Energy Conversion Devices Reports Third Quarter 2011 Results; Launches Strategic Corporate Restructuring
Energy Conversion Devices, Inc. (ECD)reported financial results for its third fiscal quarter of 2011 ended March 31, 2011, and said it will implement a strategic corporate restructuring to better position and focus the company for success in the rapidly evolving solar industry.
Total consolidated revenue for the quarter was $21.5 million, a decrease of 70% over the third fiscal quarter of 2010, and a decrease of 69% over the previous quarter, due primarily to significant industry-wide disruptions in the company’s key European solar markets. The company reported a net loss of $243.2 million, or $4.88 per share, which included non-cash impairment charges of $222.8 million, or $4.47 per share, compared to a net loss of $385.0 million, or $9.10 per share, in the third fiscal quarter of 2010, which included a non-cash impairment charge of $358.0 million, or $8.46 per share.
Excluding impairment charges, the net loss in the third fiscal quarter of 2011 was $20.4 million, or $0.41 per share, compared to a net loss of $27.0 million, or $0.64 per share, in the third fiscal quarter of 2010. As of March 31, 2011, the company had $172 million of cash, cash-equivalents, restricted cash and short-term investments.
The company said it is implementing a strategic corporate restructuring that will include a reduction in its workforce of approximately 300 employees or 20% of the company’s current associates worldwide. In addition, the Board of Directors appointed Jay Knoll as Interim President, replacing former President and CEO Mark Morelli, who has resigned. Knoll formerly served as Executive Vice President, General Counsel and Chief Administrative Officer. The Board has also initiated a search for a permanent CEO.
"These actions will enable ECD to better meet the needs of the dynamic global solar market and will strengthen our ability to respond to this changed industry environment," said Stephen Rabinowitz, Chairman of the ECD Board of Directors. "Our Board is confident that Jay Knoll and the other members of the senior management team, who have extensive experience in our business and industry, executive management and corporate restructuring, will provide strong leadership as we search for a permanent chief executive to lead the organization. We firmly believe that the restructuring, the continuing implementation of our technology roadmap and our strong cash balance position the company for success as a leader in flexible thin-film PV technology and its applications."
As part of its restructuring, ECD will focus on its growing North American business, concentrate on its two-step distribution model with existing and new channel partners, and pursue opportunities in fast-growing emerging markets. At the same time, the company will maintain its commitment to key European markets as they stabilize. The company will continue to focus on the commercialization of its next-generation technologies, including its High Frequency and Nano-Crystalline technologies to improve conversion efficiency and lower costs. ECD’s technology roadmap is designed to enable the company’s flexible solar products to compete more effectively with standard grid electricity, particularly on rooftop applications.
