Enovix Corporation (“Enovix”) (Nasdaq: ENVX), the leader in the
design and manufacture of next generation 3D Silicon™ Lithium-ion
batteries, today announced that T.J. Rodgers has been appointed
Executive Chairman, effective immediately. Rodgers holds 21.4
million shares of Enovix and was a buyer ($3.5 million) in May when
the stock dropped into the $8.85 range.
Rodgers said, “Our
board has by design several successful
operating executives, who are committed to spend whatever time is
required at Enovix to ensure the Company’s operational
success. Our team has and will continue to put in
significant extra effort until that task is completed, which it is
not. In addition to me, the Enovix board contains Manny Hernandez,
formerly the CFO of both Cypress and SunPower; Dan McCranie,
formerly the EVP of Cypress Sales and Marketing, and Chairman of
both Freescale Semiconductor and ON Semiconductor; and Greg
Reichow, former Cypress and SunPower manufacturing executive who
built and ran multiple SunPower and Tesla manufacturing plants. We
are silicon and Moore’s Law operations people and comprehend the
sea-change opportunity Enovix and its technology offer.”
Rodgers continued, “Investors might well ask ‘With
all that expert help, why did ENVX stock just drop 42%, to $10.74
in the last week, after an unexpectedly poor quarterly report?’ The
answer is that we lowered our 2023 revenue projection in a
confusing manner that erroneously implied that there were bigger
problems with our technology. Our revenue projections were lowered
because our Fab-1 manufacturing ramp was delayed in our first year
of production. This is an unacceptable execution problem which I
will discuss.
“However, as I look back on the decisions the
company made, I would make the same calls again. For example, when
Harrold Rust called me and said that Enovix Fab-1 would be delayed
by at least three months due to the COVID-related shipping malaise
unless we spent $1.4 million to charter the world’s largest
airplane, a Ukrainian AN-124, to fly over 55 tons of Fab-1
equipment to Silicon Valley in one shot, I said, ‘Brilliant, do
it.’ Our decision violated our sacred
Equipment Procurement
Review (EPR)
specification by waiving a key milestone called
Factory Acceptance Test (FAT), which required that a team of Enovix
engineers fly to multiple Chinese factories, and personally observe
each piece of Fab-1 equipment running at full speed before we
approved shipment. But those factories stopped receiving guests due
to COVID, and we decided to waive the FAT milestone and catch up
later.
“The catch up would have occurred at the Site
Acceptance Test (SAT) milestone, which required their engineers to
come to Enovix to demonstrate full functionality, but the equipment
vendors were not allowed to travel and we installed our equipment
with our employees and local contractors. We are still paying for
the months we gained and then gave back due to equipment problems.
In my new position, I will have the time to create better strategic
decisions. I cannot promise that we will not be surprised
technically, but I can promise there will be fewer unforced
execution errors.”
Rodgers continued, “My appointment in no way
implies that we intend to micromanage the Company. The board’s
objective has always been to guide the company to become a
successful public company ‒ not micromanage it. I plan to initiate
and directly manage some key upstream strategic business decisions
that are new to the young management team. My first order of
business will be to address three problems concerning
shareholders:
Problem 1: The
lack of clear and transparent investor communications. I
have worked with the Enovix team for ten years. It has always been
honest. Yet, we must improve the clarity of our communications.
I am going to be
present and comment during quarterly reports to
shareholders. Then, before leaving this job, I will
install a known-effective business process to efficiently prepare
high-quality quarterly reports and conference calls. Within a few
weeks, I will bring investors up to date with a special
presentation.
Problem 2:
The delay and projected underperformance of
Fab-1. We have poorly communicated on the status of Fab-1.
I have heard from many investors that the delay and projected
underperformance of Fab-1 must be the result of some catastrophic
technology problem. For the record: Fab-1 is going to work
and ship a lot of batteries to our customers ‒ period. I
will personally be in all Fab-1 reviews, because Fab-1 is not only
critical to the Company, but also to our customers, some of whom
are designing products right now that could not exist without
Enovix battery performance.
Problem 3:
The delay of the Gen2 autoline, the Enovix “copy
exact” engine for economic scaling. An astute investor
tracked me down on my car phone just before the Enovix board
meeting last Friday. His question was, ‘What’s holding up the Gen2
line?’ My answer was, ‘T.J. Rodgers.’
The management team at
Enovix is laser-focused on quickly placing the rest of the Gen2
purchase orders, but I have demanded detailed proof that the team
is rigorously following the EPR process before I allow those POs to
go to the board (that’s the “Executive” part of my new title). I
believe this intervention will put
Gen2 online
sooner at a higher level of performance.”
Rodgers concluded, “We have $349 million of your
dollars left and that money will produce world-record
batteries in Fab-1 and create
the first Gen2
line.
“By the way, the next battery shipped from Fab-1
will be serial number 4,163 (with zero returns), and I am proud of
that.”
About EnovixEnovix is the leader
in advanced silicon-anode lithium-ion battery development and
production. The company's proprietary 3D cell architecture
increases energy density and maintains high cycle life. Enovix is
building an advanced silicon-anode lithium-ion battery production
facility in the U.S. for volume production. The company's initial
goal is to provide designers of category-leading mobile devices
with a high-energy battery so they can create more innovative and
effective portable products. Enovix is also developing its 3D cell
technology and production process for the electric vehicle and
energy storage markets to help enable widespread utilization of
renewable energy. For more information, go to www.enovix.com.
Forward Looking StatementsThis
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
about us and our industry that involve substantial risks and
uncertainties. Forward-looking statements generally relate to
future events or our future financial or operating performance. In
some cases, you can identify forward-looking statements because
they contain words such as “believe”, “will”, “may”, “estimate”,
“continue”, “anticipate”, “intend”, “should”, “plan”, “expect”,
“predict”, “could”, “potentially", “target”, “project”, or the
negative of these terms or similar expressions. Forward-looking
statements in this press release include, but are not limited to,
the successful implementation of business processes, the Company’s
ability to successfully manage and execute strategic business
decisions, the Company’s ability to address shareholder concerns,
the timeline for the launch of the Gen2 autoline, the Company’s
ability to produce high density batteries and the expansion of
Enovix’ manufacturing footprint to meet expected volume
requirements. Actual results could differ materially from these
forward-looking statements as a result of certain risks and
uncertainties. For additional information on these risks and
uncertainties and other potential factors that could affect our
business and financial results or cause actual results to differ
from the results predicted, please refer to our filings with the
Securities and Exchange Commission (the “SEC”), including in the
“Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” sections of our most
recently filed annual periodic reports on Form 10-K and quarterly
report on Form 10-Q and other documents that we have filed, or that
we will file, with the SEC. Any forward-looking statements made by
us in this press release speak only as of the date on which they
are made and subsequent events may cause these expectations to
change. We disclaim any obligations to update or alter these
forward-looking statements in the future, whether as a result of
new information, future events or otherwise, except as required by
law.
For investor inquiries, please
contact:
Enovix CorporationCharles AndersonPhone: +1 (612)
229-9729Email: canderson@enovix.com
The Blueshirt GroupGary Dvorchak, CFAPhone: (323)
240-5796Email: gary@blueshirtgroup.com
For media inquiries, please
contact:
Enovix CorporationKristin AtkinsPhone: +1 (650)
815-6934Email: katkins@enovix.com
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