August 7, 2014 - SunEdison Semiconductor Limited today reported financial results for the second quarter ended June 30, 2014.
Highlights:
- Higher sales and lower costs drove sequential growth in profitability
- Gross profit increased 145% sequentially to $20.4 million
- IPO and related financing transactions successfully closed
Second Quarter 2014 Results Review
In the second quarter of 2014, the Company reported strong sequential growth in profitability driven by higher sales and lower costs. Net sales for the second quarter of 2014 were $214.9 million, up 4.3% from first quarter 2014 as a result of higher volume, improved selling prices, and better product mix. Compared to the prior year, sales were down 11.9% on lower volumes and pricing. Gross profit was $20.4 million, or 9.5% of net sales, compared to $8.3 million, or 4.0% of net sales, for the 2014 first quarter and $31.4 million, or 12.9% of net sales, for the 2013 second quarter.
"I am pleased with our performance in the second quarter," said Shaker Sadasivam, SunEdison Semiconductor's President and Chief Executive Officer. "Demand grew and our average selling price increased sequentially despite the competitive market environment. Additionally, lower costs and improved plant utilization contributed to higher gross profit compared to the prior quarter. Our focus over the next several quarters will be on driving profitable growth through the capture of attractive revenue opportunities and relentless cost management."
Adjusted EBITDA was $20.1 million, up 34.0% compared to first quarter 2014 adjusted EBITDA of $15.0 million and down 21.2% compared to 2013 second quarter adjusted EBITDA of $25.5 million. Please see the reconciliation and a description of adjusted EBITDA in the attached financial tables.
Operating profit was $1.3 million, compared to an operating loss of $16.9 million for the 2014 first quarter and an operating loss of $4.2 million for the 2013 second quarter. Second quarter 2014 operating expenses of $19.1 million, or 8.9% of sales, included $10.8 million of net favorable restructuring related reversals.
During the 2014 second quarter, the Company reported operating cash use of $125.2 million which was primarily driven by IPO related items and cash restructuring. The Company ended the quarter with cash and cash equivalents of $115.4 million. Capital expenditures totaled $22.3 million during the quarter.
Initial Public Offering and Related Financing Transactions
On May 28, 2014, the Company closed its initial public offering, selling a total of 8,280,000 ordinary shares at a public offering price of $13.00 per share. The 8,280,000 included all of the underwriters' overallotment option of 1,080,000 shares.
Concurrent with the IPO, Samsung Fine Chemicals Co., Ltd. purchased $93.6 million of the Company's ordinary shares in a separate private placement at $13.00 per share, resulting in the issuance of an additional 7,200,000 ordinary shares. In connection with the IPO, Samsung Electronics, Ltd. transferred to us its remaining 20% interest in MKC as consideration for the issuance of ordinary shares of $31.5 million.
On May 27, 2014, the Company entered into a credit agreement which provides for a senior secured term loan facility of $210.0 million with a term of five years, and a senior secured revolving credit facility of up to $50.0 million with a three-year term. As of June 30, 2014, no amounts were drawn and no letters of credit were issued under the revolving facility.
