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GT Advanced Technologies Inc. Announces Results for Quarter and Year Ending December 31, 2012



  GT Advanced Technologies Inc. Announces Results for Quarter and Year Ending
  December 31, 2012

Business Wire

NASHUA, N.H. -- February 27, 2013

GT Advanced Technologies Inc. (NASDAQ: GTAT) today reported results for the
fourth quarter and calendar year 2012, which ended December 31, 2012.

“Our Q4 results came in largely as expected as we continue to face challenging
conditions in the solar and LED markets,” said Tom Gutierrez, president and
chief executive officer. “We have taken steps to resize the business and
manage our balance sheet and believe 2013 will be a year during which we
continue to strengthen our foundation and further diversify the business.

“We are positioned to continue making R&D investments in new technologies to
enhance our product offerings and market position. Coupled with our leadership
in currently served markets, we believe our participation in growth areas such
as cover and touch screen sapphire applications, power electronics and next
generation solar will provide a path to resumed growth and cash generation in
the years ahead.”

Summary of Fourth Quarter Actions and Related Charges

In the fourth quarter of calendar 2012, the company took actions to better
align the business with current and expected market conditions, as described
in its December 18, 2012 conference call with the investment community. As a
result the company recorded several one-time charges, which are described
below and excluded from non-GAAP results.

The one-time charges included a cash-charge of $3.1 million for restructuring
related to the workforce reduction announced in October and the idling of the
company’s St. Louis pilot manufacturing facility as well as the following
non-cash charges: $30.3 million of asset impairment charges related to the
workforce reduction and idling of the St. Louis facility; $71.8 million for
the write down of inventory and related charges, primarily related to DSS
inventory as a result of prevailing poor PV market conditions; $57.0 million
of charges related to the impairment of goodwill related to the PV business
and $2.5 million of charges primarily related to certain sapphire materials
assets acquired with the acquisition of the business which are now obsolete.
For a complete reconciliation of non-GAAP measures to measures presented in
accordance with generally accepted accounting principles in the United States
(“GAAP”), please see tables below.

As previously indicated, the company’s non-GAAP EPS guidance range issued on
December 18, 2012 excluded the impact of goodwill impairment charges related
to the PV business, restructuring and asset impairment charges related to the
idling of the St. Louis facility and the related tax effect of these
adjustments, which represented an additional $0.08 non-GAAP EPS loss. The
adjusted non-GAAP EPS guidance range to account for these charges is a $0.13
loss to a $0.18 loss and the company’s Q4 non-GAAP earnings per share
performance of a $0.15 loss is within this adjusted guidance range.

Q4 and CY12 Results Highlights

Revenue for the fourth quarter of calendar 2012 came in at $102.3 million
including $89.3 million in polysilicon, $6.5 million in photovoltaic (PV), and
$6.5 million in sapphire. This compares to revenue in the third quarter of
calendar 2012 of $110.1 million and $153.0 million in the fourth quarter of
calendar 2011. For calendar 2012, revenue was $733.5 million including $460.6
million in polysilicon, $48.9 million in PV, and $224.0 million in sapphire.
This compares to $873.4 million of revenue for calendar 2011.

Non-GAAP gross profit for the fourth quarter of calendar 2012 was $33.1
million, or 32.4 percent of revenue, compared to $35.0 million, or 31.8
percent of revenue in the third quarter of calendar 2012 and $66.0 million, or
43.1 percent of revenue for the fourth quarter of calendar 2011. For calendar
2012, non-GAAP gross profit was $280.7 million, or 38.3 percent of revenue,
compared to $391.3 million, or 44.8 percent of revenue in calendar 2011.

Gross profit for the fourth quarter of calendar 2012 was a loss of $41.2
million, or a loss of 40.2 percent of revenue, compared to $35.0 million, or
31.8 percent of revenue in the third quarter of calendar 2012 and $66.0
million, or 43.1 percent of revenue for the fourth quarter of calendar 2011.
For calendar 2012, gross profit was $206.4 million, or 28.1 percent of
revenue, compared to $391.3 million, or 44.8 percent of revenue in calendar
2011.

Non-GAAP net income was a loss of $18.1 million in the fourth quarter of
calendar 2012, compared to $0.7 million in the third quarter of calendar 2012
and $23.8 million for the fourth quarter of calendar 2011. For calendar 2012,
non-GAAP net income was $87.9 million, compared to $181.7 million in calendar
2011.

Net income in the fourth quarter of calendar 2012 was a loss of $159.4
million, compared to $2.3 million in the third quarter of calendar 2012 and
$15.3 million for fourth quarter of calendar 2011. For calendar 2012, net
income was a loss of $63.2 million, compared to $156.2 million in calendar
2011.

Non-GAAP earnings per share on a fully-diluted basis, including the additional
$0.08 non-GAAP EPS loss described above, was a $0.15 loss in the fourth
quarter of calendar 2012 and $0.73 for calendar 2012. This compares to
non-GAAP EPS of $0.01 in the third quarter of calendar 2012, $0.19 in the
fourth quarter of calendar 2011 and $1.41 in calendar 2011.

Earnings per share on a fully-diluted basis was a $1.34 loss in the fourth
quarter of calendar 2012, compared to $0.02 for the third quarter of calendar
2012 and $0.12 for the fourth quarter of calendar 2011. For calendar 2012,
earnings per share on a fully-diluted basis was a $0.53 loss, compared to
$1.21 for calendar 2011.

Cash, Backlog, Orders

At the end of the fourth quarter of calendar 2012, the balance sheet had cash
and cash equivalents totaling $418.1 million and total debt of $297.0 million.
This compares to $479.2 million of cash and cash equivalents at the end of the
third quarter of calendar 2012 which included $298.1 million of total debt and
$206.9 million of cash and cash equivalents at the end of the fourth quarter
of calendar 2011 which included zero debt.

As of December 31, 2012, the company’s backlog was $1.25 billion. This
included $528.9 million in the polysilicon segment, $3.3 million in the PV
segment and $716.5 million in the sapphire segment. Included in the total
backlog was approximately $121.9 million of deferred revenue.

New orders for the fourth quarter of calendar 2012 were $6.5 million. The
company had $132.2 million of negative adjustments to backlog primarily
related to the company’s decision to debook the vast majority of its DSS
backlog as the company had previously indicated it expected to do.

Amendment to Credit Facility

On February 27, 2013 the company entered into an amendment to its Credit
Facility with Bank of America. The Amendment provides, among other things,
that certain financial covenants be waived for the six quarter period
beginning with the quarter ending March 31, 2013 and ending with the quarter
ending June 30, 2014. Through this action the company avoids the possibility
of a breach to these covenants and bolsters its ability to continue to execute
on its growth programs. In connection with this amendment, the company will
also pay down $40 million of the term loan, has reduced its total revolver
availability by $50 million (and restricted the use of the revolving credit
facility to letters of credit) and the company agreed to additional covenants
relating to minimum liquidity and EBITDA levels.

Business Outlook

The company is reiterating the following guidance for FY 2013, which ends
December 31, 2013: revenue in the range of $500 to $600 million, non-GAAP
gross margin in the range of 35% to 37% and non-GAAP EPS in the range of $0.25
to $0.45. Non-GAAP EPS and non-GAAP gross margin guidance excludes potential
purchase order cancellation fees. Non-GAAP EPS guidance also excludes
approximately $2 to $4 million in lease exit costs for the St. Louis facility,
restructuring charges and any gain/loss associated with the disposition of
this facility.

The company will provide additional guidance details on its webcasted
conference call. See below for details.

Conference Call, Webcast

Tomorrow morning, Thursday, February 28, 2013, 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 CY2012 results and CY2013 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. To access the 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 14, 2013 and requires the passcode 96009462.

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 CY12 Earnings Call”
webcast page. To access: http://investor.gtat.com.

About GT Advanced Technologies Inc.

GT Advanced Technologies Inc. is a diversified technology company with
innovative crystal growth equipment and solutions for the global solar, LED
and electronics industries. Our products accelerate the adoption of new
advanced materials that improve performance and lower the cost of
manufacturing. 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,
                                                     2012          2011       
                                                                  
Assets
Current assets:
  Cash and cash equivalents                       $  418,095     $ 206,878
  Restricted cash                                    -             96,202
  Accounts receivable, net                           23,829        51,468
  Inventories                                        133,286       198,624
  Deferred costs                                     30,248        221,919
  Vendor advances                                    32,440        55,226
  Deferred income taxes                              28,309        31,698
  Refundable income taxes                            1,516         1,516
  Prepaid expenses and other current assets          9,168         16,681     
             Total current assets                    676,891       880,212
                                                                              
  Property, plant and equipment, net                 77,980        81,904
  Other assets                                       86,920        32,740
  Intangible assets, net                             90,516        88,903
  Deferred cost                                      24,423        7,801
  Goodwill                                           46,052        102,152    
             Total assets                         $  1,002,782   $ 1,193,712  
                                                                  
Liabilities and stockholders’ equity
Current liabilities:
  Current portion of long-term debt               $  7,250       $ -
  Accounts payable                                   44,848        69,854
  Accrued expenses                                   30,928        35,679
  Contingent consideration                           4,901         17,511
  Customer deposits                                  111,777       307,879
  Deferred revenue                                   86,098        408,032
  Accrued income taxes                               21,716        6,897      
             Total current liabilities               307,518       845,852
                                                                              
  Long-term debt                                     132,313       -
  Convertible notes                                  157,440       -
  Deferred income taxes                              22,573        52,008
  Customer deposits                                  71,340        -
  Deferred revenue                                   35,848        23,021
  Contingent consideration                           5,414         6,202
  Other non-current liabilities                      2,323         687
  Accrued income taxes                               25,762        19,491     
             Total liabilities                       760,531       947,261
                                                                  
Commitments and contingencies
Stockholders’ equity:
  Preferred stock, 10,000 shares authorized,         -             -
  none issued and outstanding
  Common stock, $0.01 par value; 500,000 shares
  authorized, 119,293 and

  119,704 shares issued and outstanding as of        1,193         1,197
  December 31, 2012 and

  December 31, 2011, respectively
  Additional paid-in capital                         183,565       113,627
  Accumulated other comprehensive loss               806           (1,514    )
  Retained earnings                                  56,687        133,141    
             Total stockholders' equity              242,251       246,451    
Total liabilities and stockholders' equity        $  1,002,782   $ 1,193,712  
                                                                              

 
GT Advanced Technologies Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
                                                                       
                   Three Months Ended                      Twelve Months Ended
                   December      September    December     December     December
                   31,           29,          31,          31,          31,
                   2012          2012         2011         2012         2011      
                                                                         
Revenue            $102,333      $110,061     $153,028     $733,536     $873,442
Cost of revenue    143,491       75,033       87,030       527,132      482,106   
  Gross profit     (41,158   )   35,028       65,998       206,404      391,336
Operating
expenses:
  Research and     22,695        18,767       13,344       70,649       42,601
  development
  Selling and      5,458         3,123        3,789        15,115       23,330
  marketing
  General and      13,801        15,428       13,837       59,532       66,588
  administrative
  Contingent
  consideration    296           (9,943   )   464          (8,965   )   5,193
  (income)
  expense
  Impairment of    57,037        -            -            57,037       -
  goodwill
  Restructuring
  charges and      33,441        -            -            33,441       -
  asset
  impairments
  Amortization
  of intangible    2,534         2,538        2,822        10,165       6,630     
  assets
Total operating    135,262       29,913       34,256       236,974      144,342   
expenses
Income from        (176,420  )   5,115        31,742       (30,570  )   246,994
operations
Other income
(expense):
  Interest         131           27           224          181          564
  income
  Interest         (5,957    )   (1,620   )   (6,827   )   (9,355   )   (14,128  )
  expense
  Other, net       (34       )   (431     )   2,036        (1,002   )   1,818     
Income before      (182,280  )   3,091        27,175       (40,746  )   235,248
income taxes
Provision for      (22,871   )   747          11,835       22,489       79,030    
income taxes
Net income         ($159,409 )   $2,344       $15,340      ($63,235 )   $156,218  
                                                                         
Net income per
share:
  Basic            ($1.34    )   $0.02        $0.12        ($0.53   )   $1.25
  Diluted          ($1.34    )   $0.02        $0.12        ($0.53   )   $1.21
                                                                         
Weighted-average
number of shares
used in per
share
calculations:
  Basic            119,109       118,769      123,628      118,931      125,402
  Diluted          119,109       119,874      124,946      118,931      128,680
                                                                         

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     September    December     December     December
                 31,          29,          31,          31,          31,
                 2012         2012         2011         2012         2011      
                                                                      
Non-GAAP Gross
Profit and
Gross Margin
                                                                      
Revenue          $102,333     $110,061     $153,028     $733,536     $873,442
Cost of          143,491      75,033       87,030       527,132      482,106   
revenue
  Gross profit   (41,158  )   35,028       65,998       206,404      391,336
                                                                      
Non-GAAP
adjustments:
                                                                      
  Write-down
  of inventory   71,754       -            -            71,754       -
  and vendor
  advances
  Accelerated
  depreciation
  for early      2,520        -            -            2,520        -         
  retirement
  of fixed
  assets
                                                                      
Non-GAAP gross   $33,116      $35,028      $65,998      $280,678     $391,336  
profit
                                                                      
Non-GAAP gross   32.4     %   31.8     %   43.1     %   38.3     %   44.8     %
margin
                                                                               

 
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      September   December    December     December
                  31,           29,         31,         31,          31,
                  2012          2012        2011        2012         2011      
                                                                      
Non-GAAP Net
Income &
Earnings per
Share
                                                                      
Net income        ($159,409 )   $2,344      $15,340     ($63,235 )   $156,218
                                                                      
Non-GAAP
adjustments:
                                                                      
  Amortization
  of acquired     2,534         2,538       2,822       10,165       6,630
  intangible
  assets
  Share-based
  compensation    2,084         4,818       3,660       15,176       13,118
  expense
  Third party
  acquisition     945           136         240         1,550        3,574
  related
  expenses
  Write-down of
  inventory and   71,754        -           -           71,754       -
  vendor
  advances
  Accelerated
  depreciation
  for early       2,520         -           -           2,520        -
  retirement of
  fixed assets
  Impairment of   57,037        -           -           57,037       -
  goodwill
  Restructuring
  charges and     33,441        -           -           33,441       -
  asset
  impairments
  Contingent
  consideration   296           (9,943  )   464         (8,965   )   5,193
  (income)
  expense
  Non-cash
  portion of      3,042         342         6,360       3,799        9,942
  interest
  expense
  Income tax
  effect of
  non-GAAP        (32,354   )   457         (5,127  )   (35,349  )   (12,989  )
  adjustments
  (1)
                                                                      
Non-GAAP net      ($18,110  )   $692        $23,759     $87,893      $181,686  
income
                                                                      
Non-GAAP
earnings per
diluted share     ($0.15    )   $0.01       $0.19       $0.73        $1.41     
("Non-GAAP
EPS")
                                                                      
Diluted
weighted          119,109       119,874     124,946     120,067      128,680
average shares
outstanding
                                                                      
                                                                      
(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
Technologies is 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 inventory and
vendor advance write-downs 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, inventory and
vendor advance write-downs, goodwill impairment, restructuring and asset
impairment, 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.

Forward-Looking Statements

Some of the information in this press release relate 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, all statements under the caption “Business Outlook,” the company’s
estimates for future periods (including for twelve month period ending
December 31, 2013) with respect to revenue, non-GAAP gross margin, and
non-GAAP fully diluted earnings per share; that the Company continues to face
challenging conditions in the solar and LED markets; the belief that 2013 will
be a year during which the Company continues to strengthen its foundation and
further diversify the business; the Company expects to continue making R&D
investments in new technologies to enhance its product offerings and market
position; and the Company believes that its participation in growth areas such
as cover and touch screen sapphire applications, power electronics and next
generation solar will provide a path to resumed growth and cash generation in
the years ahead. . 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 the statements.
These factors may include the possibility that the company is unable to
recognize revenue on contracts in its order backlog. 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 quarter ended December 31,
2012, we cannot guarantee that our bookings or order backlog 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 impact of continued decreased demand
and/or excess capacity in the markets for the output of our solar and sapphire
equipment, general economic conditions and the tightening credit market for
having an adverse impact on demand for our products, the possibility that
changes in government incentives may reduce demand for solar products, which
would, in turn, reduce demand for our equipment, technological changes could
render existing products or technologies obsolete, the company may be unable
to protect its intellectual property rights, 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.’s filings
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 fiscal quarter ended September 29, 2012. 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.’s expectations 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.

Contact:

GT Advanced Technologies Inc.
Media
Jeff Nestel-Patt, 603-204-2883
jeff.nestelpatt@gtat.com
or
Investors/Analysts
Ryan Flaim, 603-681-3869
Ryan.flaim@gtat.com
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