(Source: PRNewswire)ST. PETERS, Mo., Sept. 8 /PRNewswire-FirstCall/ -- MEMC Electronic Materials, Inc. (NYSE: WFR) today provided an update on guidance for the current quarter in light of recent events, and also announced that it will cease production of silicon crystal ingots and wafers at facilities in Sherman, Texas and St. Peters, Missouri. These closings will occur in stages during 2010 and early 2011, as production shifts to other locations.

Business Update. The company disclosed that it experienced a disruption in production at its polysilicon facility in Pasadena, Texas due to an equipment failure on August 7, 2009, requiring a large portion of the facility to be shut-down. Initial reports indicated that the company's silane and polysilicon inventory levels would cover the lost output caused by this disruption until normal production levels were achieved. Although the failed equipment has been replaced, subsequent rebuild and restart difficulties have delayed the resumption of normal operations at this facility. The company expects to be back to normal production levels before the end of September. The lost production and related costs are expected to negatively affect the company's revenue and margins in the third quarter of 2009.

The company now anticipates revenue for the third quarter of 2009 to be approximately $285-$315 million, with gross margins expected to be in the mid to high single digits. This compares to the company's second quarter of 2009 revenue of $282.9 with a gross margin of 12.3% and the previously announced third quarter targets of $300-$350 million in revenue with gross margin being up slightly from the second quarter level.

Plant Consolidations. The company also announced the planned closings of the Sherman, Texas plant and portions of the St. Peters, Missouri plant. Chief Executive Officer Ahmad Chatila stated, "We must continue to aggressively drive all unnecessary costs out of the business during these extraordinary times. We will be shifting this high-volume production closer to a number of our customers, who are located in lower cost regions. This will allow us to reduce manufacturing costs and to serve our customers effectively, with the right cost-competitive capacity - in the right places - to meet their needs."

"We recognize that this decision will adversely affect many of our employees at these locations, and consequently these steps were not taken lightly or planned for any sooner than absolutely necessary to advance our strategic goals," continued Chatila. "We are announcing our plans now to give affected employees a significant transition period, and we will be putting severance and assistance programs in place for those employees who will not continue with MEMC," Chatila stated.

The actions at the two sites are expected to affect approximately 540 employees in the U.S.