Off the Wire:
Tuesday September 10 4:53 PM EDT
MEMC comments on third quarter outlook
ST. PETERS, Mo.--(BUSINESS WIRE)--Sept. 10, 1996--MEMC Electronic Materials, Inc. indicated today
that its financial results for the third quarter ending September 30, 1996 will be adversely affected by the
current difficult business conditions in the semiconductor industry.
The Company stated that third quarter net sales are expected to be sequentially down from the second quarter
1996 net sales and more in line with first quarter 1996 net sales of $289.8 million. In comparison, in the 1995
third quarter net sales were $251.2 million. Gross margin for the period is expected to approximate the gross
margin of $62.7 million reported in the third quarter of 1995. However, as a percent of sales, the gross margin
is likely to be below the 25% reported in last year's third quarter. This is a result of a lower rate of capacity
utilization and start-up costs. The Company noted that net earnings in the 1996 third quarter will also reflect a
significant decrease in the level of contribution from equity in income of joint ventures in comparison to the
1995 third quarter. This decrease is attributable to lower sales at PHC, the Korean joint venture, and start-up
costs at Taisil, the Taiwanese joint venture.
Ludger H. Viefhues, Chief Executive Officer, commented, "The inventory correction that is taking place in the
worldwide semiconductor industry has begun to impact silicon wafer manufacturers. Although our market
ranking and technological leadership put us in a strong competitive position within the industry, we could not
maintain our previous growth momentum during these difficult market conditions."
Dr. Robert Sandfort, President and Chief Operating Officer, continued, "As a result of this environment, our
visibility with respect to the level of future customer orders and requirements is continuing to contract, and it is
difficult to predict how long these conditions will prevail. At this point in time, anticipated sales for the 1996
fourth quarter are significantly below our earlier expectations."
"We continue to be optimistic for the longer term prospects of the industry. However, in response to the current
rapidly changing environment, we are taking actions to improve efficiencies and reduce costs throughout the
Company. We have begun eliminating temporary employees and overtime throughout our manufacturing
facilities worldwide."
MEMC Electronic Materials will report final results for the three months ended September 30, 1996 on or
about October 24, 1996.
Except for the historical information contained herein, the matters discussed in this news release are
forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as
overall economic conditions, demand for semiconductors generally, demand for the Company's silicon wafers,
technological and product developments risks, competitors' actions and other risks described in the Company's
filings with the Securities and Exchange Commission, including the reports on Form 8-K dated September 10,
1996 and 10-K for the year ended December 31, 1995. These forward-looking statements represent the
Company's judgement as of the date of this release. The Company disclaims, however, any intent or obligation
to update these forward-looking statements.
Based in St. Peters, MO, MEMC is the world's second-largest producer of polished and epitaxial silicon
wafers. The silicon wafer is the fundamental building block of semiconductors, which, in turn, are found in
every type of microelectronics application, including computer systems, telecommunications equipment,
automobiles, consumer electronics products, industrial automation and control systems, and analytical and
defense systems.
The Company and its affiliates operate manufacturing facilities throughout the world and employ approximately
9,000 people. In the United States, MEMC operates manufacturing plants in St. Peters, MO; Santa Clara, CA;
Spartanburg, SC; and Pasadena and Sherman, TX. The Company and its affiliates also operate plants in Italy,
Japan, Malaysia, the Peoples Republic of China, South Korea and Taiwan. MEMC is traded on the New York
Stock Exchange under the symbol "WFR." |
