ROCHESTER HILLS, Mich., Nov. 9 /PRNewswire-FirstCall/ -- Energy
Conversion Devices, Inc. (ECD Ovonics) (Nasdaq: ENER) today reported its
results for the first quarter ended September 30, 2006. The company
reported a net loss of $2.3 million (or $0.06 per share) on revenues of
$27.2 million in the first quarter of fiscal 2007, as compared to a net
loss of $6.5 million (or $0.22 per share) on revenues of $23.2 million in
the first quarter of fiscal 2006.
"We are building on the momentum from last year and beginning our 2007
fiscal year with a solid first quarter of improved performance," said
Chairman and CEO Robert C. Stempel. "Our new manufacturing capacity is
coming online at just the right time for growing demand in our United Solar
Ovonic segment, and increasing commercial acceptance of products in our
Cobasys and Ovonyx joint ventures presents exciting opportunities."
The following are highlights from ECD Ovonics' first quarter of 2007:
* ECD Ovonics' wholly owned subsidiary United Solar Ovonic had
operating income of $1.5 million on revenues of $23.9 million in the first
quarter of fiscal 2007, as compared to operating income of $1.7 million on
revenues of $19.4 million in the first quarter of fiscal 2006. The first
quarter 2007 fiscal year results include a $1 million increase in the
allowance for uncollectible accounts for one of our major customers.
* United Solar Ovonic's gross profit margin was 24% in the first
quarter of fiscal 2007, up from 20% in the first quarter of fiscal 2006
reflecting increased production and sales.
* United Solar Ovonic's solar modules have been installed and activated
in a 1MW array on a General Motors' parts warehouse in Rancho Cucamonga,
Calif. Importantly, this project was privately financed under a long-term
power purchase agreement in which General Motors purchases electricity
produced from the array rather than fund the up-front capital costs. This
installation is expected to provide up to half of the building's
electricity and reduce overall electricity costs.
* United Solar Ovonic currently has 28MW of annual production capacity
at its Auburn Hills 1 location. The company's new 30MW Auburn Hills 2
facility, which is a duplicate of its Auburn Hills 1 facility, is in the
final testing stages and is on track to begin commercial production in the
next 45 days. Our expansion plan increases United Solar Ovonic's
manufacturing capacity to 118MW, 178MW and over 300MW per annum by the end
of calendar years 2007, 2008 and 2010, respectively.
* ECD Ovonics' Production Technology and Machine Building Division is
manufacturing and delivering the proprietary PV module manufacturing
equipment for the new Auburn Hills 2 facility on budget and on schedule.
This division is continuously improving its manufacturing productivity,
which will result in lower capital costs and shorter equipment
manufacturing cycles for the announced Greenville, Mich. facilities, as
well as for future expansion projects.
* ECD Ovonics' Cobasys LLC joint venture is supplying commercial
volumes of its battery systems to General Motors for the new Saturn VUE
Green Line hybrid. The Saturn VUE hybrid is in dealer showrooms and on the
road.
* Cobasys, the only United States-based supplier of NiMH battery
systems for hybrid electric vehicles, continued to successfully compete for
new business opportunities, including selection by Enova Systems to provide
its NiMHax(R) battery system for integration into service vans for a major
North American fleet operator.
* Cobasys is supplying its NiMH battery systems for the Saturn VUE and
others from its state-of-the-art manufacturing facility in Springboro,
Ohio, which is fully certified to all standards required to be a supplier
to the automakers. Cobasys recently completed its first TS16949 quality
standard surveillance audit, an exacting set of principles that define the
quality management system requirements for the design, development and
manufacture of products for the automotive industry.
* ECD Ovonics' Ovonyx, Inc. joint venture licensees continue to make
substantial progress toward commercialization. For example, Samsung
Electronics Co., Ltd. announced prototypes of its next generation NOR
flash, which is based on OUM technology, indicating that commercial
products are expected to be available in 2008. Intel Corporation, as part
of a joint venture with STMicroelectronics, also announced that it had
produced prototypes of flash products based on OUM technology.
* ECD Ovonics' combined research and development costs and net
operating, general and administrative expenses increased by $2.1 million in
the first quarter fiscal 2007 versus the first quarter fiscal 2006
primarily reflecting the growth in our solar business and the $1 million
increase in the allowance for uncollectible accounts as discussed above.
The Company continues to pursue third-party funding, including strategic
alliances and government contracts, to offset its funding requirements to
carry on research and development activities to define and develop
marketable technologies that can result in commercial products.
* ECD Ovonics' Central Analytical Lab was granted ISO 17025
accreditation, representing the highest level of technical competence and
quality for a testing facility.
* ECD Ovonics announced several corporate governance initiatives to
further strengthen and improve its corporate governance structure,
including the appointment of two new independent directors to its Board of
Directors -- Pasquale Pistorio, the retired President and Chief Executive
Officer of STMicroelectronics, and George A. Schreiber, Jr., President and
Chief Executive Officer of SEMCO Energy, Inc.
* ECD Ovonics was selected as an inaugural constituent of the Ocean
Tomo 300 Patent Index, a market-equity stock index priced and published by
the American Stock Exchange, representing a diversified portfolio of 300
companies that own the most valuable patents relative to their book value.
Mr. Stempel added, "We continue to be positive about the future of our
business and the markets in which we participate. Demand for solar products
is expanding globally, including here in the United States, with United
Solar Ovonic strengthening its competitive position and growing through
aggressive expansion plans. Our Cobasys joint venture is at the forefront
of the hybrid vehicle market, which represents the most exciting new market
in the automotive industry. And, of course, our Ovonyx joint venture's OUM
technology is on the cusp of commercialization in the global semiconductor
market. Overall, we see many exciting opportunities for ECD Ovonics'
technologies and products that are increasingly needed in our changing
world."
Additional information about the Company and its consolidated financial
results can be found in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006, which was filed with the Securities and
Exchange Commission today and will be available on the Company's website.
Conference Call Information
ECD Ovonics will hold a conference call today, Thursday, November 9, at
5:00 p.m. (Eastern Standard Time) to discuss operating results for the
first quarter ended September 30, 2006. To access the conference call,
please call (877) 858-2512 or (706) 634-1291. A live webcast of the call
will be available online at http://www.ovonic.com/investor or through the
Company's website at http://www.ovonic.com . A replay of the call will be
available approximately one hour after the conclusion of the call through
close of business on Monday, November 13, 2006, at (800) 642-1687 or (706)
645-9291. Callers should use conference ID 1109335 to access the conference
call and the replay.
About ECD Ovonics
ECD Ovonics is the leader in the synthesis of new materials and the
development of advanced production technology and innovative products. It
has invented, pioneered and developed its proprietary, enabling
technologies in the fields of energy and information leading to new
products and production processes based on amorphous, disordered and
related materials. The Company's portfolio of alternative energy solutions
includes Ovonic thin-film amorphous solar cells, modules, panels and
systems for generating solar electric power; Ovonic NiMH batteries; Ovonic
hydride storage materials capable of storing hydrogen in the solid state
for use as a feedstock for fuel cells or internal combustion engines or as
an enhancement or replacement for any type of hydrocarbon fuel; and Ovonic
fuel cell technology. ECD Ovonics' proprietary advanced information
technologies include Ovonic phase-change electrical memory, Ovonic
phase-change optical memory and the Ovonic Threshold Switch. 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 on
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.
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three Months Ended
September 30,
2006 2005
(Unaudited)
REVENUES
Product sales $22,858 $19,267
Royalties 664 1,183
Revenues from product development agreements 2,954 1,897
Revenues from product development agreements
with related parties 151 415
Total revenues from product development
agreements 3,105 2,312
Revenues from license and other agreements 555 486
TOTAL REVENUES 27,182 23,248
EXPENSES
Cost of product sales 18,004 15,860
Cost of revenues from product development
agreements 2,574 1,871
Product development and research 8,175 8,505
Operating, general and administrative
(net) and patents 5,773 3,796
TOTAL EXPENSES 34,526 30,032
LOSS FROM OPERATIONS (7,344) (6,784)
Interest and other income (expense), net 5,042 576
NET LOSS FROM CONTINUING OPERATIONS (2,302) (6,208)
LOSS FROM DISCONTINUED OPERATIONS - (258)
NET LOSS $(2,302) $(6,466)
Basic Net Loss Per Share
Continuing operations $(.06) $(.21)
Discontinued operations - (.01)
$(.06) $(.22)
Diluted Net Loss Per Share
Continuing operations $(.06) $(.21)
Discontinued operations - (.01)
$(.06) $(.22)
Shares used in calculation of net income
per share:
Basic 39,070 29,016
Diluted 39,070 29,016
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
September 30, June 30,
2006 2006
(Unaudited)
ASSETS
Cash and cash equivalents $63,360 $164,962
Short-term investments 314,355 239,505
Accounts receivable, net 27,953 27,885
Inventories 22,986 21,527
Property, plant and equipment (net) 162,732 138,231
Other 5,198 4,232
TOTAL ASSETS $596,584 $596,342
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other liabilities $28,323 $26,339
Long-term liabilities 32,535 32,982
Total Liabilities 60,858 59,321
Stockholders' equity 535,726 537,021
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $596,584 $596,342
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
Three Months Ended
September 30,
2006 2005
(Unaudited)
OPERATING ACTIVITIES:
Net loss $(2,302) $(6,466)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 1,982 1,982
Bad debt expense 1,051 25
Amortization of premium/discount on
investments 534 -
Stock and stock options issued
for services rendered 603 999
Other 147 (171)
Changes in working capital (2,034) (2,339)
NET CASH USED IN OPERATING ACTIVITIES (19) (5,970)
INVESTING ACTIVITIES:
Purchases of property, plant and
equipment (including construction
in progress) (26,472) (10,643)
Purchase (proceeds from sale) of
investments (75,370) 11,841
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES (101,842) 1,198
NET CASH PROVIDED BY FINANCING ACTIVITIES 226 9,265
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS 33 (127)
NET CASH FLOW (101,602) 4,366
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 164,962 84,295
CASH AND CASH EQUIVALENTS AT END OF PERIOD $63,360 $88,661
ENERGY CONVERSION DEVICES, INC. AND SUBSIDIARIES
SEGMENT REVENUE AND OPERATING INCOME/(LOSS)
(In Thousands)
Income (Loss) from
Revenues Operations
Three Months Ended Three Months Ended
September 30, September 30,
2006 2005 2006 2005
(Unaudited) (Unaudited)
United Solar Ovonic $23,860 $19,359 $1,469 $1,680
Ovonic Battery(1) 1,860 2,964 (1,521) (724)
Energy Conversion Devices 19,861(2) 11,115(2) (6,761) (7,592)
Consolidating Entries (18,399) (10,190) (531) (148)
Consolidated $27,182 $23,248 $(7,344) $(6,784)
(1) Excludes discontinued operations
(2) Principally the sale by ECD to United Solar Ovonic of the solar PV
module machinery and equipment which is eliminated in consolidation. The
ECD revenues, excluding the consolidating entry, were $1,474,000 and
$933,000 at September 30, 2006 and 2005, respectively.
SOURCE Energy Conversion Devices, Inc.
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Related links:
http://www.ovonic.com
CONTACT:
Sanjeev Kumar, Vice President and CFO, or
Ghazaleh Koefod, Investor Relations, of Energy Conversion
Devices, Inc., +1-248-293-0440; Bruce MacDonald of
Liebler!MacDonald, +1-248-233-8062
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