GT Advanced Technologies to ship OCI-Poly equipment order in 2014

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Correction: GT Advanced Technologies (GTAT) said that around 42% of expected sales in 2013 would be attributed to its polysilicon segment business despite a major order in its backlog from Korean-based polysilicon producer OCI-Poly.

The equipment order is worth approximately US$260 million which is expected to finally be shipped in the second half of 2014.

“OCI's Phase 4 order, which is represented in blue on the chart, comprises approximately $260 million of our backlog, and we continue to expect that we will start delivery on this order in the second half of 2014,” noted Thomas Gutierrez, Chief Executive Office and President  of GT Advanced Technologies. 

OCI-Poly had previously planned to continue to expand polysilicon production but put plans on hold in 2012 when prices plummeted due to severe overcapacity.

OCI-Poly has yet to make any announcement on re-starting its polysilicon expansion plans.

Management noted in a call to discuss financial results that the OCI-Poly order was fully secured in backlog to be shipped this year. A small remaining PV segment backlog of only US$3 million left on its books will also be shipped in 2013.

GTAT had de-booked all outstanding orders for its DSS furnace business and said it was developing a programme to convert DSS inventory to cash during the year.

Quarterly results

GTAT reported fourth quarter revenue of US$102.3 million including US$89.3 million in polysilicon, US$6.5 million in PV and US$6.5 million in sapphire.

The company made a gross profit loss of US$41.2 million compared to a profit of US$35.0 million in the third quarter of 2012.

“Our Q4 results came in largely as expected as we continue to face challenging conditions in the solar and LED markets,” said Gutierrez. “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.

The balance sheet of cash and cash equivalents totalled US$418.1 million and the company had a total debt of US$297.0 million.

Orders and backlog

GTAT reported an order backlog of US$1.25 billion at the end of the year, which included US$528.9 million in the polysilicon segment, US$3.3 million in the PV segment and US$716.5 million in the sapphire segment. Included in the total backlog was approximately US$121.9 million of deferred revenue.

However, the company de-booked US$132.2 million of DSS business, virtually all outstanding orders not being shipped in the next 12 months.

Full-year results

GTAT reported 2012 revenue of US$734 million, compared to US$873 million in 2011. Non-GAAP net income was negative US$18.1 million. The company had made a 25% headcount reduction in the year.

2013 guidance

GTAT guided full-year revenue to be in the range of US$500 to US$600 million in 2013, with 40% of revenue expected in the first-half of the year and the balance in the second-half of the year.

“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,” added Gutierrez. 

Update & correction. 

The OCI-Poly equipment order shipment was was wrongly stated to occur in the second-half of 2013. The shipment has been retained in the backlog due to being fully secured but will be shipped in 2014. 

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