Hoku posts third straight net loss
Hoku Scientific Inc., facing an Oct. 17 deadline to secure funding for its Idaho polysilicon plant or risk losing a key client, said yesterday it is speaking with financial institutions about debt financing and that preparations for its new business remain on track.
The Kapolei-based alternative energy provider, which has been de-emphasizing its fuel-cell business in favor of polysilicon production and solar installation, announced its third straight quarterly loss after the market closed yesterday and lowered revenue guidance.
Hoku had a net loss for its fiscal first quarter of $653,000, or 4 cents a share, compared with net income of $313,000, or 2 cents a share, a year ago. Revenue, coming solely from $1.1 million in fuel-cell contracts with the U.S. Navy, fell 8.3 percent from $1.2 million a year earlier, when $992,000 came from contracts with Nissan Motor Co. Ltd.
The company also forecast a loss for the current quarter and said it expects revenue to be in the range of $200,00 to $500,000 -- with most of that coming from a U.S. Navy contract to be completed next month. Hoku lowered revenue guidance for fiscal 2008 to a range of $3 million to $6 million from a range of $7 million to $10 million due to its decision to not enter the solar module manufacturing business.
Hoku said yesterday it has signed solar installation contracts with Bank of Hawaii, for its Kohala branch, and Paradise Beverages. Hoku previously announced a deal with Hardware Hawaii and is still negotiating another with Hawaiian Electric Co.
Dustin Shindo, chairman, president and chief executive of Hoku, said the company needs to secure at least $100 million in financing for the $260 million-plus polysilicon plant to avoid triggering a clause that would let Japan-based Sanyo Electric Co. Ltd. cancel its $370 million polysilicon purchase contract. Hoku has similar financing contingency deadlines of March 31 on its contracts with Taiwan-based Suntech Power Holdings Co. Ltd. and a unit of Germany-based Solar Fabrik AG.
"We're actively speaking to financial institutions and we're cognizant of the constraints we have around us, but we can provide no assurance on the outcome," Shindo said.
Shindo said Hoku will need to raise a minimum of $150 million in debt financing to complete the plant. Hoku's customers will pay about $211 million in advance if Hoku achieves specific milestones in each of their contracts.