Spire Corporation: Q4 and Year-End 2009 Results
Spire Corporation, a global solar company providing solar system integration services, capital equipment and turnkey manufacturing lines to manufacture photovoltaic (PV) modules, reported record revenues for the year ended December 31, 2009 of $69.9 million not including revenues from our discontinued operations, a 7.6% increase from $65.0 million in 2008.
Net loss for the year ended December 31, 2009 was $5.3 million, or $0.63 per diluted share, compared to net income of $4.8 million, or $0.56 per diluted share, for the same period of 2008. In 2009, the Company recorded a $5.5 million gain, net of a tax provision of $2.2 million, on the sale of the assets of its Medical Device business to Bard Access Systems, Inc. and a $3.1 million gain on termination of contracts and in 2008, the Company recorded a $6.8 million gain on a contract termination.
Spire’s revenues for the fourth-quarter ended December 31, 2009 were $19.7 million, not including discontinued operations, an increase of 4.9% from $18.8 million in the fourth-quarter of 2008. Net income for the quarter was $4.3 million, or $0.52 per diluted share, compared to net income of $5.1 million, or $0.61 per diluted share, for the fourth-quarter of 2008. Spire recorded a net loss from continuing operations of $0.7 million in the fourth-quarter of 2009 compared to net income from continuing operations of $5.4 million in the fourth-quarter of 2008.
Net cash used in operating activities was $3.8 million for the year ended 2009 as compared to net cash flow of $5.5 million for the same period last year. At year-end 2009, Spire had cash and cash equivalents of $10.5 million of which $9.0 million is unrestricted.
Roger G. Little, Chairman and CEO, said “We achieved significant accomplishments in 2009. We delivered a fully automated 50 megawatt (MW) per year module assembly line to Martifer Solar in Portugal, a 30 MW per year solar cell line to Hanwha International in Korea and sold many simulators maintaining our market leadership position for that product.
“We reinitiated our Spire Solar Systems business and expect it to contribute this year in terms of revenue and operational profits. We feel the U.S. domestic market for systems is positioned for substantial growth and pursuing these areas will enable us to leverage our knowledge of the module market supply chain.
“Although our semiconductor operation significantly underperformed, contributing to our operational loss, Spire Semiconductor has been successful hitting the high efficiency multi-junction concentrator cell targets for its DOE program. We received confirmation this week that our latest submission achieved 41.0% efficiency at 500x suns.
“As part of our strategic initiatives to focus our business on being a global solar company, we restructured our operations with the sale of our catheter business to Bard Access Systems, Inc. This transaction was entered into in December 2009, with the initial proceeds providing important working capital. Spire has obligations to continue to manufacture catheters for Bard during the transition period, which is expected to conclude in the second quarter of 2010, whereby we would receive additional milestone payments.
Mr. Little went on to say, “We were, of course, disappointed in our operational loss. This loss was mostly driven by several equipment and line orders being cancelled or delayed during the year due to a slowdown in our customers’ expansion plans. This resulted in underutilization in our manufacturing capacity eroding gross margins.
“We have taken steps to reduce costs across the board. We reduced payroll and corporate purchases and renegotiated a number of contracts giving us more favorable terms.
“With our restructuring efforts, we do see sales of our solar products and services to account for more than 90% of our revenue-base in 2010, when factoring in our solar cell development programs at our Spire Semiconductor operations.
“With the rapid growth of the PV market in the U.S., we are focusing our efforts locally, while continuing to maintain our international position.
“We expect improved operational performance based upon higher revenues and reduced costs in 2010,” concluded Mr. Little.
About Spire Corporation
Spire Corporation, voted 2009’s Turnkey PV Manufacturing Line Company of the Year, is global solar company providing capital equipment and turnkey production lines to manufacture PV cells and modules.
Spire Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
Three Months Ended
2009 2008 2009 2008
Net sales and revenues
$ 19,747 $ 18,814 $ 69,871 $ 64,964
Gain on termination of contracts
1,388 6,761 3,123 6,761
Income (loss) from operations
(2,707 ) 6,205 (9,340 ) 7,174
Total other expense, net
(290 ) (491 ) (1,565 ) (1,449 )
Income (loss) from continuing operations before income tax benefit (provision)
(2,997 ) 5,714 (10,905 ) 5,725
Income tax benefit (provision) – continuing operations
2,305 (270 ) 2,241
Net income (loss) from continuing operations
(692 ) 5,444 (8,664 ) 5,455
Loss from discontinued operations – before sale of business unit
(466 ) (322 ) (2,105 ) (680 )
Gain on sale of discontinued operations – net of taxes
5,487 - 5,487 -
Net income (loss)
$ 4,329 $ 5,122 $ (5,282 ) $ 4,775
Basic income (loss) per share:
From continuing operations after income taxes $ (0.08 ) $ 0.65 $ (1.04 ) $ 0.65
From discontinued operations, net of tax 0.60 (0.04 ) 0.41 0.08
Basic income (loss) per share $ 0.52 $ 0.61 $ (0.63 ) $ 0.57
Diluted income (loss) per share:
From continuing operations after income taxes $ (0.08 ) $ 0.64 $ (1.04 ) $ 0.64
From discontinued operations, net of tax 0.60 (0.04 ) 0.41 (0.08 )
Diluted income (loss) per share $ 0.52 $ 0.60 $ (0.63 ) $ 0.56
Weighted average number of common and common equivalent shares outstanding - basic
Weighted average number of common and common equivalent shares outstanding - diluted
8,365,568 8,425,059 8,334,304
Summary of Condensed Consolidated Balance Sheets
Current assets $ 44,981
Net property and equipment 5,364
Other assets 3,048
Total assets $ 53,393
Liabilities and stockholders' equity
Current liabilities $ 41,263
Total long-term liabilities 2,626
Stockholders’ equity 9,504
Total liabilities and stockholders’ equity $ 53,393
Certain matters described in this press release including those relating to Spire’s prospects for growth constitute forward-looking statements under the federal securities laws. The discussion of forward-looking information requires management of the Company to make certain estimates and assumptions regarding the Company’s strategic duration and the effect of such plans on the Company’s financial results. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, the risk of dependence on market growth, competition and dependence on government agencies and other third parties for funding contract research and services, as well as other factors described in the Company's Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Forward-looking statements contained in the press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The Company undertakes no obligation and expressly disclaims any duty to update such statements.
Christian Dufresne, 781-275-6000
Chief Financial Officer & Treasurer