ROCHESTER HILLS, Mich., April 19 /PRNewswire-FirstCall/ -- Energy
Conversion Devices, Inc. (ECD Ovonics) (Nasdaq: ENER) announced today that
it is implementing an organizational restructuring plan to consolidate and
realign its business activities and reduce annual costs by approximately
$23 million when fully implemented by the end of fiscal year 2008. The
first phase of restructuring actions (from which approximately $17 million
of the annualized savings will be realized) has begun, and a second phase
will begin in the first quarter of fiscal year 2008. In connection with the
implementation of this plan, the company will incur restructuring and other
related charges in the fourth quarter of the current fiscal year of $3 - 6
million, with additional charges in fiscal year 2008.
"Consistent with our commitment to create value for shareholders, we
are focused on taking the steps necessary to reach and maintain sustainable
profitability and at the same time successfully grow our profitable solar
business and realize the full potential in our Cobasys and Ovonyx joint
ventures," said James R. Metzger, Interim President and Chief Operating
Officer. "We are completing a transition from our historic research and
development roots to become a competitive, commercial organization. Part of
that transition requires us to bring our operating costs in line, which we
will accomplish through this restructuring plan."
Mr. Metzger added, "In addition to the projected cost savings, one of
the key drivers of this plan is establishing a dynamic new platform for the
company's operational success consisting of two strong business segments
supported by a right-sized overhead and administrative structure."
One of these segments -- the company's existing United Solar Ovonic
segment, which is already profitable -- will be strengthened by the
addition of the photovoltaic machine-building activities, which were
previously part of the company's Production Technology and Machine Building
Division (in the ECD business segment). This consolidation will align all
of the key components for photovoltaic operations within a single, unified
operating structure to lower capital and production costs and drive
technology improvements.
The other segment -- the new Ovonic Materials business segment -- is
being formed from the consolidation of the Ovonic Battery segment with the
remainder of the ECD business segment (hydrogen storage, fuel cell,
photonic devices and cognitive computer). The combined activities are being
substantially reduced and balanced with external sources of revenues, such
as royalties, development agreements (including government contracts) and
product sales, to realign commercialization efforts at sustainable levels.
The specific restructuring actions include workforce reductions,
facility closings, and asset disposals primarily in the Ovonic Battery and
ECD segments and home office functions.
Preliminary Third Quarter Revenue
ECD Ovonics will be releasing its third quarter fiscal year 2007
operating results on May 8, 2007, when it files its Form 10-Q for the
quarter ended March 31, 2007. At that time, the company expects to report
consolidated revenues of approximately $27 million for the third quarter,
including revenues of approximately $24 million for its wholly owned
subsidiary United Solar Ovonic. These preliminary revenues are subject to
change, and final operating results will be contained in the company's Form
10-Q. The third quarter operating results will not include any costs or
benefits from the restructuring plan announced today.
Robert C. Stempel, ECD Ovonics' Chairman and CEO noted, "We are using
this opportunity to pre-release our preliminary third quarter revenues as
part of our commitment to effectively communicate with our investors. With
that goal in mind, we will provide an overview of the photovoltaic market
and our strategies in this market as part of our regular disclosure of
complete operating results on May 8. These strategies -- which are bearing
near-term results and creating the foundation for our success in the
photovoltaic market -- support our confidence in our business as we look
forward."
Conference Call and Webcast
ECD Ovonics will host a conference call today at 4:30 pm EDT to discuss
the restructuring plan. The call can be accessed by dialing 877-858-2512 or
706-634-1291 prior to the start of the call. Callers will need to reference
conference ID 5961038. The conference call will also be webcast live at
http://www.ovonic.com/investor or by logging on to ECD Ovonics' website at
http://www.ovonic.com.
For those unable to join the live conference call, a replay will be
available from 6:00 p.m. on April 19 through 5:00 p.m. on April 23. To
access the replay, dial (800) 642-1687 or (706) 645-9291 and refer to
conference ID 5961038. The webcast will be archived on the company's
website.
About ECD Ovonics
ECD Ovonics is the leader in the synthesis of new materials and the
development of advanced production technology and innovative alternative
energy products and solutions. The company's portfolio of alternative
energy solutions and proprietary information processing technologies
features the latest advances in solar electric power generation, NiMH
batteries, and fuel cell, solid hydride storage and phase-change memory
technologies. ECD Ovonics 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 Ovonics holds the basic
patents in its fields. More information on the Company is available at
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 Ovonics, as of the date of this release, believes to be reasonable and
appropriate. ECD Ovonics 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. The risk factors identified in the ECD Ovonics filings with the
Securities and Exchange Commission, including the company's most recent
Annual Report on Form 10-K, could impact any forward-looking statements
contained in this release.
SOURCE Energy Conversion Devices, Inc.
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Related links:
http://www.ovonic.com
http://www.ovonic.com/investor
CONTACT:
Ghazaleh Koefod, Investor Relations, or Dick
Thompson, Media Relations, of Energy Conversion Devices, Inc.,
+1-248-293-0440
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