UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

_______________________

 

FORM 6-K
_______________________

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2016

 

Commission File Number: 001-33911

 


_______________________

 

RENESOLA LTD
_______________________

 

No. 8 Baoqun Road, YaoZhuang
Jiashan, Zhejiang 314117
People’s Republic of China
(Address of principal executive offices)

 

  

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F þ Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 

 

Incorporation by Reference

 

This Form 6-K is being incorporated by reference into the Registrant’s Registration Statement on Form F-3 (No. 333-189650), initially filed with the Securities and Exchange Commission on June 28, 2013 and as amended on August 7, 2013 and September 6, 2013, and declared effective on September 9, 2013.

 

 

 

 

Second Quarter 2016 Results

 

ReneSola Ltd (“ReneSola” or the “Company”) reported its unaudited financial results for the second quarter ended June 30, 2016.

 

Second Quarter 2016 Highlights

 

 

Q2 2016

(in million)

 Q/Q Change Y/Y Change
Revenue $250.0 -4.1% -6.8%
Gross Profit $41.2 -7.5% -7.3%
Operating Income $6.4 -47.9% -39.2%
Net Income $5.5 -3.5% N/A

 

·Revenue was $250.0 million, compared with guidance range of $280-$290 million
·Gross margin was 16.5%, compared with 17.1% in Q1 2016 and 16.5% in Q2 2015
·Net income was $5.5 million, compared with $5.7 million in Q1 2016 and net loss of $2.3 million in Q2 2015
·Total external module shipments were 282.4 MW while module shipments to the Company’s downstream projects were approximately 18.9 MW;
·Total external wafer shipments were 423.3 MW compared with 351.0 MW in Q1 2016 which reflects the Company’s wafer capacity expansion strategy through technology improvement;
·Successfully sold approximately 20.0 MW of projects in the UK; £21.2 million to be recognized in Q3 2016, additional £1.6 million be recognized within two years
·The Company now has a solar power project pipeline of 938.2 MW, of which 323.8 MW are late stage
·The Company connected six utility-scale projects to UK grid during the quarter with total capacity of approximately 26 MW and expects the projects to be sold in Q3 2016
·LED sales up 26% sequentially with gross margin over 30%

 

Second Quarter 2016 Financial Results

 

Revenue of $250.0 million was down 4.1% q/q and down 6.8% y/y. Revenue declined due to lower wafer ASP and reduced module shipments to external customers. The Company continues to scale back its OEM business in order to shift toward downstream project development.

 

Gross profit of $41.2 million was down 7.5% q/q and down 7.3% y/y. Gross margin decreased sequentially to 16.5% from 17.1% in Q1, but was unchanged relative to last year. The sequential margin decline in the quarter was primarily due to changes in product mix, coupled with margin pressure related to wafer sales.

 

Operating expenses of $34.8 million were 13.9% of revenue, up from 12.4% in Q1 of 2016 and up from 12.6% in Q2 of 2015. The increase in operating expenses in the quarter was largely attributable to higher sales commissions. Sequentially, SG&A expenses increased 7% while R&D expenses decreased 9%.

 

Operating income was $6.4 million, compared to operating income of $12.2 million in Q1 of 2016 and $10.5 million in Q2 of 2015. Operating margin decreased to 2.5% from 4.7% in Q1 of 2016 and from 3.9% in Q2 of 2015.

 

Non-operating expenses of $0.4 million include net interest expense of $7.8 million, offset by gains on derivatives of $2.9 million, and foreign exchange gains of $4.3 million.

 

 

 

 

Net income was $5.5 million, compared to a net income of $5.7 million in Q1 of 2016 and a net loss of $2.3 million in Q2 of 2015. Earnings per ADS were $0.05, compared to $0.06 in Q1 of 2016.

 

Balance Sheet, Liquidity and Capital Resources

 

The Company had cash and cash equivalents (including restricted cash) of $163.4 million as of June 30, 2016, compared with $190.0 million at the end of Q1 2016. The decrease of $26.6 million includes a negative foreign currency translation impact of $6.8 million. Total debt was $716.5 million, down from $737.2 million as of March 31, 2016. Total borrowings decreased by $20.7 million in the quarter, similarly benefiting from foreign currency translation.

 

Second Quarter Operating Highlights

 

The Company remains focused on developing, operating and selling high-quality solar power projects. Activity is centered on building a pipeline of distributed generation and utility-scale projects in attractive geographies worldwide.

 

Project Sales

 

The Company sold four utility-scale projects in the United Kingdom in the second quarter of 2016, representing a total of approximately 20.0 MW of generating capacity. Revenue from the sales of these projects will be recognized in the third quarter of 2016.

 

Project Sales Location Size (MW)
Collacott UK 5.0
Debdale UK 5.0
Handley UK 5.0
Stretton UK 5.0

 

Project Pipeline

 

The Company currently has 938.2 MW of projects in various stages of development. The Company is starting to identify opportunity in the domestic distributed generation market, and now has 35 MW of such projects in its pipeline. The Company continues to focus on developed markets with stable returns and healthy cash flow.

 

 

 

 

The geographic distribution of project pipeline is outlined in the table below.

 

Project Location Total Pipeline (MW) Late Stage Projects of Total Pipeline (MW)
USA 169.6                  107.81
UK 250.2 45.3
Japan 31.5                   29.6
Canada 32.3                      9.0
Poland 140.0                -
Turkey 116.0 116.02
Spain 75.0 -
Thailand 50.0 -
France 38.6 0.1
China DG 35.0 16.0
Total 938.2 323.8

 

Modules and Wafers

 

The Company continues to provide high quality products at lower cost to select customers. The Company considers its competitive advantages to be improving conversion efficiency and supply chain management.

 

During the second quarter, total external module shipments were 282.4 MW, down 19.5% from the first quarter of 2016 and down 12.3% from the second quarter of 2015. Total wafer shipments were 423.3 MW, up 20.6% q/q and up 50.3% y/y which reflects the Company’s wafer capacity expansion strategy through technology improvement.

 

LED

 

During the second quarter, ReneSola’s LED business reached revenue of $7.8 million, up approximately 26% from $6.2 million in Q1 2016, and achieved a gross margin of over 30%.

 

The market for energy efficient products is large and growing rapidly. LED lighting is one of the most effective products for reducing energy consumption with high product quality. We are leveraging our brand name and global distribution footprint to build an attractive, high margin business that we think will grow into a meaningful contributor to our results in the years ahead.

 

Safe Harbor Statement

 

Certain statement in this Current Report on Form 6-K may contain statements that constitute ''forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when the Company describes what it "believes," "expects" or "anticipates" will occur, what "will" or "could" happen, and other similar statements), you must remember that the Company’s expectations may not be correct, even though it believes that they are reasonable. The Company does not guarantee that the forward-looking statements will happen as described or that they will happen at all. Further information regarding risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements is included in the Company’s filings with the U.S. Securities and Exchange Commission, including the Company’s annual report on Form 20-F. The Company undertakes no obligation, beyond that required by law, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made, even though the Company’s situation may change in the future.

 

 

_________________________

1 As of May 31, 2016, the Company entered into a settlement agreement with Pristine Sun, LLC and certain of its affiliates (collectively, “Pristine”), by which it resolved its dispute with Pristine, dismissed the action previously filed against Pristine, and acquired 100% ownership of 85 MW of solar energy projects under development in California, North Carolina, and Minnesota.

 

2 With the start of operation, the projects will be transferred into a joint venture, of which Renesola will hold 50% of equity interest of the 116MW projects.

 

 

 

 

RENESOLA LTD

 Unaudited Consolidated Balance Sheets

 (US dollars in thousands)

 

   Jun 30,   Mar 31,   Jun 30, 
   2016   2016   2015 
 ASSETS            
 Current assets:            
 Cash and cash equivalents   23,723    38,687    43,153 
 Restricted cash   139,645    151,339    141,942 
 Accounts receivable, net of allowances for doubtful accounts   185,573    176,391    89,826 
 Inventories   165,470    181,659    277,658 
 Advances to suppliers-current   23,286    28,316    44,566 
 Amounts due from related parties   77    95    101 
 Value added tax recoverable   5,911    20,573    24,355 
 Prepaid income tax   4,338    1,900    1,705 
 Prepaid expenses and other current assets   18,288    15,901    53,351 
 Project assets   64,756    34,949    53,651 
 Deferred convertible notes issue costs-current   -    -    302 
 Derivative assets   2,077    -    1,577 
 Assets held-for-sale   -    -    - 
 Deferred tax assets-current, net   -    2,242    4,496 
 Total current assets   633,144    652,052    736,683 
                
 Property, plant and equipment, net   568,090    603,248    705,256 
 Prepaid land use right, net   35,842    37,179    40,151 
 Deferred tax assets-non-current, net   14,403    14,121    15,886 
 Deferred convertible notes issue costs-non-current   -    -    - 
 Advances for purchases of property, plant and equipment   285    1,288    169 
 Deferred project costs   17,576    20,874    20,874 
 Project assets-noncurrent   9,463    -    - 
 Other long-lived assets   9,943    10,144    6,248 
 Total assets   1,288,746    1,338,906    1,525,267 
                
 LIABILITIES AND SHAREHOLDERS' EQUITY               
                
 Current liabilities:               
 Convertible bond payable-current   -    -    62,190 
 Short-term borrowings   716,512    735,610    653,627 
 Accounts payable   280,609    301,976    405,881 
 Advances from customers-current   20,342    24,985    32,656 
 Amounts due to related parties   2,831    3,189    6,392 
 Other current liabilities    66,536    62,727    113,187 
 Income tax payable   128    124    125 
 Derivative liabilities   -    343    4,747 
 Warrant liability   26    158    1,050 
 Total current liabilities   1,086,984    1,129,112    1,279,855 
                
 Convertible notes payable-non-current   -    -    - 
 Long-term borrowings   -    1,551    41,117 
 Advances from customers-non-current   -    -    1,191 
 Deferred revenue   28,366    32,376    26,054 
 Warranty   38,870    38,070    36,185 
 Deferred subsidies and other   22,203    23,116    24,744 
 Other long-term liabilities   15    15    972 
 Total liabilities   1,176,438    1,224,240    1,410,118 
                
 Shareholders' equity               
   Common shares   477,171    477,419    478,391 
   Additional paid-in capital   7,994    7,707    7,248 
   Accumulated loss   (424,020)   (429,544)   (450,530)
   Accumulated other comprehensive income   51,163    59,084    80,040 
 Total equity attribute to ReneSola Ltd   112,308    114,666    115,149 
 Total  shareholders' equity   112,308    114,666    115,149 
                
 Total liabilities and shareholders' equity   1,288,746    1,338,906    1,525,267 

 

 

 

 

RENESOLA LTD

Unaudited Consolidated Statements of Income

(US dollar in thousands, except ADS and share data)

 

   Three Months Ended   Six Months Ended 
   Jun 30, 2016   Mar 31, 2016   Jun 30, 2015   Jun 30, 2016   Jun 30, 2015 
                     
Net revenues   250,038    260,696    268,401    510,734    617,404 
Cost of revenues   (208,886)   (216,191)   (224,001)   (425,077)   (536,339)
Gross profit   41,152    44,505    44,400    85,657    81,065 
GP%   16.5%   17.1%   16.5%   16.8%   13.1%
                          
Operating (expenses) income:                         
Sales and marketing   (15,152)   (13,500)   (18,126)   (28,652)   (39,969)
General and administrative   (13,525)   (13,269)   (15,518)   (26,794)   (29,254)
Research and development   (7,424)   (8,190)   (11,166)   (15,614)   (24,584)
Other operating income   1,324    2,694    10,893    4,018    13,705 
Total operating expenses   (34,777)   (32,265)   (33,917)   (67,042)   (80,102)
                          
Income (loss) from operations   6,375    12,240    10,483    18,615    963 
    2.5%   4.7%   3.9%   3.6%   0.2%
Non-operating (expenses) income:                         
Interest income   715    777    743    1,492    1,675 
Interest expense   (8,477)   (9,860)   (11,177)   (18,337)   (22,019)
Foreign exchange gains (losses)   4,336    2,945    6,181    7,281    (9,889)
Gains (losses) on derivatives, net   2,869    (602)   (8,753)   2,267    (4,252)
Investment gain on disposal of subsidiaries   -    7    -    7    - 
Gains on repurchase of convertible bonds   -    213    155    213    11,803 
Fair value change of warrant liability   131    420    683    551    841 
                          
Income (loss) before income tax, noncontrolling interests   5,949    6,140    (1,685)   12,089    (20,878)
                          
Income tax (expense) benefit   (425)   (407)   (615)   (832)   550 
Net income (loss)   5,524    5,733    (2,300)   11,257    (20,328)
                          
Less: Net income (loss) attributed to noncontrolling interests   -    -    -    -    - 
Net income (loss) attributed to holders of ordinary shares   5,524    5,733    (2,300)   11,257    (20,328)
                          
Earnings per share                         
  Basic   0.03    0.03    (0.01)   0.06    (0.10)
  Diluted   0.03    0.03    (0.01)   0.06    (0.10)
                          
Earnings per ADS                         
  Basic   0.05    0.06    (0.02)   0.11    (0.20)
  Diluted   0.05    0.06    (0.02)   0.11    (0.20)
                          
Weighted average number of shares used in  computing loss per share                         
  Basic   201,998,340    203,163,310    204,627,464    202,580,825    204,275,041 
  Diluted   201,998,340    203,163,310    204,627,464    202,580,825    204,275,041 

 

Net income (loss)   5,524    5,733    (2,300)   11,257    (20,328)
Other comprehensive income (loss)                         
Foreign exchange translation adjustment   (7,921)   (2,493)   (7,211)   (10,414)   (1,040)
Other comprehensive income (loss)   (7,921)   (2,493)   (7,211)   (10,414)   (1,040)
                          
Comprehensive income (loss)   (2,397)   3,240    (9,511)   843    (21,368)
Less: comprehensive loss attributable to non-controlling interest   -    -    -    -    - 
Comprehensive income (loss) attributable to ReneSola   (2,397)   3,240    (9,511)   843    (21,368)

 

 

 

 

RENESOLA LTD

Unaudited Consolidated Statements of Cash Flow

(US dollar in thousands)

 

   Six Months Ended 
   Jun 30, 2016   Jun 30, 2015 
         
Operating activities:          
Net profit/(loss)   11,257    (20,328)
Adjustment to reconcile net loss to net cash provided by (used in) operating activity:          
Inventory write-down   -    640 
Depreciation and amortization   39,275    46,601 
Amortization of deferred convertible bond issuances costs and premium   33    254 
Allowance of doubtful receivables, advance to suppliers and prepayment for purchases of property, plant and equipment   131    (1,277)
Loss on derivatives   (2,088)   4,252 
Fair value change of warrant liability   (551)   (841)
Gain from settlement of certain payables   -    (6,258)
Gain from advances from customers   -    - 
Share-based compensation   512    791 
Loss on disposal of long-lived assets   5,358    (4)
Gain on disposal of solar project   (2,527)   - 
Impairment of goodwill   -    - 
Impairment of Intangible assets   -    - 
Impairment of  long-lived assets   -    - 
Reversal of firm purchase commitment   -    - 
Gain on disposal of  subsidiaries   -    - 
Gain on CB repurchase   (212)   (11,803)
           
Changes in assets and liabilities:          
Accounts receivable   (29,480)   30,133 
Inventories   1,119    45,767 
Project assets and deferred project cost   (25,676)   (12,782)
Advances to suppliers   (6,354)   (16,375)
Amounts due from related parties   257    (3,828)
Value added tax recoverable   18,668    5,406 
Prepaid expenses and other current assets   6,658    (8,745)
Prepaid land use rights, net   464    (535)
Proceeds from disposal of land use right        
Deferred project costs        
Accounts payable   (12,643)   (49,389)
Advances from customers   (8,198)   (47,927)
Income tax payable   (778)   (475)
Other  current liabilities   (10,050)   124 
Deferred revenue   (4,010)   26,054 
Other long-term liabilities   (458)   (620)
Other non-current assets   -    - 
Other long-term assets   -    (2,727)
Accrued warranty cost   3,821    4,406 
Deferred taxes assets   1,959    (1,145)
Provision for litigation   -    - 
Net cash provided by (used in) operating activities   (13,513)   (20,631)
           
Investing activities:          
Purchases of property, plant and equipment   (4,162)   (1,661)
Advances for purchases of property, plant and equipment   5,140    (103)
Cash received from government subsidy   -    - 
Proceeds from disposal of property, plant and equipment   -    25 
Changes in restricted cash   (2,895)   (20,095)
Net cash received (paid) on settlement of  derivatives   179    606 
Purchases of investment securities   -    - 
Proceeds from disposal of subsidiaries   -    - 
Net  cash provided by (used in) investing activities   (1,738)   (21,228)
           
Financing activities:          
Proceeds from bank borrowings   497,630    475,612 
Proceeds from issuance of common shares   -    - 
Proceeds from related parties   -    3,000 
Repayment of bank borrowings   (464,338)   (473,566)
Proceeds from exercise of stock options   -    221 
Paid for CB repurchase   -    - 
Share issuance costs   -    - 
Repurchace from noncontrolling interests   -    - 
Repurchase of convertible notes   (25,931)   (20,364)
Cash paid for ADS/s repurchase   (981)   - 
Net cash provided  by (used in) financing activities   6,380    (15,097)
           
Effect of exchange rate changes   (5,451)   261 
           
Net increase (decrease) in cash and cash equivalents   (14,322)   (56,695)
Cash and cash equivalents, beginning of period/year   38,045    99,848 
Cash and cash equivalents, end of period/year   23,723    43,153 

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

RENESOLA LTD

 

 

 

By: /s/ Xianshou Li             
Name: Xianshou Li
Title: Chief Executive Officer

  

 

Date: August 24, 2016