Energy Conversion Devices is still struggling to sell its flexible thin-film laminates in a market that is only slowly recovering, according to its latest second quarter financial year results. Revenues increased slightly Q-on-Q to US$52.9 million, compared to US$42.9 million in the first quarter of fiscal 2010. However, losses of US$39.1 million were reported, which are much higher than the first quarter loss of US$11.8 million. Revenue in the same period a year ago had topped US$103.1 million with income of US$13.0 million.
The company is still feeling the impact of its acquisition of Solar Integrated Technologies and recent workforce reductions. It is also impacted by lower utilization rates, which the company noted had negatively impacted the quarterly results to the tune of US$7.4 million.
“We reduced our inventory balances, continued to restructure our company and are encouraged by the early results of the business initiatives undertaken in the second quarter,” commented Mark Morelli, ECD’s President and Chief Executive Officer. “We’ve signed more than 35 megawatts of new projects and agreements since the end of the quarter, and we expect to build on this momentum in the second half of the fiscal year.”
Morelli went on to claim that he was confident the company would be able to achieve 12% laminate conversion efficiencies and less than $0.95 manufacturing cost per watt, though didn’t give a timeline to these milestones in statement.
Update: 9th February.
During a conference call with financial analysts, executives of the company noted that it would be lowering production to only 25% of capacity in the current quarter, due to an inventory (finished goods) glut of approximately 44MW. The company had previously reduced utilization rates to 50%.
Production costs are running higher than current ASP’s forcing a high cash burn rate, which was put at approximately US$40 million per quarter by executives.
The lower utilization rates are designed to burn-off inventory at a higher rate and generate cash for the company.