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 May 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 x      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.

  

 

 

 

First Quarter 2016 Results

 

ReneSola Ltd (“ReneSola” or the “Company”) reported its unaudited financial results for the first quarter ended March 31, 2016.

 

First Quarter 2016 Highlights

 

  Q1 2016 Q/Q Change Y/Y Change
Revenue $260.7 -12.0% -25.3%
Gross Profit $44.5 -6.2% +21.4%
Operating Income $12.2 -27.7% N/A
Net Income $5.7 -13.9% N/A

 

·Revenue of $260.7 million was in-line with management guidance range of $260-$270 million
·Gross margin increased to 17.1% from 16.0% in Q4 2015 and 10.5% in Q1 2015
·Net Income was $5.7 million, compared with $6.7 million in Q4 2015 and net loss of $18 million in Q1 2015
·Total external module shipments were 350.7 MW while module shipments to the Company’s downstream projects were 20.1 MW;
·Sold 9.7 MW of projects in Bulgaria; the sales were booked as disposal of assets and contributed to operating income of $2.5 million;
·The Company now has a solar power project pipeline of 785.3 MW at different development stages; and
·The Company connected four utility-scale projects to UK grid during the quarter with total capacity of approximately 20 MW

 

First Quarter 2016 Financial Results

 

Revenue of $260.7 million was down 12.0% q/q and 25.3% y/y and in-line with guidance of $260-$270 million. The revenue decline reflects lower module ASP and lower module shipments to external customers as the Company continues to scale back its OEM business and shift towards downstream project development.

 

Gross profit of $44.5 million was down 6.2% q/q and up 21.4% y/y. Gross margin increased to 17.1% from 16.0% in Q4 of 2015 and 10.5% in Q1 of 2015. The sequential margin improvement in the quarter was due to wafer margin improvement.

 

Operating expenses of $32.3 million were 12.4% of revenue, up from 10.3% in Q4 of 2015 and down from 13.2% in Q1 of 2015.

 

Operating income was $12.2 million, compared to operating income of $16.9 million in Q4 of 2015and operating loss of $9.5 million in Q1 of 2015. Operating margin decreased sequentially to 4.7% from 5.7% in Q4 of 2015.

 

Non-operating expenses of $6.1 million include net interest expense of $9.1 million and loss on derivative of $0.6 million, offset by foreign exchange gains of $2.9 million.

 

Net income was $5.7 million, compared to a net income of $6.7 million in Q4 of 2015 and a net loss of $18.0 million in Q1 of 2015. Earnings per ADS were $0.06, compared to $0.07 in Q4 of 2015.

 

 

 

 

Balance Sheet, Liquidity and Capital Resources

 

The Company had cash and equivalents (including restricted cash) of $190 million as of March 31, 2016. Total debt was $737 million, largely in-line with the debt balance as of December 31, 2015. Short-term borrowings increased $66.8 million in the quarter due to an increase of working capital loans and factoring arrangements, coupled with the fact that $31 million of the current portion of long-term borrowings were reclassified as short-term borrowings. Total long-term borrowings decreased in the quarter as the long-term loan associated with the Bulgaria projects was transferred to the buyer, and as mentioned above, a portion of the long-term borrowings was reclassified as short-terms borrowings. During the quarter, the Company repurchased all of the remaining convertible notes of $26.1 million.

 

First Quarter Operating Highlights

 

Since disclosing its strategic shift to solar power project development at the start of 2015, the Company has focused its efforts 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 two projects in Bulgaria in the first quarter of 2016, representing a total of 9.7 MW of generating capacity. Because these projects were recognized as long-term assets on the balance sheet since the end of 2013, the sale was booked as disposal of assets and the gain on sale was included in operating income. The purchase included cash payment of $5.1 million and the assumption of project debt. The structure of the transaction reflects the Company’s continued focus to reduce debt and monetize projects assets.

 

Project Sales Location Size (MW)
Nove ECO Bulgaria 5.0
MG Solar Bulgaria 4.7

 

Operating Assets

 

After the sale of projects in Bulgaria, the Company currently owns and operates two solar power projects it developed in earlier years. While the Company expects the projects to produce a steady stream of recurring revenue, the Company is holding its operating assets for eventual sale.

 

IPP Assets Location Size (MW)
Lucas EST Romania 6.0
Ecosfer Energy Romania 9.4

 

Project Pipeline

 

The company currently has 785.3 MW of projects in various stages of development. The geographic distribution of projects is outlined in the table below.

 

 

 

 

 

Project Location Total Pipeline (MW) Late Stage Projects of Total Pipeline (MW)
USA 121.4                   103.31
UK 180.5                 65.3
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  
Total 785.3 323.2

 

Modules and Wafers

 

The Company continues to fully utilize its capacity 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 first quarter, total external module shipments were 350.7 MW, representing a decrease of 6.0% from Q4 2015. Total wafer shipments were 351.0 MW, up 29.8% q/q and up 79.9% y/y.

 

LED

During the first quarter, ReneSola’s LED business reached revenue of $6.2 million, up from $4.9 million in Q4 2015, and achieved a gross margin of over 30%.

 

The energy efficiency market is a large and growing market, and LED lighting is a critical element. A key strategic focus of the Company is to grow its share in the high-growth LED market by utilizing its world-wide distribution channels.

 

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 On March 25, 2016, the Company entered into a binding settlement term sheet with Pristine and certain of its affiliates to resolve our dispute, dismiss the action that we previously filed against Pristine and transfer 88 MW solar energy projects under development in California, North Carolina, and Minnesota by Pristine and its affiliates to one of our wholly owned subsidiaries in the United States. Upon consummation of the transfer, we will be the 100% owner of the 88 MW portfolio of solar energy projects.

 

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

 

 

 

 

RENESOLA LTD
Unaudited Consolidated Balance Sheets
(US dollars in thousands)
   Mar 31,   Dec 31,   Mar 31, 
   2016   2015   2015 
 ASSETS               
 Current assets:               
 Cash and cash equivalents   38,687    38,045    47,857 
 Restricted cash   151,339    140,338    180,291 
 Accounts receivable, net of allowances for doubtful accounts   176,391    161,166    133,462 
 Inventories   181,659    193,171    268,546 
 Advances to suppliers-current   28,316    18,480    50,629 
 Amounts due from related parties   95    111    12 
 Value added tax recoverable   20,573    24,525    29,261 
 Prepaid income tax   1,900    3,609    1,108 
 Prepaid expenses and other current assets   15,901    27,770    48,457 
 Project assets   34,949    20,214    65,791 
 Deferred convertible notes issue costs-current   -    35    414 
 Derivative assets   -    56    1,839 
 Assets held-for-sale   -    4,241    - 
 Deferred tax assets-current, net   2,242    5,989    3,568 
 Total current assets   652,052    637,750    831,235 
                
 Property, plant and equipment, net   603,248    630,462    728,670 
 Prepaid land use right, net   37,179    37,240    40,381 
 Deferred tax assets-non-current, net   14,121    10,238    17,428 
 Deferred convertible notes issue costs-non-current             - 
 Advances for purchases of property, plant and equipment   1,288    382    954 
 Deferred project costs   20,874    20,874    - 
 Other long-lived assets   10,144    9,374    8,360 
 Total assets   1,338,906    1,346,320    1,627,028 
                
 LIABILITIES AND SHAREHOLDERS' EQUITY               
                
 Current liabilities:               
 Convertible bond payable-current        26,145    62,850 
 Short-term borrowings   735,610    668,788    681,707 
 Accounts payable   301,976    300,176    478,559 
 Advances from customers-current   24,985    28,101    53,109 
 Amounts due to related parties   3,189    2,677    2,889 
 Other current liabilities   62,727    77,237    118,794 
 Income tax payable   124    130    124 
 Derivative liabilities   343    30    22 
 Warrant liability   158    578    1,733 
 Total current liabilities   1,129,112    1,103,862    1,399,787 
                
 Convertible notes payable-non-current             - 
 Long-term borrowings   1,551    38,777    41,342 
 Advances from customers-non-current             1,191 
 Deferred revenue   32,376    32,376    - 
 Warranty   38,070    36,024    34,298 
 Deferred subsidies and other   23,116    23,242    24,988 
 Other long-term liabilities   15    105    1,128 
 Total liabilities   1,224,240    1,234,386    1,502,734 
                
 Shareholders' equity               
   Common shares   477,419    477,965    478,391 
   Additional paid-in capital   7,707    7,669    6,882 
   Accumulated loss   (429,544)   (435,277)   (448,230)
   Accumulated other comprehensive income   59,084    61,577    87,251 
 Total equity attribute to ReneSola Ltd   114,666    111,934    124,294 
 Total  shareholders' equity   114,666    111,934    124,294 
                
 Total liabilities and shareholders' equity   1,338,906    1,346,320    1,627,028 

 

 

 

 

 

 

 

RENESOLA LTD
Unaudited Consolidated Statements of Income
(US dollar in thousands, except ADS and share data)
             
       Three Months Ended 
   Mar 31, 2016   Dec 31, 2015   Mar 31, 2015 
             
Net revenues   260,696    296,388    349,003 
Cost of revenues   (216,191)   (248,917)   (312,338)
Gross profit   44,505    47,471    36,665 
GP%   17.1%   16.0%   10.5%
                
Operating (expenses) income:               
Sales and marketing   (13,500)   (12,465)   (21,843)
General and administrative   (13,269)   (15,211)   (13,736)
Research and development   (8,190)   (9,518)   (13,418)
Other operating income   2,694    6,651    2,812 
Total operating expenses   (32,265)   (30,543)   (46,185)
    -12.4%   -10.3%   -13.2%
Income (loss) from operations   12,240    16,928    (9,520)
    4.7%   5.7%   -2.7%
Non-operating (expenses) income:               
Interest income   777    544    932 
Interest expense   (9,860)   (10,352)   (10,842)
Foreign exchange gains (losses)   2,945    2,056    (16,070)
Gains (losses) on derivatives, net   (602)   (1,159)   4,501 
Investment gain on disposal of subsidiaries   7         - 
Gains on repurchase of convertible bonds   213    -    11,648 
Fair value change of warrant liability   420    (315)   158 
Income (loss) before income tax, noncontrolling interests   6,140    7,702    (19,193)
                
Income tax (expense) benefit   (407)   (1,046)   1,165 
Net income (loss)   5,733    6,656    (18,028)
                
Less: Net income (loss) attributed to noncontrolling interests             - 
Net income (loss) attributed to holders of ordinary shares   5,733    6,656    (18,028)
                
                
Earnings per share               
  Basic   0.03    0.03    (0.09)
  Diluted   0.03    0.03    (0.09)
                
Earnings per ADS               
  Basic   0.06    0.07    (0.18)
  Diluted   0.06    0.07    (0.18)
                
Weighted average number of shares used in computing loss per share               
  Basic   203,163,310    203,137,831    203,918,702 
  Diluted   203,163,310    203,137,831    203,918,702 
                
                
                
                
                
                
         Three Months ended 
    Mar 31, 2016    Dec 31, 2015    Mar 31, 2015 
Net income (loss)   5,733    6,656    (18,028)
Other comprehensive income (loss)               
Foreign exchange translation adjustment   (2,493)   (4,629)   6,171 
Other comprehensive income (loss)   (2,493)   (4,629)   6,171 
                
Comprehensive income (loss)   3,240    2,027    (11,857)
Less:comprehensive loss attributable to non-controlling interest   -    -    - 
Comprehensive income (loss) attributable to ReneSola   3,240    2,027    (11,857)
                

 

 

 

 

RENESOLA LTD
Unaudited Consolidated Statements of Cash Flow
(US dollar in thousands)
   Three Months Ended   Three Months Ended 
   Mar 31, 2016   Mar 31, 2015 
         
Operating activities:          
Net profit/(loss)   5,733    (18,028)
Adjustment to reconcile net loss to net cash provided by (used in) operating activity:          
  Inventory write-down   0    331 
  Depreciation and amortization   21,218    22,430 
  Amortization of deferred convertible bond issuances costs and premium   33    387 
  Allowance of doubtful receivables, advance to suppliers and prepayment for purchases of property, plant and equipment   (1,108)   383 
  Loss on derivatives   (56)   (4,501)
  Fair value change of warrant liability   (420)   (158)
  Gain from settlement of certain payables          
  Gain from advances from customers   0    - 
  Share-based compensation   225    425 
  Loss on disposal of long-lived assets   1,208    (493)
  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)   (11,648)
           
Changes in assets and liabilities:          
  Accounts receivable   (15,263)   (6,921)
  Inventories   2,489    52,526 
  Project assets and deferred project cost   (3,227)   (2,098)
  Advances to suppliers   (9,728)   (23,833)
  Amounts due from related parties   509    (170)
  Value added tax recoverable   4,413    473 
  Prepaid expenses and other current assets   10,415    (2,245)
  Prepaid land use rights, net   230    (742)
  Proceeds from disposal of land use right        - 
  Deferred project costs          
  Accounts payable   (1,196)   21,510 
  Advances from customers   (3,465)   (27,133)
  Income tax payable   1,548    99 
  Other  current liabilities   (15,696)   (9,510)
  Deferred revenue          
  Other long-term liabilities   (230)   (380)
 Other non-current assets          
  Other long-term assets        (239)
  Accrued warranty cost   1,854    2,520 
  Deferred taxes assets   (1,044)   (2,011)
  Provision for litigation   (89)   - 
Net cash provided by (used in) operating activities   (4,386)   (9,026)
           
Investing activities:          
  Purchases of property, plant and equipment   (2,240)   (387)
  Advances for purchases of property, plant and equipment   -    (1,241)
  Cash received from government subsidy   -    - 
Proceeds from disposal of property, plant and equipment   -    23 
  Changes in restricted cash   (10,211)   (58,197)
  Net cash received (paid) on settlement of  derivatives   420    4,371 
  Purchases of investment securities   -    - 
  Proceeds from disposal of subsidiaries   5,140    - 
Net  cash provided by (used in) investing activities   (6,891)   (55,431)
           
Financing activities:          
  Proceeds from bank borrowings   264,262    265,599 
  Proceeds from issuance of common shares   -    - 
  Proceeds from related parties   -    (4,072)
  Repayment of bank borrowings   (227,058)   (236,907)
  Proceeds from exercise of stock options        1,625 
 Paid for CB repurchase   (25,931)     
  Share issuance costs        - 
  Repurchace from noncontrolling interests        - 
  Repurchase of convertible notes        (20,059)
Cash paid for ADS/s repurchase   (733)   - 
Net cash provided  by (used in) financing activities   10,540    6,186 
           
Effect of exchange rate changes   1,379    6,280 
           
Net increase (decrease) in cash and cash equivalents   642    (51,991)
Cash and cash equivalents, beginning of period/year   38,045    99,848 
Cash and cash equivalents, end of period/year   38,687    47,857 

  

 

 

 

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: May 23, 2016