1Q MEMC news:
MEMC Electronic
Materials, Inc. (NYSE: WFR) today announced that it
expects to report a net loss of $29.3 million, or $0.72 per
diluted share on net sales of approximately $235 million for
the first quarter of 1998. The anticipated loss is higher than
analysts' expectations and is primarily attributable to higher
losses from the Company's unconsolidated joint ventures in
Korea and Taiwan and a charge related to a voluntary
separation program. Ongoing weakness in the Asian
markets and foreign currency transaction losses related to
the Korean won negatively impacted the joint ventures'
results.
The Company now anticipates that the current soft market
conditions will continue into the second quarter of 1998 and
that silicon wafer prices will continue to decline. As a result,
the Company expects to report a net loss in the 1998
second quarter similar to that of the first quarter.
In response to these market conditions, MEMC has
implemented a series of interrelated headcount reduction
and cost savings initiatives. Specifically, MEMC has
released temporary and contract employees and initiated a
voluntary separation program for its hourly and salaried
workforce. The cost to implement this program was $8
million in the first quarter of 1998 with an additional charge
to be taken in the 1998 second quarter based upon the level
of employee participation. These actions have resulted thus
far in the reduction of approximately 250 temporary and
contract employees and 400 members of the hourly and
salaried workforce through April 1, 1998.
The Company also initiated one week to ten-day plant
shutdowns for specific sites at different points in time during
the first and second quarters of 1998. Specific cost
reduction measures have also been instituted at each plant
site, ranging from an additional workforce reduction at one
to a wage decrease at another. These measures are in
addition to aggressive spending cuts that have been made
for all departments.
"We are taking what we believe to be the necessary steps to
better align our costs with the current lower level of demand
and price weakness in the silicon wafer industry,"
commented Ludger H. Viefhues, Chief Executive Officer.
"These actions are in addition to our continuing efforts to
reduce processing costs through the implementation of best
practices worldwide and the development of new
manufacturing technologies."
These initiatives follow MEMC reorganizing its operating
structure from a world area or regional basis to a functional
basis. The new operating structure was enacted to more
clearly focus the Company's resources and to create
synergies within MEMC, better enabling the Company to
contribute to its customers' success.
Negotiations between MEMC and Tokuyama Corporation
and Marubeni Corporation regarding the formation of a joint
venture to operate the granular polysilicon business are
continuing. The Company is uncertain when these will be
concluded.
MEMC will report final first quarter results on Thursday,
April 23, 1998 at 4:00 p.m. Eastern Daylight Time with a
conference call to follow on Friday, April 24, 1998 at 9:00
a.m. Eastern Daylight Time.
Perhaps this is the bad news that will turn this stock around!!! HEHEHEHEHEHEHEHEHEHEHEHE.........DOH!
Tom |
