3Q Earnings:
MEMC Reports 9% Sequential Quarterly Increase in Net Sales
Achieves Positive Gross Margin
ST. PETERS, Mo.--(BUSINESS WIRE)--Nov. 1, 1999--MEMC Electronic Materials, Inc. (NYSE: WFR - news) today released financial results for the third quarter ended September 30, 1999. MEMC reported that net sales for the third quarter increased 9% to $182.8 million from the 1999 second quarter net sales of $168.0 million.
''MEMC's product volumes continued to improve in the third quarter of 1999 compared to the 1999 second quarter, with higher volumes experienced in all geographic areas, led by significantly higher volumes in Europe and Asia Pacific,'' commented Klaus von Horde, MEMC Chief Executive Officer. ''As anticipated, MEMC achieved a positive gross margin this quarter. This marks the first time MEMC has posted a positive gross margin since the 1998 first quarter.
''It appears that we have now reached a period of price stabilization in the market, and we are cautiously optimistic that this market stabilization will continue. For some of our products, we are now seeing evidence of price increases and can see over the next few quarters the opportunity for price increases in the smaller diameters where the market is relatively sold out.''
For the 1999 third quarter, the Company reported a net loss of $33.7 million, or $0.48 per share, on approximately 69.5 million weighted average shares outstanding. This compares to a net loss in the 1999 second quarter of $39.3 million, or $0.58 per share on approximately 67.3 million weighted average shares outstanding. Second and third quarter 1999 weighted average shares reflect the issuance of 13.6 million shares of common stock on April 16, 1999 in connection with the Company's rights offering.
MEMC experienced in the third quarter a high single digit percentage increase in product volume over the 1999 second quarter. In particular, 200mm volumes increased during the third quarter. Advanced large diameter and epitaxial products as a percent of total volume remained unchanged compared to the 1999 second quarter. Average selling prices were stable as compared to the 1999 second quarter.
In the third quarter of 1999, gross margin was 2.7%, compared to negative 1.2% in the 1999 second quarter. The improved gross margin is primarily attributable to higher product volumes, as well as continuing realization of benefits from the manufacturing cost reduction strategies initiated in 1998.
The Company's effective tax rate was 31% for the 1999 third quarter.
Equity in loss of joint ventures was $2.6 million in the third quarter of 1999, compared to $3.9 million in the 1999 second quarter. The improvement in results of the joint ventures is due primarily to higher product volumes. Both of the Asian joint ventures produced positive operating profit and positive operating cash flow in the 1999 third quarter.
MEMC is a leading global producer of polysilicon and silicon wafers. The silicon wafer is the fundamental building block of semiconductors, which, in turn, are found in virtually all electronics applications, including computers, telecommunications equipment, automobiles, consumer electronics products, industrial automation and control systems, and analytical and defense systems. Headquartered in St. Peters, MO, MEMC operates manufacturing facilities directly or through joint ventures in Italy, Japan, Malaysia, South Korea, Taiwan, and the United States.
|
