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 sold |
167.3 |
|
|
166.6 |
|
|
182.2 |
|
| Gross
profit |
15.0 |
|
|
15.1 |
|
|
17.2 |
|
| Operating expenses: |
|
|
|
|
|
| Marketing
and administration |
19.7 |
|
|
18.3 |
|
|
20.5 |
|
| Research and
development |
6.6 |
|
|
6.4 |
|
|
8.1 |
|
|
Restructuring charges |
1.5 |
|
|
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 |
|
| SUNEDISON
SEMICONDUCTOR LIMITED AND SUBSIDIARIES |
| UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS |
| (In
millions) |
| |
| |
March 31, 2016 |
|
December 31, 2015 |
|
Assets |
|
|
|
| Current assets: |
|
|
|
| Cash and
cash equivalents |
$ |
79.7 |
|
|
$ |
83.5 |
|
| Accounts
receivable, net |
92.7 |
|
|
85.8 |
|
|
Inventories |
111.5 |
|
|
109.3 |
|
| Prepaid and
other current assets |
22.9 |
|
|
31.2 |
|
| Total current assets |
306.8 |
|
|
309.8 |
|
| Property, plant, and
equipment, net |
548.3 |
|
|
530.8 |
|
| Investments |
0.3 |
|
|
121.9 |
|
| Other assets |
102.7 |
|
|
86.5 |
|
| Total assets |
$ |
958.1 |
|
|
$ |
1,049.0 |
|
| |
|
|
|
| Liabilities and
Shareholders' Equity |
|
|
|
| Current liabilities: |
|
|
|
| Current
portion, long-term debt |
$ |
11.7 |
|
|
$ |
6.7 |
|
| Short-term
borrowings |
8.2 |
|
|
6.6 |
|
| Accounts
payable |
107.3 |
|
|
116.5 |
|
| Deposit for
investment distribution |
— |
|
|
35.0 |
|
| Accrued
liabilities |
44.7 |
|
|
46.4 |
|
| Accrued
wages and salaries |
24.4 |
|
|
21.1 |
|
|
Restructuring liabilities |
9.5 |
|
|
9.1 |
|
| Total current liabilities |
205.8 |
|
|
241.4 |
|
| Long-term debt, less
current portion |
191.9 |
|
|
191.9 |
|
| Pension and
post-employment liabilities |
51.9 |
|
|
51.9 |
|
| Restructuring
liabilities |
3.6 |
|
|
3.5 |
|
| Refundable customer
deposits |
34.2 |
|
|
— |
|
| Other liabilities |
23.7 |
|
|
22.2 |
|
| Total liabilities |
511.1 |
|
|
510.9 |
|
| |
|
|
|
| Shareholders' equity: |
|
|
|
| Ordinary
shares |
961.1 |
|
|
957.2 |
|
| Accumulated
deficit |
(332.5 |
) |
|
(215.4 |
) |
| Accumulated
other comprehensive loss |
(182.8 |
) |
|
(204.9 |
) |
| Total SunEdison Semiconductor
Limited shareholders' equity |
445.8 |
|
|
536.9 |
|
| Noncontrolling
interests |
1.2 |
|
|
1.2 |
|
| Total shareholders' equity |
447.0 |
|
|
538.1 |
|
| Total liabilities and shareholders'
equity |
$ |
958.1 |
|
|
$ |
1,049.0 |
|
| SUNEDISON
SEMICONDUCTOR LIMITED AND SUBSIDIARIES |
| UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In
millions) |
| |
| |
Three Months Ended |
| |
March 31, 2016 |
|
December 31, 2015 |
|
March 31, 2015 |
| Cash flows from operating activities: |
|
|
|
|
|
| Net loss |
$ |
(117.1 |
) |
|
$ |
(31.1 |
) |
|
$ |
(9.3 |
) |
| Adjustments to reconcile net loss
to net cash provided by operating activities: |
|
|
|
|
|
| Depreciation and amortization |
26.5 |
|
|
29.6 |
|
|
29.7 |
|
| Loss on partial sale of SMP
investment |
6.1 |
|
|
— |
|
|
— |
|
| Long-lived asset impairment
charges |
— |
|
|
2.7 |
|
|
0.1 |
|
| Stock-based compensation |
3.9 |
|
|
4.1 |
|
|
3.6 |
|
| Provision for deferred taxes |
0.4 |
|
|
4.7 |
|
|
3.5 |
|
| Equity in loss (income) of equity
method investments |
86.2 |
|
|
(0.7 |
) |
|
0.3 |
|
| Other |
1.5 |
|
|
(2.2 |
) |
|
(0.5 |
) |
| Changes in assets and
liabilities: |
|
|
|
|
|
| Accounts receivable |
(8.1 |
) |
|
14.6 |
|
|
(3.9 |
) |
| Inventories |
0.5 |
|
|
(6.7 |
) |
|
5.7 |
|
| Accounts receivable, affiliate |
— |
|
|
— |
|
|
(11.1 |
) |
| Accounts payable, affiliate |
— |
|
|
— |
|
|
11.9 |
|
| Prepaid and other current
assets |
7.2 |
|
|
(0.1 |
) |
|
(0.4 |
) |
| Accounts payable and accrued
liabilities |
(5.7 |
) |
|
5.0 |
|
|
7.8 |
|
| Income taxes payable |
3.6 |
|
|
(3.0 |
) |
|
3.1 |
|
| Pension and post-employment
liabilities |
(0.3 |
) |
|
1.2 |
|
|
(0.1 |
) |
| Restructuring liabilities |
0.2 |
|
|
0.8 |
|
|
(0.6 |
) |
| Other |
6.1 |
|
|
2.9 |
|
|
(5.2 |
) |
| Net cash provided by operating
activities |
11.0 |
|
|
21.8 |
|
|
34.6 |
|
| Cash flows from investing activities: |
|
|
|
|
|
| Capital expenditures |
(41.0 |
) |
|
(23.5 |
) |
|
(28.8 |
) |
| Disbursements made for notes
receivable |
— |
|
|
— |
|
|
(9.1 |
) |
| Other |
2.5 |
|
|
(2.6 |
) |
|
— |
|
| Net cash used in investing
activities |
(38.5 |
) |
|
(26.1 |
) |
|
(37.9 |
) |
| Cash flows from financing activities: |
|
|
|
|
|
| Principal payments on long-term
debt |
(0.4 |
) |
|
(40.4 |
) |
|
(0.5 |
) |
| Proceeds from long-term debt |
4.2 |
|
|
38.5 |
|
|
— |
|
| Change in ordinary shares |
— |
|
|
(0.1 |
) |
|
— |
|
| Net proceeds (payments) on
short-term borrowings |
1.6 |
|
|
(0.1 |
) |
|
7.6 |
|
| Deferred financing costs and
original issuance discount |
— |
|
|
(0.4 |
) |
|
— |
|
| Advanced payments |
17.7 |
|
|
— |
|
|
— |
|
| Other |
— |
|
|
— |
|
|
0.1 |
|
| Net cash provided by (used in)
financing activities |
23.1 |
|
|
(2.5 |
) |
|
7.2 |
|
| Effect of exchange rate changes on cash and cash
equivalents |
0.6 |
|
|
(0.5 |
) |
|
(1.5 |
) |
| Net (decrease) increase in cash and
cash equivalents |
(3.8 |
) |
|
(7.3 |
) |
|
2.4 |
|
| Cash and cash equivalents at beginning of
period |
83.5 |
|
|
90.8 |
|
|
88.2 |
|
| Cash and cash equivalents at end of period |
$ |
79.7 |
|
|
$ |
83.5 |
|
|
$ |
90.6 |
|
| SUNEDISON
SEMICONDUCTOR LIMITED AND SUBSIDIARIES |
| UNAUDITED
SUPPLEMENTAL INFORMATION |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURE |
| (In
millions) |
| |
| ADJUSTED EBITDA CALCULATION
[*] |
| |
Three Months Ended |
| |
March 31,
2016 |
|
December 31,
2015 |
|
March 31, 2015 |
| Net loss |
$ |
(117.1 |
) |
|
$ |
(31.1 |
) |
|
$ |
(9.3 |
) |
| Interest, net |
3.9 |
|
|
7.4 |
|
|
3.4 |
|
| Income tax expense |
7.4 |
|
|
9.9 |
|
|
3.3 |
|
| Depreciation and amortization |
25.9 |
|
|
27.3 |
|
|
29.0 |
|
| Restructuring charges and other
non-recurring items (1) (2) |
3.8 |
|
|
3.5 |
|
|
1.2 |
|
| Loss on partial sale of SMP
investment |
6.1 |
|
|
— |
|
|
— |
|
| Long-lived asset impairment
charges |
— |
|
|
2.7 |
|
|
0.1 |
|
| Pension settlement charge (3) |
— |
|
|
0.6 |
|
|
— |
|
| Stock compensation expense |
3.9 |
|
|
4.1 |
|
|
3.6 |
|
| Equity in loss (income) of equity
method investments (4) |
86.2 |
|
|
(0.7 |
) |
|
0.3 |
|
| Adjusted EBITDA [*] |
$ |
20.1 |
|
|
$ |
23.7 |
|
|
$ |
31.6 |
|
(1) For the three months ended March 31, 2016 and December
31, 2015, we recognized approximately $0.2 million and $0.4
million, respectively, of securities transaction tax related to the
dispositions of approximately 30% and 21%, respectively, investment
interest in SMP, Ltd. ("SMP") to our subsidiary. This is a
non-recurring expense that is excluded from Adjusted EBITDA as we
do not consider this to be useful in assessing our on-going
operating performance.
(2) For the three months ended March 31, 2016, we reserved
approximately $2.1 million in net receivables from SunEdison, Inc.,
our former parent, due to their filing for Chapter 11 bankruptcy
protection on April 21, 2016. This is excluded from Adjusted EBITDA
as we do not consider this to be useful in assessing our on-going
operating performance.
(3) For the three months ended December 31, 2015, we recognized
approximately $0.6 million in interim lump-sum pension settlement
charges related to our U.S. pension plan. Pension lump-sum
settlement charges is a non-cash expense that is excluded from
Adjusted EBITDA as we do not consider this to be useful in
assessing our on-going operating performance.
(4) For the three months ended March 31, 2016, we recognized
$86.2 million equity in loss of equity method investments, net of
tax, primarily due to an $86.9 million other-than-temporary
impairment charge related to SMP. These charges are non-cash
expenses that are excluded from Adjusted EBITDA as we do not
consider this to be useful in assessing our on-going operating
performance.
[*] Adjusted EBITDA is a non-GAAP
financial measure. This measurement should not be viewed as an
alternative to GAAP measures of performance. The presentation of
Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items.
We define Adjusted EBITDA as earnings before net interest
expense; income tax expense (benefit); depreciation and
amortization; restructuring charges (reversals); non-recurring
items; loss on sale of property, plant, and equipment; long-lived
asset impairment charges; pension settlement charges; stock
compensation expense; and equity in loss of equity method
investments. All of the omitted items are either (i) non-cash items
or (ii) items that we do not consider in assessing our on-going
operating performance. Because it omits non-cash items, we feel
that Adjusted EBITDA is less susceptible to variances in actual
performance resulting from depreciation, amortization and other
non-cash charges and more reflective of other factors that affect
our operating performance. Because it omits the other items, we
believe Adjusted EBITDA is also more reflective of our on-going
operating performance. We believe Adjusted EBITDA is useful to
investors in evaluating our operating performance
because:
- securities analysts and other interested parties use such
calculations as a measure of financial performance and debt service
capabilities, and
- it is used by our management for internal planning purposes,
including aspects of our operating budget and capital
expenditures.
Adjusted EBITDA has limitations as an analytical tool, and it
should not be considered in isolation or as a substitute for
analysis of our results as reported under GAAP. Some of these
limitations include:
- it does not reflect our cash expenditures or future
requirements for capital expenditures or contractual
commitments,
- it does not reflect changes in, or cash requirements for,
working capital,
- it does not reflect interest expense or the cash requirements
necessary to service interest or principal payments on our
outstanding debt,
- it does not reflect payments made or future requirements for
income taxes,
- it adjusts for restructuring charges (reversals), non-recurring
items, loss on sale of property, plant, and equipment, long-lived
asset impairments, and pension settlement charges which are factors
that we do not consider indicative of future performance,
- it adjusts for non-cash stock compensation expense and equity
in loss of equity method investments to more clearly reflect
comparable period-over-period cash operating performance,
- although it reflects adjustments for factors that we do not
consider indicative of future performance, we may, in the future,
incur expenses similar to the adjustments reflected in our
calculation of Adjusted EBITDA, and
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future and Adjusted EBITDA does not reflect cash
requirements for such replacements.
Investors are encouraged to evaluate each adjustment and the
reasons we consider it appropriate for supplemental analysis.
Investor & Media Contact
Chris Chaney
Director, Investor Relations & Corporate Communications
SunEdison Semiconductor Limited
cchaney@sunedisonsemi.com
+1 636 474 5226
SUNEDISON SEMICONDUCTOR LTD (NASDAQ:SEMI)
Historical Stock Chart
From Oct 2024 to Nov 2024
SUNEDISON SEMICONDUCTOR LTD (NASDAQ:SEMI)
Historical Stock Chart
From Nov 2023 to Nov 2024
