Don Shorling, sent me e-mail the article to post from Oakland Press. Its under business-auto news section,Wednesday, October 1, 2003.
theoaklandpress.com
Business/Auto
ECD, facing loss, seeks more time to file report
By JOSEPH SZCZESNY , Of The Daily Oakland Press 09/30/2003
September 30, 2003
Energy Conversion Devices Inc. has asked for more time to file its annual report with the U.S. Securities Exchange Commission and confirmed that losses for the past fiscal year will exceed $21 million.
The company, which has been experiencing financial difficulties, said Monday that it had filed with the SEC a Form 12b-25, which extends the due date for the filing of ECD's annual report on Form 10-K for 15 calendar days. The company's stock dropped nearly $4.12 per share to $10.93 in trading on the Nasdaq Exchange after the announcement.
Robert Stempel, ECD chairman, said in a telephone interview that he could not add to the cryptic comments included in Monday's statement.
"I really can't say anything more," Stempel said.
ECD is searching for additional financing and hopes to have it in place soon, Stempel said.
"ECD is attempting to obtain additional sources of cash required to sustain its operations and is in the process of a number of negotiations and discussions with third parties to fund its operations, including securing the working capital required through additional debt and/or equity financings," the company's statement said.
The statement also said ECD expects to report a huge drop in revenues for the fiscal year ended June 30. ECD's revenue dropped to approximately $66 million from $91.7 million in the prior year, the company reported.
The sharp decline was due to lower equipment sales to Rare Earth Ovonic in China and reduced funding from ChevronTexaco Corp., the company's statement said.
"Net loss for the year ended June 30, 2003, will be significantly higher than the $20.9 million in the prior year," the statement added.
The statement also said the company's finances have been stretched thin by the need to use cash buy out N.V. Bekaert's share of its fuel cell and photovoltaic business.
"ECD's completion of its annual financial statements and the audit of such consolidated financial statements by its independent auditors, Deloitte & Touche LLP, are being delayed pending the completion and accounting analyses of ECD's purchase accounting for the May 2003 transaction in which ECD acquired from N.V. Bekaert S.A. and its related companies," the statement said.
Last month, ECD had announced plans to trim its work force by 20 percent by eliminating 70 jobs by the end of the year in an effort to protect the company's long-term prospects. The company had 350 employees at the beginning of August.
The cuts are expected to save the company between $19 million and $25 million annually.
ECD, long considered one of Michigan's most innovative companies, also said last month that it was looking for strategic partners.
Stempel said the company also was shifting its operating philosophy to focus on profitability.
Through the years, Stanford R. Ovshinsky, ECD founder and chief executive, has operated the company at a loss but managed to keep bringing in fresh capital by licensing the company's inventions and patents. The unorthodox strategy has worked for years, but Stempel acknowledged the restructuring probably could be read as a sign the company has changed direction and philosophy.
©The Oakland Press 2003
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