All information provided on this call is as of today's date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information except as required under applicable law.At this time, I would like to now turn the call over to Dr. Shawn Qu. Please go ahead, sir. Shawn Qu Thanks, David, and thank you, all, for joining us on today's call. With a backdrop of a challenging solar industry environment, we are pleased with our results for the quarter at 412 megawatts. Our shipments came in close to our expectations, while gross margin on a GAAP basis came in above our guidance. Demand strength in Europe was offset by somehow slow sales in North America, while we are still waiting for the demand surge expected in other markets such as China and Japan. The key theme for Canadian Solar in the second quarter remains a solid execution at all levels of our organization. We continued to execute on all the key components of our strategy. Specifically, we are focused on increasing our market share and gaining scale, reducing our costs, expanding our higher-margin total solution business and enhancing our product offering by launching innovative, high-efficiency modules. In the second quarter, we believe we gained market share over other competitors while expanding our customer base and geographic footprint. We are consolidating our position on our worldwide top 4 suppliers, making Canadian Solar the partner of choice across all key geographies. In addition, we are executing the -- we are exiting the second quarter with one of the strongest balance sheets in the solar industry, positioning Canadian Solar to benefit from the global flight to quality and bankability and to emerge from the current cycle as a stronger leader. On the manufacturing front, we continued our relentless focus on the reduction of our all-in module manufacturing costs, which reached $0.67 per watt, down from $0.73 per watt in the first quarter. Progress of our cost roadmap was driven by continued improvement across all the staff in the production process. The $0.06 per watt cost reduction from Q1 to Q2 is roughly equally shared by reduction in the cost of silicon wafer and the cost of cellular module processing in our own factory. We believe we are now among the lowest cost suppliers in the world, and we are within reach of our industry-leading OEM module manufacturing cost target below $0.60 per watt by the end of 2012.
The important point to note here is that we are doing all of this while maintaining the high quality, high performance and reliability, while -- which our customers around the world can rely on. Our achievement on cost reduction, together with our continued improvement in solar module efficiency, allows us to be competitive and gain more market share in a global solar module business.We also reached several important milestones in the development of our total solution business. During the quarter, we completed the acquisition of 16 projects in Ontario, Canada, from SkyPower Limited. These projects are expected to be built from now to the end of 2014. With this acquisition, our project pipeline in Canada with approved feed-in tariff exceeds 300 megawatts. We also announced the acquisition of 11 late-stage development projects totaling 122 megawatts in the U.S. market. Since this announcement, our U.S. project pipeline has expanded to approximately 140 megawatts. And while there has been some market chatter about financing challenges in the industry, we believe that we continue to receive strong support from our financing partners. As the industry leader with strong and breakeven cash flow in the first half of this year, as well as our accumulated experience since we entered into the PV project business in 2009, Canadian Solar stands out when we enter discussions with banks. Lenders want to partner with us and support our ongoing expansion, given our successful track record and strong financial position. As a result, we recently secured a CAD 120 million revolving credit facility from Bank of China to support the construction of our project in Canada. We also secured a CAD 93 million of long term loan facility from China Development Bank to partially finance the SkyPower acquisition. This loan is noteworthy, not only because it demonstrates our bankability during the tough time for solar companies, but also because it is financing at the development stage, which is rare to be achieved. Read the rest of this transcript for free on seekingalpha.com