Energy Conversion Devices Announces Improved Operating Results for the First Quarter
TROY, Mich., Nov. 14 /PRNewswire/ -- Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER) announced today a significant improvement in its operating results. Revenues increased 33.7% to $10,134,000 compared to $7,580,000 in the first quarter last year. Similarly, the Company's net loss of $1,745,000 was a $2,000,000 improvement compared to the same quarter last year. On a per-share basis, the loss was $.09 in 2000 compared to a loss of $.28 in 1999.
In a joint statement, Stanford R. Ovshinsky, President and CEO, and Robert C. Stempel, Chairman, said, "We're very pleased to see the tangible improvement in our operating results. Our technologies and products have entered a new stage of acceptance and growth in both energy and information, and our new strategic alliances will allow us to greatly accelerate the commercialization of our products." They further noted that revenue growth is expected to continue based on agreements and orders in hand for commercial products, product development and large-scale machine building.
The improved performance is a direct result of a fundamental restructuring of the Company. Strategic alliances formed over the last year resulted in ECD's business partners funding the development and commercialization of the Company's products, costs that ECD shouldered on their own in the past. The alliances include those with Texaco Inc. and its wholly owned subsidiary, Texaco Energy Systems, Inc. (TESI); Intel Corporation; General Electric; N.V. Bekaert S.A.; and China's Rare Earth High Tech Co., Ltd. of Baotou Steel Company.
The agreements have not only brought ECD's cash reserves to over $90 million, but will have a significant positive impact on future cash flows and operations. As part of its long-standing strategy, the Company has made investments in its technologies which have resulted in enabling intellectual property and products. Since June 30, 2000, the Company has entered into the following agreements:
* On October 31, 2000, ECD and TESI formed Texaco Ovonic Hydrogen Systems LLC. TESI is funding Texaco Ovonic Hydrogen Systems, including initial product and market development and a multimillion dollar contract from Texaco Ovonic Hydrogen Systems to ECD to further develop and advance the commercialization of ECD's technology to store hydrogen in metal hydrides.
* On October 12, 2000, ECD announced that Texaco and Ovonic Battery signed a Memorandum of Understanding (MOU) to continue the business of GM Ovonic as a new entity, to be named Texaco Ovonic LLC. General Motors' interest is to be converted and restructured so that ECD and Texaco each will have a 50 percent interest in the joint venture. The MOU was signed in conjunction with an MOU signed between Texaco and General Motors on October 10, 2000.
* On September 21, 2000, TESI and ECD announced that Texaco Ovonic Fuel Cell Company LLC, a 50-50 joint venture, was formed. TESI is funding Texaco Ovonic Fuel Cell in an amount estimated to exceed $40 million, including initial product and market development and a multimillion dollar contract from Texaco Ovonic Fuel Cell to ECD to further develop Ovonic Regenerative Fuel Cells(TM) technology, validate manufacturing methodologies and produce production-ready prototypes.
On November 9, 2000, ECD announced the creation of a new position, Senior Vice President of Global Sales and Marketing. Mr. Thomas S. Neslage, former president of Texaco Global Products, was appointed to this position. He will oversee the development of cohesive corporate and product brand management strategies for all ECD products and services.
The following significant events, which were previously reported to ECD's shareholders, also help enhance the Company's cash flows and results from operations:
* An $84 million investment in United Solar Systems Corp. by Bekaert, including approximately $50 million for purchase of production equipment from ECD which will enable United Solar to accelerate the market penetration of United Solar's unique lightweight, flexible, and rugged solar products to address the rapidly expanding photovoltaic markets.
* A series of NiMH projects in China with Rare Earth High Tech Co. Ltd. (Rare Earth High-Tech) of Baotou Steel Company of Inner Mongolia, China. Rare Earth High Tech is one of the principal suppliers of rare earth raw materials to NiMH battery material manufacturers around the world and, together with its affiliates, is believed to own approximately half of the world's reserves of these rare earth materials. These projects are valued in total at approximately $100 million, of which the first three (valued at $63.6 million) have started. Each of these projects involves joint ventures, the licensing of advanced NiMH technology and the sale of production equipment. To date, cash payments exceeding $4,000,000 have been received related to these projects.
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