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MEMC may restate 1997 financial results
ST. PETERS, Mo., Jan 26 (Reuters) - MEMC Electronic Materials Inc. said Tuesday it may be
required to restate its 1997 financial statements to show additional equity in income from its joint
ventures of about $6 million, which would reduce its reported overall consolidated net loss of $6.7
million to about break-even.
As part of its normal review process, MEMC said the U.S. Securities and Exchange Commission is
reviewing certain legal and accounting issues used by MEMC's joint ventures in Korea and Taiwan.
MEMC said it believes that the joint ventures' accounting for currency was appropriate and the
company is working with the SEC to resolve the issues. However, there can be no assurance that the
MEMC will prevail in its discussions.
As a result, MEMC said it may restate 1997 results.
MEMC also reported a 1998 fourth quarter loss of $65.1 million, or $1.61 per share before
restructuring and severance costs of $5.3 million, or $0.13 per share. This compares with a net loss of
$3.5 million or $0.08 per share in the 1997 period.
MEMC's 1998 fourth quarter sales fell to $153.8 million from $258.6 million in the year ago quarter.
As expected, MEMC said its sales continued to decline in the fourth quarter of 1998 as the Japanese
market remained weak. It also experienced decreased volumes in the European region, while volumes
in the United States were flat in the 1998 fourth quarter as compared to the 1998 third quarter.
"MEMC is aggressively continuing its cost-cutting and plant rationalization strategies," said Chief
Executive Officer Ludger Viefhues, in a news release.
"Looking forward, we expect to see some sequential improvement in product volumes in the first
quarter of 1999, especially in the U.S. and Europe, as well as at our unconsolidated joint ventures in
Korea and Taiwan," he said.
Silicon wafer prices have continued to decline, especially for 8-inch wafers as excess capacity still
affects the industry, he said. However, MEMC believes it will see some reduction in losses in the first
quarter of 1999 as a result of the restructuring and cost cutting actions taken.
Equity in loss of joint ventures was $10.7 million in the fourth quarter of 1998, compared with income
of $12.7 million in the year- ago period. The loss in the 1998 fourth quarter included foreign currency
losses on New Taiwanese dollar currency exposure at Taisil, the company's unconsolidated
Taiwanese joint venture, and on Korean won exposure at PHC, the company's unconsolidated
Korean joint venture, totaling $2.9 million.
MEMC is the second largest producer of silicon wafers in the world. The silicon wafer is the
fundamental building block of semiconductors, which, are found in virtually all computers,
telecommunications equipment, automobiles, and consumer electronics product |
