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Good day and thank you for standing by. Welcome to the Fourth Quarter and Full Year 2021 ReneSola Power Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Gary Dvorchak. Please go ahead.

Thank you, Victor and hello, everyone. Thank you for joining us on today's call to discuss our fourth quarter 2021 results. We released our shareholder letter after the market closed today. It's available on the website. There is also a supplemental slide deck posted on the website that we will reference during our prepared remarks. On the call with me today are Mr. Yumin Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, Mr. John Ewen, CEO of North America. Before we continue, note on slide two that this presentation will have remarks that are made -- that may include predictions, estimates or other information that might be considered forward-looking. These forward-looking statements represent ReneSola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under the Risk Factors and elsewhere in ReneSola Power's filings with the SEC. Please do not place undue reliance on these forward-looking statements, which reflect ReneSola Power's opinions only as of the date of this call. ReneSola Power is not obliged to update you on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Yumin Liu, our CEO. Yumin?

Thank you, Gary and thanks everyone for joining the call. Before we dive into our fourth quarter results, I'd like to remind everyone that we examined the quarter in detail in our shareholder letter posted on our website. So, I'm just going to call out the highlights that used to study in the letter and supplemental deck. The first key point is that, for the full year, we returned our business to growth with revenue up 8% year-over-year to $79.7 million and GAAP net income per ADS up 77% to $0.10 per ADS from $0.06 per ADS in 2020. For Q4, we grew revenue 47% sequentially to $22.8 million, which was just slightly below the mid-point of our guidance range as a result of a project sale delay, which is now scheduled to close in the first half of 2022. Second, in 2021, we more than doubled our Project Development pipeline from 1 gigawatt at end of last year to 2.2 gigawatts by the end of 2021, above our original growth target of 2 gigawatts set in the beginning of the year. I'm extremely proud of the strong project pipeline that we have built with over 60% is located in Europe, our largest market, where there are tremendous opportunities in the renewable energy projects. In 2021, over 60% of our revenue and 50% of gross profit came from our European operations. As we look forward, we believe the solar industry will experience unprecedented growth as the crisis in the Ukraine has awakened worldwide desire and sense of urgency to achieve energy independence. We are already seeing signs of this acceleration in Europe. As an example, on February 28, Germany announced its decision to rapidly accelerate the expansion of the wind and solar power with the goal to generate almost all of the country's electricity from renewable sources by 2035. Across Europe, many countries are announcing plans similar to the Germany's. The USA, our second largest market, is also expected to grow rapidly in the coming years, both in utility-scale projects and community solar programs. As an example, recently the U.S. Department of Energy announced plans to enable enough community solar projects to power 5 million homes by 2025. This initiative would increase current capacity by an additional 700%. With a significant strong demand for solar industry, we believe we are well-positioned to capitalize on the tremendous opportunities in front of us, given our deep expertise in developing and operating solar projects, extensive network of industry partnerships, well-capitalized balance sheet and unmatched track record in closing financing transactions. In 2022, we expect to build our strong pipeline growth momentum and closed the year at 3 gigawatts with a significant portion of the growth coming from Europe. Longer term, we are targeting 5 gigawatts of mid to late stage pipeline by end of 2024. With that, I now turn the call over to ReneSola Power's CFO, Ke Chen. Ke?

Thank you, Yumin and thanks again everyone for joining us on the call today. Our shareholder letter and supplemental slides contain all the figures and comparison unit. I'm not going to repeat every number, instead I'm going to focus on the factors that influenced results. As I speak, please keep in mind that we will discuss certain non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors, along with the GAAP measures. A non-GAAP to GAAP reconciliation is included in our shareholder letter. Let's begin with our Q4 financial highlights on slide 17. Revenue was $22.8 million, slightly below our guidance mid-point of $24 million due to a delayed project sale, which is now scheduled to close in the first half of 2022. As a reminder, project sales are large with unpredictable timing and the quarterly revenue will often fluctuate significantly. As such, we measure our success by focusing on profit and pipeline growth. This result revenue was $22.8 million, slightly below our mid-point of $24 million due to delayed projects. As such, we measure our success by focusing on profit and pipeline growth, this result was still very strong. However, as it represents 47% sequential and 39% year-over-year growth. Project Development revenue consists of sales of solar projects in Poland, Spain, Hungary and the U.S. IPP energy revenue came from 34-million-kilowatt hour generated by our rooftop DG Project in China and the U.S. Our GAAP gross margin for the quarter was 31.7%, which is below the guidance range that we provided, also primarily as a result of this project delay. Year-over-year, however, gross margin improved significantly from 12% in Q4 2020, was driven by our focus on high margin NTP sales supported by high margin IPP electricity sales. Moving onto the operating expense. This quarter, we were impacted by several non-cash items that caused our GAAP results to be unimpressive. And I will go through them one by one. First, we recorded a $2.3 million account receivable write-off related to our legacy manufacturing business as part of our receivable going process. Second, we issued $1.8 million in stock awards to key employees as part of incentive program to support our continued growth. Third, we record a $400,000 impairment for an IPP project in China, $200,000 write-off for fire accident at one of our IPP project sites. And lastly, we recorded a $200,000 project cancellation cost. As such, we recorded a GAAP net loss of $1.6 million in Q4, 2021. On a non-GAAP basis, however, our Q4 operating expense was only $4.3 million, and our non-GAAP net income was $2.5 million, or 11% of our revenue. Our results for the quarter were even stronger if you look at our adjusted EBITDA or free cash flow, which was $5.3 million and $5.5 million, respectively. For the full year 2021, revenue increased 8% year-over-year to $79.7 million from $73.5 million in 2020. High margin Project Development segment revenue increased 23% year-over-year to $61.1 million and they now represent almost 77% of our revenue, up from 67% in 2020. GAAP gross margin improved to 39.4% from 22.7%. GAAP net income increased to $6.9 million in 2021 from $2.8 million in 2020. Non-GAAP net income nearly quadrupled to $14.7 million from $3.7 million. Finally, adjusted EBITDA grew 58% to nearly $26 million. Now let's review the balance sheet shown on slide 20. Our financial position remained strong, and we have the ability to fund any number of initiatives and opportunities. Cash decreased in the quarter as we repurchased $80 million of our own stock and continued to paydown some of our debt. Our debt to asset ratio at end of Q4 was a record low of 10.3%. Now let's cover guidance as shown on slide 26. For 2022, we expect our revenue growth to accelerate, and for the full year to be in the range of $100 million to $120 million. We anticipate our Q1 revenue will only be between $3 million to $4 million, as the bulk of our project sales were scheduled to ramp beginning in Q2. We expect our gross margin for the year to be between 20% to 25%. For net profit, we are targeting between $9 million to $10 million for the full year, which is in line with our prior guidance of at least 30% growth. Finally, in regard to our share repurchase plan. As of today, we have completed repurchase of $20 million of ADS shares outstanding, and we still have $30 million remaining. We believe this share repurchase demonstrates the confidence of our Board and the management team in the strength of our business and the compelling growth opportunity in front of us. Thank you. And now, we would like to open up the call for any questions that you may have for us. Operator, please go ahead.

Thank you. [Operator Instructions] Our first question will come from the line of Philip Shen from ROTH. You may begin.

Hi, everyone. Thanks for taking my questions. First one on Q4, I think you talked about a $2 plus million non-cash charge from the legacy manufacturing business. Do you expect more of those ahead? And it's been a while since you've been tied to the manufacturing business. And so, why is this charge coming up just now? Thanks.

Yes, Phil. And actually, we are taking a very prudent approach based on the auditor's guidance. We are still negotiating with them to get this money back. But auditor, again, decided we have to make this charge. We're great, and we're actively looking for -- still looking for pursue to get some money back, this is first thing. Secondly, we don't expect any more significant write-down related to manufacturing anymore going forward.

Okay. Got it. Thank you. You gave your 2022 guidance. And the margins are a little bit lighter than we would have thought. I know the bottom line increase, you're maintaining 30% year-over-year. But I was wondering you've been able to deliver nice gross margins in the recent quarters. What is -- how are you getting to the steady state of this 20% plus margin as opposed to -- what makes it more difficult to kind of get into that 30% to 35%? Is it greater competition? Is it -- I mean, you guys sell NTP, so I can't imagine it's supply chain, but maybe it is for your customer. And so, just curious if you can give us a little bit more color as to what it might take to drive that margin higher in 2022? Thanks.

Sure. Let me answer that first. I will turn to Yumin. Again, overall, gross margin guided a little lower because we do expect some COD sale in Poland. And COD sale will have a bigger mix this year and the margin will be lower than the NTP sale. So, that's the main reason.

Let me add a couple of points, Phil, that the number one our normal NTP project sales, the margin absolutely is expected higher or a lot higher than the current 20% to 25%, okay? The reason, as Ke mentioned, we do have a 75 megawatts project under EPC contract we'll sell to -- it's already -- it's already sold to Optum, but it's under EPC management. As we said, the majority of our sales strategy will be at NTP. But depending on the request from our customers, we do as we are also capable of doing those EPC and EPC management, including major procurement, okay? So that -- we interpret that as part of the COD sale, that would increase the revenue part, but will lower the gross margin.

Okay. Thank you for that. And so, when you think about the 2022 megawatts that you sell, how many megawatts do you think you are -- have you factored into your guidance for sale? And then, what's the mix between NTP sale versus build-to-sale? Thanks.

The two parts of the question or two parts of the answer I hope to give to you. Number one is that our majority of the sales will still be NTP sales. Except some projects in Poland and Hungary will turn to be COD sales as requested by customers, okay? Number two, in the past many years, we have been doing smaller projects. So, the sales were on the smaller deals, including those 1, 2 megawatts up to 5 megawatts at most. But starting in 2022, we will have utility-scale projects in the sales process. And the megawatt-wide will be significantly increased, but that the sales will include a big utility-scale or middle sized utility-scale projects.

Okay.

Add to that, yeah. I want to actually just add to Yumin, in 2021, we sold 128 megawatts. Again, majority that NTP sale. And in 2022, we target sales 300 megawatts, as Yumin said majority there still will be NTP sale.

Okay. Great. Thank you for that detail. And as you think through the cadence of revenue in Q2, Q3 and Q4. You gave us Q1, it's clearly a little bit light, but due to timing. Can you talk through how the revenues might look as well as margins by quarter? I know you haven't given official guidance, but a general kind of sense of that trajectory would be great.

Yeah. Okay. You will -- Yumin, let me answer then you maybe add?

Go ahead. Go ahead.

Yeah. Again, yes, it will be heavily towards Q3, Q4 in terms of the revenue mix. So, that's a general trend for this year as most of our sales in Europe will towards third quarter and fourth quarter.

Okay. Thanks. And then, one last one for me. Looking through your pipeline, it looked like in Q4 you drove substantial growth in the U.S. pipeline. I was wondering if you could talk through that a bit. And then, looking ahead, I think, Yumin, you mentioned that you might end 2022 with 3 gigawatts. And so, I was wondering if you might be able to share where that growth comes from? Is it primarily the U.S., or because of the war you see substantial growth in Europe as well? Thanks.

Yeah. Thank you. This is a great question. The -- number one -- the second part of the question is we are expecting a big or tremendous growth opportunities coming from Europe. The 3 gigawatts target is what we come up at this time, seeing the opportunities the market has presented to us, especially from the Ukraine -- Russian/Ukraine crisis. The current European market, as we see, in the seven to eight countries we have activities, all have great demand for solar. And our team are not only committed, but also our team is very, very confident to grow our pipeline in the similar way as we do in last year. The 3 gigawatts pipeline, I expect the majority of the -- not majority, over 60%-plus of the projects will come from Europe. Coming back to U.S., U.S. as we are doing both small utility-scale and middle to large sized utility-scale, but also we do community solar programs, those 1 to 5 megawatts. As I mentioned at the earnings script that the -- we do expect the booming growth of the community solar programs in the U.S. At the same time, we also see the greater demand of the medium sized utility-scale projects. Throughout the years, in the last, I would say, 18 to 24 months, we do believe we are getting there, are well-positioned to expand our pipeline in the U.S. in both sectors. So, we hope we can grow our pipeline to at least in the same pace of the company in the U.S. one-third will come from the U.S. As you see in our presentation, that 60%-plus from Europe, 30%-plus from U.S. and about 5% from China. So that will -- that proportion will continue as we expect.

Great. Okay. Really appreciate it. I will pass it on. Thank you.

Thank you, Phil.

Our next question comes from the line of Pavel Molchanov from Raymond James. You may begin.

Thanks for taking the question. Let me start with Europe, where if I'm not mistaken, you added a new country in the last 100 days, and that's Italy. What encouraged you to enter the Italian market for the first time?

Italy naturally have been there for a long time. We have not only formed two joint venture partnerships, but also we have a strong network in Italy. Italy has been one of the leading solar countries in Europe, one of the top five installations across the Europe. And we believe it will present us great opportunities in the years ahead. And the -- not only in the last like 120 days, but also in the first quarter of this year, we continue our, I call it, a very quick growth in Italy. And we'll start building our teams in every single country and expand our teams in every single country in Europe. [Technical Difficulty] have activities, currently activities. One thing I have to remind everybody that the we remain to be very focused. We have activities up to eight countries in Europe. We don't go to every country in Europe.

Right. Sorry. In that context, given the geopolitical backdrop of the war, and the heightened focus on energy security, particularly in the frontline states in Eastern Europe, so you're already in Poland and Hungary. Are you seeing any substantive acceleration in demand in those eastern EU members that have historically had the highest level of dependence on natural gas from Russia, so I'm thinking Bulgaria, Romania, Czech Republic and the Baltic states, in addition to the ones that -- the countries you are already in?

That's a good question that the -- that's also driving us to always remaining to be focused, okay? The two countries, as you mentioned, Poland and Hungary, are the frontline of the neighboring territories, but we all believe that, not only us, but also we extensively have discussions with our European partners. We are all very confident about the growth, especially in Poland, okay? As you see the news, Poland has stopped the importing natural gas from Russia, although they still have about over 80% of the coal power. So, the EU is push to Poland or Poland's commitment to go renewable energy has never been changed or it will be speeded up with the crisis of Ukraine. And the investors, the financing parties, the banks and our partners, we have extensive discussions about Poland, Hungary and neighboring countries next to the crisis. We do not have any of those growth concerns. We may face some challenges near-term, but the mid-term, long-term, we absolutely see the strong growth from those countries.

Okay. And final question for me. One year ago, you talked about adding IPP assets potentially in China and potentially outside of China as well for more recurring revenue. So, with the last 12 months, have you made any progress on bolstering your generation portfolio?

The reason for us to consider light -- we so-called light IPP strategy is to accumulate high and attractive return and stable cash flow. As I mentioned, the China, the rooftop DG Projects had provided the highest, the most attractive economic return compared to any other territory we have project activities. So that is why we have this initiative, IPP -- holding those as IPP assets in our portfolio. At the same time, we also have noticed that we have opportunities either from ourselves or from our partnerships that they're requesting us to stay long-term in the IPP portfolios. And that drive us to think carefully how we develop our IPP portfolio in Europe. Combined Europe and China IPP strategy, we call them as the overall IPP strategy, not only we have abundant cash in our hand, but also, we are actively raising more capital to fund our IPP strategy.

Understood. Thank you very much.

Thank you. Thank you, Pavel.

Thank you. [Operator Instructions] Our next question comes from the line of Amit Dayal from H.C. Wainwright. You may begin.

Thank you. Good afternoon everyone. Just to begin with, did you say you have sold 128 megawatts in 2021?

Yes, Amit, that's all the projects we sold. Most of them are NTP, yes, in 2021. Yes.

And then, for 2022, you're targeting around 300 megawatts. Did I get that correctly?

We're targeting 300 megawatts.

Okay. So, what I'm trying to sort of circle back to is, we did almost $80 million with 128 megawatts. But we're guiding for $100 million to $120 million with more than double megawatts potentially plants for sale in 2022. So, why is this number a little bit lower than what it probably should look like even though -- even if you have higher COD sales that should push the revenue number a little bit higher. Just trying to understand this discrepancy in terms of project -- yeah, yeah. Yeah.

Yes. I think the main reason is some of the large utility-scale project in the U.S., their ASP is much lower than the traditional community solar projects. So that's the main reason.

Okay. Understood.

Adding actually the point there, in the 2020 and 2021 all the project we sold are almost -- every single one, are the small ones, small ones, meaning 1 to 5 megawatts in range. And starting in 2022, we will sell middle size or some utility-scale sized projects.

Okay. So that's one of the factors. Understood. And then on the margin side, again, you're already doing the 20% level of margins with the COD type sales two years ago. The expectations were you're going to move to 30% to 40% type gross margins with the NTP sales. Your outlook is calling from higher NTP contribution next year or this year, starting 2022. But the margins are still trending at the COD type levels. So, again, just -- if you could clarify how we should look at what is going on here?

Sure. Amit, basically the NTP sale, we're still going to have higher margins. But in terms of total revenue, the COD sale will have a bigger portion compared to NTP sales. So that's drive the percentage of margin towards COD sales. But again, this year and starting last year, we -- you see that supply chain challenge and cost challenges. So, we have been conservative on the COD margin estimate. So, I think, COD sale margin will be in the teens, not in the 20s. S that's why you see the gross margin guidance between 20%, 25%.

Okay. And then, in the pipeline, you're targeting -- you're at 2.2 gigawatts, you're targeting 3 gigawatts. The expectation was that you guys would probably be leaning more towards NTP in that mix. How should we think about that mix now? Like given that sort of COD still is playing a role in impacting margins and sales. In that 2 to 3 gigawatts, how much is COD, how much is NTP? Any color on that would be helpful.

Okay. The majority of the sales will remain to be NTP sales. Just as I mentioned, the only one we are requested by our customers to present the COD sales case, just like in Europe, we will do it as we are fully capable of doing so. So, the -- I would say, even in this year or in the future years, currently we are focusing on NTP sales.

Okay. Thank you for that. And then, guidance around the IPP from China was 100 to 150 megawatts over the -- by 2022 end of this year. Is that still on track you think?

It is on track. We target as the -- quarter ago, we say we target to the end of 2022 to build additional 100 to 150 megawatts of the new project in China, adding to our light IPP asset capacity and it's on track.

Okay. Alright. Those are my questions for now. I will take another questions offline. Thank you so much.

Thank you.

Thanks.

[Operator Instructions] Our next question will come from the line of Marisa Hernandez from Sidoti. You may begin.

Good afternoon and thank you for taking my questions.

Good afternoon, Marisa.

So, if you could please clarify the following for me. On the net profit guidance, I think you mentioned $9 million to $10 million in 2022, which suggests that's GAAP basis, correct?

Yes. At this point, yes.

Yeah. So, what would be the non-GAAP number that corresponds to that and is comparable to your $14.7 million in non-GAAP net profit for 2021? I don't know if it's just direct translation of some puts and takes there?

Yeah. For non-GAAP, it's very hard to predict right now, because we're beginning of this year. But again, we don't expect whole lot variations here going forward. So that's why we guided this as a GAAP. So.

Okay. And then, just to clarify the mix of projects in 2022. You mentioned the utility-scale. Is that one big project that you have contracted for 2022, or is it several ones?

There's several projects in 2022, yeah, especially utility project in United States.

Are they all based in the U.S.?

Not all based in U.S. There's -- again, there's a big utilities project in the U.S.

Okay. So, those utility-scale projects, I thought you said they are COD. Did I get that right? And if so, I want to know that you are doing COD as well.

Not all the U.S. project. Again, I think we said -- I think Yumin mentioned that COD projects mainly in Europe, mainly in Poland. In U.S. we ...

Utility project in Poland, and that's ...

In U.S., we only do NTP sale right now.

Okay. So, what you are doing in Poland this year on the utility-scale side, are you doing -- are you responsible for the EPC as well?

In Poland, yes. In Hungary several projects we will do EPC, but most others due to the NTP sale.

Okay. So, how do you manage the materials procurement side of things? Have you already secured modules? What are your thoughts on how to manage that given the inflation environment? Yeah.

We have already started procurement of the modules in Europe for our projects in Poland and Hungary. And the -- currently -- the U.S. is tough, but luckily, we do not do COD sales in the U.S. Europe is still absolutely manageable, although the price is higher.

Okay. And of those 300 megawatts, give or take, that you're expecting to do in 2022, how many of those are these larger utility-scale projects? Just to have a sense of the mix.

The -- we talk -- utility-scale, including smaller or middle sized utility-scale 20 to 40 megawatts, including some bigger ones that the -- I will say, it's about maybe half of the sales will be on the utility-scale and another half will be on the smaller deals.

When you say half, you're talking half of the megawatt number, yeah?

Yes.

As opposed to revenue? Okay. Alright. Thank you.

Utility-scale in Europe, we use the U.S. standard. When we say 1, 2, 5 megawatts, we don't count them as utility-scale in Europe. We still count them the small projects.

Okay. Okay. And yeah, on that changing gears a little bit -- on that -- sorry, before I do that. The one project, the timing did not occur in the fourth quarter and you're expecting mostly in the second quarter. Can you share with us how big that project is in terms of megawatts or sale number?

That is the fact that the U.S. utility-scale middle sized projects. And we are in the process -- we're going to close that -- target to close that in Q2.

Okay. Can you share the size approximately, Yumin?

20-plus megawatts.

Thank you. And my final question is, on that receivable write-off, from -- related to the manufacturing business. I understood, Ke, that you said you don't expect any further write-offs. But are there any other receivables or any other sort of assets in your balance sheet related to the manufacturing business other than this last write-off?

No. Like I said, very minimal, not significant.

Okay. Thank you. That’s all I have.

Thank you, Marisa.

Thank you.

[Operator Instructions] I'm not showing any further questions in the queue. I'll turn the call back over to Yumin for any closing remarks.