Energy Conversion Devices: Q2 Financial Results

Energy Conversion Devices: Q2 Financial ResuDie untenstehende Meldung ist eine Original-Meldung des Unternehmens. Sie ist nicht von der ECOreporter.de-Redaktion bearbeitet. Die presserechtliche Verantwortlichkeit liegt bei dem meldenden Unternehmen.

Energy Conversion Devices, Inc. (ECD), a leading global provider of thin-film flexible solar laminate products and systems to the building-integrated, commercial and residential rooftop markets, today reported financial results for its second fiscal quarter of 2011 ended December 31, 2010.

Total consolidated revenue for the quarter was $69.5 million, an increase of 31% over the second fiscal quarter of 2010, and an increase of 2% over the previous quarter. Solar product and system sales were $66.5 million, an increase of 44% over the second fiscal quarter of 2010, and an increase of 2% over the previous quarter. Consolidated gross margin was 21% as compared to (15%) in the year-ago quarter, and 18% in the first fiscal quarter of 2011. During the quarter, ECD shipped 28 megawatts of its UNI-SOLAR® brand PV products, and produced 33 megawatts.

The company reported a net loss of $7.6 million, or $0.16 per share. This compares to a net loss of $39.3 million, or $0.93 per share, in the second fiscal quarter of 2010, and a net loss of $13.5 million, or $0.29 per share, in the prior quarter. Earnings before interest, taxes, depreciation and amortization and excluding restructuring and stock expense (EBITDARS) were $4.4 million in the quarter, compared to about zero in the prior quarter and ($20.4) million in the year-ago quarter.

As of December 31, 2010 the company had $182.6 million of cash, cash-equivalents, restricted cash and short-term investments.

"ECD generated meaningfully positive EBITDARS for the first time in four quarters, which is an effective measure of the company's progress on our path to profitability. We demonstrated significant improvement in reducing our cost structure during the second quarter. Gross margin increased to 21% and operating expenses declined significantly," said Mark Morelli, ECD's President and Chief Executive Officer.

"We are achieving the milestones in our technology roadmap laid out last year. First, we are on track to begin production this summer of our new PowerBond product with our next-generation High Frequency technology and 10% aperture-area conversion efficiency. At full production, we expect to manufacture this technology at a cost of approximately $1.15 per watt. In addition, we recently announced NREL confirmation of our Nano-Crystalline technology with an initial conversion efficiency of 12% in a large-area encapsulated cell, a world record for thin-film silicon. Both of these technological advancements will enable us to deliver our flexible, lightweight PV products at lower prices, thereby positioning us amongst the best-in-class on the cost of solar energy."

"North America is rapidly growing as a large core market for us. For example, last quarter we sold 5.4 megawatts to Constellation Energy for a large rooftop project in New Jersey, further demonstrating our traction with large-scale projects in the United States," Morelli continued.

The company provided guidance for the second half and full fiscal year of 2011 as follows:
     Q3'11    Q4'11    FY 2011
Shipments (MW)    27-33    33-38    120-130
Production (MW)    27-33    30-33    125-130
Consolidated Revenue ($M)    55-65    115-130    310-335
Consolidated Gross Margin (%)    19-22%    12-15%    17-18%
SG&A and R&D Expense ($M)    ~19    ~18    ~75
Restructuring Charges ($M)    ~2    ~1    ~3
Pre-Production Expense ($M)    ~0    ~2    ~2
Interest Expense ($M)    ~6    ~6    ~27
Tax Expense ($M)    ~0.1    ~0.1    ~1
Capital Expenditures ($M)    ~10    ~15    ~45

Morelli concluded, "Our guidance for the third quarter reflects a decrease in revenue but an increase in shipments compared to the second fiscal quarter. Specifically, we expect an increase in the relative amount of system shipments in the coming quarters. Due to the timing of project construction, revenue from system shipments is not recognized contemporaneously. Thus, the revenue for the system shipments in the third quarter will be recognized over subsequent quarters. Additionally, our fourth quarter guidance anticipates projects that include sourced products not included in our shipment guidance. Our fourth quarter revenue guidance and our increased full fiscal year revenue guidance reflect the shift in our business mix from product sales to system sales. As we continue to implement our technology roadmap and execute on our path to profitability, I am confident that we are doing the right things to continue moving the company forward."

About Energy Conversion Devices

Energy Conversion Devices is a leading global provider of thin-film flexible solar laminate products and systems for the building integrated, commercial and residential rooftop markets. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable 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. 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. In addition, ECD's Ovonic Materials Division is the pioneer in NiMH battery technology and other material science technologies for the renewable energy industry. For more information, please visit energyconversiondevices.com.

This release contains forward-looking statements within the meaning of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements do not constitute guarantees of future performance. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future net sales or performance, capital expenditures, financing needs, plans or intentions relating to expansions, business trends and other information that is not historical information. All forward-looking statements are based upon information available to us on the date of this release and are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements. Risks that could cause such results to differ include: our ability to maintain our customer relationships and establish new relationships; the worldwide market for solar energy systems; changes to government incentives related to solar energy; our customers' ability to access capital to finance the purchase of our products; and our ability through technology improvements to reduce cost and improve the conversion efficiency of our solar products. 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. assumes no responsibility to update any forward-looking statements contained herein.

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

     Three Months Ended
December 31,    Six Months Ended
December 31,
     2010    2009 (1)    2010    2009 (1)
Revenues                    
Product sales    $ 54,732    $ 43,826    108,129    $ 77,969
System sales    11,825    3,369    23,475    5,936
Royalties    1,943    2,254    4,058    4,213
Revenues from product development agreements    591    3,007    1,418    6,998
License and other revenues    456    456    864    740
Total Revenues    69,547    52,912    137,944    95,856
Expenses                    
Cost of product sales    42,931    51,279    87,947    75,386
Cost of system sales    11,547    7,102    22,102    10,828
Cost of revenues from product development agreements    220    2,394    549    5,675
Product development and research    2,393    3,130    4,792    5,375
Preproduction costs    29    --    93    10
Selling, general and administrative    16,054    17,220    33,698    33,422
Net loss (gain) on disposal of property, plant and equipment    21    291    (55)    1,265
Impairment loss    --    1,253    --    1,253
Restructuring (income) expense    (69)    2,445    422    3,122
Total Expenses    73,126    85,114    149,548    136,336
Operating Loss    (3,579)    (32,202)    (11,604)    (40,480)
Other Income (Expense)                    
Interest income    726    264    1,070    556
Interest expense    (6,697)    (7,044)    (13,683)    (14,214)
Gain on debt extinguishment    2,138    --    3,327    --
Distribution from joint venture    --    --    --    1,309
Other nonoperating expense, net    (207)    (981)    (75)    (76)
Total Other Income (Expense)    (4,040)    (7,761)    (9,361)    (12,425)
Loss before Income Taxes and Equity Loss    (7,619)    (39,963)    (20,965)    (52,905)
Income tax expense (benefit)    12    (985)    167    (1,900)
Loss before Equity Loss    (7,631)    (38,978)    (21,132)    (51,005)
Equity gain (loss)    19    (313)    (15)    (333)
Net Loss    (7,612)    (39,291)    (21,147)    (51,338)
Net Loss Attributable to Noncontrolling Interest    (99)    (79)    (178)    (153)
Net Loss Attributable to ECD Stockholders'    $  (7,513)    $ (39,212)    $ (20,969)    $ (51,185)

Loss Per Share, Attributable to ECD Stockholders'    $ (0.16)    $ (0.93)    $ (0.46)    $ (1.21)

Diluted Loss Per Share, Attributable to ECD Stockholders'    $ (0.16)    $ (0.93)    $ (0.46)    $ (1.21)

Basic weighted shares outstanding    46,431    42,299    45,869    42,299
Diluted shares outstanding    46,431    42,299    45,869    42,299
(1) As adjusted due to the implementation of FASB ASC 470-20 (See Note 1).


ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

     December 31,
2010    June 30,
2010 (1)
     (Unaudited)     
ASSETS           
Current Assets:          
Cash and cash equivalents    $   65,988    $   79,158
Short-term investments    105,683    113,771
Accounts receivable, net    61,666    72,021
Inventories, net    66,191    61,495
Other current assets    38,695    27,237
Total Current Assets    338,223    353,682

Property, Plant and Equipment, net    307,269    301,056

Other Assets:          
Restricted cash    10,924    11,749
Lease receivable, net    10,458    10,854
Other assets    11,725    14,606
Total Other Assets    33,107    37,209

Total Assets    $  678,599    $   691,947

LIABILITIES AND STOCKHOLDERS' EQUITY          
Current Liabilities:          
Accounts payable and accrued expenses    $ 58,578    $ 56,035 
Current portion of warranty liability    9,855    12,125
Other current liabilities    9,274    9,130
Total Current Liabilities    77,707     77,290

Long-Term Liabilities:          
Convertible senior notes    225,362    243,654
Capital lease obligations    19,672    20,296
Warranty liability    31,127    29,210
Other liabilities    18,733    19,872
Total Long-Term Liabilities    294,894    313,032

Commitments and Contingencies (See Note 10 of Form 10-Q)          

Stockholders' Equity          
Common stock, $0.01 par value, 150 and 100 million shares authorized, 53,274,101 and 48,554,812 issued at December 31, 2010 and June 30, 2010, respectively    533     486
Additional paid-in capital    1,103,322    1,079,910
Treasury stock    (700)    (700)
Accumulated deficit    (795,261)    (774,388)
Accumulated other comprehensive loss, net    (1,605)     (3,570)
Total ECD stockholders' equity    306,289    301,738
Accumulated deficit – noncontrolling interest    (291)    (113)
Total Stockholders' Equity    305,998    301,625
Total Liabilities and Stockholders' Equity    $ 678,599     $   691,947
(1) As adjusted due to the implementation of FASB ASC 470-20 (See Note 1).


ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in thousands)
     Six Months Ended
December 31,
     2010    2009 (1)
Cash flows from operating activities:          
Net loss    $ (21,147)    $ (51,338)
Adjustments to reconcile net loss to net cash used in operating activities:          
Depreciation and amortization    10,715    18,300
Amortization of debt discount and deferred financing fees    8,492    8,229
Share-based compensation    1,703    2,266
Gain on debt extinguishment    (3,327)    --
Net (gain) loss on disposal of property, plant and equipment    (55)    1,265
Impairment loss    --    1,253
Equity loss    15    333
Changes in operating assets and liabilities, net of foreign exchange:          
Accounts receivable    11,035    4,632
Inventories    (3,755)    (22,430)
Other assets    (7,430)    (1,773)
Accounts payable and accrued expenses    4,348    (21,348)
Other liabilities    (869)    502
Net cash used in operating activities    (275)    (60,109)

Cash flows from investing activities:          
Purchases of property, plant and equipment    (19,053)    (18,759)
Acquisition of business, net of cash acquired    --    (2,088)
Purchases of investments    (71,944)    --
Proceeds from maturities of investments    14,200    120,119
Proceeds from sale of investments    64,062    9,921
Proceeds from sale of property, plant and equipment    145    --
Proceeds from development loans    1,420    --
Decrease in restricted cash    825    --
Net cash (used in) provided by investing activities    (10,345)    109,193

Cash flows from financing activities:          
Principal payments under capitalized lease obligations and other debt    (902)    (734)
Repayment of revolving credit facility    --    (5,705)
Repayment of convertible notes    --    (8,000)
Net cash used in financing activities    (902)    (14,439)

Effect of exchange rate changes on cash and cash equivalents    (1,648)    (368)
Net (decrease) increase in cash and cash equivalents    (13,170)    34,277
Cash and cash equivalents at beginning of period    79,158    56,379
Cash and cash equivalents at end of period    $ 65,988    $ 90,656
(1)As adjusted due to the implementation of FASB ASC 470-20 (See Note 1).


ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (Unaudited)

     Three Months Ended
     December 31, 2010    September 30, 2010    December 31, 2009
     (in thousands)
Net Loss    $ (7,612)    $ (13,535)    $ (39,291)
Plus:               
Interest income    (726)    (344)    (264)
Interest expense    6,697    6,986    7,044
Income tax expense (benefit)    12    155    (985)
Depreciation and amortization    5,306    5,409    9,408
Restructuring (income) expense    (69)    491    2,445
Share-based compensation    822    881    1,215
EBITDARS    $ 4,430    $  43    $ (20,428)

CONTACT: Michael E. Schostak
         Head of Investor Relations
         (248) 299-6063
         investor.relations@energyconversiondevices.comlts
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