July 31, July 31,
2009 2008 2009 2008
----------- ----------- ----------- -----------
REVENUES $ 9,264,089 $17,699,289 $19,671,727 $41,088,361
COST OF REVENUES 7,421,533 16,416,328 20,119,706 38,099,065
----------- ----------- ----------- -----------
GROSS PROFIT 1,842,556 1,282,961 (447,979) 2,989,296
----------- ----------- ----------- -----------
OPERATING
EXPENSES:
Selling,
general and
administrative 2,955,025 1,265,404 5,540,410 4,738,345
Research and
development 72,005 42,605 244,552 145,394
----------- ----------- ----------- -----------
Total
operating
expenses 3,027,030 1,308,009 5,784,962 4,883,739
----------- ----------- ----------- -----------
LOSS FROM
OPERATIONS (1,184,474) (25,048) (6,232,941) (1,894,443)
----------- ----------- ----------- -----------
OTHER INCOME
(EXPENSE):
Interest
expense and
other bank
charges (3,840) (3,030) (5,732) (35,573)
Interest income 4,227 6,514 20,862 75,222
Non-operating
income (expense) 222 (51,027) 1,913 (42,683)
Change in fair
value of
derivative
instruments 84,332 2,657,382 684,154 10,935,256
----------- ----------- ----------- -----------
Total other
income 84,941 2,609,839 701,197 10,932,222
----------- ----------- ----------- -----------
INCOME (LOSS)
BEFORE PROVISION
FOR INCOME TAXES (1,099,533) 2,584,791 (5,531,744) 9,037,779
PROVISION
(BENEFIT) FOR
INCOME TAXES (117,208) 51,305 (459,127) 189,580
----------- ----------- ----------- -----------
NET INCOME (LOSS) (982,325) 2,533,486 (5,072,617) 8,848,199
OTHER
COMPREHENSIVE
INCOME:
Foreign
currency
translation
adjustments (171,347) 367,916 (79,710) 1,224,994
----------- ----------- ----------- -----------
COMPREHENSIVE
INCOME (LOSS) $(1,153,672) $ 2,901,402 $(5,152,327) $10,073,193
=========== =========== =========== ===========
EARNINGS PER
SHARE:
Basic $ (0.03) $ 0.09 $ (0.17) $ 0.30
=========== =========== =========== ===========
Diluted $ (0.03) $ 0.09 $ (0.17) $ 0.29
=========== =========== =========== ===========
WEIGHTED AVERAGE
NUMBER OF SHARES:
Basic 29,626,916 29,626,916 29,626,916 29,603,019
=========== =========== =========== ===========
Diluted 29,626,916 29,626,916 29,626,916 30,043,171
----------- ----------- ----------- -----------
PERFECTENERGY INTERNATIONAL LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine months ended
--------------------------
July 31, 2009 July 31, 2008
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (5,072,617) $ 8,848,199
Adjustments to reconcile net income
(loss) to cash provided by operating
activities:
Depreciation 632,542 239,439
Bad debt expense 1,859,068 --
Inventory written off 388,337 88,780
Compensation expense for options issued
to employees 1,217,556 1,188,755
Change in fair value of derivative
instruments (684,154) (10,935,256)
Late registration penalties -- 1,079,467
Changes in assets and liabilities:
Accounts receivable 95,789 (2,972,632)
Other receivables 14,859 (17,356)
Inventories (1,423,569) (973,032)
Prepayments 1,762,219 (8,256,732)
Prepaid taxes credits 32,496 134,085
Deferred tax assets (459,127) 79,636
Accounts payable 2,220,413 6,600,204
Accrued liabilities (35,805) 391,325
Customer deposits (1,632,054) 4,781,733
Other payables 982,235 (109,388)
VAT payables 871,650 54,579
------------ ------------
Net cash provided by operating
activities 769,838 221,806
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and leasehold
improvements (326,814) (4,485,609)
Advances on equipment purchases (227,998) (271,342)
------------ ------------
Net cash used in investing
activities (554,812) (4,756,951)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock -- 26,250
Payment on late registration penalties -- (390,738)
------------ ------------
Net cash used in financing
activities -- (364,488)
------------ ------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (410,055) 346,681
------------ ------------
DECREASE IN CASH (195,029) (4,552,952)
CASH, beginning of period 2,022,052 9,701,545
------------ ------------
CASH, end of period $ 1,827,023 $ 5,148,593
============ ============
Non-cash investing and financing activity:
Approved value-added tax credit on
domestic equipment purchase transferred
from construction in progress to
refundable tax credit $ 61,134 $ --
============ ============
Value-added tax refund received on
domestic equipment purchase transferred
from construction in progress to prepaid
expenses $ 324,330 $ --
============ ============
Acquisition of equipment through
liabilities $ 45,446 $ --
============ ============
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Perfectenergy International Ltd.
CONTACT: Perfectenergy International Ltd. Jack Li, Chief Executive Officer 008621 5488 0958 RedChip Companies, Inc. Investor Relations: Jon Cunningham 1-800-733-2447, Ext. 107 info@redchip.com
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