SunEdison Semiconductor Reports First Quarter 2016 Results

ST. PETERS, Mo, May 09, 2016 (GLOBE NEWSWIRE) -- SunEdison Semiconductor Limited (NASDAQ:SEMI) ("SunEdison Semiconductor" or the “Company”) today reported financial results for the first quarter ended March 31, 2016.

First Quarter 2016 Summary: 

  • Revenue grew modestly on stronger demand for large-diameter wafers
  • Manufacturing cost reductions and favorable mix helped to offset continued price erosion
  • Received $34.2 million customer deposit

Results Review

Net sales for the 2016 first quarter were $182.3 million, up 0.3% sequentially compared to $181.7 million in the prior quarter.  The sequential increase was primarily driven by higher unit volume, partially offset by weaker pricing.  Gross profit for the 2016 first quarter was $15.0 million, or 8.2% of net sales, compared to $15.1 million, or 8.3% of net sales in the prior quarter. 

“We started off the new year well, growing our unit volume and we continue to focus on our longer term goals of increasing both profit margins and EBITDA,” said Shaker Sadasivam, President and CEO.  “Leading-edge design wins have continued to strengthen our market position and we are encouraged by continued improvements in our execution.  Although there is no update regarding our review of strategic alternatives at this time, we remain committed to creating value for our customers, our shareholders and our business partners.”

First quarter 2016 operating loss was $12.8 million, compared to an operating loss of $15.4 million in the 2015 fourth quarter.  First quarter 2016 operating loss included a $1.5 million charge related to previously announced restructuring activities.  Fourth quarter 2015 operating loss included a $3.1 million charge related to previously announced restructuring activities and a $2.7 million asset impairment charge. 

In May, SMP Ltd., filed an application for rehabilitation under Korean law, which is similar to a reorganization under U.S. bankruptcy law, due to liquidity issues. The uncertainties resulting from this filing and the Chapter 11 filing of SunEdison, Inc., SMP’s largest investor and customer, triggered an interim impairment analysis of our investment in SMP, resulting in the recording of an $86.9 million other-than-temporary asset impairment charge, for the three months ended March 31, 2016.   This impairment loss is recorded in the equity in loss of equity method investments in our consolidated statement of operations.  As a result of this impairment, our equity investment in SMP recorded on our balance sheet as of March 31, 2016 is now zero.  As we have stated previously, we expect to procure electronic grade polysilicon from multiple third party sources in the future.

First quarter 2016 operating cash flow was $11.0 million compared to $21.8 million in the prior quarter.  The decrease was primarily influenced by changes in working capital in the 2015 fourth quarter.  First quarter 2016 cash flow from financing activities of $23.1 million included $17.7 million of a $34.2 million advanced payment related to a customer deposit.  The remaining $16.5 million of the customer deposit was classified as a long-term asset.  First quarter 2016 cash used in investing activities of $38.5 million included $41.0 million of capital spending, of which a portion was funded by the customer deposit.  The Company ended the quarter with cash and cash equivalents of $79.7 million, down $3.8 million from the prior quarter.

First quarter 2016 Adjusted EBITDA was $20.1 million, or 11.0% of sales, down $3.6 million compared to $23.7 million, or 13.0% of sales for the prior quarter.  First quarter 2016 and fourth quarter 2015 Adjusted EBITDA included foreign exchange losses of $1.0 million and $0.7 million, respectively, associated with the re-measurement of intra-company balances and derivative foreign currency forward contracts.  Please see the reconciliation of Adjusted EBITDA to GAAP financial measures and a description of Adjusted EBITDA in the attached financial tables.

Conference Call

SunEdison Semiconductor will host a conference call tomorrow, May 10, 2016, at 9:00 a.m. ET to discuss the Company’s first quarter 2016 results and related business matters.  A live webcast will be available on the Company’s web site at www.sunedisonsemi.com.  Interested investors should go to the Company's web site at least fifteen minutes prior to the call to register and download any necessary audio software.

A replay of the conference call will be available from 10:30 a.m. ET on May 10, 2016, until 11:59 p.m. ET on May 24, 2016.  To access the replay, please dial (320) 365-3844 at any time during that period, using passcode 392139.  An audio replay will also be available on the Company’s web site.

About SunEdison Semiconductor

SunEdison Semiconductor is a global leader in the manufacture and sale of silicon wafers to the semiconductor industry.  For over 55 years, SunEdison Semiconductor has been a pioneer in the design and development of silicon wafer technologies. With R&D and manufacturing facilities in the U.S., Europe, and Asia, SunEdison Semiconductor enables the next generation of high performance semiconductor devices. SunEdison Semiconductor’s common stock is listed on the NASDAQ OMX Global Select Market under the symbol "SEMI."  For more information about SunEdison Semiconductor, please visit www.sunedisonsemi.com.


SUNEDISON SEMICONDUCTOR LIMITED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
 
  Three Months Ended
  March 31,
2016
  December
31, 2015
  March 31,
2015
Net sales to non-affiliates$182.3  $181.7  $199.0 
Net sales to affiliates    0.4 
Cost of goods sold167.3  166.6  182.2 
Gross profit15.0  15.1  17.2 
Operating expenses:     
Marketing and administration19.7  18.3  20.5 
Research and development6.6  6.4  8.1 
Restructuring charges1.5   3.1     1.2  
Long-lived asset impairment charges     2.7     0.1  
Operating loss (12.8 )   (15.4 )   (12.7 )
Non-operating expenses (income):          
Interest expense 4.0     7.5     3.5  
Interest income (0.1 )   (0.1 )   (0.1 )
Other, net 6.8     (0.9 )   (10.4 )
Total non-operating expenses (income) 10.7     6.5     (7.0 )
Loss before income tax expense (23.5 )   (21.9 )   (5.7 )
Income tax expense 7.4     9.9     3.3  
Loss before equity in (loss) income of equity method investments (30.9 )   (31.8 )   (9.0 )
Equity in (loss) income of equity method investments, net of tax (86.2 )   0.7     (0.3 )
Net loss $ (117.1 )   $ (31.1 )   $ (9.3 )
Basic loss per share $ (2.79 )   $ (0.74 )   $ (0.22 )
Diluted loss per share $ (2.79 )   $ (0.74 )   $ (0.22 )
Weighted-average shares used in computing basic loss per share 42.0     42.0     41.5  
Weighted-average shares used in computing diluted loss per share 42.0     42.0     41.5  



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