- Operating Profitability Achieved in Second Half, Solar Gross Margin
Sustained at 30+ Percent
- World's Largest 12MW Solar Rooftop Installation Confirms Leadership in
BIPV/Rooftop Market
- Sales Pipeline Grows 50% to $1.8 Billion
ROCHESTER HILLS, Mich., Aug. 28 /PRNewswire-FirstCall/ -- Energy
Conversion Devices, Inc. (ECD) (Nasdaq: ENER), 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 fourth quarter and fiscal year ended June 30, 2008.
Total consolidated revenues for the quarter were $82.4 million, up 18
percent from third quarter revenues of $70.0 million, and 129 percent
higher than fourth quarter fiscal 2007 revenues of $36.0 million. Solar
product sales were $77 million, a 19 percent sequential increase and a 161
percent increase over the prior-year quarter.
Net income for the fourth quarter was $9.9 million, or $0.24 per share,
compared to net income of $7.0 million, or $0.17 per share, in the third
quarter of fiscal 2008, and a net loss of $13.1 million, or $0.33 per
share, in the year-ago period.
Gross margin on product sales in the solar business was 33.5 percent in
the fourth quarter, compared with 30.7 percent in the third quarter. United
Solar Ovonic produced 26.2 MWs in the fourth quarter and 73.6 MWs for the
fiscal year. As of June 30, 2008, the solar product sales pipeline was $1.8
billion, as compared to $1.2 billion at the end of the fiscal third
quarter.
Mark Morelli, ECD's president and chief executive officer, said,
"During fiscal 2008, we focused on operational excellence, and successfully
built a strong foundation for sustained long-term growth. For example,
fourth quarter solar gross margin improved to 33.5 percent compared with
15.8 percent last year. SG&A as a percent of revenue in the fourth quarter
declined to 16.9 percent from 30.8 percent a year ago. As a result, we
achieved profitability from operations for the second half of fiscal 2008."
Mr. Morelli added, "Fiscal 2008 marked a major transition in ECD's
history, as the company generated positive operating cash flow of $28.5
million during the year, a significant improvement from the negative $21.8
million in fiscal 2007. We also completed an important capital raise that
will allow us to fund our expansion to 1GW of capacity by the end of fiscal
2012. The selection of UNI-SOLAR to power the world's largest rooftop solar
installation validates our continued success at selling UNI-SOLAR's
differentiated value proposition into new and expanding markets and
distribution channels in the rooftop and building-integrated PV markets. I
am confident that our growth and momentum will continue into fiscal 2009
and beyond."
Fiscal Year Results
For fiscal 2008, total consolidated revenues were $255.9 million
compared with $113.6 million for fiscal 2007, an increase of 125 percent.
Solar product sales totaled $231.5 million in fiscal 2008, a 154 percent
increase compared with $91.2 million last year. For fiscal 2008, the
company reported net income of $3.9 million, or $0.10 per share, compared
to a net loss of $25.2 million, or $0.64 per share in fiscal 2007.
The company's cash, cash equivalents, and short-term investments
totaled approximately $500 million at the end of the fiscal year,
reflecting the net proceeds of $405 million from the issuance of the
company's convertible senior notes and common stock in June 2008. Common
shares outstanding at June 30, 2008 were 45,575,554, however, as the
company loaned 3,444,975 shares of its common stock to Credit Suisse
International, pursuant to a share lending agreement, the shares used for
the calculation of shares outstanding for the full year were 40,231,379 for
basic and 41,137,849 for diluted shares.
First Quarter and Fiscal Year 2009 Guidance
Total consolidated revenues are expected to be between $95 and $98
million for the fiscal first quarter ending September 30, 2008, and between
$455 and $485 million for fiscal 2009. Solar product sales for the first
quarter are expected to be $89 to $91 million and $430 to $450 million for
fiscal 2009. For the first quarter, gross margin is expected to be about 31
percent, and between 33 and 35 percent for the second half of the fiscal
year. Restructuring costs are expected to be between $1.7 and $2.0 million
for the first quarter and $2.5 to $3.0 million for fiscal 2009.
Preproduction costs are expected to be between $1.5 and $1.9 million for
the first quarter and between $7.0 and $9.0 million for fiscal 2009.
Conference Call / Webcast Details
Management of Energy Conversion Devices will review these financial
results on a conference call on Thursday, August 28, 2008, at 10:00 a.m.
ET. The dial-in number for the live audio call is 877-858-2512 or
706-634-6076 (international) with conference ID number 60981223. The
conference call will be webcast live over the Internet and can be accessed
in the Investor Relations -- Conference Calls -- section of the company's
website at http://www.ovonic.com
An audio replay of the call will be available approximately two hours
after the conclusion of the call. The audio replay will remain available
until 11:59 p.m., September 1, 2008, and can be accessed by dialing (800)
642-1687 or (706) 645-9291 (international), with conference ID number
60981223. The webcast will also be archived on the company's website.
About Energy Conversion Devices
Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER) 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 http://www.ovonic.com
This release contains forward-looking statements within the meaning of
the Safe Harbor Provisions of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements include statements concerning our
plans, objectives, goals, strategies, future events, future net sales or
performance, capital expenditures, financing needs, plans or intentions
relating to expansions, business trends and other information that is not
historical information. All forward-looking statements are based upon
information available to us on the date of this release and are subject to
risks, uncertainties and other factors, many of which are outside of our
control, that could cause actual results to differ materially from the
results discussed in the forward-looking statements. Risks that could cause
such results to differ include: our ability to achieve sustainable
profitability; our ability to maintain our customer relationships; our
ability to expand our manufacturing capacity in a timely and cost-effective
manner; the worldwide demand for electricity and the market for solar
energy; the supply and price of components and raw materials for our
products; and the resolution of pending legal disputes. The risk factors
identified in the ECD filings with the Securities and Exchange Commission,
including the company's most recent Annual Report on Form 10-K and most
recent Quarterly Report on Form 10-Q, could impact any forward-looking
statements contained in this release.
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Quarter Ended Year Ended
June 30, June 30,
2008 2007 2008 2007
Revenues
Product Sales $77,800 $31,284 $237,191 $96,014
Royalties 1,262 926 5,306 3,323
Revenue from Product Development
Agreements 2,950 3,184 11,440 11,934
Revenue from License Agreements 238 313 1,253 1,047
Other 138 302 671 1,249
Total Revenues 82,388 36,009 255,861 113,567
Expenses
Cost of Product Sales 51,966 27,119 174,075 81,241
Cost of Revenues from Product
Development Agreements 1,865 2,146 7,257 7,685
Product Development and Research
Expenses 2,207 4,220 9,905 19,745
Preproduction Costs 1,346 2,019 6,920 3,614
Selling, General and
Administrative (Net)
(Including Patents) 15,287(1) 11,422(2) 52,369(1) 38,399(2)
Restructuring Charges 1,940 5,385 9,396 5,385
Total Expenses 74,611 52,311 259,922 156,069
Income (Loss) from Operations 7,777 (16,302) (4,061) (42,502)
Other Income (Expense)
Interest Income 981 3,168 7,019 17,543
Other (99) (2) (165) (2)
Other Nonoperating Income
(Expense) 1,274 (9) 1,216 (270)
Total Other Income 2,156 3,157 8,070 17,271
Net Income (Loss) before Income
Taxes 9,933 (13,145) 4,009 (25,231)
Income Taxes 61 - 156 -
Net Income (Loss) $9,872 $(13,145) $3,853 $(25,231)
Basic Net Income (Loss) Per Share $.24 $(.33) $.10 $(.64)
Diluted Net Income (Loss) Per Share $.24 $(.33) $.09 $(.64)
Shares Used in Calculation of Net
Income(Loss) Per Share(3):
Basic 40,666 39,655 40,231 39,389
Diluted 41,525 39,655 41,138 39,389
(1) Includes net loss on disposal of property, plant and equipment of
$1,330 for the fourth quarter and $1,116 for the full year
(2) Includes net loss on disposal of property, plant and equipment of $318
for both periods
(3) Excludes for 2008 the effect of the 3.4 million shares loaned pursuant
to the share lending agreement.
Non-GAAP Financial Measures
To supplement its financial statements presented in accordance with
Generally Accepted Accounting Principles (GAAP) ECD uses the following
measures as defined by the Securities and Exchange Commission as non-GAAP
measures:
Quarter Ended Year Ended
June 30, June 30,
2008 2007 2008 2007
(In Thousands Except Per Share Data)
Net Income (Loss) $9,872 $(13,145) $3,853 $(25,231)
Add:
- Preproduction Costs 1,346 2,019 6,920 3,614
- Restructuring Charges 1,940 5,385 9,396 5,385
Net Income (Loss) as Adjusted
(Non-GAAP) $13,158 $(5,741) $20,169 $(16,232)
Net Income (Loss) (Basic) Per
Share as Reported $.24 $(.33) $.10 $(.64)
Net Income (Loss) (Diluted) Per
Share as Reported $.24 $(.33) $.09 $(.64)
Net Income (Loss) (Basic) Per
Share as Adjusted (Non-GAAP) $.32 $(.14) $.50 $(.41)
Net Income (Loss) (Diluted) Per
Share as Adjusted (Non-GAAP) $.32 $(.14) $.49 $(.41)
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
Year Ended June 30,
2008 2007
ASSETS
Cash and Cash Equivalents $484,492 $80,770
Short-Term Investments 14,989 125,004
Accounts Receivable (Net) 53,525 36,498
Inventories 31,337 38,692
Assets Held for Sale 1,539 1,524
Property, Plant and Equipment (Net) 404,119 311,369
Other 51,966 6,822
TOTAL ASSETS $1,041,967 $600,679
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable and Other Current Liabilities $52,103 $42,940
Long-Term Liabilities 347,952 32,232
TOTAL LIABILITIES 400,055 75,172
STOCKHOLDERS' EQUITY 641,912 525,507
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,041,967 $600,679
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended June 30,
2008 2007
OPERATING ACTIVITIES:
Net (Income)Loss $3,853 $(25,231)
Adjustments to Reconcile Net Income(Loss)
to Net Cash Used In Operating Activities:
Depreciation and Amortization 21,917 12,170
Bad Debt 868 10
Amortization of Premium (Discount) on Investments 1 529
Allowance for Slow-Moving Inventory 2,920 1,348
Restructuring Charge 2,165 107
Stock and Stock Options Issued for Services
Rendered 2,010 1,763
Other 989 (1,123)
Changes in Working Capital (6,213) (11,387)
NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES 28,510 (21,814)
INVESTING ACTIVITIES:
Purchases of Property, Plant and Equipment
(Including Construction in Progress) (Net) (117,047) (186,988)
Proceeds from Sale of Investments 75,379 113,975
Payment to Ovonyx - (200)
NET CASH USED IN INVESTING ACTIVITIES (41,668) (73,213)
NET CASH PROVIDED BY FINANCING ACTIVITIES 417,247(1) 11,016
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (368) (181)
NET CASH FLOW 403,721 (84,192)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 80,770 164,962
CASH AND CASH EQUIVALENTS AT END OF PERIOD $484,491 $80,770
(1) Primarily $405 million capital raise in June 2008.
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
SEGMENT REVENUE AND OPERATING INCOME/(LOSS)
(In Thousands)
Quarter Ended June 30,
2008 2007 2008 2007
Revenues Income (Loss) from Operations
United Solar Ovonic $79,055 $31,468 $16,292 $(908)
Ovonic Materials(1) 3,226 4,372 260 (2,749)
Corporate Activities(2) 242 257 (8,833) (12,242)
Consolidating Entries (135) (88) 58 (403)
Consolidated $82,388 $36,009 $7,777 $(16,302)
Year Ended June 30,
2008 2007 2008 2007
Revenues Income (Loss) from Operations
United Solar Ovonic $239,398 $98,363 $31,644 $1,962
Ovonic Materials(1) 16,066 14,635 899 (13,706)
Corporate
Activities(2) 1,039 1,147 (36,816) (28,769)
Consolidating Entries (642) (578) 212 (1,989)
Consolidated $255,861 $113,567 $(4,061) $(42,502)
(1) Excludes discontinued operations.
(2) Revenues consist primarily of services, facilities and miscellaneous
administrative and laboratory and machine shop services provided to
certain affiliates; expense primarily includes corporate operations,
including facilities, human resources, legal, finance, information
technology, business development, purchasing and restructuring. The
loss from operations includes restructuring costs of $5.4 million in
fiscal 2007 for the first phase of the Company's restructuring plan
and $9.4 million in fiscal 2008.
Segment Operations - United Solar Ovonic
(In Thousands)
Three Months Ended Year Ended
June 30, June 30,
2008 2007 2008 2007
PV Product Sales $76,981 $29,467 $231,519 $91,182
Megawatts Produced 26.2 10.7 73.6 32.5
Megawatts Shipped 25.7 10.1 77.1 29.3
Cost of Product Sales $51,169 $24,798 $169,015 $75,096
Gross Margin $25,812 $4,669 $62,504 $16,086
Gross Margin % 33.5% 15.8% 27.0% 17.6%
Other Revenues:
Research and Development $2,074 $2,000 $7,879 $7,174
Other Operating Revenues - 1 - 7
Other Revenues Total 2,074 2,001 7,879 7,181
Total Revenues 79,055 31,468 239,398 98,363
Other Expenses:
Cost of Revenues from Product
Development Agreements 1,347 1,002 4,938 2,922
Product Development and
Research Expenses 927 864 3,650 3,737
Preproduction 1,346 2,019 6,920 3,614
Selling, General and
Administrative Expenses 7,974(1) 3,693(2) 23,231(1) 11,032(2)
Total Other Expenses 11,594 7,578 38,739 21,305
Income (Loss) from
Operations $16,292 $(908) $31,644 $1,962
(1) Includes net loss on disposal of property, plant and equipment of
$1,296 for both periods.
(2) Includes net loss on disposal of property, plant and equipment of $319
for both periods.
Segment Operations - Ovonic Materials
(In Thousands)
Three Months Ended Year Ended
June 30, June 30,
2008 2007 2008 2007
Product Sales $818 $1,816 $5,690 $4,832
Cost of Product Sales 855 1,992 5,374 4,666
Other Revenues:
Royalties 1,262 926 5,306 3,323
Research and Development 876 1,184 3,560 4,780
Licenses 238 313 1,253 1,047
Other Operating Revenues 32 133 257 653
Other Revenues Total 2,408 2,556 10,376 9,803
Total Revenues 3,226 4,372 16,066 14,635
Other Expenses:
Cost of Revenues from Product
Development Agreements 518 1,144 2,318 4,783
Product Development and
Research Expenses 1,280 3,357 6,256 16,007
Operating, General and
Administrative Expenses 313 628 1,219 2,885
Total Other Expenses 2,111 5,129 9,793 23,675
Income (Loss) from
Operations $260 $(2,749) $899 $(13,706)
Segment Operations - Corporate Activities
(In Thousands)
Three Months Ended Year Ended
June 30, June 30,
2008 2007 2008 2007
Other Operating Revenues $242 $257 $1,039 $1,147
Other Expenses:
Restructuring 1,939 5,385 9,396 5,385
Operating, General and
Administrative Expenses 7,136 7,114 28,459 24,531
Total Expenses 9,075 12,499 37,855 29,916
Loss from Operations $(8,833) $(12,242) $(36,816) $(28,769)
SOURCE Energy Conversion Devices, Inc.
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Related links:
http://www.ovonic.com
CONTACT:
Mark Trinske, Vice President, Investor
Relations & Communications of Energy Conversion Devices, Inc.,
+1-248-299-6063
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