Stock Alert for Energy Conversion Devices Inc. (ENER)
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    Stock Alert for Energy Conversion Devices Inc. (ENER)

    Energy Conversion Devices Inc. (ECD), through its subsidiaries, commercializes materials, products and production processes for the alternative energy generation (primarily solar energy), energy storage and information technology markets.  Through its United Solar Ovonic subsidiary, the Company manufactures, sells and installs thin-film solar laminates that convert sunlight to clean, renewable energy using proprietary technology. It also designs, manufactures and installs rooftop photovoltaic systems, which enable customers to transform unused rooftop space into a value-generating asset. The Company’s Ovonic Materials division includes the Ovonic Battery Company, the inventor and worldwide licensor of nickel-metal-hydride battery technology and the developer of proprietary advanced lithium-ion cathode materials, along with other emerging energy storage technologies. ENER’s Ovonyx joint venture is the inventor and worldwide licensor of phase change memory (PCM) technology.

    Share Statistics (22-Sept-11)

    FY2010 FY2011 % Chg Q22010 Q22011 % Chg
    Symbol ENER Revenue, $Mn 254.42 232.55 -8.6% 86.15 73.11 -15.1%
    Current price $1.07 Gross marg. 3.3% 9.2% 178.8% 3.5% -13.1% -474.3%
    52wk Range: $0.56-$5.38 Oper. margin -122.4% -50.8%
    Avg Vol (3m): 960,323 Net margin -179.6% -131.6% -26.7% -24.1% -57.4% 138.2%
    Market Cap. 57.00M
    Shares Outstanding 53.27M EPS, $ -5.23 -3.24 -38.0% -0.54 -0.70 29.6%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of ENER gained 55.2% over the last five days and 65.1% over the last month.  Year to date, the stockis down 76.6%. Shares of the Michigan-based solar energy technology provider jumped as much as 11% on Tuesday after itsUnited Solar subsidiary said its UNI-SOLAR brand photovoltaics have been used for one of the largest knownresidential solar installations in the world. United Solar announced in the press release that it provided 259 UNI-SOLAR brand flexible, lightweightphotovoltaic modules for the 24 kilowatt (kW) solar installation, which was completed in July 2011 by ADRSolar Solutions. It said the solar panels will power the majority of the home systems that are typically poweredby natural gas, including lighting, electronics and heating and air conditioning systems. Nancy Palmer, sales and marketing manager of ADR Solar Solutions commentated that “UNI-SOLAR was theonly application considered for the installation and is not only working as anticipated, but is a beautiful additionto the design of the state of the art home. The California-based solar installation firm intends to use UNI-SOLARon many upcoming projects.
    Earlier this month, United Solar announced its solar laminates will be installed on the Pituaçu Stadium in Salvador da Bahia, Brazil, marking the first solar photovoltaic system to be installed on a soccer stadium in South America. The installation is expected to commence this month and be completed before the year ends.

    Commenting on the news, Steve Szamocki, United Solar senior vice president of sales-Americas, stated: “United Solar is proud to be a pioneer in the application of solar technology in emerging markets. This is a perfect example of how UNI-SOLAR lightweight solar laminates can be integrated directly into a building for a cost-saving renewable energy solution. We see great opportunity for solar adoption in Brazil with its high average insolation and growing infrastructure investment leading up to the World Cup in 2014.”

    Source:

    http://investor.shareholder.com/ovonics/releasedetail.cfm?ReleaseID=606600

    Financial Summary

    ENER reported revenues of $73.1 million for its fourth quarter ended June 30, 2011, up 240% from $21.5 million in the third quarter of fiscal 2011, but down 15% from $86.2 million in the fourth quarter of fiscal 2010.

    The Company’s solar product sales for the quarter were $28.9 million, compared to $17.5 million in the previous quarter, an increase of 65%, and $66.9 million in the same quarter last year, a 57% decrease. Solar system sales for the quarter were $41.3 million compared to $1.1 million in the prior quarter, and $14.4 million in the year-ago quarter. Most of the $41.3 million of solar system revenue in the fourth quarter was attributable to a single large project in Italy, which is now substantially complete.  Shipments of solar laminates in the quarter were 15.9 megawatts (MW) compared to 11.4 MW in the previous quarter, an increase of 39%, and 33.8 MW in the year-ago quarter, a decrease of 53%.

    For the fourth quarter, the Company reported a net loss of $42.1 million or $0.84 per share, which includes a non-cash impairment charge of $6.0 million, or $0.12 per share. This compares to a net loss of $243.2 million, or $4.88 per share, in the previous quarter, which includes a non-cash impairment charge of $222.8 million or $4.47 per share. The net loss in the fourth fiscal quarter of 2010 was $20.9 million or $0.49 per share.

    Fourth quarter net results were negatively affected by under-absorption of factory overhead costs of $9.5 million, the previously noted non-cash impairment charge of $6.0 million due to the write-down of the Company’s outstanding development loan for certain solar projects in Italy, a $4.1 million charge for raw materials and other commitments, a $2.3 million adjustment to the carrying value of certain inventory, and a restructuring charge of $4.6 million related to employee severance costs from the Company’s previously announced strategic corporate restructuring. The net impact of these items was an increase of the quarter’s net loss by $26.5 million or $0.53 per share.

    As of June 30, 2011, ENER had $140.7 million of cash, cash-equivalents, short-term investments and restricted cash, compared to $172.0 million as of March 31, 2011. The Company’s decrease in cash was due primarily to the cash loss from operations, timing of receipts and disbursements for system projects and capital spending on the technology roadmap.

    For the fiscal year ended June 30, 2011, total consolidated revenues were $232.5 million compared to $254.4 million in the prior fiscal year. Combined solar product and system sales were $220.1 million for fiscal year 2011 compared to $227.3 million in the prior fiscal year, a decline of 3%, driven primarily by lower total shipments of 85.7 MW versus 95.4 MW in the prior year and lower average selling price, offset by an increase in system sales.

    The net loss for fiscal year 2011 was $306.4 million or $6.41 per share compared to a net loss of $457.2 million or $10.75 per share in the year-ago period. Excluding non-cash impairment charges of $228.8 million and $359.2 million, respectively, the net loss for fiscal year 2011 was $77.6 million, or $1.62 per share, compared to $98.0 million, or $2.30 per share, in fiscal year 2010.

    Source:

    http://investor.shareholder.com/ovonics/releasedetail.cfm?ReleaseID=606600

    Financial Strength (22-Sept-2011)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 2.82 0.39 0.54 0.78
    Current Ratio (MRQ) 3.79 0.55 0.78 1.15
    LT Debt to Equity (MRQ) 985.00 41.96 14.38 108.97
    Total Debt to Equity (MRQ) 985.00 47.68 18.89 145.77
    Interest Coverage (TTM) -16.55 1.40 10.00 23.5

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    Analyst Recommendations and Revisions

    1-5 Linear Scale

    Current

    1 Month
    Ago

    2 Month
    Ago

    3 Month
    Ago

    (1) BUY 0 0 0 0
    (2) OUTPERFORM 0 0 0 0
    (3) HOLD 3 4 4 5
    (4) UNDERPERFORM 6 5 5 5
    (5) SELL 2 3 3 2
    No Opinion 0 0 0 0
    Mean Rating 3.91 3.92 3.92 3.75

    Source: http://www.reuters.com/finance/stocks/analyst?symbol=ENER.O

    Consensus Estimates Analysis

    # of Estimates

    Mean

    High

    Low

    1 Year Ago

    SALES (in millions)
    Quarter Ending Sep-11 5 48.93 66.60 42.20 89.69
    Quarter Ending Dec-11 5 57.04 76.50 46.60 93.57
    Year Ending Jun-11 9 196.47 218.50 185.57
    Year Ending Jun-12 9 206.75 296.00 156.18 372.47
    Year Ending Jun-13 5 264.98 314.80 232.42 410.13
    EARNINGS (per share)
    Quarter Ending Sep-11 8 -0.43 -0.26 -0.57 -0.23
    Quarter Ending Dec-11 8 -0.41 -0.23 -0.50 -0.22
    Year Ending Jun-11 10 -3.68 -1.03 -6.23
    Year Ending Jun-12 10 -1.57 -0.77 -3.32 -0.96
    Year Ending Jun-13 6 -0.86 -0.19 -1.81 -0.56

    Technical Analysis

    Source: http://stockcharts.com

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Sept22-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    Broadcom Corp. BRCM 33.60 17.98B 11.35 10.84 2.37 2.16
    Applied Materials Inc. AMAT 10.37 13.66B 7.92 10.37 1.29 1.46
    China Sunergy Co. Ltd. CSUN 1.20 53.46M n/a 17.14 0.08 0.08
    Ascent Solar Technologies Inc. ASTI 0.82 31.98M n/a n/a 5.53 1.46
    Atmel Corp. ATML 9.12 4.25B 11.84 10.25 2.20 2.01
    Semiconductor – Specialized Median       12.58 n/a 2.11 n/a
    Energy Conversion Devices Inc. ENER 1.05 55.93M n/a n/a 0.27 0.21

    Source: Thomson Financial

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