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Entech Solar: First Quarter Results
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Entech Solar, Inc. a leading developer of concentrating photovoltaic (CPV) solar energy systems, has announced its financial results for the three months ended March 31, 2009.
Operational Highlights:
* The Company has suspended manufacturing operations of its first-generation CPV products to focus all of its resources on its next generation of solar concentrating modules for expanded rooftop and other customer-driven applications.
* Entech Solar is leveraging its proprietary SolarVolt™ and ThermaVolt™ technology and know-how to form the foundation for these next generation products, which are being developed by a team of highly qualified solar, electrical, mechanical, and process engineers and scientists, and will employ many proven industry-standard manufacturing processes and practices.
* Based on the decision to suspend manufacturing, the Company took a non-cash impairment charge of $6.8 million during its first quarter related to certain fair value adjustments to manufacturing equipment, inventory and leasehold improvements.
* The Company’s balance sheet remains strong, with cash on hand of $8.9 million at March 31, 2009. Management plans to complete the $3 million Rights Offering and intends to seek additional funding for growth through the equity capital markets.
“Entech Solar announced a significant change to its product development plan this past quarter that is designed to focus the Company on the most commercially viable development path for maximum market penetration,” said Frank Smith, CEO. “We are committed to commercializing our next generation CPV technology to improve upon our existing ThermaVolt and SolarVolt product lines as a key element in providing both hardware and turnkey, vertically-integrated energy solutions to our customers. We believe our new products will provide a more attractive value proposition, serve a wider market, and provide better returns for the Company and our shareholders going forward.”
Financial Results
Revenues for the first quarter of 2009 were $2.0 million, compared with $9.0 million reported in the first quarter of 2008. During the 2009 first quarter, the Company recorded a non-cash impairment charge of $6.8 million to reflect fair value adjustments of its manufacturing operations, after the decision was made to indefinitely suspend current production activities. In addition, the Company recorded a provision for doubtful accounts of approximately $1 million based on one customer's inability to make required contractual payments. The 2009 first quarter also reflects other restructuring costs incurred in connection with the Company’s recently announced changes. Based on the items discussed above, the Company’s Net Loss for the first quarter of 2009 was $16.0 million, or $0.07 per share, compared with a loss of $7.3 million, or $0.04 per share, in the first quarter of 2008.
About Entech Solar, Inc.
Entech Solar, Inc. is a leading developer of concentrating solar energy systems. Entech Solar designs modules that provide both electricity and thermal energy by utilizing its proprietary concentrating photovoltaic technologies in its SolarVolt™ and ThermaVolt™ systems, both of which produce cost-competitive distributed energy for a variety of commercial and industrial applications. For more information, please visit www.entechsolar.com.
Forward Looking Statements:
Except for historical information contained herein, this document contains forward-looking statements within the meaning of Section 21-E of the Securities Exchange Act of 1934. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in industries where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Other important factors that the Company believes might cause such differences are discussed in the risk factors detailed in the Company's 10-K and its quarterly reports on Form 10-Q both as filed with the Securities and Exchange Commission, which include the Company's cash flow difficulties, dependence on significant customers, and rapid development of technology, among other risks. In assessing forward-looking statements contained herein, readers are urged to carefully read all cautionary statements contained in the Company's filings with the Securities and Exchange Commission.
ENTECH SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31,
(UNAUDITED)
(In thousands, except per share data)
Three Months Ended
March 31,
2009 2008
Revenues:
Contract $ 1,097 $ 8,229
Equipment 143 —
Related party 597 775
Related party - former chairman 126 —
Total 1,963 9,004
Cost of Revenues:
Contract 827 10,222
Equipment 97 —
Related party 597 673
Related party - former chairman 142 —
Provision for loss on contracts — 409
Manufacturing operations impairment 6,758 —
Total 8,421 11,304
Gross Profit (Loss):
Contract 270 (2,402 )
Equipment 46 —
Related party — 102
Related party - former chairman (16 ) —
Manufacturing operations impairment (6,758 ) —
Total (6,458 ) (2,300 )
Operating Expenses:
Marketing, general and administrative expenses 9,445 5,204
Research and development expense 211 41
Total Operating Expenses 9,656 5,245
Loss from Operations (16,114 ) (7,545 )
Other income (expense)
Beneficial conversion and warrant amortization — (32 )
Interest income 24 301
Total other income, net 24 269
Net Loss (16,090 ) (7,276 )
Net loss attributable to noncontrolling interest 127 —
Net loss attributable to Entech Solar, Inc. (15,963 ) (7,276 )
Accretion of preferred stock dividends - Series C — (5 )
Net Loss attributable to Entech Solar, Inc. $ (15,963 ) $ (7,281 )
Net Loss attributable to Entech Solar, Inc. per Common Share (basic and diluted) $ (0.07 ) $ (0.04 )
Weighted Average Common Shares Outstanding used in Per Share Calculation (Basic and Diluted) 237,130 190,326
ENTECH SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND DECEMBER 31, 2008
(In thousands, except share and per share data)
March 31, 2009
December 31, 2008
(UNAUDITED) *
Assets
Current assets:
Cash and cash equivalents $ 8,898 $ 12,169
Accounts receivable - trade (net of allowance of $1,112 and $155 at March 31, 2009 and December 31, 2008, respectively) 552 1,971
Rebates receivable 1,458 115
Inventory (net of reserve of $2,845 and $1,112 at March 31, 2009 and December 31, 2008, respectively) 881 3,664
Costs and estimated earnings/losses in excess of billings 35 2,613
Escrow funds relating to contract performance 500 1,339
Prepaid expenses and deposits 528 964
Total Current assets 12,852 22,835
Advances on machinery and equipment — 2,285
Property and Equipment (net of accumulated depreciation and net of impairment of $4,795 and $0 at March 31, 2009 and December 31, 2008, respectively) 3,317 5,969
Intangible and other assets
Other intangible assets, net 22,433 23,058
Goodwill 23,837 23,837
Other deposits 145 153
Total Assets $ 62,584 $ 78,137
Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 3,694 $ 3,955
Customer deposits 20 20
Customer deposits - related party — 1,023
REC guarantee liability, current portion 60 60
Series D Preferred Stock Warrants 1,394 1,394
Billings in excess of costs and estimated earnings/losses 354 760
Accrued losses on construction in progress 38 101
Total Current liabilities 5,560 7,313
Serverance payable, long term 494 —
REC guarantee liability, net of current portion 180 180
Total Liabilities 6,234 7,493
Convertible redeemable preferred stock
Series C convertible redeemable preferred stock — 170
Series D convertible redeemable preferred stock 11,180 11,180
Total Convertible redeemable preferred stock 11,180 11,350
Stockholders’ Equity
Preferred stock convertible $.01 par value authorized 10,000,000; 5,503,968 issued and outstanding: Series B 7%- 611,111 shares liquidation preference $550,000
6 6
Common stock, $.001 par value; authorized 450,000,000; 238,119,959 and 236,420,779 shares issued at March 31, 2009 and December 31, 2008, respectively; 238,092,091 and 236,392,911 shares outstanding at March 31, 2009 and December 31, 2008, respectively 238 236
Additional paid-in capital 169,773 167,979
Treasury stock, 27,868 shares, at cost, as of March 31, 2009 and December 31, 2008, respectively (39 ) (39 )
Accumulated deficit (124,851 ) (108,888 )
Noncontrolling interest 43 —
Total Stockholders’ Equity 45,170 59,294
Total Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity $ 62,584 $ 78,137
* Derived from audited financial information
Contact:
Chris Witty, 646-438-9385
[email protected]
Entech Solar, Inc. a leading developer of concentrating photovoltaic (CPV) solar energy systems, has announced its financial results for the three months ended March 31, 2009.
Operational Highlights:
* The Company has suspended manufacturing operations of its first-generation CPV products to focus all of its resources on its next generation of solar concentrating modules for expanded rooftop and other customer-driven applications.
* Entech Solar is leveraging its proprietary SolarVolt™ and ThermaVolt™ technology and know-how to form the foundation for these next generation products, which are being developed by a team of highly qualified solar, electrical, mechanical, and process engineers and scientists, and will employ many proven industry-standard manufacturing processes and practices.
* Based on the decision to suspend manufacturing, the Company took a non-cash impairment charge of $6.8 million during its first quarter related to certain fair value adjustments to manufacturing equipment, inventory and leasehold improvements.
* The Company’s balance sheet remains strong, with cash on hand of $8.9 million at March 31, 2009. Management plans to complete the $3 million Rights Offering and intends to seek additional funding for growth through the equity capital markets.
“Entech Solar announced a significant change to its product development plan this past quarter that is designed to focus the Company on the most commercially viable development path for maximum market penetration,” said Frank Smith, CEO. “We are committed to commercializing our next generation CPV technology to improve upon our existing ThermaVolt and SolarVolt product lines as a key element in providing both hardware and turnkey, vertically-integrated energy solutions to our customers. We believe our new products will provide a more attractive value proposition, serve a wider market, and provide better returns for the Company and our shareholders going forward.”
Financial Results
Revenues for the first quarter of 2009 were $2.0 million, compared with $9.0 million reported in the first quarter of 2008. During the 2009 first quarter, the Company recorded a non-cash impairment charge of $6.8 million to reflect fair value adjustments of its manufacturing operations, after the decision was made to indefinitely suspend current production activities. In addition, the Company recorded a provision for doubtful accounts of approximately $1 million based on one customer's inability to make required contractual payments. The 2009 first quarter also reflects other restructuring costs incurred in connection with the Company’s recently announced changes. Based on the items discussed above, the Company’s Net Loss for the first quarter of 2009 was $16.0 million, or $0.07 per share, compared with a loss of $7.3 million, or $0.04 per share, in the first quarter of 2008.
About Entech Solar, Inc.
Entech Solar, Inc. is a leading developer of concentrating solar energy systems. Entech Solar designs modules that provide both electricity and thermal energy by utilizing its proprietary concentrating photovoltaic technologies in its SolarVolt™ and ThermaVolt™ systems, both of which produce cost-competitive distributed energy for a variety of commercial and industrial applications. For more information, please visit www.entechsolar.com.
Forward Looking Statements:
Except for historical information contained herein, this document contains forward-looking statements within the meaning of Section 21-E of the Securities Exchange Act of 1934. These statements involve known and unknown risks and uncertainties that may cause the Company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in industries where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company's control. Other important factors that the Company believes might cause such differences are discussed in the risk factors detailed in the Company's 10-K and its quarterly reports on Form 10-Q both as filed with the Securities and Exchange Commission, which include the Company's cash flow difficulties, dependence on significant customers, and rapid development of technology, among other risks. In assessing forward-looking statements contained herein, readers are urged to carefully read all cautionary statements contained in the Company's filings with the Securities and Exchange Commission.
ENTECH SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31,
(UNAUDITED)
(In thousands, except per share data)
Three Months Ended
March 31,
2009 2008
Revenues:
Contract $ 1,097 $ 8,229
Equipment 143 —
Related party 597 775
Related party - former chairman 126 —
Total 1,963 9,004
Cost of Revenues:
Contract 827 10,222
Equipment 97 —
Related party 597 673
Related party - former chairman 142 —
Provision for loss on contracts — 409
Manufacturing operations impairment 6,758 —
Total 8,421 11,304
Gross Profit (Loss):
Contract 270 (2,402 )
Equipment 46 —
Related party — 102
Related party - former chairman (16 ) —
Manufacturing operations impairment (6,758 ) —
Total (6,458 ) (2,300 )
Operating Expenses:
Marketing, general and administrative expenses 9,445 5,204
Research and development expense 211 41
Total Operating Expenses 9,656 5,245
Loss from Operations (16,114 ) (7,545 )
Other income (expense)
Beneficial conversion and warrant amortization — (32 )
Interest income 24 301
Total other income, net 24 269
Net Loss (16,090 ) (7,276 )
Net loss attributable to noncontrolling interest 127 —
Net loss attributable to Entech Solar, Inc. (15,963 ) (7,276 )
Accretion of preferred stock dividends - Series C — (5 )
Net Loss attributable to Entech Solar, Inc. $ (15,963 ) $ (7,281 )
Net Loss attributable to Entech Solar, Inc. per Common Share (basic and diluted) $ (0.07 ) $ (0.04 )
Weighted Average Common Shares Outstanding used in Per Share Calculation (Basic and Diluted) 237,130 190,326
ENTECH SOLAR, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2009 AND DECEMBER 31, 2008
(In thousands, except share and per share data)
March 31, 2009
December 31, 2008
(UNAUDITED) *
Assets
Current assets:
Cash and cash equivalents $ 8,898 $ 12,169
Accounts receivable - trade (net of allowance of $1,112 and $155 at March 31, 2009 and December 31, 2008, respectively) 552 1,971
Rebates receivable 1,458 115
Inventory (net of reserve of $2,845 and $1,112 at March 31, 2009 and December 31, 2008, respectively) 881 3,664
Costs and estimated earnings/losses in excess of billings 35 2,613
Escrow funds relating to contract performance 500 1,339
Prepaid expenses and deposits 528 964
Total Current assets 12,852 22,835
Advances on machinery and equipment — 2,285
Property and Equipment (net of accumulated depreciation and net of impairment of $4,795 and $0 at March 31, 2009 and December 31, 2008, respectively) 3,317 5,969
Intangible and other assets
Other intangible assets, net 22,433 23,058
Goodwill 23,837 23,837
Other deposits 145 153
Total Assets $ 62,584 $ 78,137
Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses $ 3,694 $ 3,955
Customer deposits 20 20
Customer deposits - related party — 1,023
REC guarantee liability, current portion 60 60
Series D Preferred Stock Warrants 1,394 1,394
Billings in excess of costs and estimated earnings/losses 354 760
Accrued losses on construction in progress 38 101
Total Current liabilities 5,560 7,313
Serverance payable, long term 494 —
REC guarantee liability, net of current portion 180 180
Total Liabilities 6,234 7,493
Convertible redeemable preferred stock
Series C convertible redeemable preferred stock — 170
Series D convertible redeemable preferred stock 11,180 11,180
Total Convertible redeemable preferred stock 11,180 11,350
Stockholders’ Equity
Preferred stock convertible $.01 par value authorized 10,000,000; 5,503,968 issued and outstanding: Series B 7%- 611,111 shares liquidation preference $550,000
6 6
Common stock, $.001 par value; authorized 450,000,000; 238,119,959 and 236,420,779 shares issued at March 31, 2009 and December 31, 2008, respectively; 238,092,091 and 236,392,911 shares outstanding at March 31, 2009 and December 31, 2008, respectively 238 236
Additional paid-in capital 169,773 167,979
Treasury stock, 27,868 shares, at cost, as of March 31, 2009 and December 31, 2008, respectively (39 ) (39 )
Accumulated deficit (124,851 ) (108,888 )
Noncontrolling interest 43 —
Total Stockholders’ Equity 45,170 59,294
Total Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity $ 62,584 $ 78,137
* Derived from audited financial information
Contact:
Chris Witty, 646-438-9385
[email protected]