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MERRIMACK, N.H., Feb. 24, 2014(GLOBE NEWSWIRE) -- GT Advanced Technologies Inc.(Nasdaq:GTAT) today reported results for the fourth quarter and fiscal year 2013, which ended December 31, 2013.
"Our results for the December quarter were in line with our guidance and the anticipated growth trajectory of our business remains unchanged," said
Tom Gutierrez, president and chief executive officer. "We expect to return to profitability during the second half of 2014.
"Our arrangement to supply sapphire materials to Apple is progressing well and we started to build out the facility in
Arizonaand staff the operation during the quarter," said Gutierrez. "We are pleased to have Apple as a sapphire customer and to be in a position to leverage our proprietary know-how to enable the supply of this versatile material. While our primary focus during the balance of the year is to continue to execute on our commitments in Arizona, our aim is to position GT not only as an exceptional sapphire supplier to Apple but also as an unparalleled world-class supplier of sapphire material and equipment to a variety of customers.
"Although we have significant opportunities in sapphire, the GT story is not only about our emerging sapphire materials business. In fact, our entry into sapphire materials may enable us to expand into other materials segments once we have fully ramped the operation in
Arizona. The many diversification and investment seeds we have planted over the last several years in the LED, power electronics, advanced solar and industrial markets are expected to begin to bear fruit over the next 18 months. We are seeing significant interest in our new products and now expect equipment orders from these initiatives to be received during the latter part of 2014, with meaningful revenue recognition beginning in early 2015.
"During the last year, we worked to ensure that our balance sheet continues to provide us with the strategic and operational flexibility necessary to take advantage of the many growth opportunities that we have identified," concluded Gutierrez.
Fourth Quarter and Full Year 2013 Financial Results
During 2013, the company made the strategic decision to forego ASF equipment sales while building out its new sapphire materials capacity. This decision has had, and will have, a clear negative impact on the company's fourth quarter and full year results for 2013 and near term future results.
Revenue for the fourth quarter came in at
$32.6 millionincluding $2.5 millionin polysilicon, $11.3 millionin photovoltaic (PV), and $18.8 millionin sapphire. This compares to revenue in the third quarter of $40.3 millionand $102.3 millionin the fourth quarter of fiscal 2012. Revenue for the year ended December 31, 2013was $299.0 millioncompared to $733.5 millionfor the year ended December 31, 2012. Summary results for the quarter and year are presented in the table below: Three-Months Ended Full Year Dec 31st,
Revenue $32.6 $40.3 $102.3 $299.0 $733.5 Gross Margin 9.3% 44.1% (40.2%) 31.1% 28.1% GAAP EPS ( $0.33) ( $0.31) ( $1.34) ( $0.71) ( $0.53) Non-GAAP EPS ( $0.26) ( $0.16) ( $0.15) ( $0.35) $0.73
Cash, Backlog and Orders
At the end of the fourth quarter, the balance sheet had cash, cash equivalents and restricted cash of
$593.0 millionand debt of $283.9 million. This compares to $418.1 millionof cash and cash equivalents at the end of the fourth quarter of calendar 2012 which included $297.0 millionof total debt. During the fourth quarter, the company received the first of a series of prepayments under its multi-year sapphire material supply agreement with Apple. Additionally, the company completed a concurrent common stock and convertible debt offering in December 2013that resulted in net proceeds of approximately $290.0 million. The company also paid off an outstanding term loan of $96.0 million.
December 31, 2013, the company's total backlog was $602.2 millioncomprised of equipment orders only. This included $298.7 millionin the polysilicon segment, $11.3 millionin the PV segment and $292.1 millionin the sapphire segment. New orders during the fourth quarter of calendar 2013 were $23.8 million. The company adjusted backlog down by approximately $47.3 millionduring the quarter primarily related to an arrangement with an ASF customer that was modified. All orders for sapphire material have been and will continue to be excluded from backlog going forward.
The company expects that 2014 will be a transformational year, one in which it builds a sapphire materials business while continuing to invest in the new technologies that will drive its equipment business in 2015 and beyond.
The company expects that revenue and profitability will be back end loaded, with its sapphire materials business ramping as the year progresses, and with improving financial performance during the second half of 2014.
On an annualized basis, during 2014, the company expects revenues to range from
$600 millionto $800 million, with approximately 15% of total revenues occurring in the first half of the year. The company expects that its sapphire segment will account for more than 80% of total revenue in 2014. The sapphire segment includes the company's equipment and materials businesses in the LED, industrial and consumer electronics markets.
During the first quarter of 2014, the company expects to generate revenues in the range of
$20 millionto $30 millionwith a non-GAAP loss per share of $0.20to $0.25.
Consolidated gross margins for 2014 are expected to be in the range of 25% to 27%, reflecting lower margin material shipments during the year, inefficiencies related to the ramp up of the sapphire materials business and underutilization of the company's equipment operations.
The company expects that 2014 non-GAAP earnings per share will be in the range of
$0.02to $0.18. This assumes an average outstanding share count of 148 million shares.
The company's cash balance at year end is currently expected to be in the range of
$400 millionto $500 million.
Conference Call, Webcast
Monday, February 24, 2014, at 8:00am ET, the company will host a live conference call with Tom Gutierrez, president and chief executive officer, and Richard Gaynor, chief financial officer, to discuss its fourth quarter and full year 2013 results, general business update and fiscal year 2014 guidance outlook.
The call will be webcast live and can be accessed by logging on to the "Investors" section of
GT Advanced Technologies'website, http://investor.gtat.com/. A slide presentation will accompany the call. The live call can also be accessed by dialing (631) 291-4543. No password is required to access the webcast or call.
A replay of the call will be available for 90-days. To access the webcast replay please go to http://investor.gtat.com/ and select the webcast replay link on the 'Events and Presentations' page. Or, please dial (404) 537-3406. The telephone replay will be available through
March 5, 2014and requires the passcode 44370871.
Investor Financial Summary Document
A comprehensive summary of the company's financial performance can be found on the Investor Relations section of its website on the "Q4 FY13 Earnings Call" webcast page. To access: http://investor.gtat.com.
Technology Day Event
Given the interest level in and importance of its new product developments, the company will be webcasting a New Product and Technology Briefing on
March 14, 2014that will focus exclusively on our new product and technology initiatives. Additional information regarding the webcast will be available later this week at http://investor.gtat.com/.
GT Advanced Technologies Inc. GT Advanced Technologies Inc.is a leading diversified technology company producing advanced materials and innovative crystal growth equipment for the global consumer electronics, power electronics, solar and LED industries. Its technical innovations accelerate the use of advanced materials, enabling a new generation of products across this diversified set of global markets. For additional information about GT Advanced Technologies, please visit www.gtat.com. GT Advanced Technologies Inc. Condensed Consolidated Balance Sheets (in thousands, except per share data) (Unaudited) December 31, December 31, 2013 2012 Assets Current assets: Cash and cash equivalents $ 498,213 $ 418,095 Restricted cash 1,330 -- Accounts receivable, net 12,377 23,829 Inventories 39,087 133,286 Deferred costs 2,977 30,248 Vendor advances 1,341 32,440 Deferred income taxes 22,194 28,226 Refundable income taxes 845 1,516 Prepaid expenses and other current assets 7,003 9,168 Total current assets 585,367 676,808 Property, plant and equipment, net 209,760 77,980 Restricted cash 93,419 -- Intangible assets, net 95,943 90,516 Goodwill 54,279 48,021 Other assets 162,075 111,343 Total assets $ 1,200,843 $ 1,004,668 Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt $ -- $ 7,250 Accounts payable 77,303 44,848 Accrued expenses 39,115 30,928 Contingent consideration 234 4,901 Customer deposits 38,995 111,777 Deferred revenue 19,724 86,098 Accrued income taxes 10,282 21,716 Total current liabilities 185,653 307,518 Long-term debt -- 132,313 Prepayment obligation 172,475 -- Convertible notes 283,914 157,440 Deferred income taxes 33,023 24,459 Customer deposits 55,598 71,340 Deferred revenue 99,672 35,848 Contingent consideration 15,173 5,414 Other non-current liabilities 808 2,323 Accrued income taxes 28,105 25,762 Total liabilities 874,421 762,417 Commitments and contingencies Stockholders' equity: Preferred stock, 10,000 shares authorized, none issued and outstanding -- -- Common stock, $0.01par value; 500,000 shares authorized, 134,463 and 119,293 shares issued and outstanding as of December 31, 2013and December 31, 2012, respectively 1,345 1,193 Additional paid-in capital 353,777 183,565 Accumulated other comprehensive income (loss) 1,259 806 Retained earnings (29,959) 56,687 Total stockholders' equity 326,422 242,251 Total liabilities and stockholders' equity $ 1,200,843 $ 1,004,668 GT Advanced Technologies Inc. Condensed Consolidated Statements of Operations (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, September 28, December 31, December 31, December 31, 2013 2013 2012 2013 2012 Revenue $32,570 $40,291 $102,333 $298,967 $733,536 Cost of revenue 29,531 22,514 143,491 205,920 527,132 Gross profit 3,039 17,777 (41,158) 93,047 206,404 Operating expenses: Research and development 26,967 21,075 22,695 83,006 70,649 Selling and marketing 4,509 3,496 5,458 15,379 15,115 General and administrative 20,460 17,427 13,801 68,967 59,532 Contingent consideration expense (income) (2,116) 4,971 296 (1,119) (8,965) Impairment of goodwill -- -- 57,037 -- 57,037 Restructuring charges -- 4,010 33,441 6,868 33,441 Amortization of intangible assets 2,975 2,976 2,534 11,073 10,165 Total operating expenses 52,795 53,955 135,262 184,174 236,974 (Loss) income from operations (49,756) (36,178) (176,420) (91,127) (30,570) Other income (expense): Interest income 78 122 131 364 181 Interest expense (11,370) (6,456) (5,957) (31,832) (9,355) Other, net 44 62 (34) 117 (1,002) (Loss) income before income taxes (61,004) (42,450) (182,280) (122,478) (40,746) (Benefit) provision for income taxes (19,238) (4,304) (22,871) (35,832) 22,489 Net (loss) income ( $41,766) ( $38,146) ( $159,409) ( $86,646) ( $63,235) Net (loss) income per share: Basic ( $0.33) ( $0.31) ( $1.34) ( $0.71) ( $0.53) Diluted ( $0.33) ( $0.31) ( $1.34) ( $0.71) ( $0.53) Weighted-average number of shares used in per share calculations: Basic 126,049 122,183 119,109 122,481 118,931 Diluted 126,049 122,183 119,109 122,481 118,931
Reconciliation of Non-GAAP Financial Measures
In accordance with the requirements of Regulation G issued by the
Securities and Exchange Commission, we are presenting the most directly comparable GAAP financial measures and reconciling the non-GAAP financial metrics to the comparable GAAP measures. GT Advanced Technologies Inc. Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, September 28, December 31, December 31, December 31, 2013 2013 2012 2013 2012 Non-GAAP Gross Profit and Gross Margin Revenue $32,570 $40,291 $102,333 $298,967 $733,536 Cost of revenue 29,531 22,514 143,491 205,920 527,132 Gross profit 3,039 17,777 (41,158) 93,047 206,404 Non-GAAP adjustments: Write-down of inventory, vendor advances and PO cancellation fees 943 19 71,754 1,499 71,754 Accelerated depreciation for early retirement of fixed assets 2,488 -- 2,520 2,488 2,520 Non-GAAP gross profit $6,470 $17,796 $33,116 $97,034 $280,678 Non-GAAP gross margin 19.9% 44.2% 32.4% 32.5% 38.3% GT Advanced Technologies Inc. Reconciliation of GAAP to non-GAAP results (In thousands, except per share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, September 28, December 31, December 31, December 31, 2013 2013 2012 2013 2012 Non-GAAP Net Income & Earnings per Share Net (loss) income ( $41,766) ( $38,146) ( $159,409) ( $86,647) ( $63,235) Non-GAAP adjustments: Amortization of acquired intangible assets 2,975 2,976 2,534 11,073 10,165 Share-based compensation expense 4,797 4,555 2,084 18,680 15,176 Third party acquisition related expenses 434 371 945 1,893 1,550 Write-down of inventory, vendor advances and PO cancellation fees 943 19 71,754 1,499 71,754 Accelerated depreciation for early retirement of fixed assets 6,794 63 2,520 9,393 2,520 Impairment of goodwill -- -- 57,037 -- 57,037 Restructuring charges -- 4,010 33,441 6,868 33,441 Contingent consideration expense (income) (2,116) 4,971 296 (1,119) (8,965) Non-cash portion of interest expense 8,812 3,352 3,042 19,676 3,799 Income tax effect of non-GAAP adjustments (1) (13,402) (1,539) (32,354) (24,053) (35,349) Non-GAAP net (loss) income ( $32,529) ( $19,368) ( $18,110) ( $42,737) $87,893 Non-GAAP earnings per diluted share ("Non-GAAP EPS") ( $0.26) ( $0.16) ( $0.15) ( $0.35) $0.73 Diluted weighted average shares outstanding 126,049 122,183 119,109 122,481 120,067 (1) The Company utilized the with and without method to determine the income tax effect on non-GAAP adjustments.
Use of Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in
the United States of America(GAAP), GT Advanced Technologiesis providing additional financial metrics that are not prepared in accordance with GAAP (non-GAAP). We believe that the inclusion of these non-GAAP financial measures helps investors to gain a meaningful understanding of our past performance and future prospects, consistent with how management measures and forecasts company performance, especially when comparing such results to previous periods or forecasts. Our management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing our performance to prior periods and to the performance of our competitors. Management also uses these measures in its financial and operational decision-making.
We define "non-GAAP gross profit" as GAAP gross profit excluding the write-down of inventory, vendor advances and PO cancellation fees, and the accelerated depreciation for early retirement of fixed assets. We consider non-GAAP gross profit to be an important indicator of our operational strength and performance of our business because it eliminates the effects of events that are not part of the Company's core operations.
We define "non-GAAP net income" as GAAP net income excluding share-based compensation expense, amortization of acquired intangible assets, acquisition and acquisition related expenses, contingent consideration, write-downs of inventory, vendor advances and PO cancellation fees, restructuring and asset impairment, accelerated depreciation for early retirement of fixed assets, and the non-cash portion of interest expense. We consider non-GAAP net income to be an important indicator of our operational strength and performance of our business because it eliminates the effects of events that are not part of the Company's core operations.
We define "non-GAAP earnings per share on a fully-diluted basis" as our non-GAAP net income divided by our weighted average shares outstanding on a fully-diluted basis.
The forward-looking guidance included in this announcement excludes certain items such as amortization of intangibles and other charges. Because the amount of these items is not fully known to us at this time, we are unable to provide guidance for, or a reconciliation to, the most directly comparable GAAP financial measures. The impact of these excluded items may cause the estimated non-GAAP financial measures to differ materially from the comparable GAAP financial measures.
Some of the information in this press release relates to future expectations, plans and prospects for our business and industry that constitute "forward-looking statements" for the purposes of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to: the anticipated growth trajectory of the Company's business remains unchanged; Company expects to return to profitability during the second half of 2014; the Company is in a position whereby its sapphire technology can enable the development of new applications for sapphire material; The Company's aim is to position the Company not only as an exceptional sapphire supplier to Apple but also as an unparalleled world-class supplier of sapphire material and equipment for a variety of applications; the diversification and investment seeds the Company has planted over the last several years in the LED, power electronics and advanced solar and industrial markets are expected to begin to bear fruit over the next 18 months; the company now expects equipment orders from investments to be received during the latter part of 2014, with meaningful revenue recognition beginning in early 2015; all statements under the caption "Business Outlook;" Company continues to from solar to a diversified, stronger, less cyclical company with multiple revenue streams; the company expects that 2014 will be a transformational year, one in which its sapphire materials business ramps and it continues to invest in the new technologies that will drive its equipment business in 2015 and beyond; the company expects that revenue and profitability will be back end loaded with its sapphire materials business ramping gradually as the year progresses, resulting in improved financial performance during the back half of 2014; the company expects revenues in 2014 to range from
$600Mto $800M, and the percentage expected to be from the sapphire segment; the company expects total revenues in the first quarter of 2014 to be in the range of $20-$30 million;revenues in the first half are expected to account for approximately 15% of total revenues for the 2014; consolidated gross margins for 2014 are expected to be in the range of 25% to 27% and the reasons therefore; capital spending is expected to be approximately $500-$600 million,with operating expenses on a non-GAAP basis of approximately $140-$160 million;Company expects capital spending will be heavily weighted towards the first half of the year; the company's cash balance at year end is currently expected to be in the range of $400to $500 million; non-GAAP EPS for the year is expected to range from $.02to $.18per share, with the end result being primarily dependent on the mix of equipment and materials business; the company expects to receive initial orders for Hyperion, SiC, HVPE and HiCz during the year, revenue recognition will not likely occur until 2015 on the bulk of this business; the company expects to return to profitability during the second half of 2014 with profitability is expected to be heavily weighted to the latter part of the year; Company expects Non-GAAP EPS during the first quarter of 2014 is expected to range from a loss of $.20to $.25. These forward-looking statements are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside the company's control, which could cause actual events to differ materially from those expressed or implied by these statements. These factors may include the possibility that the company is unable to recognize revenue on contracts in its order backlog and may not recognize any benefits from its arrangement with Apple. Although the Company's backlog is based on signed purchase orders or other written contractual commitments in effect as of the end of our fiscal year ended December 31, 2013, we cannot guarantee that our bookings or order backlog or our arrangement with Apple will result in actual revenue in the originally anticipated period or at all, which could reduce our revenue, profitability and liquidity. Other factors that may cause actual events to differ materially from those expressed or implied by our forward-looking statements include the Company's ability to transition its business to being a sapphire material and equipment provider; Apple purchasing sufficient quantities under its arrangements with the Company; the Company complying with the provisions of its arrangements with Apple; the impact of continued decreased demand and/or excess capacity in the markets for the output of our solar (polysilicon and photovoltaic) and sapphire equipment, general economic conditions and the tightening credit markets having an adverse impact on demand for our products; increased trade tensions between the United Statesand China(and other jurisdictions); the possibility that changes in government incentives may reduce demand for solar products, which would, in turn, reduce demand for our polysilicon and photovoltaic equipment, technological changes could render existing products or technologies obsolete, the Company may be unable to protect its intellectual property rights or may be subject to liability for violating intellectual property rights of another party, competition from other manufacturers may increase, exchange rate fluctuations and conditions in the credit markets and economy may reduce demand for the company's products and various other risks as outlined in GT Advanced Technologies Inc.'sfilings with the Securities and Exchange Commission, including the statements under the heading "Risk Factors" in the company's quarterly report on Form 10-Q for the quarter ended September 28, 2013. Statements in this press release should be evaluated in light of these important factors. The statements in this press release represent GT Advanced Technologies Inc.'sexpectations and beliefs as of the date of this press release. GT Advanced Technologies Inc.anticipates that subsequent events and developments may cause these expectations and beliefs to change. GT Advanced Technologies Inc.is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise. GT Advanced Technologies
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