6.6.2006: Meldung: Evergreen Solar, Inc.: Equal Partner in EverQ
MARLBORO, Mass.-- June 5, 2006--
EverQ to Commence Near-Term Expansion at Thalheim Plant Total Capacity Expected to Ramp to Approximately 300MW by 2010
Evergreen Solar, Inc. (Nasdaq: ESLR), a manufacturer of solar power products with its proprietary, low-cost String Ribbon(TM) wafer technology, today announced the execution of a binding memorandum of understanding regarding new polysilicon supply agreements sufficient to allow its EverQ joint venture to increase its solar module production capacity. EverQ currently expects to ramp production capacity from about 30MW this year to approximately 300MW by 2010 and possibly as early as the second half of 2009. The supply agreements are expected to be finalized and become effective early in the third quarter of 2006.
Under the proposed terms of a long-term supply agreement, Renewable Energy Corporation of Norway (OSEAX: REC.OL) will supply EverQ with a total of 7,400 metric tons of granular polysilicon over seven years beginning in 2008. Shipments of approximately 400 metric tons are expected to begin in the second half of 2008 and increase to 1,200 metric tons annually by 2010, continuing through 2014. This is in addition to the 190 metric tons REC is supplying EverQ annually under an existing arrangement.
In conjunction with the implementation of today"s supply agreements and consistent with the existing joint venture documents, Evergreen Solar, Q-Cells AG of Germany (FSE: QCE) and REC have agreed to become equal partners in EverQ. It is anticipated that Evergreen Solar will continue to market and sell all modules manufactured by EverQ.
Proposed Near-Term Expansion
The binding memorandum of understanding also contemplates that EverQ will sign interim silicon supply guarantees to immediately enable the next phase of expansion of its facility in Thalheim, Germany, prior to 2008. Under the proposed terms of the interim supply agreements, Q-Cells and REC will each provide up to 150 metric tons of polysilicon, at near-term market pricing, to EverQ as required from mid 2007 to mid 2008. With silicon secured, EverQ expects to expand its Thalheim operations with the construction of a second integrated wafer, cell and module factory with a capacity of approximately 50MW. Subject to final approval of investment grants, construction of this facility is anticipated to commence in the third quarter of 2006. Production is expected to begin in the first half of 2007 and reach full capacity by year-end 2007.
Evergreen Solar President and Chief Executive Officer Richard M. Feldt said, "Today"s announcement is a historic event for EverQ and its partner companies. As participants in EverQ, Evergreen Solar, Q-Cells and REC share a common vision - to rapidly advance photovoltaic technology and ultimately achieve economic parity with retail electricity. We each bring critical resources and competencies to this venture. Joining one of the global leaders in silicon production as well as the world"s largest independent manufacturer of high-efficiency solar cells as equal partners in advanced solar module production validates the significance of Evergreen"s String Ribbon technology and opens new doors to long-term accelerated growth for Evergreen Solar and our partners."
Evergreen Solar Financial Outlook
The amended agreements, which will make Evergreen Solar, Q-Cells and REC equal partners at 33.33Prozent ownership, are expected to be finalized early in the third quarter of 2006. As a result, Evergreen Solar expects that it will account for its share of EverQ"s financial results under the equity method of accounting beginning in the third quarter of 2006. Since there are no anticipated changes in the current distribution arrangements under which Evergreen Solar markets and sells all modules manufactured by EverQ, the Company expects to continue to report revenue resulting from 100Prozent of EverQ"s module production.
Evergreen Solar is reaffirming its previously issued financial guidance for 2006 quarterly revenue and gross margin for both its Marlboro and EverQ factories. The Company continues to expect its reported revenue to increase throughout the year, more than doubling from 2005 levels for full-year 2006 as the EverQ operation ramps production. Based on the current assessment of EverQ"s second-quarter supply chain status and planned production ramp, the Company continues to expect EverQ to achieve $8 to $13 million in revenue for the second quarter, increasing to $16 to $22 million and $23 to $25 million for the third and fourth quarters, respectively. Evergreen Solar expects quarterly revenue from its Marlboro factory to continue in the $10 to $12 million range for the balance of 2006.
Evergreen Solar expects that accelerating to full production at EverQ and implementing its R&D initiatives in Marlboro will continue to affect gross margins throughout 2006. Gross margin at its Marlboro facility, including stock compensation expenses associated with the adoption of FAS123R, is expected to be in the 5Prozent to 10Prozent range in the second quarter, and then to increase to a range of 7Prozent to 15Prozent in the second half of fiscal 2006 as the Company benefits from its thin-wafer conversion. Evergreen Solar expects EverQ"s gross margin to be in a range of negative 35Prozent to approximately break-even in the second quarter, improve to a range of 12Prozent to 25Prozent in the third quarter and rise to a range of 30Prozent to 35Prozent by the fourth quarter. EverQ"s gross margin guidance excludes the impact of any costs associated with Evergreen Solar"s share of the start-up expenses for the new 50MW facility.
EverQ"s existing solar module manufacturing plant in Thalheim, Germany, commenced commercial operations early in the second quarter of 2006. The plant manufactures Evergreen Solar"s high-output Spruce Line(TM) of photovoltaic panels. Products fabricated by EverQ use Evergreen Solar"s patented String Ribbon(TM) manufacturing process. String Ribbon is substantially more efficient in the use of silicon than conventional sliced crystalline technologies.
EverQ is a strategic partnership of Evergreen Solar, Inc. of the United States, Q-Cells AG of Germany, and Renewable Energy Corporation ASA of Norway. Evergreen Solar develops, manufactures and markets solar power products using its String Ribbon technology. Q-Cells is the world"s largest independent manufacturer of crystalline silicon solar cells. Renewable Energy Corporation is one of the world"s largest manufacturers of solar-grade silicon and multicrystalline wafers.
About Evergreen Solar, Inc.
Evergreen Solar, Inc. develops, manufactures and markets solar power products using proprietary, low-cost manufacturing technologies. The Company"s patented crystalline silicon technology, known as String Ribbon, uses significantly less silicon than conventional approaches. Evergreen Solar"s products provide reliable and environmentally clean electric power for residential and commercial applications globally. For more information about the Company, please visit www.evergreensolar.com.
Evergreen Solar(R) is a registered trademark and String Ribbon(TM) is a trademark of Evergreen Solar, Inc.
CONTACT: Evergreen Solar, Inc.
Donald Muir, 508-357-2221 x7708
Chief Financial Officer
Sharon Merrill Associates, Inc.
David Reichman, 617-542-5300
SOURCE: Evergreen Solar, Inc.