8.2.2008: Meldung: Energy Conversion Devices Reports Q2 Results

Energy Conversion Devices, Inc. (ECD), the leading global maEnergy Conversion Devicesnufacturer of solar thin-film laminate products, today reported financial results for the second quarter of fiscal 2008, ended December 31, 2007.

Revenues in the second quarter of fiscal 2008 were $56.4 million, up 20 percent from first quarter revenues of $47.0 million and up 146 percent from $22.9 million in the second quarter of fiscal 2007. Revenues from the company"s solar business were $51.7 million, or 92 percent of total revenues. Second quarter solar revenues represented a 23 percent sequential increase and a 169 percent increase over the prior-year quarter. Gross margins in the solar business were 19.2 percent.

ECD reported a net loss for the quarter of $5.4 million, or $0.14 per share, compared to a net loss of $7.6 million, or $0.19 per share, in the first quarter of fiscal 2008, and a net loss of $2.9 million, or $0.07 per share, in the year-ago period. Second quarter results included $2.5 million, or $0.06 per share, of restructuring charges principally for severance and other costs associated with corporate staff reductions and management transition. Results in the quarter were also impacted by approximately $2.3 million, or $0.06 per share, of preproduction costs.

For the first six months of fiscal 2008, total revenues were $103.5 million compared with $50.1 million for the first six months of fiscal 2007, an increase of 106 percent. Revenues from the solar business totaled $93.6 million in the first six months of fiscal 2008, a 118 percent increase compared with $43.0 million last year.

For the six-month period, the company reported a net loss of $13.0 million, or $0.33 per share, compared with the previous year"s net loss of $5.2 million, or $0.13 per share. Restructuring costs for the first six months of fiscal 2008 amounted to $5.1 million, or $0.13 per share. Preproduction costs for the period were $4.8 million, or $0.12 per share.

Mark Morelli, ECD"s president and CEO, commented, "We are excited with the progress we are making in growing revenues and reinventing the company around operational excellence. During the quarter, our production of thin-film solar laminates expanded by 50 percent over the first quarter, and tripled over last year"s second quarter. At the same time, our sales pipeline continues to run ahead of production capacity as new and repeat customers in key markets around the world have come to recognize the significant advantages and attractive return on investment of our UNI-SOLAR laminates. As a result, we remain confident that we will reach sustainable profitability by the fiscal fourth quarter."

The company"s manufacturing ramp continues on schedule, and United Solar Ovonic produced 15.4 MW in the quarter and 25.8 MW for the first half of the fiscal year. No polysilicon is required for the manufacturing of UNI-SOLAR laminates; therefore, production is not affected by polysilicon supply. Nameplate capacity currently stands at 118 MW.

Sanjeev Kumar, ECD"s CFO, said, "United Solar"s gross margin of 19.2 percent for the quarter exceeded our forecast of 15 to 16 percent due to improved production ramp and operational efficiencies. We continue to see excellent top-line momentum going forward, which will begin to appear below the line in the coming quarters as we complete our restructuring and management transition."

"As a result of our significant cost reductions in R&D, Ovonic Materials has reached breakeven, and we expect it to remain so going forward. Second quarter, consolidated SG&A costs increased about $6 million from the second quarter last year as a result of investments we are making in the right staff and expertise to grow our solar business. The key takeaway is that these costs are increasing at a much slower rate than our overall sales and productivity. These line items now constitute about 23% of revenues and will continue to decline as a percentage of revenues over time as we successfully scale our operations," Kumar added.

Key Developments

-- A multiple-year supply agreement to sell up to 21.15 MW of UNI-SOLAR
laminates to Enfinity Management, one of Europe"s largest investors in
solar PV installations. Enfinity will use the UNI-SOLAR products for
rooftop installations in Europe.
-- An agreement with SunEdison, North America"s largest solar energy
service provider, to provide up to 17 MW of UNI-SOLAR laminates for use
on large-scale rooftop installations on industrial and commercial
buildings, principally in the US.
-- The hiring of key senior management, including Marcelino Susas, Vice
President, Strategic Marketing; Corby Whitaker, Vice President, Global
Sales; Joseph Conroy, Vice President, Operations; and Tom Schultz, Vice
President, Human Resources - United Solar Ovonic Operations.
-- The signing of several sales agreements in South Korea, one of the
world"s fastest growing solar markets, including a take-or-pay
commitment from AirTec for 25 MW in calendar 2008 and 2009.
-- The completion of a $55 million credit facility. In addition, the
company had approximately $155 million in cash and cash equivalents at
the end of the quarter.


Narrowing Full-Year Revenue Guidance; Reiterating Sustainable Profitability in Fiscal Q4

The company narrowed its prior revenue guidance provided at the end of the fiscal first quarter. Fiscal year 2008 consolidated revenues are now expected to be $235 to $245 million versus prior guidance of $220 to $245 million. Fiscal year United Solar product sales are expected to be $215 to $225 million versus prior guidance of $205 to $225 million. Anticipated full-year preproduction costs are in the range of $8 to $9 million. Restructuring costs for fiscal year 2008 are expected to be $7.0 to $8.0 million versus prior guidance of $3 to $5 million due to additional staff reductions and other cost-saving initiatives. The company is reiterating its expectation that it will reach sustainable profitability in the fiscal fourth quarter.

For the fiscal third quarter ending March 31, 2008, total consolidated revenues are expected to be between $65 to $70 million, of which solar product sales are expected to be $60 to $65 million. Gross margins on solar product sales for the fiscal third quarter are expected to be approximately 21 to 23 percent, reflecting further improvement in operational performance and the ramp up of the company"s first Greenville manufacturing facility. Restructuring costs for the third quarter are expected to be in the range of $2.0 to $3.0 million. The company anticipates preproduction costs of approximately $1.5 to $2.5 million in the quarter.

Additionally, the company is increasing its guidance on United Solar gross margins for the fiscal fourth quarter to approximately 23 to 25 percent.

Conference Call / Webcast Details

Management of Energy Conversion Devices will host a conference call today at 10:00 a.m. EST to review the financial results. The dial-in number for the live audio call is 877-858-2512 or 706-634-1291 (international) with conference ID number 32008676. The conference call will be webcast live over the Internet and can be accessed in the Investor Relations - Conference Calls - section of the company"s website at www.ovonic.com.

An audio replay of the call will be available approximately two hours after the conclusion of the call. The audio replay will remain available until 11:59 p.m., February 8, 2008, and can be accessed by dialing (800) 642- 1687 or (706) 645-9291 (international), with conference ID number 32008676. The webcast will also be archived on the company"s website.

About Energy Conversion Devices

Energy Conversion Devices, Inc. (NASDAQ: ENER) manufactures and sells thin-film solar laminates that convert sunlight to energy using proprietary technology. Distributed globally under the UNI-SOLAR(R) brand, the company"s products are ideally suited for cost-effective solutions for roofing applications because they are lightweight, durable, flexible, can be integrated directly with building materials, and generate more energy in real- world conditions. ECD also pioneers other alternative technologies, including a new type of nonvolatile digital memory technology that is significantly faster and less expensive, ideal for use in a variety of applications including cell phones, digital cameras and personal computers. For more information, please visit www.ovonic.com.

This release may contain forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on assumptions which ECD, as of the date of this release, believes to be reasonable and appropriate. ECD cautions, however, that the actual facts and conditions that may exist in the future could vary materially from the assumed facts and conditions upon which such forward-looking statements are based. The risk factors identified in the ECD filings with the Securities and Exchange Commission, including the company"s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q, could impact any forward-looking statements contained in this release.


ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
(in thousands, except per-share amounts)

Revenues
Product sales $51,558 $18,667 $94,025 $41,525
Royalties 1,492 964 2,507 1,627
Revenue from product
development agreements 2,921 2,758 5,799 5,863
Revenue from license
agreements 238 238 751 496
Other 240 320 409 618
Total revenues 56,449 22,947 103,491 50,129

Expenses
Cost of product sales 41,745 16,325 76,813 34,335
Cost of revenues from
product development
agreements 1,819 1,700 3,528 3,713
Product development and
research 2,583 4,926 6,045 9,667
Preproduction costs 2,279 750 4,824 1,104
Operating, general and
administrative (net)
(including patents) 12,925 7,122 24,621 16,529
Restructuring charges 2,555 - 5,070 -
Total expenses 63,906 30,823 120,901 65,348
Loss from operations (7,457) (7,876) (17,410) (15,219)
Total other income 2,082 4,963 4,475 10,004
Net loss before income
taxes (5,375) (2,913) (12,935) (5,215)
Income taxes 51 - 58 -

Net loss $(5,426) $(2,913) $(12,993) $(5,215)

Basic net loss per share $(.14) $(.07) $(.33) $(.13)

Diluted net loss per share $(.14) $(.07) $(.33) $(.13)

Shares used in calculation
of net loss per share
Basic 40,035 39,302 39,950 39,186
Diluted 40,035 39,302 39,950 39,186



Non-GAAP Financial Measures

To supplement its financial statements presented in accordance with
Generally Accepted Accounting Principles (GAAP), ECD uses the following
measures as defined by the Securities and Exchange Commission as non-GAAP
measures:

Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
(In Thousands)

Net Loss $(5,426) $(2,913) $(12,993) $(5,215)
Add:
- Preproduction Costs 2,279 750 4,824 1,104
- Restructuring Charges 2,555 - 5,070 -

Net Loss as adjusted (non-GAAP) $(592) $(2,163) $(3,099) $(4,111)
Net Loss (basic and fully
diluted) per share as
reported $(.14) $(.07) $(.33) $(.13)
Net Loss (basic and fully
diluted) per share as
adjusted (non-GAAP) $(.01) $(.06) $(.08) $(.10)



ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)

December 31, 2007 June 30, 2007
(Unaudited)
ASSETS
Cash and cash equivalents $90,764 $80,770
Restricted investment 5,614 -
Short-term investments 59,042 125,004
Accounts receivable (net) 34,603 36,498
Inventories 30,932 38,692
Assets held for sale 1,539 1,524
Property, plant and equipment (net) 364,935 311,369
Other 8,654 6,822
TOTAL ASSETS $596,083 $600,679
LIABILITIES AND STOCKHOLDERS" EQUITY
Accounts payable and other liabilities $44,618 $42,940
Long-term liabilities 31,859 32,232
TOTAL LIABILITIES 76,477 75,172
STOCKHOLDERS" EQUITY 519,606 525,507
TOTAL LIABILITIES AND STOCKHOLDERS" EQUITY $596,083 $600,679



ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)

Six Months Ended
December 31,
2007 2006
(Unaudited)

OPERATING ACTIVITIES:
Net loss $(12,993) $(5,215)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 8,640 4,583
Bad debt and other expenses 866 (83)
Obsolescence charge 1,374 46
Restructuring charge 979 -
Stock and stock options issued for services
rendered 866 1,084
Other (6) (154)
Changes in working capital 6,773 8,463
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,499 8,724
INVESTING ACTIVITIES:
Increase in restricted investment (5,614) -
Purchases of property, plant and equipment
(including construction in progress) (net) (62,270) (70,261)
Purchase (proceeds from sale) of investments 65,640 (90,790)
NET CASH USED IN INVESTING ACTIVITIES (2,244) (161,051)
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,639 8,006
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 100 21
NET CASH FLOW 9,994 (144,300)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80,770 164,962
CASH AND CASH EQUIVALENTS AT END OF PERIOD $90,764 $20,662



ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
SEGMENT REVENUE AND OPERATING INCOME/(LOSS)
(In Thousands)
(Unaudited)

Three Months Ended December 31,
2007 2006 2007 2006
Income (Loss)
Revenues from Operations

United Solar Ovonic $51,720 $19,194 $2,084 $864
Ovonic Materials 4,570 3,580 399 (2,864)
Corporate Activities 376 356 (9,974) (5,339)
Consolidating Entries (217) (183) 34 (537)
Consolidated $56,449 $22,947 $(7,457) $(7,876)


Six Months Ended December 31,
2007 2006 2007 2006
Income (Loss)
Revenues from Operations

United Solar Ovonic $93,607 $43,054 $1,616 $2,351
Ovonic Materials 9,662 6,821 (301) (6,772)
Corporate Activities 545 599 (18,807) (9,731)
Consolidating Entries (323) (345) 82 (1,067)
Consolidated $103,491 $50,129 $(17,410) $(15,219)



Segment Operations - United Solar Ovonic
(In Thousands)
Quarterly Periods Ended

Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited)

PV Product Sales $49,726 $17,445 $89,596 $39,572
Megawatts Produced 15.4 6.8 25.8 12.9
Megawatts Shipped 16.9 5.3 30.0 11.8
Cost of Product Sales $40,203 $15,029 $72,826 $31,995
Gross Margin $9,523 $2,416 $16,770 $7,577
Gross Margin % 19.2% 13.8% 18.7% 19.1%

Other Revenues:
Research and Development $1,994 $1,748 $4,011 $3,478
Other Operating Revenues - $1 $- $4
Other Revenues Total $1,994 $1,749 $4,011 $3,482
Total Revenues $51,720 $19,194 $93,607 $43,054

Other Expenses:
Research and Development $2,096 $1,451 $4,371 $2,849
Preproduction $2,279 $750 $4,824 $1,104
Operating, Selling, General
and Administrative Expenses $5,058 $1,100 $9,970 $4,755
Total Other Expenses $9,433 $3,301 $19,165 $8,708
Income from Operations $2,084 $864 $1,616 $2,351



Segment Operations - Ovonic Materials
(In Thousands)
Quarterly Periods Ended

Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited)

Product Sales $1,831 $1,222 $4,446 $1,953
Cost of Product Sales $1,594 $925 $4,163 $1,576
Other Revenues:
Royalties $1,492 $964 $2,507 $1,628
Research and Development $928 $1,014 $1,788 $2,402
Licenses $238 $238 $751 $496
Other Operating Revenues $81 $142 $170 $342
Other Revenues Total $2,739 $2,358 $5,216 $4,868
Total Revenues $4,570 $3,580 $9,662 $6,821
Other Expenses:
Research and Development $2,289 $5,180 $5,203 $10,549
Operating, General and
Administrative Expenses $288 $339 $597 $1,468
Total Other Expenses $2,577 $5,519 $5,800 $12,017
Income (Loss) from Operations $399 $(2,864) $(301) $(6,772)



Segment Operations - Corporate Activities
(In Thousands)
Quarterly Periods Ended

Three Months Ended Six Months Ended
December 31, December 31,
2007 2006 2007 2006
(Unaudited)

Other Operating Revenues $376 $356 $545 $599
Other Expenses:
Restructuring $2,555 $- $5,070 $-
Operating, General and
Administrative Expenses $7,795 $5,695 $14,282 $10,330
Total Expenses $10,350 $5,695 $19,352 $10,330
Loss from Operations $(9,974) $(5,339) $(18,807) $(9,731)



SOURCE: Energy Conversion Devices, Inc.
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