More dismal news for United Solar

By Ryan Jeltema • Last Updated 2:37 pm on Monday, November 14, 2011

AUBURN HILLS — United Solar Ovonic’s parent company delayed its quarterly results conference call planned for today as it seeks further cost cutting and a debt restructuring plan to stay alive.
Energy Conversion Devices Inc. (ECD) was planning to reveal its financial performance from the July 1-Sept. 30 fiscal quarter on Wednesday. Company officials called that off late Tuesday in a press release that revealed more troubling news for the struggling solar panel manufacturer with a pair of plants in Greenville, including 500 more job cuts.
Revenue for the quarter plummeted to $22 million — only a third of the $65 million in revenue during the same quarter last year — amid steep price cuts and overproduction of solar panels worldwide. ECD also burned through another $10.5 million in cash reserves during the quarter.
“These operating results highlight the challenges facing us and the solar industry today,” said Interim President Jay Knoll.
He said a steep drop in sales to European countries, which once comprised nearly all of United Solar’s market, the tight credit market and cheap foreign solar panels flooding the market are making the sales and installation processes difficult. The company is offering self-financing and deep discounts to stay afloat.
“The economics of this environment require us to rethink our approach to the sales process and rationalize our cost structure, both of which are under way,” Knoll said.
About 500 more employees worldwide will lose their jobs by the end of this year in a continued restructuring to bring costs in line with sharply lower sales. Those cuts are in addition to 500 layoffs announced last May and completed in June.
The restructuring in June saved about $20 million in annual costs.
Also, 400 employees, including 144 in Greenville, are on furlough for the rest of this year while United Solar idles its manufacturing plants in Michigan, Mexico and Ontario. The plants will reopen when a backlog of inventory is sold and market conditions improve, the news release said.
That could happen in as little as 60 days.
ECD also is working with creditors to restructure debt that is coming due in 2013.
But the news isn’t all bad.
United Solar is retrofitting one of the production lines in Greenville with patented nano-crystalline technology, which is expected to improve the sunlight to electricity conversion process by 50 percent. That offers a better product that is cheaper to produce.
The revamped line is expected to begin preproduction testing in the middle of next year.
ECD is working to sell its Ovonic Battery Company division, which licenses nickel metal hydride battery technology, and pour the proceeds into United Solar.
The company also is gaining traction in new markets. Forty percent of sales went outside Europe and North America during the quarter, a ten-fold increase over the 4 percent at this time last year.
Shipments went to places such as Brazil, China, the Caribbean, India and South Korea.

Follow Us
Rate this Article
VN:R_U [1.9.10_1130]
Rating: 0 (from 0 votes)