The Auburn Hills-based company said the furloughs include more than 140 employees who last week were given temporary layoffs at United Solar Ovonic plants in Greenville, plus manufacturing employees in Ontario and Mexico, citing high inventory levels.
"As we sell through that inventory, we'll resume production," said Michael Schostak, a company spokesman.
Layoffs will include manufacturing and corporate staff, with less than 100 expected to be in Michigan, Schostak said.
It also has begun conversations with some holders of the $263 million in outstanding notes it has coming due in June 2013 to reorganize or restructure the debt "to assist the company in its restructuring," Schostak said.
Energy Conversion Devices was expected today to report its 2012 first-quarter earnings and host an earnings call for analysts but said in a news release that the call has been postponed.
The company instead has asked for an extension to file its quarterly report with the U.S. Securities and Exchange Commission, Schostak said.
Energy Conversion Devices is expecting revenue of about $22 million in its first quarter, while the company said it had $130.2 million in cash on the books as of Sept. 30.
"These operating results highlight the challenges facing us and the solar industry today," Jay Knoll, ECD's interim president, said in a statement. "With reductions in incentives in our core European markets and a volatile credit market, solar projects are having tremendous difficulty closing. These factors combined with a flood of cheap modules from foreign manufacturers have created an environment where very few projects are getting completed without self-financing and steep discounts. The economics of this environment require us to rethink our approach to the sales process and rationalize our cost structure, both of which are currently under way."
Earlier in the year, the solar company laid off about 300 workers, including 115 in Michigan, amid cutbacks in government solar incentives overseas.
The company posted a net loss of $306.4 million in the 2011 fiscal year ended June 30, including a net loss of $42.1 million in its fiscal 2011 fourth quarter.
Some analysts have said the company could be heading toward bankruptcy.
"Bankruptcy continues to become more and more likely, although it still is possible ECD could make it through the next year," Morningstar Inc. analyst Stephen Simko wrote in a late August note to investors.
Schostak said the company is well positioned with cash and spent about $10.5 million during the last quarter.
"With the debt overhang, it certainly leaves some to question the long-term viability of the enterprise," he said. "My response to that is we've got cash to weather the storm. We've taken action today and over the last six months to reduce cash usage."
Energy Conversion Devices has a viable product in a viable market, Schostak said.
"We're not concerned about going away," he said.
Source: http://www.detnews.com/article/20111109/BIZ/111090371/1001/biz
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