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MEMC Reports Second Quarter Results.

Article Excerpt
ST. PETERS, Mo., July 25 /PRNewswire-FirstCall/ -- MEMC Electronic Materials, Inc. today reported financial results for the quarter ended June 30, 2007.



Summary of second quarter results: -- Net sales of $472.7 million -- Gross margin of $245.6 million (52.0% of net sales) -- Operating income of $207.3 million (43.9% of net sales) -- Cash and short-term investment balances of $995.7 million -- Share repurchase program implemented -- MEMC added to S&P 500 Index

The company reported second quarter net sales of $472.7 million, which represents an increase of 7.3% from first quarter 2007 net sales of $440.4 million and an increase of 27.6% over second quarter 2006 net sales of $370.5 million.

Gross margin in the quarter was $245.6 million, or 52.0% of net sales, compared to $222.5 million, or 50.5% of sales, in the 2007 first quarter and $160.4 million, or 43.3% of sales, in the 2006 second quarter. This represents sequential growth of 10.4% in gross margin dollars and 150 basis points as a percentage of net sales over the first quarter level and 53.1% growth in gross margin dollars and 870 basis points as a percentage of net sales over the 2006 second quarter.

The company achieved operating income during the quarter of $207.3 million, or 43.9% of net sales. This compares to $187.7 million, or 42.6% of net sales, for the 2007 first quarter and $127.3 million, or 34.4% of net sales, for the 2006 second quarter. The 10.4% sequential improvement in operating income and 130 basis point improvement as a percentage of net sales was the result of a higher gross margin, with operating expenses staying approximately flat as a percentage of net sales. Operating expenses were $38.3 million, or 8.1% of sales, compared to $34.8 million, or 7.9% of sales, in the 2007 first quarter, and $33.1 million, or 8.9% of sales, in the 2006 second quarter. The sequential increase in operating expense was primarily the result of higher legal, benefits and stock compensation expenses. Non- operating income in the quarter includes a non-cash benefit of $7.9 million, reflecting the required quarterly valuation of the Suntech warrants.

Using an estimated effective cash tax rate...