First quarter highlights: - Revenue increases to $438 million - Solar Energy (SunEdison) revenue of $60.7 million - GAAP net loss of $9.6 million

MEMC Electronic Materials, Inc. today reported financial results for the quarter ended March 31, 2010.

Net sales for the 2010 first quarter were $437.7 million, representing an increase of 23% from fourth quarter 2009 net sales of $356.7 million, and an increase of 105% from first quarter 2009 net sales of $214.0 million.  First quarter 2010 results include $60.7 million from the SunEdison business that was acquired in November 2009.  Excluding SunEdison, net sales were up 7% sequentially and 76% year-over-year.

Gross profit in the quarter was $59.3 million, or 13.5% of net sales, compared to $53.0 million, or 14.9% of net sales, in the 2009 fourth quarter and $19.7 million, or 9.2% of net sales, in the 2009 first quarter.

The company reported an operating loss of $15.3 million for the quarter, compared to an operating loss of $11.0 million in the 2009 fourth quarter and an operating loss of $26.4 million in the 2009 first quarter.

MEMC's net loss for the 2010 first quarter was $9.6 million, or $0.04 per share, compared to a net loss of $7.1 million, or $0.03 per share in the 2009 fourth quarter and net income of $2.0 million, or $0.01 per share, in the 2009 first quarter. Results in the 2010 first quarter include a non-cash $5.3 million loss, or $0.02 per share, associated with the valuation adjustment of the Suntech warrants.

"Improving end markets, successful efforts to recapture customer share, and the addition of SunEdison to our portfolio have together driven significant sales growth for the fourth sequential quarter since the severe cyclical downturn," said Ahmad Chatila, MEMC's Chief Executive Officer.  "The efforts and investments undertaken to rebuild and reposition our company are beginning to deliver results and we believe will become more evident as the year progresses."

Segment Operating Results

Semiconductor Materials Operating Results

Semiconductor Materials sales for the 2010 first quarter were $219.3 million, an increase of 5.6% from fourth quarter 2009 net sales of $207.7 million, and an increase of 273.6% from first quarter 2009 net sales of $58.7 million.  The sequential increase in sales was the result of higher wafer volumes and modestly higher wafer prices. The year-over-year increase is attributable to significantly higher wafer volume partially offset by lower prices.

Segment operating loss narrowed to $7.9 million in the 2010 first quarter from $9.6 million in the fourth quarter of 2009 and from $73.4 million in the first quarter of 2009. The sequential improvement in segment operating loss was primarily the result of higher productivity. The year-over-year improvement is attributable to increased volume, fixed cost absorption, and productivity improvements, partially offset by lower pricing.

Solar Materials Operating Results

Solar Materials sales for the 2010 first quarter were $157.7 million, an increase of 8.6% from fourth quarter 2009 net sales of $145.2 million, and an increase of 1.5% from first quarter 2009 net sales of $155.3 million.  Both the sequential and year-over-year increases were the result of higher wafer volumes, partially offset by lower wafer prices.

Segment operating profit decreased to $12.2 million in the 2010 first quarter from $32.4 million in the fourth quarter of 2009 and from $67.8 million in the first quarter of 2009. The sequential decrease in segment operating profit was the result of lower wafer pricing and higher wafering costs.  The year-over-year decrease is attributable to lower wafer pricing, lower polysilicon sales, and higher wafering costs.

Solar Energy (SunEdison) Operating Results

SunEdison sales for the first quarter were $60.7 million and operating profit was $4.7 million. Because SunEdison was acquired on November 20, 2009, historical SunEdison results are not reflected in our consolidated financial results, and therefore comparisons to prior periods are not meaningful.  During the quarter, SunEdison successfully interconnected 10.9 MW of solar power projects. These projects included 6.7 MW of international projects that were sold to third parties and 4.2 MW of domestic projects that were funded with non-recourse financing.

Corporate/Other

Corporate/other cost was $24.3 million in the 2010 first quarter, compared to $27.6 million in the fourth quarter of 2009 and $20.8 million in the first quarter of 2009.  The sequential decrease was the result of higher costs in the fourth quarter related to professional services for the SunEdison acquisition.

The year over year increase was a result of higher costs related to professional services and general corporate overhead to support the business units.

Capital Position

During the 2010 first quarter, the company utilized cash in operations of $110.1 million, compared to operating cash generated of $19.4 million in the fourth quarter of 2009 and operating cash consumed of $14.6 million in the first quarter of 2009.  The sequential increase in cash consumed is a result of higher working capital needs to support increased Semiconductor Materials and Solar Materials sales and an increase in SunEdison solar plant development currently carried in inventory for direct sales in 2010.

Capital expenditures in our Semiconductor Materials and Solar Materials segments were $46.2 million in the quarter, and in SunEdison were $44.9 million in the quarter for the construction of solar projects currently classified as owned projects and carried as fixed assets.

Free cash consumed (defined by MEMC as operating cash flow minus capital expenditures, plus net inflows associated with non-recourse SunEdison project financing) was $132 million.  See the reconciliation table included with the financial statement tables at the end of this press release.

MEMC ended the first quarter with cash and investment balances of $923.8 million ($477.9 million in cash and cash equivalents, $64.6 million in restricted cash, and $381.3 million in short and long term investments).  In addition, SunEdison's non-recourse project debt and capital leases to support solar energy systems was $413.7 million.

Outlook

After considering the first quarter results the company still believes that its full year guidance for revenue, EPS, and positive free cash flow are appropriate, however, its current outlook does suggest that full year revenue may exceed the high end of the previously guided range.

Conference Call

MEMC will host a conference call today, April 29 at 5:30 p.m. ET 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 www.memc.com.

A replay of the conference call will be available from 7:30 p.m. ET on April 29 until 11:59 p.m. ET on May 6.  To access the replay, please dial (320) 365-3844 at any time during that period, using passcode 154411. A replay will also be available until 11:59 p.m. ET on May 6 on the company's web site at www.memc.com.

About MEMC

MEMC is a global leader in the manufacture and sale of wafers and related intermediate products to the semiconductor and solar industries.  With the recent acquisition of SunEdison, MEMC is also a developer of solar power projects and North America's largest solar energy services provider.

MEMC has been a pioneer in the design and development of silicon wafer technologies for 50 years.  With R&D and manufacturing facilities in the U.S., Europe and Asia, MEMC enables the next generation of high performance semiconductor devices and solar cells.

MEMC's common stock is listed on the New York Stock Exchange under the symbol "WFR" and is included in the S&P 500 Index.  For more information about MEMC, please visit www.memc.com.