Energy Conversion Devices Reports Fourth Quarter and Fiscal Year 2011 Financial Results
Energy Conversion Devices, Inc. (ECD) announced financial results for its fourth quarter and fiscal year ended June 30, 2011.
Total consolidated revenues for the quarter were $73.1 million, compared to $21.5 million in the third quarter of fiscal 2011, a 240% increase, and $86.2 million in the fourth quarter of fiscal 2010, a 15% decrease. Solar product sales for the quarter were $28.9 million, compared to $17.5 million in the previous quarter, an increase of 65%, and $66.9 million in the same quarter last year, a 57% decrease. Solar system sales for the quarter were $41.3 million compared to $1.1 million in the prior quarter, and $14.4 million in the year-ago quarter. Most of the $41.3 million of solar system revenue in the fourth quarter was attributable to a single large project in Italy, which is now substantially complete.
Shipments of solar laminates in the quarter were 15.9 MW compared to 11.4 MW in the previous quarter, an increase of 39%, and 33.8 MW in the year-ago quarter, a decrease of 53%.
For the fourth quarter, the company reported a net loss of $42.1 million or $0.84 per share, which includes a non-cash impairment charge of $6.0 million, or $0.12 per share. This compares to a net loss of $243.2 million, or $4.88 per share, in the previous quarter, which includes a non-cash impairment charge of $222.8 million or $4.47 per share. The net loss in the fourth fiscal quarter of 2010 was $20.9 million or $0.49 per share.
Fourth quarter net results were negatively affected by under-absorption of factory overhead costs of $9.5 million, the previously noted non-cash impairment charge of $6.0 million due to the write-down of the company’s outstanding development loan for certain solar projects in Italy, a $4.1 million charge for raw materials and other commitments, a $2.3 million adjustment to the carrying value of certain inventory, and a restructuring charge of $4.6 million related to employee severance costs from the company’s previously announced strategic corporate restructuring. The net impact of these items was an increase of the quarter’s net loss by $26.5 million or $0.53 per share.
As of June 30, 2011, the company had $140.7 million of cash, cash-equivalents, short-term investments and restricted cash, compared to $172.0 million as of March 31, 2011. The company’s decrease in cash was due primarily to the cash loss from operations, timing of receipts and disbursements for system projects and capital spending on the technology roadmap.
For the fiscal year ended June 30, 2011, total consolidated revenues were $232.5 million compared to $254.4 million in the prior fiscal year. Combined solar product and system sales were $220.1 million for fiscal year 2011 compared to $227.3 million in the prior fiscal year, a decline of 3%, driven primarily by lower total shipments of 85.7 MW versus 95.4 MW in the prior year and lower average selling price, offset by an increase in system sales.
The net loss for fiscal year 2011 was $306.4 million or $6.41 per share compared to a net loss of $457.2 million or $10.75 per share in the year-ago period. Excluding non-cash impairment charges of $228.8 million and $359.2 million, respectively, the net loss for fiscal year 2011 was $77.6 million, or $1.62 per share, compared to $98.0 million, or $2.30 per share, in fiscal year 2010.
Jay Knoll, ECD’s Interim President, said, "Our quarterly increase in shipments and revenue is a step in the right direction, as we are starting to see signs of returning growth in key European markets, following two disruptive quarters caused by market uncertainties. We are also continuing to expand our North American business, where we recently completed the largest operating solar rooftop project in North America and one of the largest solar rooftop projects in Ontario. Overall, we see trends in key solar markets that are favoring our unique rooftop products and we are focused on executing on these opportunities to further improve our sales.
"We are proud to announce our newest initiative, Open Solar.™ By unlocking third-party innovation using our solar cells and laminates, we can expand our addressable markets while defining new product categories. Also, we will seek to more thoroughly integrate our products into building materials and everyday applications which will drive down the total cost of solar energy and increase market adoption of solar technology."
Knoll added, "At the same time, we recognize the urgent need to improve our competitiveness now and for the future in response to fundamental shifts in market dynamics and are therefore focused on our strategic corporate restructuring to reduce cost, globalize our sales and enhance our technology. As part of these initiatives, we have completed a company-wide reduction-in-force of approximately 300 associates which we expect will reduce labor expenses by more than $15 million on an annual basis coupled with an additional $5 million of other annualized cost reductions. We are also closely examining our technology roadmap to find areas where we can reduce capital expenditures, improve manufacturability and shorten ramp-up times. While this may result in near-term delays to our roadmap, we will ultimately strengthen our operational capabilities to deliver higher-efficiency and lower-cost products to our customers."
"In addition, we recently announced that we would divest our Ovonic Battery Company subsidiary to focus on our solar business. We believe that we are taking the right steps to improve the company’s operations and strengthen the company for the future," concluded Knoll.