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SolyndraCROreport

SolyndraCROreport

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Published by: melaniel_co on Mar 27, 2012
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10/29/2012

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Table #25 below illustrates the overall impact of the differences between the Sponsor

Forecasts and actual results in the first three quarters to the Sponsor Forecast and the actual

results of the last three quarters of 2010. As shown below, the difference between the forecasted

and actual negative net operating margin for the first three quarters ended April 3, 2010 was

333

See Appendix V for DOE Loan Guarantee waivers obtained from DOE beginning in October 28, 2010 through

the bankruptcy petition.

334

Bierman cited the primary causes as lower line speed and recent mfg excursion which resulted in shorter CIGS
runs and lower yield. Bierman assured RW Beck that corrective actions were under way and he expected recovery
in the first quarter of 2011.

164

$71.9 million. This difference almost tripled to $210.7 million for the last three quarters ending

January 1, 2011.

TABLE #25

Comparison of Forecast and Actual Results
For the Three Quarters Ended April 3, 2010 and January 1, 2011

(In thousands)

For the 3 Quarters Ended
April 3, 2010

For the 3 Quarters Ended
January 1, 2011

Projected

Actual

Projected

Actual

Total Revenue

$ 126,244 $ 120,965 $ 236,761 $ 102,766

Cost of Sales
Direct Materials

43,107 49,317 67,243 63,045
Direct Labor & Related Costs 38,791 27,959 39,092 37,331
Direct Overhead

20,133 47,461 23,181 38,912

Depreciation

25,585 24,423 21,361 28,149
Warranty, other Cost of Sales 1,894 15,852 3,551 (2,219)

Total Cost of Sales

129,510 165,012 154,428 165,218

Gross Margin

(3,266) (44,047) 82,333 (62,452)

Operating Expenses
Research & Development

48,937 67,134 31,430 51,726

Sales & Marketing

9,780 10,579 9,787 16,662

General & Administrative

14,576 20,836 15,411 28,641

Pre-Production Start-up

837 6,730 - 25,506

Total Operating Expenses

74,130 105,279 56,628 122,535

Operating Margin

$ (77,396) $(149,326) $ 25,705 $(184,987)

As previously stated, by the end of the three quarters ending April 3, 2010, the actual

operating margin was $71.9 million less than forecast in the Sponsor Forecast. Notwithstanding

the magnitude of this loss, it is not uncommon for start-up companies in the early stages of

operation to underestimate future losses and to make accommodation for those circumstances

through the infusion of capital.

However, the underestimation of projected losses by $210 million just precedent to the

finalization of Fab 2 Phase I and the starting of production raised significant liquidity concerns

for the company and required immediate action to raise new capital.

165

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