Exhibit 99:
- ----------
CONTACT: Sam Duggan
Director, Investor Relations
(314) 279-5920
Michele Katz/Connie Bienfait/
Ian Hirsch
Morgen-Walke Associates
Press: Lee Foley/Elizabeth Pieroni
(212) 850-5600
MEMC COMMENTS ON PRELIMINARY FIRST QUARTER RESULTS
Headcount reductions, spending cuts and process improvements
will better align costs with current level of demand
St. Peters, MO, April 14, 1998 -- 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.
The matters discussed in this news release regarding net sales and net losses
for the first quarter of 1998, anticipated market conditions and wafer prices
for the 1998 second quarter, expected net loss for the second quarter of 1998
and the charge from the voluntary separation program in the 1998 second quarter
are forward-looking statements. 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 such
factors as demand for the Company's silicon wafers, utilization of manufacturing
capacity, demand for semiconductors generally, changes in the pricing
environment, general economic conditions in Asia and specifically Korea,
competitors' actions and other risks described in the Company's filings with the
Securities and Exchange Commission, including the report on Form 10-K for the
year ended December 31, 1997. 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.
MEMC is the leading worldwide producer of silicon wafers outside of Japan and is
the only non-Japanese silicon wafer manufacturer with manufacturing and research
facilities in Japan. 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. Headquartered in St. Peters, MO, MEMC operates manufacturing facilities
directly or through joint ventures in China, Italy, Japan, Malaysia, South
Korea, Taiwan and the United States.
News releases and other information about MEMC are available on the Internet via
the World Wide Web at www.memc.com.
# # #