Energy Conversion Devices Reports Fourth Quarter & Year End Fiscal Results

August 27, 2008 by Jeff Shepard

Energy Conversion Devices, Inc. (ECD) 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% from third quarter revenues of $70.0 million, and 129% higher than fourth quarter fiscal 2007 revenues of $36.0 million. Solar product sales were $77 million, a 19% sequential increase and a 161% 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% in the fourth quarter, compared with 30.7% 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 CEO, 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% compared with 15.8% last year. SG&A as a% of revenue in the fourth quarter declined to 16.9% from 30.8% a year ago. As a result, we achieved profitability from operations for the second half of fiscal 2008."

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."

For fiscal 2008, total consolidated revenues were $255.9 million compared with $113.6 million for fiscal 2007, an increase of 125%. Solar product sales totaled $231.5 million in fiscal 2008, a 154% 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.