Energy Conversion Devices Doubles Revenues in First Quarter of Fiscal 2009
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- Solar Gross Margin Exceeds 33% due to Continued Focus on Operational Excellence
- Strong Balance Sheet with $478 Million in Cash, Cash Equivalents and Short- Term Investments
ROCHESTER HILLS, Mich., Nov. 10 -- 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 the quarter ended September 30, 2008.
Total consolidated revenues for the quarter were $95.8 million, an increase of 16 percent over the $82.4 million in revenues from the fourth quarter of fiscal 2008, and 104 percent higher than revenues of $47.0 million in the first quarter of fiscal 2008. Solar product sales were $89.5 million, a 16 percent sequential increase and a 124 percent increase over the prior- year quarter. The average selling price for solar laminates during the quarter was $3.04.
Net income for the first quarter was $12.7 million, or $0.29 per fully diluted share, compared to net income of $9.9 million, or $0.24 per fully diluted share, in the fourth quarter of fiscal 2008, and a net loss of $7.6 million, or $0.19 per fully diluted share, in the year-ago period. The company reported net operating cash flow of $26.5 million for the first quarter, versus a use of cash of $14.8 million during the first quarter of fiscal 2008.
First quarter net income and per-share figures include preproduction costs of $2.0 million or $0.05 per fully diluted share, restructuring costs of $0.2 million, or less than one cent per fully diluted share. The company also recorded an "other-than-temporary impairment of investment" of approximately $1.0 million, or $0.02 per fully diluted share, to reflect the decreased market value of a floating rate note issued by Lehman Brothers.
Gross margin in the first quarter on solar product sales was 33.4 percent, and total gross margin was 34.1 percent. United Solar Ovonic produced 30.8 MWs and shipped 29.5 MWs of solar laminates in the first quarter.
Mark Morelli, ECD's president and chief executive officer, said, "Fiscal 2009 is off to a strong start and demand continues for UNI-SOLAR products from our target markets in Europe, Asia and the US. We recognize that there are new challenges in the present environment, and we are actively managing our business model accordingly. For example, our ongoing commitment to operational excellence enabled us to complete the retrofit of our Auburn Hills 1 facility quickly, while simultaneously ramping a new production line in Greenville ahead of schedule. These improvements elevated our productivity during the quarter and contributed to stronger than anticipated gross margins."
Harry Zike, ECD's vice president and chief financial officer, commented, "Our strong balance sheet and fully funded growth plan differentiates us in today's market. With a strong cash position, positive operating cash flow, and an increasing earnings stream, we have the resources to fund demand-driven growth."
About Energy Conversion Devices
Energy Conversion Devices, Inc. (ECD) is the leader in building integrated and commercial rooftop photovoltaics, one of the fastest growing segments of the solar power industry. The company manufactures and sells thin-film solar laminates that convert sunlight to energy using proprietary technology. ECD's UNI-SOLAR(R) brand products are unique because of their flexibility, light weight, ease of installation, durability, and real-world efficiency. ECD also pioneers other alternative technologies, including a new type of nonvolatile digital memory technology that is significantly faster, less expensive, and ideal for use in a variety of applications including cell phones, digital cameras and personal computers. For more information, please visit www.ovonic.com.
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Quarter Ended
September 30,
2008 2007
Revenues
Product sales $90,801 $42,467
Royalties 1,344 1,015
Revenue from product development
agreements 3,271 2,877
Other revenues 349 683
Total revenues 95,765 47,042
Expenses
Cost of product sales 60,967 35,069
Cost of revenues from product
development agreements 2,181 1,709
Product development and research 2,190 3,462
Preproduction costs 1,977 2,545
Selling, general and administrative 14,434 11,695
Restructuring charges 244 2,515
Total expenses 81,993 56,995
Income (Loss) from operations 13,772 (9,953)
Other income (expense)
Interest income 2,604 2,452
Interest expense (2,732) -
Other nonoperating expense (926) (60)
Total other (expense) income (1,054) 2,392
Net income (loss) before income taxes 12,718 (7,561)
Income taxes 57 6
Net income (loss) $12,661 $(7,567)
Basic net income (loss) per share $.30 $(.19)
Diluted net income (loss) per share $.29 $(.19)
Shares used in calculation of net
income(loss) per share(1):
Basic 42,222 39,838
Diluted 43,052 39,838
(1) Excludes for 2008 the effect of the 3.4 million shares loaned pursuant to the share lending agreement
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, June 30,
2008 2008
(unaudited)
ASSETS
Cash and cash equivalents $467,018 $484,492
Short-term investments 11,201 14,989
Accounts receivable (net) 63,165 53,525
Inventories 34,342 31,337
Assets held for sale 1,532 1,539
Property, plant and equipment (net) 443,390 404,119
Other 54,171 51,966
TOTAL ASSETS $1,074,819 $1,041,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other current
liabilities $68,455 $52,103
Long-term liabilities 350,396 347,952
TOTAL LIABILITIES 418,851 400,055
STOCKHOLDERS' EQUITY 655,968 641,912
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,074,819 $1,041,967
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
Quarter Ended
September 30,
2008 2007
(unaudited)
OPERATING ACTIVITIES:
Net Income (loss) $12,661 $(7,567)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 6,969 3,693
Stock and stock options issued for
services rendered 1,478 268
Other-than-temporary impairment of
investment 964 -
Other 330 713
Changes in working capital 4,130 (11,915)
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 26,532 (14,808)
INVESTING ACTIVITIES:
Purchases of property, plant and equipment
(including construction in progress) (46,909) (30,118)
Investment in joint venture (1,000) -
Purchase of investments - (42,400)
Proceeds from maturities of investments 2,700 66,760
Proceeds from sale of investments - 10,610
Proceeds from sales of property, plant and
equipment - 9
NET CASH (USED IN) PROVIDED BY INVESTING
ACTIVITIES (45,209) 4,861
NET CASH PROVIDED BY FINANCING ACTIVITIES 935 758
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 268 118
NET CASH FLOW (17,474) (9,071)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 484,492 80,770
CASH AND CASH EQUIVALENTS AT END OF PERIOD $467,018 $71,699
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
SEGMENT REVENUE AND OPERATING INCOME/(LOSS)
(In Thousands)
Quarter ended September 30,
2008 2007 2008 2007
Income (Loss) from
Revenues Operations
United Solar Ovonic $91,811 $41,887 $20,786 $(468)
Ovonic Materials 3,879 5,092 254 (700)
Corporate activities(1) 75 169 (7,327) (8,833)
Consolidating entries - (106) 59 48
Consolidated $95,765 $47,042 $13,772 $(9,953)
(1) Revenues consist primarily of services, facilities and miscellaneous administrative and laboratory services provided to certain affiliates; expense primarily includes corporate operations, including facilities, human resources, legal, finance, information technology, business development, purchasing and restructuring.
Segment Operations - United Solar Ovonic
(In Thousands)
Quarter ended
September 30,
2008 2007
PV product sales $89,450 $39,870
Megawatts produced 30.8 10.4
Megawatts shipped 29.5 13.1
Cost of product sales 59,589 32,622
Gross margin 29,861 7,248
Gross margin % 33.4% 18.2%
Research and development
revenue $2,361 $2,017
Total revenues 91,811 41,887
Other expenses:
Cost of revenues from
product development
agreements 1,555 1,150
Product development and
research 984 1,125
Preproduction costs 1,977 2,545
Selling, general and
administrative expenses 6,920 4,913
Total other expenses 11,436 9,733
Income (loss) from operations $20,786 $(468)
Segment Operations - Ovonic Materials
(In Thousands)
Quarter ended
September 30,
2008 2007
Product sales $1,351 $2,615
Cost of product sales 1,437 2,568
Other revenues:
Royalties 1,345 1,015
Product development
agreements 910 860
Other revenues 273 602
Other revenues total 2,528 2,477
Total revenues 3,879 5,092
Other expenses:
Cost of revenues from
product development
agreements 627 577
Product development and
research 1,206 2,338
Selling, general and
administrative Expenses 355 309
Total other expenses 2,188 3,224
Income (loss) from operations $254 $(700)
Segment Operations - Corporate Activities
(In Thousands)
Quarter ended
September 30,
2008 2007
Other revenues $75 $169
Other expenses:
Selling, general and
administrative expenses 7,157 6,486
Restructuring costs 245 2,516
Total expenses 7,402 9,002
Loss from operations $(7,327) $(8,833)
NOTE: Certain principals of The Auto Channel, LLC own an equity position in ECD.
