SunEdison Semiconductor reported financial results for the fourth quarter and year ended December 31, 2015.
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Net sales for the 2015 fourth quarter were $181.7 million, down 3.9% sequentially compared to $189.0 million in the prior quarter. The sequential decline was primarily a result of lower small diameter wafer volume and generally weaker prices.
Net sales for the full year 2015 were $777.5 million, down 7.5% from $840.1 million in the prior year.
The year-over-year decline was primarily due to wafer price decreases, partly offset by volume increases.
Gross profit for the 2015 fourth quarter was $15.1 million, or 8.3% of net sales, compared to $21.3 million, or 11.3% of net sales in the prior quarter.
Gross profit declined sequentially primarily due to lower prices and volume, only partially offset by manufacturing cost reductions. Third quarter 2015 gross profit included a $2.0 million non-cash pension settlement charge.
Gross profit for the full year 2015 was $77.1 million, down $1.9 million compared to $79.0 in million the prior year.
Full year 2015 gross margin increased to 9.9% from 9.4% the prior year despite 7.5% lower net sales due to a combination of foreign exchange benefits, lower raw material cost, higher volume and manufacturing cost reductions.
Fourth quarter 2015 operating loss was $15.4 million, compared to an operating loss of $68.8 million in the 2015 third quarter. Fourth quarter operating loss included a $3.1 million restructuring charge related to the Company’s decisions to close its facility in Ipoh, Malaysia and to cease crystal production in its St. Peters, MO facility, and a $2.7 million asset impairment charge.
Third quarter 2015 operating loss included non-cash charges of $56.7 million related to asset impairments from the Ipoh facility closure, $3.9 million in other restructuring activities and $4.8 million related to a non-cash pension settlement charge.
Full year 2015 operating loss was $101.9 million, compared to an operating loss of $81.8 million in the prior year.
Operating loss for the full year 2015 included impairment charges of $60.7 million and a restructuring charge of $6.8 million primarily related to the Ipoh closure. Full year 2014 operating loss included long-lived impairment charges of $59.4 million, primarily related to the sale of the Company’s facility in Merano, Italy.
Full year 2014 operating loss also included restructuring reversals of $22.9 million primarily related to a favorable settlement of a polysilicon supply agreement, severance reversals related to the Merano facility and other net favorable revisions to estimated restructuring liabilities.
Fourth quarter 2015 operating cash flow was $21.8 million compared to $8.4 million in the prior quarter. The increase was primarily influenced by changes in working capital.
Fourth quarter 2015 cash used in investing activities of $26.1 million included $23.5 million of capital spending.
Full year 2015 capital spending was $106.3 million to further the advancement of the Company’s next generation products. The Company ended the year with cash and cash equivalents of $83.5 million, down $7.3 million compared to the prior quarter, and down only $4.7 million year-over-year.
On December 29, 2015, the Company amended its $210.0 million senior secured term facility and $50.0 million senior secured revolving facility. As a result, the Company recognized additional interest expense of $3.0 million during the 2015 fourth quarter.
The terms of the refinancing included a lower interest rate, which the Company expects will reduce annual interest expense by approximately $1.0 million. In addition, the new loan facility enhances the Company’s capital structure flexibility, provides better currency matching and improves covenant coverage.
Fourth quarter 2015 Adjusted EBITDA was $23.7 million, down only $0.4 million compared to $24.1 million the prior quarter despite $7.3 million lower net sales. Adjusted EBITDA margin for the 2015 fourth quarter grew to 13.0%, from 12.8% the prior quarter.
Third quarter and fourth quarter 2015 Adjusted EBITDA included foreign exchange losses of $1.7 million and $0.7 million, respectively, associated with the re-measurement of intra-company balances and derivative foreign currency forward contracts, and excluded $4.8 million and $0.6 million, respectively, in non-cash pension settlement charges. Adjusted EBITDA is a non-GAAP financial measure.
Attached is a reconciliation of Adjusted EBITDA to GAAP financial measures and a description of Adjusted EBITDA.
Full year 2015 Adjusted EBITDA was $103.6 million, or 13.3% of net sales, up from $92.3 million, or 11.0% of net sales the prior year.
Full year 2015 Adjusted EBITDA included a foreign exchange gain of $7.2 million associated with the re-measurement of intra-company balances and derivative foreign currency forward contracts and excluded $5.4 million in non-cash pension settlement charges.
Full year 2014 Adjusted EBITDA included a $3.4 million foreign exchange gains associated with the re-measurement of intra-company balances and excluded a $3.1 million non-cash pension settlement charge. ■