News Releases

Canadian Solar Reports Second Quarter 2008 Results

    Q208 Results

    -- Q208 net revenues of $212.6 million, up 24% from Q108 net revenues of
       $171.2 million

    -- Q208 GAAP net income per diluted share of $0.36, compared to Q108 GAAP
       net income per diluted share of $0.61.  Q208 non-GAAP net income per
       diluted share of $0.78, compared to Q108 non-GAAP net income per
       diluted share of $0.65

    -- Q208 shipments of 47.1 MW, compared to Q108 shipments of 41.8 MW

    Outlook and Developments

    -- Increased the full year 2008 net revenue guidance to $850-$970 million
       from the previously announced $750-$870 million

    -- Successfully ramped up UMG e-Module production; delivered 2.2MW in Q208
       to customers in Germany and USA; and expect to further ramp up the
       production by five-fold and deliver approximately 10MW e-Module
       products in Q3

    -- Ramp-up of module capacity on track, bringing the total module capacity
       to 620MW by the end of 2008

    -- Construction of Phase II solar cell facility completed; 150MW of
       additional cell capacity to be commissioned before the end of Q308, and
       another 150MW to be commissioned by the end of 2008, bringing the total
       internal cell capacity to 400MW

    -- Construction of ingot and wafer plant completed and test ingots and
       wafers produced; 40MW of UMG ingot and wafer capacity to be ramped up
       by the end of Q308 and another 140MW to be ramped up by early 2009,
       bringing total nominal internal ingot and wafer capacity to
       approximately 180MW

    -- Completed in July a public offering of 3.5 million shares for net
       proceeds of $112.7 million

TORONTO, Aug. 13 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("the Company'', ''CSI'' or ''we'') (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the second quarter ended June 30, 2008.

Net revenues for the quarter were $212.6 million (including $5.1 million of silicon material sales), compared to net revenues of $60.4 million for the second quarter of 2007 (including $2.7 million of silicon material sales) and $171.2 million for the first quarter of 2008 (including $2.2 million of silicon material sales). Net income for the quarter was $10.5 million, or $0.36 per diluted share, compared to a net loss of $2.9 million, or $0.11 per diluted share, for the second quarter of 2007 and net income of $19.0 million, or $0.61 per diluted share, for the first quarter of 2008. Excluding share- based compensation expenses of $2.3 million and a one-time non-cash debt conversion charge of $10.2 million, non-GAAP net income for the quarter is $23.0 million, or $0.78 per diluted share.

Dr. Shawn Qu, Chairman and CEO of CSI, commented: ''It has been a very solid and eventful quarter for the Company, with progress on all fronts. This marks our fifth consecutive quarter of sequential quarter-to-quarter top line growth. During this period we have also improved our margins. We have also successfully advanced our capital projects, both for the ingot and wafer plant, and the Phase II solar cell facility, and we expect significant increases in our H2 of 2008 deliveries compared with H1 of 2008. Further vertical integration on the ingot and wafer side is now well in progress with the Company having produced its first wafers on August 2nd. This will provide additional efficiencies in manufacturing the e-Module products and allow us to employ proprietary methods and patented technologies in the production of UMG ingots and wafers. During the quarter, we have seen our average conversion efficiency for UMG cells improve from approximately 13.3% to approximately 13.7%, and we expect further improvements going forward. On the supply side, we have entered into two new long-term contracts with LDK and New Solar Power, which will improve our supply situation in 2009.''

Shawn Qu added, ''In June, we successfully completed the early conversion of our convertible notes due 2017. We successfully closed a secondary share offering in July with approximately $112.7 million of net proceeds. As a result, we believe that we now have one of the strongest balance sheets in the solar industry.''

Arthur Chien, CFO of CSI, noted: ''Revenues for Q2 were $212.6 million, which is more than 10% above our prior guidance of $185 - $190 million, while our gross margin of 15.8% (excluding silicon material sales) remained above our target gross margin range of 13% - 15%. Our GAAP income per diluted share included a one-time non-cash charge of $10.2 million associated with the early conversion of our convertible notes, which will help CSI save future interest payments. Our non-GAAP income per diluted share of $0.78 demonstrates our ability to continuously deliver strong operating results and returns to our shareholders. Our successful secondary offering in July has positioned us in a stronger foothold that would empower us to carry on in our path of rapid growth well into 2009 with elevated financial flexibility. Our cash position is now excellent as well as our financial ratios. We have adequate resources for all of our planned H2 2008 capital expenditures and working capital purposes. Looking ahead, we expect our margins to remain steady and within our target range. I am confident that our quarterly revenue will continue to grow in the second half of 2008.''

                 Revenue by Geographical Location (US $ millions)

                        Q2-08               Q1-08               Q2-07
       Region     Revenue       %     Revenue      %      Revenue       %
    Europe          188.3     88.6%    167.6     97.9%      57.3      94.8%
    Asia             13.1      6.2%      2.4      1.4%       3.0       4.9%
    America          11.2      5.2%      1.2      0.7%       0.1       0.3%
    Total Net       212.6      100%    171.2      100%      60.4       100%

    Note: Asian revenue included $5.1 million of silicon material sales in Q2-
          08 and $2.2 million of silicon material sales in Q1-08.

    Recent Developments and Management Update
    -- Launched commercial sales of e-Modules at Intersolar in Munich and San
       Francisco, for both the European and the US markets
    -- Signed five new sales contracts in June and diversified our markets to
       include Italy, the Czech Republic, North America and Asia, while
       maintaining strong sales into our traditional markets of Germany and
    -- Signed significant supply deals with LDK and New Solar Power, thereby
       increasing our supply visibility for 2009 to 70%
    -- The Board of Directors appointed the following senior executives:
       -- Gregory Spanoudakis has been appointed as President, European
          Operations.  Mr. Spanoudakis was previously our Vice President of
          European Sales
       -- Charlotte Xi Klein has been appointed as Vice President, Finance &
          Compliance. Ms. Klein was previously our Financial Controller


For the rest of the year and for 2009, we are maintaining our positive outlook for growth in both net revenues and MW shipments. We are increasing our 2008 revenue guidance to $850 - $970 million from the previously guided $750 - $870 million. Based on current sales and supply agreements and market forecasts, we reiterate our 2009 shipment target of 500 - 550MW. The 2009 target includes about 400 MW of regular solar modules and 100 - 150 MW of e- Modules.

The Company is now signing sales contracts for delivery in 2009. We launched our e-Module products in Q208 and are now selling our 2009 capacity for these products. We have seen strong demand and firm interest for our products, with nearly all of our key long-term customers doubling their product requests in 2009.

Our capacity and supply ramp-ups have positioned us well to increase our deliveries of products in 2009. The company now has two differentiated product lines (regular and e-Modules) that it can sell into different pricing tiers. Geographically, we are now selling to eight different regions including Germany, Spain, Italy, the Czech Republic, the US, Canada, South Korea and China. This market and product diversification will give us less exposure to changes in any individual market segment such as Spain, where we have reduced our exposure, and gives us access to certain strategic price sensitive markets, especially the US.

Net revenues for Q308 are expected to be in the range of $245 - $255 million, with non-GAAP net income, determined by excluding share-based compensation expenses, expected to be in the range of $24 - $25 million. Shipments for Q308 are expected to be approximately 60 MW.

Investor Conference Call / Webcast Details

A conference call has been scheduled for 8:00 PM. on Wednesday, August 13, 2008, Beijing time or 8:00 AM, EDT on Wednesday, August 13, 2008 in New York. During the call, time will be set-aside for analysts and interested investors to ask questions of senior executive officers of the Company.

The call may be accessed by dialing: +1-866-383-8008 (domestic) or +1-617- 597-5341 (international). The passcode is 55405119. A live webcast of the conference call will be available on Canadian Solar's website at . A replay of the call will be available starting one hour after the call and continuing until 10:00 p.m. on Wednesday, August 20, 2008 (Beijing time) or 10:00 a.m. on Wednesday, August 20, 2008 (Eastern Daylight Time) at and by telephone at +1-888-286-8010 (domestic) or +1-617-801-6888 (international). The passcode to access the replay is: 61245887.

About Canadian Solar Inc. (NASDAQ: CSIQ)

Founded in 2001, Canadian Solar Inc. (CSI) is a vertically integrated manufacturer of solar cell, solar module and custom-designed solar application products serving customers worldwide. CSI is incorporated in Canada and conducts its businesses worldwide and manufacturing operations in China. Backed by years of experience and knowledge in the solar power market and the silicon industry, CSI has become a major global provider of solar power products for a wide range of applications. For more information, please visit .

Safe Harbor/Forward-Looking Statements

Certain statements in this press release including statements regarding expected future financial and industry growth 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 general business and economic conditions and the state of the solar industry; governmental support for the deployment of solar power; future shortage or availability of the supply 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, including customers of our silicon materials sales; 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 price; delays in new product introduction; 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 originally filed on May 29, 2007. 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 BELOW

                               Canadian Solar Inc.
                 Condensed Consolidated Statements of Operations
    (In Thousands of U.S. Dollars, except share and per share data and unless
                                otherwise stated)

                           Q2 2008    Q1 2008    Q2 2007    H1 2008    H1 2007
    Net Revenues:
    Net Revenues -
     Products              212,585    171,235     60,413    383,820     77,902
    Cost of Revenues:
    Cost of Revenues -
     Products              179,509    143,000     57,940    322,509     75,084
    - Gross Profit          33,076     28,235      2,473     61,311      2,818

    Operating Expenses:
     Selling Expenses        2,852      2,505      1,294      5,357      2,347
    General and
    Expenses                 6,485      5,426      3,765     11,911      6,851
    Research and
     Expenses                  447        303        204        749        390
    Total Operating
     Expenses                9,784      8,234      5,263     18,017      9,588

    Income/(loss) from
     operations             23,292     20,001     (2,790)    43,294     (6,770)
    Other Income
    Interest Expenses       (3,162)    (2,246)      (275)    (5,408)      (342)
    Interest Income             59        102         41        161        326
    Debt Conversion
     Expense               (10,170)        --         --    (10,170)        --
    Others - Net              (600)     8,174         --      7,574         --

    Income (Loss) before
     Taxes                   9,419     26,031     (3,024)    35,451     (6,786)
    Income Taxes             1,127     (7,036)       153     (5,909)        61
    Net Income (Loss)       10,546     18,995     (2,871)    29,542     (6,725)

    Basic Earnings
     (Loss) per
     Share                   $0.38      $0.69     $(0.11)     $1.06     $(0.25)
    Basic Weighted
     Shares             28,085,875 27,391,315 27,276,699 27,738,862 27,273,350
    Diluted Earnings
     (Loss) per Share        $0.36      $0.61     $(0.11)     $1.01     $(0.25)
    Diluted Weighted
     Shares             29,384,701 32,392,020 27,276,699 29,160,071 27,273,350

                               Canadian Solar Inc.
     Reconciliation of US GAAP Gross Profit, Operating Income (Loss) and Net
                                Income (Loss) to
     Non-US GAAP Gross Profit, Operating Income (Loss) and Net Income (Loss)
                      Use of Non-GAAP Financial Information

To supplement its condensed consolidated financial statements presented in accordance with GAAP, CSI uses the following measures as defined as non-GAAP financial measures by the SEC: adjusted gross profit, adjusted operating income (loss) and adjusted net income (loss), each excluding share-based compensation and other one-time non-cash charges, expenses or gains, which we refer to as special items. CSI believes that non-GAAP adjusted gross profit, adjusted operating income (loss) and adjusted net income (loss) measures indicate the company's baseline performance before subtracting those charges. In addition, these non-GAAP measures are among the primary indicators used by the management as a basis for its planning and forecasting of future periods. The presentation of these non-GAAP measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

                                                      Q2 2008

                                             Gross     Operating      Net
                                            Profit      Income      Income
                                                        (Loss)      (Loss)

    US GAAP Profit (Loss)                    33,076      23,292      10,547
                Share-based Compensation         88       2,336       2,336
                Convertible Note
                 Conversion Costs                --          --      10,170

    Total Special Items                          88       2,336      12,506
    Non-US GAAP Profit (Loss)                33,164      25,628      23,053
    Non-US GAAP Earnings (Loss) per
     Diluted Share                                                    $0.78
    Adjusted Gross Margin                    15.60%
    Adjusted Operating Margin                            12.06%

                                                      Q1 2008

                                             Gross     Operating      Net
                                             Profit      Income      Income
                                                         (Loss)      (Loss)

    US GAAP Profit (Loss)                    28,235      20,001      18,995
                Share-based Compensation         90       2,199       2,199
                Convertible Note
                 Conversion Costs                --          --          --

    Total Special Items                          90       2,199       2,199
    Non-US GAAP Profit (Loss)                28,325      22,200      21,194
    Non-US GAAP Earnings (Loss) per
     Diluted Share                                                    $0.65
    Adjusted Gross Margin                    16.54%
    Adjusted Operating Margin                            12.96%

                                                       Q2 2007

                                             Gross       Operating       Net
                                             Profit       Income       Income
                                                          (Loss)       (Loss)

    US GAAP Profit (Loss)                     2,473       (2,790)      (2,871)
                Share-based Compensation         57        2,365        2,365
                Convertible Note
                 Conversion Costs                --           --           --

    Total Special Items                          57        2,365        2,365
    Non-US GAAP Profit (Loss)                 2,530         (425)        (506)
    Non-US GAAP Earnings (Loss) per
     Diluted Share                                                     ($0.02)
    Adjusted Gross Margin                     4.19%
    Adjusted Operating Margin                             (0.70%)

                                                      H1 2008

                                             Gross     Operating      Net
                                             Profit      Income      Income
                                                         (Loss)      (Loss)

    US GAAP Profit (Loss)                    61,311      43,294      29,542
                Share-based Compensation        178       4,535       4,535
                Convertible Note
                 Conversion Costs                --          --      10,170

    Total Special Items                         178       4,535      14,705
    Non-US GAAP Profit (Loss)                61,489      47,829      44,247
    Non-US GAAP Earnings (Loss) per
     Diluted Share                                                    $1.52
    Adjusted Gross Margin                    16.02%
    Adjusted Operating Margin                            12.46%

                                                       H1 2007

                                             Gross      Operating       Net
                                             Profit      Income        Income
                                                          (Loss)       (Loss)

    US GAAP Profit (Loss)                     2,818       (6,770)      (6,725)
                Share-based Compensation        126        4,589        4,589
                Convertible Note
                 Conversion Costs                --           --           --

    Total Special Items                         126        4,589        4,589
    Non-US GAAP Profit (Loss)                 2,944       (2,181)      (2,136)
    Non-US GAAP Earnings (Loss) per
     Diluted Share                                                     ($0.08)
    Adjusted Gross Margin                     3.78%
    Adjusted Operating Margin                             (2.80%)

    Non-US GAAP adjusted condensed consolidated statements of operations are
    intended to present the Company's operating results, excluding special

                               Canadian Solar Inc.
                 Unaudited Condensed Consolidated Balance Sheets
                          (In Thousands of U.S. Dollars)

                                                June 30           December 31
                                                  2008                2007
    Current assets:
    Cash and Cash Equivalents                     65,138              37,667
    Restricted Cash                               19,393               1,625
    Accounts Receivable, Net                     140,935              58,637
    Inventories                                   90,440              70,921
    Value-added Tax Recoverable                   17,329              12,247
    Advances to Suppliers                         19,134              28,745
    Prepaid and Other Current Assets              11,494              10,058
    Total Current Assets                         363,863             219,900
    Property, Plant and Equipment, Net            92,095              51,486
    Intangible Assets                                212                 136
    Long Term Prepayments                         15,673               4,103
    Prepaid Lease Payments                         5,812               1,616
    Deferred Tax Assets - Non-current              6,550               3,966
    Long-term Deferred Expenses                       41               3,296
    TOTAL ASSETS                                 484,246             284,503

    Current Liabilities:
    Short-term Borrowings                         92,727              40,374
    Accounts Payable                              13,285               8,251
    Other Payables                                10,505               6,153
    Advances from Suppliers and
     Customers                                    11,314               1,962
    Income Tax Payable                             5,212                 143
    Amounts Due to Related Parties                30,000                 209
    Other Current Liabilities                      7,647               2,121
    Total Current Liabilities                    170,690              59,213
    Accrued Warranty Costs                         7,678               3,879
    Provision for Uncertain Tax Issue              4,997               2,278
    Long-term Debt                                48,217              17,866
    Convertible Notes                              1,000              75,000
    TOTAL LIABILITIES                            232,582             158,236

    Stockholders' Equity
    Common Shares                                180,623              97,454
    Additional Paid-in-capital                    30,970              26,436
    Retained Earnings/(Accumulated
     Deficit)                                     25,938              (3,604)
    Accumulated Other Comprehensive
     Income                                       14,133               5,981
    TOTAL STOCKHOLDERS' EQUITY                   251,664             126,267
    EQUITY                                       484,246             284,503

    For more information, please contact:

    In Canada
     Alex Taylor, IR Director
     Canadian Solar Inc.
     Tel:   +1-905-530-2334
     Fax:   +1-905-530-2001

    In the U.S.
     John Robertson
     The Ruth Group
     Tel:   +1-646-536-7024
SOURCE  Canadian Solar Inc.
    -0-                             08/13/2008
    /CONTACT:  In Canada, Alex Taylor, IR Director of Canadian Solar Inc.,
+1-905-530-2334, or fax, +1-905-530-2001, or; In the U.S.,
John Robertson of The Ruth Group, +1-646-536-7024, or /
    /Web Site:  /

CO:  Canadian Solar Inc.
ST:  Canada, China

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