News Releases

Canadian Solar Reports Third Quarter 2007 Results

    -- Q3 net revenues of $97.4 million, a 61% increase over Q2 net
       revenues of $60.4 million

    -- Q3 earnings per diluted share of $0.02 compared to Q2 loss per
       diluted share of $0.11

    -- Full year 2007 net revenue guidance increased to $285-$295 million
       from previous guidance of $255-$265 million

    -- Full year 2008 net revenue expected to be $650-$750 million and
       shipments expected to be 200-220MW

JIANGSU, China, Nov. 14 /Xinhua-PRNewswire/ -- Canadian Solar Inc. ("the Company," "CSI," or "we") (Nasdaq: CSIQ) today reported its preliminary unaudited US GAAP financial information for the third quarter of 2007 ended September 30, 2007.

Net revenues for the quarter were $97.4 million, including $3.8 million of silicon material sales, compared to net revenues of $17.8 million for the third quarter of 2006 and $60.4 million for the second quarter of 2007. Net revenues for the second quarter of 2007 included $2.7 million of silicon material sales. Net income for the quarter was $0.5 million, or $0.02 per diluted share, compared to net income of $0.24 million, or $0.01 per diluted share, for the third quarter of 2006 and net loss of $2.9 million, or $0.11 per diluted share, for the second quarter of 2007. Excluding share-based compensation expenses of $2.4 million, non-GAAP net income for the quarter would have been $3.0 million, or $0.11 per diluted share.

Dr. Shawn Qu, Chairman and CEO of CSI, commented: "Q3 was another strong quarter for us as we achieved revenues above our guidance for the second quarter in a row. Our return to profitability was achieved through continued sales momentum, improved production yields, better inventory controls, improved cash management and stable pricing. As a result, we were able to increase our product shipments and improve our profit margins as forecast despite modest price increases in materials from some suppliers. Our second 25MW solar cell manufacturing line is now operating at full production capacity. In addition, we have completed the installation of our third and fourth lines, and expect to bring our total internal solar cell manufacturing capacity to 100MW starting next month. During the quarter, we also added new members to our Board of Directors and expanded our executive management team to help manage the next phase of our growth. Our strengthened supply situation and execution have led to increased confidence in our forecasts for revenue growth and margin improvement in Q4 and 2008."

Bing Zhu, CFO of CSI, noted: "As expected, our gross margins improved in Q3 due to the combination of continued sales growth and effective cost controls, as well as our increased in-house solar cell manufacturing capability. Our current progress in Q4 gives us confidence that we will be able to continue our pace of growth and profitability improvement in 2008."

                      Revenue by Geography (US $ thousands)
                           Q307              Q207                Q306
         Region       Revenue       %    Revenue      %     Revenue       %
    Asia                4,097     4.20%    2,959     4.90%      569     3.20%
    Europe             93,036    95.48%   57,282    94.82%   16,613    93.33%
    Americas               --        --      142     0.23%      575     3.23%
    Other                 304     0.32%       30     0.05%       43     0.24%
    Total Net Revenue  97,437   100.00%   60,413   100.00%   17,800   100.00%
    Note: Asian revenue included $3.8 million of silicon materials sales in
    the third quarter of 2007 and $2.7 million of silicon materials sales in
    the second quarter of 2007.

    Recent Developments

The construction of our new Changshu solar module plant is currently on schedule. We expect the new plant, which will have 24,000 square meters of production and training space, to open in January 2008, bringing our total annual solar module production capacity to 400MW.

    We have commenced work on two new projects:
    -- Expansion of our solar cell manufacturing capacity from 100MW to 250 MW.
       We expect to complete this project by the summer of 2008; and
    -- Construction of a solar ingot and wafer plant in the City of Luoyang,
       China.  We expect to complete Phase One of this project by the summer
       of 2008, which will give us an annual solar wafer capacity of 40-60MW.


Dr. Qu continued: "We recently announced sales contracts in Spain, the U.S. and Germany, all of which are important solar industry growth markets. Customer demand remains strong and our operational structure is now much leaner. We are positioned for further growth as we demonstrate the successful leveraging of our operating model."

Based on current market conditions, our order backlog and our production capacity, we are increasing our prior guidance of net revenues for the full year 2007 to $285-$295 million from the previous guidance of $255-$265 million. The total annual shipments are expected to be about 80MW, including some OEM tolling business.

Net revenue for the fourth quarter of 2007 is expected to be $110-$120 million, with non-GAAP operating income, determined by excluding share based compensation expenses expected to be in the range from $8.0-$8.5 million. Shipments for the fourth quarter of 2007 are expected to be approximately 35 MW.

Based on current customer orders and market forecasts, we expect net revenue for 2008 to be $650-$750 million. The Company intends to continue its long-term supply chain strategy, which combines internal solar wafer and cell production and direct purchasing from a selected number of long-term strategic wafer and cell suppliers. The Company believes that it has contractually secured 90% of its silicon or cell requirements to support module production of 200-220MW in 2008. The Company continues to evaluate new technologies, including the use of metallurgical silicon (UMG) products, which, if successful, would have the potential to increase total shipments by 30-40MW in 2008.

Investor Conference Call / Webcast Details

A conference call has been scheduled for 10:00 p.m. on Wednesday, November 14, 2007 (in Jiangsu). This will be 9:00 a.m. on Wednesday, November 14, 2007 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: +1-800-435-1398 (domestic) or +1-617- 614-4078 (international). The passcode to access the call is: 74227024. A replay of the call will be available starting one hour after the call and continuing until 12:00 a.m. on Thursday, November 22, 2007 (in Jiangsu) or 11:00a.m. on Wednesday, November 21, 2007 (in New York) at and by telephone at +1-888-286-8010 (domestic) or +1- 617-801-6888 (international). The passcode to access the replay is: 90058052.

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 all of its 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.

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

                                                         9 Months   9 Months
                                   Q3 2007    Q3 2006      2007       2006
    Net revenues:
    Net revenues - product          97,437     17,799     175,339     43,773
    Net revenues - others               --                     --         68
    Total net revenues              97,437     17,799     175,339     43,841

    Cost of revenues:
    Cost of revenues - product      91,088     12,977     166,172     31,533
    Cost of revenues - others           --                     --         68
    Total cost of sales             91,088     12,977     166,172     31,601
    Gross profit                     6,349      4,822       9,167     12,240
    Operating expenses:
     Selling expenses                2,214      1,147       4,560       1676
    General and administrative
     expenses                        4,527      2,733      11,378      4,483
    Research and development
     expenses                          287         70         677        115
    Total operating expenses         7,028      3,950      16,615      6,274
    Income/(loss) from
     operations                       (679)       872      (7,448)     5,966
    Other income (expenses):
    Interest expenses                 (601)      (346)       (943)    (1,980)
    Interest income                     70         38         396         91
    Loss on change in fair value
     of derivatives                     --         --          --     (6,997)
    Loss on change in fair value
     of instruments related
     to convertible notes               --         --          --     (1,190)
    Others - net                     1,716        (12)      1,716        (13)
    Income (loss) before taxes         506        552      (6,279)    (4,123)
    Income taxes                        16       (313)         77       (202)
    Net income (loss)                  522        239      (6,202)    (4,325)

    Basic gain (loss) per share       0.02       0.01       (0.23)     (0.25)
    Basic weighted average
     outstanding shares         27,290,298 20,970,000  27,279,021 17,275,330
    Diluted gain (loss) per
     share                            0.02       0.01       (0.23)     (0.25)
    Diluted weighted average
     outstanding shares         27,416,859 20,998,334  27,279,021 17,275,330

                               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.

                                 Q3 2007                    Q3 2006
                        Gross   Operating   Net    Gross   Operating    Net
                        Profit   Income    Income  Profit   Income    Income
                                 (Loss)    (Loss)           (Loss)    (Loss)

    US GAAP Profit
     (Loss)             6,349     (679)      522   4,822        872      239
      compensation         36    2,428     2,428      73      2,904    2,904
    Total Special Items    36    2,428     2,428      73      2,904    2,904
    Non-US GAAP Profit
     (Loss)             6,385    1,749     2,950   4,895      3,776    3,143
    Non-US GAAP Gain
     (Loss) per
    Diluted Share                           0.11                        0.15
    Adjusted Gross
     Margin                                6.55%                      27.50%
    Adjusted Operating
     Margin                                1.80%                      21.21%

                              9 Months 2007              9 Months 2006
                        Gross   Operating   Net    Gross   Operating   Net
                       Profit    Income    Income Profit    Income    Income
                                 (Loss)    (Loss)           (Loss)    (Loss)

    US GAAP Profit
     (Loss)             9,167    (7,448)  (6,202) 12,240     5,966    (4,325)
     Convertible Note
      charge                                                           8,893
      compensation        162     7,018    7,018      97     3,494     3,494
    Total Special Items   162     7,018    7,018      97     3,494    12,387
    Non-US GAAP Profit
     (Loss)             9,329     (430)      816  12,337     9,460     8,062
    Non-US GAAP Gain
     (Loss) per
    Diluted Share                           0.03                        0.47
    Adjusted Gross
     Margin                                5.32%                      28.14%
    Adjusted Operating
     Margin                              (0.25)%                      21.58%

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

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

                                                   September 30    December 31
                                                        2007           2006
    Current assets:
    Cash and cash equivalents                          27,402         40,911
    Restricted cash                                     3,357            825
    Accounts receivable, net                           49,061         17,344
    Inventories                                        65,918         39,700
    Value added tax recoverable                         7,926          2,281
    Advances to suppliers                              18,731         13,484
    Prepaid and other current assets                    2,473          2,398
    Total current assets                              174,868        116,943
    Property, plant and equipment, net                 31,688          7,910
    Intangible assets                                      91             39
    Prepaid lease payments                              1,178          1,103
    Deferred tax assets - non current                   3,837          3,639
    TOTAL ASSETS                                      211,662        129,634

    Current liabilities:
    Short term borrowings                              51,651          3,311
    Accounts payable                                   14,919          6,874
    Other payables                                      5,189            993
    Advances from suppliers and customers               9,496          3,225
    Income tax payable                                    509            112
    Amounts due to related parties                        202            149
    Other current liabilities                           1,330          1,191
    Total current liabilities                          83,296         15,855
    Accrued warranty costs                              2,552            875
    Long term debt                                     10,003
    TOTAL LIABILITIES                                  95,851         16,730

    Stockholders' equity
    Common shares                                      97,354         97,302
    Additional paid in capital                         24,352         17,334
    Accumulated deficit                                (9,597)        (2,783)
    Accumulated other comprehensive income              3,702          1,051
    TOTAL STOCKHOLDERS' EQUITY                        115,811        112,904

     EQUITY                                           211,662        129,634

    For more information, please contact:

     In Jiangsu, P.R. China
      Bing Zhu, Chief Financial Officer
      Canadian Solar Inc.
      Tel:   +86-512-6269-6755

     In the U.S.
      David Pasquale
      The Ruth Group
      Tel:   +1-646-536-7006
SOURCE  Canadian Solar Inc.
    -0-                             11/14/2007
    /CONTACT:  In Jiangsu, P.R. China - Bing Zhu, Chief Financial Officer of
Canadian Solar Inc., +86-512-6269-6755, or; or In the U.S. -
David Pasquale of The Ruth Group, +1-646-536-7006, or, for Canadian Solar Inc. /
    /Web Site: /

CO:  Canadian Solar Inc.
ST:  China

-- CNW033 --
0465 11/14/2007 07:00 EST