MOSES LAKE — A delay in shipping polysilicon materials led to a delay in production, which led to a drop in earnings for REC Silicon in the third quarter of the year. The company announced a few days after releasing its third quarter earnings report that some of the obstacles delaying delivery were cleared. 

The company cut back some operations at its Moses Lake facility as a result of the decreased earnings, according to its quarterly earnings report.  

The company reported sales of $33.8 million in the third quarter, compared to $37.7 million in the second quarter. The loss for the third quarter was $42.7 million compared to $38.2 million in the second quarter. That’s the loss before other income is calculated.  

As a result, REC’s available cash decreased. The company had $32.6 million in cash at the end of September, compared with $37.6 million at the end of June.  

“The decrease in cash was primarily the result of cash outflows from operating activities at the Moses Lake facility due to a delay in polysilicon sales,” the earnings statement said.  

Silicon gas sales dropped in the third quarter, according to the quarterly earnings report. Silicon gas sales were 515 metric tons compared to 654 metric tons in the second quarter. Total polysilicon sales in the third quarter were 169 metric tons.  

Some of the material used in the process at the Moses Lake facility requires testing and there were delays in that process, according to a REC press release. 

“Qualification (testing of) material of ultra-high purity polysilicon was delayed with unexpected procedures by Customs in the country where the qualification testing will be performed. The qualification material cleared Customs and is now available for the third party to test,” the press release said. 

The delay affected the company’s production schedule, which is still in doubt. 

“Although the testing is expected to commence soon, the exact schedule is contingent upon the third party’s own production schedule,” the REC release said. “The company continues to work with the customer to determine the new schedule and where possible expedite the qualification test. The company does not expect to receive the results of the qualification test for a minimum of four weeks.”  

Depending on the test schedule, the results would be available in mid-December at the earliest. 

“The qualification process must be completed successfully before the company is able to make the first shipment of product with a modified specification,” the release said. 

REC Silicon sales dropped in the third quarter of the year when compared to the second quarter, according to the earnings report. The delay in obtaining materials affected third-quarter sales. Some of the company’s products are used in the manufacture of solar panels, and that market sector has experienced declining sales. 

In addition, REC owns a facility in Butte, Montana that manufactures polysilicon gas. That facility was closed for scheduled maintenance during part of the third quarter. 

Chief Executive Officer Kurt Levens said in the earnings report that the company is taking steps to cut expenses. 

“(The testing delay) together with the scheduled regular maintenance shutdown at the Butte facility and reduced silicon gas sales, primarily due to the challenging PV market, further decreased our financial results for the quarter. To address the current and anticipated environment, we are focusing on increasing gases sale opportunities, and the Moses Lake facility has been turned down to save on operating costs while we focus on improving our quality,” Levins said.