Energy Conversion Devices, Inc.: Financial results fiscal year
August 27, 2009
Energy Conversion Devices Reports Revenues of $316 Million and Earnings per Share of $0.29 for Fiscal Year 2009
Solar Integrated Merger Opens New Markets, Adds Capabilities to Reduce Total Installed Costs; Company Maintains Strong Financial Position
Rochester Hills, Mich., August 27, 2009 - Energy Conversion Devices, Inc. (ECD), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced financial results for its fourth quarter and fiscal year ended June 30, 2009.
Total consolidated revenues for the quarter were $51.4 million compared to $82.4 million in the fourth quarter of fiscal 2008 and $66.0 million in the third quarter of fiscal 2009. Solar product sales for the quarter were $46.0 million compared to $77.0 million in the same quarter last year and $59.7 million in the third quarter of fiscal 2009.
For the fourth quarter, the company reported a loss of $15.8 million or a loss of $0.37 per fully diluted share compared to a net income of $9.9 million or $0.24 per fully diluted share in the year-ago period. This compares to net income of $1.3 million or $0.03 per fully diluted share in the third quarter of fiscal 2009.
For the fiscal year ended June 30, 2009, total consolidated revenues were $316.3 million compared to $255.9 million in the prior year. Solar product sales were $292.4 million for fiscal 2009 compared to $231.5 million for the prior year. Net income for fiscal 2009 was $12.5 million or $0.29 per fully diluted share versus net income of $3.9 million or $0.09 per fully diluted share in the year-ago period. Net operating cash flow for fiscal 2009 was $11.1 million versus $28.5 million during fiscal 2008.
Mark Morelli, ECD's President and Chief Executive Officer, said, "Demand for solar products in our target markets weakened further from the third quarter into the fourth quarter as commercial construction declined, building owners deferred reroofing projects, and project financing constraints continued. In response, we took deliberate steps to reduce our production levels to better match anticipated demand and to preserve strategically important capital at a time of capital market uncertainty. We pulled back on production and expansion, and reduced fixed and variable costs. These actions had a significant impact on our operating income for the second half of our fiscal year, but helped maintain positive full year cash flow."
"We are driving our demand creation activities in and beyond our core building integrated photovoltaic markets. This is highlighted by our acquisition of Solar Integrated Technologies (SIT) which expands our capabilities in large projects and strengthens our commercial team globally. SIT also enhances our ability to reduce balance-of-system and installation costs, further improving our competitive levelized cost of energy. Looking ahead, we are cautiously encouraged by an overall uptick in market activity, including a significant increase in the volume of projects on which we are bidding. Overall, our demand-creation strategy and the integration of SIT are key ingredients of our plan to return to profitability" added Mr. Morelli.
Fourth-quarter net results were negatively impacted by $13.6 million of items, of which approximately $8.8 million are non-cash charges. These include unabsorbed overhead costs of $6.1 million ($0.14 per fully diluted share) resulting from production cutbacks; restructuring costs of $1.7 million ($0.04 per fully diluted share) resulting from the previously announced consolidation of operations between the company's Auburn Hills 1 and Auburn Hills 2 facilities and the associated headcount reduction; a write down of an asset held for sale of $1.2 million ($0.03 per fully diluted share); and other costs of $4.6 million ($0.11 per fully diluted share) which includes increases in reserves for bad debt and warranty and a write-off of certain inventory.
Fiscal Year 2010 Guidance
The company expects access to capital will continue to be a constraint and average selling prices will remain under significant pressure for the fiscal year. While there has been increased project activity, U.S. Government stimulus spending and the company's demand-creation initiatives for large and U.S utility projects will not drive a meaningful increase in revenues until the second half of the fiscal year. Based on these assumptions, the company believes revenues for the first fiscal quarter will be in line with fourth quarter 2009 revenues. For the full fiscal year, revenues are anticipated to be approximately 10-15% higher than in fiscal year 2009. Production is expected to be about 150MW for the year, with higher volumes in the second half. Interest expense is expected to be $28 million for the year including $14 million (noncash) related to the impact of FSP APB 14-1 regarding accounting for convertible debt. Costs associated with the acquisition of SIT will include transaction-related costs of approximately $5 million and restructuring costs of approximately $5 million.
Conference Call / Webcast Details
Management of Energy Conversion Devices will review these financial results on a conference call on Thursday, August 27, 2009, at 10:00 a.m. EDT. The dial-in number for the live audio call is 877-858-2512 or 706-634-6076 (international) with conference ID number 25690028. 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.energyconversiondevices.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., August 29, 2009, and can be accessed by dialing 800-642-1687 or 706-645-9291 (international), with conference ID number 25690028. The webcast will also be archived on the company's website.
About Energy Conversion Devices
Energy Conversion Devices is a leader in building integrated and rooftop photovoltaics. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to energy using proprietary technology. ECD's UNI-SOLAR® brand products are unique because of their flexibility, light weight, ease of installation, durability, and real-world efficiency. Through its Solar Integrated Technologies business, the company also designs, manufactures and installs rooftop photovoltaic systems which enable customers to transform unused space on the rooftop into a value-generating asset. For more information, please visit www.energyconversiondevices.com.
Mark Trinske, Vice President
Investor Relations & Communications