MEMC REPORTS NET SALES OF $188.3 MILLION IN 2003 FIRST QUARTER St. Peters, MO, April 28, 2003 - MEMC Electronic Materials, Inc. (NYSE: WFR) today reported financial results for the first quarter ended March 31, 2003. Summary of the first quarter results: - Net sales of $188.3 million
- Gross margin of 28.8% of net sales
- Operating income of $32.7 million (17.4% of net sales)
- Net income of $19.7 million, basic EPS of $0.10, diluted EPS of $0.09
Commenting on the quarterly results, Nabeel Gareeb, MEMC's Chief Executive Officer, said: "We are proud of our results this quarter. We believe we maintained our strong market position, while paying down debt and continuing to invest in our future. As anticipated, we experienced pricing pressure this quarter as a result of pricing contracts with customers that were effective January 1, 2003. We were able to offset some of these effects with manufacturing cost savings. These achievements are even more remarkable when you consider the challenging market, macroeconomic and geopolitical conditions." Net sales were $188.3 million for the 2003 first quarter compared to $186.0 million for the 2002 fourth quarter. Net sales increased 38% compared to $136.7 million in the 2002 first quarter. The year-over-year increase in net sales was a result of significantly higher product volumes across all geographic areas and all product diameters. The Company reported gross margin in the 2003 first quarter of $54.2 million, or 29% of net sales, compared to $54.1 million, or 29% of net sales, in the 2002 fourth quarter. The Company's year-over-year gross margin improved $32.5 million from $21.7 million in the 2002 first quarter. Beginning with the new fiscal year, the Company made the amortization of spare parts consistent with the Company's capitalization policy, which had a $1.8 million favorable impact on the 2003 first quarter. The Company reported operating income of $32.7 million, or 17% of net sales, in the 2003 first quarter, compared to operating income of $32.1 million, or 17% of net sales, for the 2002 fourth quarter. The Company reported an operating loss of $4.8 million in the 2002 first quarter. The year-over-year improvement in operating results is a result of significantly increased productivity, as cost of goods sold increased only 17% compared to a 38% increase in net sales. The Company continues to focus on improvements in yield a nd further cost reductions. The Company reported net income allocable to common stockholders of $19.7 million, or $0.10 per basic share and $0.09 per diluted share, for the 2003 first quarter compared to $35.7 million, or $0.18 per basic share and $0.17 per diluted share, in the 2002 fourth quarter. Non-operating income in the 2002 fourth quarter included a $7.5 million one-time gain on an option on MEMC Pasadena, Inc., which expired October 31, 2002. In addition, currency losses in the 2003 first quarter totaled $2.6 million, compared to currency gains of $4.5 million in the 2002 fourth quarter. The currency loss in the 2003 first quarter relates primarily to the translation of Won-denominated net assets at the Company's Korean subsidiary. The 2003 first quarter results benefited from improved joint venture earnings and minority interest, offset by increased income tax provisions. Compared to the 2002 first quarter, the Company's net income allocable to common stockholders improved $37.8 million, from an $18.1 million loss, or $(0. 26) per basic and diluted share. The Company achieved operating cash flow of $24.5 million for the 2003 first quarter, compared to $42.6 million in the 2002 fourth quarter and $(6.6) million in the 2002 first quarter. Normal first quarter payments of bonuses and certain taxes accounted for approximately $15.0 million of the decrease in operating cash flow in the 2003 first quarter compared to the 2002 fourth quarter. Capital expenditures during the 2003 first quarter totaled $15.8 million, compared to $9.6 million in the 2002 fourth quarter and $2.7 million in the 2002 first quarter. Net repayments of debt in the 2003 first quarter totaled $11.7 million, compared to $1.4 million in the 2002 fourth quarter and $16.2 million in the 2002 first quarter. The Company's cash and cash equivalents and short-term investments totaled $160.8 million at the end of 2003 first quarter, compared to $165.6 million at the end of 2002 fourth quarter and $82.1 million at the end of the 2002 first quarter. Outlook "Based on current industry market conditions, we expect our net sales in the 2003 second quarter to increase in the low single digit percentage range from the 2003 first quarter levels. We also expect sequential improvement in our gross margin and net income as we continue to aggressively pursue our cost reduction plans," continued Gareeb. Conference Call MEMC will host a conference call today, April 28, 2003, at 5:30 p.m. EDT to discuss the Company's first quarter results and related business matters. A live webcast will be available on the Company's Web site at http://www.memc.com/. Please go to the Web site at least fifteen minutes prior to the call to register, download and install any necessary audio software. A replay of the conference call will be available from 8:30 p.m. EDT on April 28, until 11:59 p.m. EDT on May 1, 2003. To access the replay, please dial 706-645-9291, and use passcode "9715489", at any time during that period. About MEMC MEMC is the world's largest public company solely devoted to the supply of wafers to semiconductor device manufacturers. MEMC has been a pioneer in the design and development of wafer technologies over the past four decades. With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC enables the next generation of high performance semiconductor devices. Certain matters discussed in this news release are forward-looking statements, including the expectation that our net sales in the 2003 second quarter will increase in the low single digit percentage range from the 2003 first quarter levels, our anticipated sequential improvement in our gross margin and net income as we continue to aggressively pursue our cost reduction plans, and the expectation that we will continue to focus on improvements in yield and further cost reductions. Such statements 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 market demand for wafers, customer acceptance of our new products, utilization of manufacturing capacity, our ability to reduce manufacturing and operating costs, inventory levels of our customers, demand for semiconductors generally, changes in the pricing environment, general economic conditions, actions by competitors, customers, and suppliers, the impact of competitive products and technologies, technological changes, currency exchange rates, and other risks described in the Company's filings with the Securities and Exchange Commission, including the Company's 2002 Form 10-K, as amended. These forward-looking statements represent the Company's judgment as of the date of this release. The Company disclaims, however, any intent or obligation to update these forward-looking statements. -tables to follow- |