October 17, 2008

Marlboro, MA, USA: Evergreen Solar Announces Third Quarter 2008 Results

Evergreen Solar, Inc., yesterday announced financial results for the quarter ended September 27, 2008.

Product sales were $17.8 million for the third quarter of 2008, compared to $18.1 million for the second quarter of 2008 and $15.4 million in the third quarter of 2007. The sequential decrease in product revenue was due to slightly lower average selling prices resulting from the strengthening U.S. dollar during the third quarter of 2008. Fees from EverQ, Evergreen Solar’s joint venture with Q-Cells AG and Renewable Energy Corporation ASA, were $4.3 million for the third quarter of 2008, compared to $4.6 million for the second quarter of 2008 and $2.8 million in the third quarter of 2007. These fees consist of royalties associated with licensing Evergreen Solar’s wafer technology and reimbursement for marketing and sales support provided by Evergreen Solar for EverQ product.

Net loss was $23.8 million for the third quarter of 2008, or $0.18 per share, compared to a net loss of $8.9 million, or $0.08 per share, for the second quarter of 2008 and a net loss of $3.7 million, or $0.04 per share, in the third quarter of 2007. The sequential increase in the net loss was principally due to costs related to the start-up and initial production of the Devens facility, combined with net foreign exchange losses of $5.0 million.

Approximately 4.4 million and 1.5 million shares were included in the per share computation for the quarter and year-to-date periods ended September 27, 2008, relating to shares of common stock previously issued in connection with a common stock lending agreement with Lehman Brothers International which Evergreen loaned 30.9 million shares of company common stock to Lehman. The common stock lending agreement was consummated in connection with the Company’s recently completed $375 million convertible notes financing. Under current accounting rules, since there was an obligation of Lehman to return the borrowed shares, such shares would have been excluded from the company’s per share calculation. However, due to the recent bankruptcy filing by Lehman, the company will now include these shares in its per share calculation on a weighted average basis pending the company exercising all of its legal remedies.

Gross margin was $1.2 million, or 5.7%, for the third quarter of 2008, compared to $7.9 million, or 34.7%, for the second quarter of 2008 and $4.5 million, or 24.9%, in the third quarter of 2007. Gross margin decreased sequentially, as expected, due to higher costs associated with the initial production of our Devens facility. Higher initial production costs are temporary and result from inefficiencies that companies typically incur in the initial stages of significant capacity changes.

“We are very pleased with the significant progress we have made with our Devens facility, and we continue to remain on schedule with the completion of both 80 MW phases,” said Richard M. Feldt, Chairman, President and Chief Executive Officer. “Virtually all of the equipment required for the first 80 MW phase is on site and we will begin to install equipment for the second phase late in the fourth quarter of 2008. We expect to begin shipping product from the second 80MW phase during the first quarter of 2009.

“While the macro economic environment remains challenging, our technology, business model and customer base all remain fundamentally strong, as evidenced by the two long-term sales contracts we recently signed, and as such, we remain confident in our ability to realize substantial profitability in 2009,” Feldt continued.

Revenue for the fourth quarter of 2008 is expected to be approximately $45 million to $55 million, including approximately $4.0 million of selling fees and royalty payments from EverQ. Production is expected to be approximately 12 MW to 15 MW, including about 8 MW to 11 MW from the Devens facility.

Gross margin is expected to be between 5% and 10%.

Operating expenses, excluding factory startup costs, are expected to be approximately $12.5 million to $13.5 million. Factory startup costs are expected to be in the range of $9.0 million to $12.0 million, including approximately $2.7 million of accelerated depreciation on equipment associated with the Marlboro ramp down. Operating loss is expected to be between $16.0 million and $22.0 million. Net loss is expected to be approximately $13.0 million to $19.0 million, or $0.08 to $0.12 per share, based upon approximately 162 million weighted average shares outstanding.

Further details about: Evergreen Solar