Day4 Energy reported revenues of US$23.3 million, a decline from its reported earnings for the Q2 2010, but a US$4.4 million increase from Q1 2011. While the company noted sales of US$2.6 million, which it accredits to its acquisition of ACI ecoTec, it notes that sales numbers did decrease when compared to previous years due to the overall instability that the solar industry has been going through over the past few months. However, Day4 acknowledged that its sales increased over Q1 2011, mainly because of the Italian government’s FiT resolution.
The company reported a gross margin of 7.8%, an advancement from Q1 2011’s 13.6%. Day4 advised that it had endured low utilization and idle plant charges for a three-month period that ended in June, which totaled US$2.6 million and stated that its gross margin on modules sold in Q2, without low utilization, idle plant charges and inventory write down, would have been US$355,842. Net loss for Q2 2011 saw a decline when compared to previous quarters. Q2 2011 net loss was recorded at US$5.6 million, or US$0.13 per share, compared to US$7 million, or US$0.16 per share in Q1 2011 and US$4.2 million, or US$0.12 per share, for Q2 2010.
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Day4 Energy stated that because its management made the decision to stop production with Jabil in Poland and begin negotiations to terminate the manufacturing contract this July, it has estimated an incremental cost to exit the agreement of US$1.3 million. Day4 expects that these costs will be reflected in Q3 2011, once the contract is negated.
Additionally, the company advised that with its acquisition of ACI in 2010, and the conversion of its business to focus more on manufacturing technology and product marketing, higher gross margins could be possible with the sale of its manufacturing solutions and equipment to PV module manufacturers. The company is also looking to increase its revenues by licensing intellectual property and from training and installation services.
“During the second quarter we made further progress toward becoming a technology and brand licensing model. Since the end of Q1 2011 we have expanded the reach of our technology and brand platform by securing license agreements with PV Products in Austria and Solar ModulesNetherlands (SMN) in Holland. With PVP and SMN joining our first licensee Gebäude-Solarsysteme (GSS) we were able to reach a contracted level of 75MW of annualized manufacturing capacity licensed to produce PV modules based on Day4 DNA technology and brand platform,” saidGeorge Rubin, president of Day4 Energy. “This is a milestone achievement as it brings the cumulative production capacity of our licensees within reach of our historical maximum of 100MW per annum run rate that we achieved in the fall of 2010. Given the solar industry's continued volatility with subsidy changes and fluctuations in demand and supply our focus on providing the tools and knowledge to cell and module manufacturers puts us in a good position to be able to manage the challenges while expanding the reach of the Day4 brand. Our immediate sales objective is to continue to expand the base of Day4 DNA licensees to reach an actual licensed production output of 150MW (annualized) required to generate sufficient revenues to cover our current levels of operating costs. In order to support our licensed partners we have made a decision to permanently cease our outsourced manufacturing operations in Poland and instead focus the full power of our distribution organization on reselling Day4 DNA PV modules from our licensed partners. In addition to fueling the growth behind our partner's business, the model further enables us to significantly reduce working capital requirements that were otherwise required to procure and distribute PV modules.”
