Energy Conversion Devices Announces
Significantly Improved Operating Results for the Second
Quarter
TROY, Mich., Feb. 14 Energy Conversion Devices, Inc. (ECD)
announced today a significant improvement in its operating
results for the three and six months ended December 31, 2000. Revenues
increased 123% to $15,088,000 compared to $6,770,000 in the second quarter
last year. Similarly, the Company's net loss of $716,000 was a $3,574,000
improvement compared to the same quarter last year. On a per-share basis, the
loss was $.04 in 2000 compared to a loss of $.32 in 1999.
Revenues increased 76% to $25,222,000 compared to $14,350,000 in the six
months ended December 31, 1999. The Company's net loss of $2,461,000 was a
$5,575,000 improvement compared to the same six months ended December 31,
1999. On a per-share basis, the loss was $.13 in 2000 compared to a loss of
$.60 in 1999.
In a joint statement, Stanford R. Ovshinsky, President and CEO, and Robert
C. Stempel, Chairman, said, "We are very pleased with the improved operating
results for the second quarter. This is our second consecutive quarter of
significantly improved results. Our long-standing strategy to invest in our
technologies has led to historic new strategic alliances. With the recent
addition of several marketing positions, our strategy now is to focus on
manufacturing and sales." They further added that the improved performance is
a direct result of a fundamental restructuring of the Company. Strategic
alliances formed over the last year resulted in funding the commercialization
efforts of ECD's products, thus improving operations and reducing the need for
internal funding.
Ovshinsky and Stempel noted that activities of the Texaco Ovonic Fuel Cell
and Texaco Ovonic Hydrogen Storage Systems joint ventures are proceeding
according to plan. In November 2000, Michigan Economic Development
Corporation offered the 100th Michigan Economic Growth Authority (MEGA) tax
credit to ECD in connection with the new Rochester Hills, Mich., facility for
the fuel cell and hydrogen joint ventures. Significant progress has been made
in connection with making the facility available for occupancy by the two
ventures.
In addition, they noted that work on the recently announced joint
development agreement between Ovonyx and STMicroelectronics is underway.
The financial results for the second quarter and six months are shown in
the following table:
Financial Results:
Three Months Ended Six Months Ended
December 31, December 31,
2000 1999 2000 1999
(In thousands, except per-share amounts)
Revenues
Product Sales $3,769 $1,377 $6,961 $3,247
Royalties 798 1,075 1,673 1,738
Revenue from Product
Development Agreements 7,768 1,992 12,862 5,910
Revenue from License
Agreements 2,500 1,778 2,800 2,178
Other 253 548 926 1,277
Total Revenue 15,088 6,770 25,222 14,350
Expenses 17,126 10,521 30,353 21,535
Net Loss from Operations (2,038) (3,751) (5,131) (7,185)
Other Income (Expense)
Interest Income 1,633 192 3,187 419
Equity Loss in
Joint Ventures (597) (738) (804) (1,298)
Other 286 7 287 28
1,322 (539) 2,670 (851)
Net Loss $(716) $(4,290) $(2,461) $(8,036)
Basic Net Loss Per
Common Share $(.04) $(.32) $(.13) $(.60)
Notes to Financial Results:
The Company had a net loss in the three months ended December 31, 2000 of
$716,000 compared to a net loss of $4,290,000 for the three months ended
December 31, 1999. The most significant factor contributing to the improved
operating results was an increase in the amount of funding from ECD's joint
venture partners for the company's product and production development efforts
related to the commercialization of ECD's products. Also contributing to the
improved operating results was an increase in license fees, lower loss on
product sales, an increase in interest income, and a decrease in equity losses
from joint ventures, partially offset by higher expenses.
Product sales increased 174% to $3,769,000 in the three months ended
December 31, 2000 from $1,377,000 in the three months ended December 31, 1999.
Photovoltaic sales were $1,588,000 in 2000 versus zero in 1999 (United Solar
financial statements were consolidated effective April 11, 2000). Machine-
building revenues increased to $1,851,000 in 2000 compared to $395,000 in
1999. The machine-building revenues in 2000 were applicable to contracts to
build production equipment for Bekaert ECD Solar Systems having 25MW of annual
capacity and for production equipment for the manufacture of NiMH batteries
for the Rare Earth Ovonic joint ventures. Sales of negative and positive
electrodes decreased $472,000, primarily due to one of the Company's principal
negative electrode licensees currently manufacturing its own electrode
products as allowed under its license from the Company. Because most battery
pack orders are being filled through GM Ovonic, the Company's battery pack
sales decreased to $271,000 in 2000 versus $452,000 in 1999.
Revenues from commercial product development agreements, which relate
primarily to joint ventures established for the commercialization of ECD's
products, increased 290% to $7,768,000 in the three months ended December 31,
2000 from $1,992,000 in the three months ended December 31, 1999. There were
total increases in product development agreements of $6,757,000 which were due
to development programs in 2000 for Texaco Ovonic Fuel Cell Company
($2,320,000), Texaco Ovonic Hydrogen Systems ($3,132,000), Ovonic Media
($775,000), and United Solar contracts with Department of Energy (DOE) and
Solar Design Associates ($185,000), partially offset by decreases resulting
from the successful completion of the Shell Hydrogen program ($0 in 2000
compared to $375,000 in 1999) and National Institute of Standards and
Technology in the Company's battery and hydrogen technologies ($206,000 in
2000 compared to $715,000 in 1999).
Revenues from license and other agreements increased to $2,500,000 in the
three months ended December 31, 2000 from $1,778,000 in the three months ended
December 31, 1999. The 2000 revenues resulted from a license to Inner
Mongolia Rare Earth Ovonic Metal Hydride Co., one of the three Rare Earth
Ovonic joint ventures. Royalties decreased 26% to $798,000 in the three
months ended December 31, 2000 from $1,075,000 in the three months ended
December 31, 1999, primarily due to a change in estimate in the 1999 period
which resulted in high 1999 revenues.
Other revenues decreased by $295,000 to $253,000 in the three months ended
December 31, 2000 from $548,000 in the three months ended December 31, 1999,
primarily due to the transfer of certain ECD employees to Ovonyx.
The Company had a net loss in the six months ended December 31, 2000 of
$2,461,000 compared to a net loss of $8,036,000 for the six months ended
December 31, 1999. The most significant factor contributing to the improved
operating results was an increase in the amount of funding from ECD's joint
venture partners for the company's product and production development efforts
related to the commercialization of ECD's products. Also contributing to the
improved operating results was an increase in license fees, a lower loss on
product sales, an increase in interest income and an improvement in equity
losses from joint ventures, partially offset by higher expenses.
Product sales increased 114% to $6,961,000 in the six months ended
December 31, 2000 from $3,247,000 in the six months ended December 31, 1999.
Photovoltaic sales were $2,970,000 in 2000 versus zero in 1999 (United Solar
financial statements were consolidated effective April 11, 2000). Machine-
building revenues increased to $3,414,000 in 2000 compared to $1,123,000 in
1999. The machine-building revenues in 2000 were applicable to contracts to
build production equipment for Bekaert ECD Solar Systems having 25MW of annual
capacity and for production equipment for the manufacture of NiMH batteries
for the Rare Earth Ovonic joint ventures. Sales of negative and positive
electrodes decreased $992,000, primarily due to one of the Company's principle
negative electrode licensees currently manufacturing its own electrode
products as allowed under its license from the Company. Because most battery
pack orders are being filled through GM Ovonic, the Company's battery pack
sales decreased to $449,000 in 2000 versus $1,005,000 in 1999.
Revenues from commercial product development agreements, which relate
primarily to joint ventures established for the commercialization of ECD's
products, increased 118% to $12,862,000 in the six months ended December 31,
2000 from $5,910,000 in the six months ended December 31, 1999. There were
total increases in product development agreements of $10,363,000 which were
due to development programs in 2000 for Texaco Ovonic Fuel Cell Company
($3,217,000), Texaco Ovonic Hydrogen Systems ($4,572,000), Ovonic Media
($1,442,000), and United Solar contracts with DOE and Solar Design Associates
($861,000), partially offset by the successful conclusion of programs with
General Motors to develop batteries for electric and hybrid electric vehicle
applications ($0 in 2000 compared to $1,002,000 in 1999), the Shell Hydrogen
program ($0 in 2000 compared to $688,000 in 1999) and decreases in programs
with DOE and National Renewable Energy Laboratory ($467,000 in 2000 compared
to $874,000 in 1999) and National Institute of Standards and Technology in the
Company's battery and hydrogen technologies ($789,000 in 2000 compared to
$1,589,000 in 1999).
Revenues from license and other agreements increased to $2,800,000 in the
six months ended December 31, 2000 from $2,178,000 in the six months ended
December 31, 1999. The 2000 revenues consisted of agreements with three
Chinese companies (BYD Battery Co., SANIK Battery Co., Ltd. and Rare Earth
High Tech). Royalties decreased 4% to $1,673,000 in the six months ended
December 31, 2000 from $1,738,000 in the six months ended December 31, 1999,
primarily due to decreased royalties from battery technologies.
Other revenues decreased by $351,000 to $926,000 in the six months ended
December 31, 2000 from $1,277,000 in the six months ended December 31, 1999,
primarily due to the transfer of certain ECD employees to Ovonyx.
ECD and its network of business partners and licensees are manufacturing
cutting-edge products in three rapidly growing global markets: energy
generation, energy storage and information technology. ECD designs and builds
manufacturing machinery that incorporates its proprietary production
processes, maintains ongoing research and development programs to continually
improve its products and develops new applications for its technologies.
ECD's web site address is http://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.
