February 3, 2010

St Peters, MO, USA: MEMC Reports 2009 Fourth Quarter Results

MEMC net sales for the fourth quarter were $356.7 million, representing an increase of 15.1% from third quarter 2009 net sales of $310.0 million, and a decrease of 16.2% from fourth quarter 2008 net sales of $425.7 million.

Gross profit in the quarter was $53.0 million, or 14.9% of net sales, compared to $20.5 million, or 6.6% of net sales, in the 2009 third quarter and $193.0 million, or 45.3% of net sales, in the 2008 fourth quarter.

Fourth quarter 2009 operating expenses were $64.0 million or 17.9% of sales, compared to $87.2 million, or 28.1% of sales, in the 2009 third quarter, and $28.2 million, or 6.6% of sales, in the 2008 fourth quarter.

The company reported an operating loss of $11.0 million during the quarter, compared to an operating loss of $66.7 million in the 2009 third quarter and operating income of $164.8 million in the 2008 fourth quarter. MEMC's net loss for the fourth quarter was $7.1 million, or $0.03 per share, compared to a net loss of $64.6 million, or $0.29 per share in the 2009 third quarter and net income of $70.3 million, or $0.31 per share, in the 2008 fourth quarter.

The 2009 results above include transaction expenses of $2.5 million associated with the company's acquisition of SunEdison as well as SunEdison's operational results from November 20, 2009 through December 31, 2009.

"The fourth quarter marked the third sequential quarterly improvement in revenue as we continue to recover from the economic downturn," said Ahmad Chatila, MEMC's Chief Executive Officer. "Pricing pressure has moderated, product volumes continued to increase and our efforts to improve our competitive positioning are working."

On November 20, 2009, MEMC completed the acquisition of SunEdison, a solar energy solutions provider. As a result, for 2009, the company operated in two reportable segments: Materials Business (historical MEMC business) and SunEdison.

Materials Business

Sales for the fourth quarter were $352.9 million, an increase of 13.8% from third quarter 2009 net sales of $310.0 million, and a decrease of 17.1% from fourth quarter 2008 net sales of $425.7 million. The sequential increase in sales was primarily the result of significantly higher wafer volumes for both semiconductor and solar applications.

Gross profit in the quarter was $51.9 million, or 14.7% of net sales, compared to $20.5 million, or 6.6% of net sales, in the 2009 third quarter and $193.0 million, or 45.3% of net sales, in the 2008 fourth quarter. The sequential increase in gross profit was primarily the result of higher volumes and improved operating performance.

Fourth quarter 2009 operating expenses of $52.5 million, or 14.9% of sales, includes $5.4 million of cost associated with the startup of the Ipoh, Malaysia facility and higher sales and customer freight expense relative to Q3 2009. This compared to $87.2 million, or 28.1% of sales, in the 2009 third quarter, which included restructuring and impairment charges of $39.7 million and $4.5 million of cost associated with the startup of the Ipoh facility. The segment reported an operating loss of $0.6 million during the quarter, compared to an operating loss of $66.7 million in the 2009 third quarter and operating income of $164.8 million in the 2008 fourth quarter.

SunEdison Business Operating Results (11/20/2009-12/31/2009)

Net sales for the period from November 20 through December 31 were $3.8 million. Gross profit was $1.1 million, or 28.9% of net sales. Operating expenses for the period were $11.5 million, and operating loss for the period was $10.4 million. During the period, 13 megawatts were installed and interconnected, with the majority of the associated revenue and profits to be recognized in future periods.

Capital Position

During the fourth quarter, the company generated operating cash flow of $19.4 million, compared to $11.8 million in the 2009 third quarter. Capital expenditures for the fourth quarter totaled $101.6 million, including $28.0 million for SunEdison related project construction. Free cash consumed (defined by MEMC as operating cash flow minus capital expenditures, plus net inflows associated with non-recourse SunEdison project financing) was $19.7 million. See the reconciliation table included with the financial statement tables at the end of this press release. MEMC ended the fourth quarter with cash and investment balances of $1,074.6 million. In addition, non-recourse SunEdison long-term debt was $382.9 million, which relates to $334.3 million of solar energy system assets.

Further details about: MEMC