Energy Conversion Devices Reports Financial Results for First Quarter of Fiscal Year 2010

ROCHESTER HILLS, Mich., Nov. 9 /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 first quarter of its fiscal year 2010.

Total consolidated revenues for the first quarter of fiscal 2010 were $42.9 million, compared to $95.8 million in the first quarter of fiscal 2009 and $51.4 million in the fourth quarter of fiscal 2009. Solar product and project sales for the quarter were $36.1 million, compared to $89.5 million in the same quarter last year and $46.0 million in the fourth quarter of fiscal 2009.

For the first quarter, the company reported a net loss of $11.8 million, or $0.28 per fully diluted share, compared to net income of $11.8 million, or $0.27 per fully diluted share, in the year-ago period. This compares to a net loss of $17.6 million, or $0.41 per fully diluted share, in the fourth quarter of fiscal 2009. Results for the first and fourth quarters of fiscal 2009 have been adjusted to reflect the company's implementation of FASB ASC 470-20.

First quarter net results were affected by several items, which, when taken collectively, had a positive net impact of approximately $2.7 million or $0.06 per share. These items included the impact related to the acquisition and integration of Solar Integrated Technologies (SIT) and non-SIT related items including the sale of previously written-down inventory and tax refunds for prior research and development expenditures.

Mark Morelli, ECD's President and Chief Executive Officer, said "In the first quarter, new construction and reroofing projects continued to be slow, negatively impacting sales through our traditional building-materials channel. We are the leaders in this building-integrated photovoltaic (BIPV) market, and remain confident that this channel will recover and our new and reroofing business will improve longer term."

"To expand our near-term addressable market beyond our traditional BIPV focus, we are developing product solutions for rooftop retrofit applications including our recently launched tilt solution. This product leverages the light-weight attributes of our core flexible laminates as well as our superior energy yield resulting in leading levelized cost of energy (LCOE) performance and attractive returns to customers worldwide," said Morelli. "We are also working with project developers to pursue large-scale projects in our key markets."

"The addressable markets for our products are large, especially as we extend our reach beyond our traditional BIPV market into the existing roof market segment where our unique product and LCOE leadership provide a cost-effective solution with attractive returns to more customers worldwide," added Morelli.

Conference Call / Webcast Details

Management of Energy Conversion Devices will review these financial results on a conference call on Monday, November 9, 2009, at 10:00 a.m. EST. The dial-in number for the live audio call is (877) 858-2512 or (706) 634-6076 (international) with conference ID number 38818387. 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 www.energyconversiondevices.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., November 11, 2009, and can be accessed by dialing (800) 642-1687 or (706) 645-9291 (international) with conference ID number 38818387. The webcast will also be archived on the company's website.

About Energy Conversion Devices

Energy Conversion Devices is a leader in building-integrated and rooftop photovoltaics. The company manufactures, sells and installs thin-film solar laminates that convert sunlight to energy using proprietary technology. ECD's UNI-SOLAR(®) brand products are unique because of their flexibility, light weight, ease of installation, durability, and real-world efficiency. Through its Solar Integrated Technologies business, the company also designs, manufactures and installs rooftop photovoltaic systems which enable customers to transform unused space on the rooftop into a value-generating asset. For more information, please visit www.energyconversiondevices.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. 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 maintain our customer relationships; the worldwide demand for electricity and the market for solar energy; the supply and price of components and raw materials for our products; and our customers' ability to access the capital needed to finance the purchase of our products; and risks associated with integrating Solar Integrated Technologies, Inc. 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
                  CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
                       (In thousands, except per share data)

                                                      Three Months Ended
                                                        September 30,
                                                   -----------------------
                                                     2009         2008 (1)
                                                   ---------     ---------
    Revenues
       Product and project sales                    $36,710        $90,801
       Royalties                                      1,959          1,344
       Revenues from product development
        agreements                                    3,991          3,271
       License and other revenues                       284            349
                                                        ---            ---
          Total Revenues                             42,944         95,765
    Expenses
       Cost of product and project sales             27,833         60,979
       Cost of revenues from product
        development agreements                        3,281          2,181
       Product development and research               2,245          2,190
       Preproduction costs                               10          1,977
       Selling, general and administrative           16,202         14,150
       Net loss on disposal of property, plant
        and equipment                                   974            284
       Restructuring charges                            677            244
                                                        ---            ---
          Total Expenses                             51,222         82,005
                                                     ------         ------
    Operating (Loss) Income                          (8,278)        13,760
    Other Income (Expense)
       Interest income                                  292          2,604
       Interest expense                              (6,963)        (3,564)
       Distribution from joint venture                1,309              -
       Other nonoperating income (expense), net         885           (926)
                                                        ---           ----
          Total Other Income (Expense)               (4,477)        (1,886)
                                                     ------         ------
    Net (Loss) Income before Income Taxes           (12,755)        11,874
    Income tax (benefit) expense                       (915)            57
                                                       ----            ---
    Net (Loss) Income                               (11,840)        11,817
    Net Loss Attributable to Noncontrolling
     Interest                                           (74)             -
                                                        ---            ---
    Net (Loss) Income Attributable to ECD
     Shareholders                                  $(11,766)       $11,817
                                                   ========        =======

    (Loss) Earnings Per Share                        $(0.28)         $0.28
                                                     ======          =====

    Diluted (Loss) Earnings Per Share                $(0.28)         $0.27
                                                     ======          =====


    Basic weighted shares outstanding                42,299         42,222
    Diluted shares outstanding                       42,299         43,052


    (1) As adjusted due to the implementation of FASB ASC 470-20.



                  ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
                             CONSOLIDATED BALANCE SHEETS
                                  (in thousands)

                                                 September 30,   June 30,
                                                 ------------- -----------
                                                     2009         2009 (1)
                                                   ---------     ---------
                                                  (Unaudited)
    ASSETS
    Current Assets:
       Cash and cash equivalents                    $54,407        $56,379
       Short-term investments                       201,015        245,182
       Accounts receivable, net                      54,912         69,382
       Inventories, net                             128,497         74,266
       Other current assets                           7,910          4,897
                                                      -----          -----
    Total Current Assets                            446,741        450,106

    Property, Plant and Equipment, net              614,617        614,330

    Other Assets:
       Restricted Cash                                1,563              -
       Goodwill                                      30,523              -
       Intangible assets, net                         2,659              -
       Lease receivable                              11,656              -
       Other assets                                  11,758         11,661
                                                     ------         ------
    Total Other Assets                               58,159         11,661
                                                     ------         ------

    Total Assets                                 $1,119,517     $1,076,097
                                                 ==========     ==========
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities:
       Accounts payable and accrued expenses        $45,025        $50,238
       Warranty liability                            40,299          5,917
       Convertible notes                              8,000              -
       Other current liabilities                      4,453          3,506
                                                      -----          -----
    Total Current Liabilities                        97,777         59,661

    Long-Term Liabilities:
       Convertible senior notes                     251,573        247,974
       Capital lease obligations                     21,154         21,412
       Other liabilities                             22,754          9,701
                                                     ------          -----
    Total Long-Term Liabilities                     295,481        279,087

    Commitments and Contingencies

    Stockholders' Equity
       Common stock, $0.01 par value, 100 million
        shares authorized, 45,755,412 and
        45,754,652 issued at September 30, 2009
        and June 30,2009, respectively                  458            458
       Additional paid-in capital                 1,056,756      1,055,705
       Treasury stock                                  (700)          (700)
       Accumulated deficit                         (328,384)      (316,618)
       Accumulated other comprehensive loss, net     (1,797)        (1,496)
                                                     ------         ------
       Total ECD stockholders' equity               726,333        737,349
    Accumulated deficit - noncontrolling interest       (74)             -
                                                        ---            ---
    Total Stockholders' Equity                      726,259        737,349
                                                    -------        -------
    Total Liabilities and Stockholders' Equity   $1,119,517     $1,076,097
                                                 ==========     ==========

    (1) As adjusted due to the implementation of FASB ASC 470-20.



                  ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                   (in thousands)

                                                     Three Months Ended
                                                        September 30,
                                                   -----------------------
                                                      2009        2008 (1)
                                                   ---------     ---------
    Cash flows from operating activities:
       Net (loss) income                           $(11,840)       $11,817
       Adjustments to reconcile net (loss)
        income to net cash (used in) provided
        by operating activities:
          Depreciation and amortization               8,892          6,981
          Amortization of debt discount and
           deferred financing fees                    3,908          3,601
          Share-based compensation                    1,051          1,478
          Other-than-temporary impairment of
           investment                                     -            964
          Loss on sale of property, plant and
           equipment                                    974            284
          Other                                           -             46
       Changes in operating assets and liabilities,
        net of foreign exchange:
          Accounts receivable                         8,924         (9,784)
          Inventories                               (29,880)        (3,127)
          Other assets                                  446         (1,956)
          Accounts payable and accrued expenses      (7,442)        13,744
          Other liabilities                            (954)         2,484
             Net cash (used in) provided by
              operating activities                  (25,921)        26,532

    Cash flows from investing activities:
       Purchases of property, plant and equipment,
        net                                         (12,157)       (46,909)
       Acquisition of business, net of cash
        acquired                                     (2,088)             -
       Investment in joint ventures                       -         (1,000)
       Proceeds from maturities of investments       34,069          2,700
       Proceeds from sale of investments              9,771              -
             Net cash provided by (used in)
              investing activities                   29,595        (45,209)

    Cash flows from financing activities:
       Principal payments under capitalized
        lease obligations                              (174)          (256)
       Repayments on revolving credit facility       (5,705)             -
       Proceeds from sale of stock and share-based
        compensation, net of expenses                     -          1,191
                                                        ---          -----
             Net cash (used in) provided by
              financing activities                   (5,879)           935

    Effect of exchange rate changes on cash and
     cash equivalents                                   233            268
    Net decrease in cash and cash equivalents        (1,972)       (17,474)
    Cash and cash equivalents at beginning of
     period                                          56,379        484,492
                                                     ------        -------
    Cash and cash equivalents at end of period      $54,407       $467,018
                                                    =======       ========

    (1) As adjusted due to the implementation of FASB ASC 470-20.



                  ENERGY CONVERSION DEVICES, INC. and SUBSIDIARIES
           RECONCILIATION OF Q4 2009 AS ADJUSTED FOR THE IMPLEMENTATION OF
                                   FASB ASC 470-20
                        (In thousands, except per share data)

                                            Quarter Ended June 30, 2009
                                      ---------------------------------------
                                      As previously
                                      reported in
                                      the Form 10-K
                                      press release  ASC 470-20   As Reported
                                      -------------  -----------  -----------
    Revenues
       Product and project sales          $46,014            $-       $46,014
       Royalties                            1,991             -         1,991
       Revenues from product development
        agreements                          3,094             -         3,094
       License and other revenues             316             -           316
                                              ---           ---           ---
          Total Revenues                   51,415             -        51,415
    Expenses
       Cost of product and project sales   41,001            27        41,028
       Cost of revenues from product
        development agreements              2,533             -         2,533
       Product development and research     2,418             -         2,418
       Preproduction costs                    276             -           276
       Selling, general and
        administrative                     14,915             -        14,915
       Net loss on disposal of property,
        plant and equipment                 1,610             -         1,610
       Restructuring charges                1,657             -         1,657
                                            -----           ---         -----
          Total Expenses                   64,410            27        64,437
                                           ------           ---        ------
    Operating (Loss) Income               (12,995)          (27)      (13,022)
    Other Income (Expense)
       Interest income                        443             -           443
       Interest expense                    (3,003)       (1,775)       (4,778)
       Other nonoperating income
        (expense), net                        437             -           437
                                              ---           ---           ---
          Total Other Income (Expense)     (2,123)       (1,775)       (3,898)
                                           ------        ------        ------
    Net (Loss) Income before Income
     Taxes                                (15,118)       (1,802)      (16,920)
       Income tax (benefit) expense           653             -           653
                                              ---           ---           ---
    Net (Loss) Income                    $(15,771)      $(1,802)     $(17,573)
                                         ========       =======      ========

    (Loss) Earnings Per Share              $(0.37)       $(0.05)       $(0.42)
                                           ======        ======        ======

    Diluted (Loss) Earnings Per Share      $(0.37)       $(0.04)       $(0.41)
                                           ======        ======        ======

    Basic weighted shares outstanding      42,314             -        42,314
    Diluted shares outstanding             42,355             -        42,355

SOURCE Energy Conversion Devices, Inc.



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http://www.energyconversiondevices.com

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