MERRIMACK, N.H.--(BUSINESS WIRE)--GT Advanced Technologies Inc. (NASDAQ: GTAT) announced today that it has entered into an agreement with UBS AG to repurchase $75 million of GT common stock under an accelerated stock repurchase program. This accelerated share repurchase is part of the company’s recently announced $100 million share repurchase authorization.
Under the agreement, GT will pay $75 million to UBS and will receive approximately 7.8 million shares of its common stock, currently estimated to be approximately 80% of the total shares to be repurchased under the agreement. The number of shares is based on GT’s closing share price of $7.67 on November 18, 2011. The company will make the payment from its available cash on hand.
The total number of shares ultimately repurchased under the agreement with UBS AG will be determined upon final settlement. GT’s effective per share repurchase price will be based on the volume-weighted average share price of its common stock, less a discount, during a period of up to four months and the settlement amount will be equivalent to the $75 million payment divided by the average share price, minus the number of initial shares.
Separately, the company indicated that it anticipated entering into a new credit facility by the end of the current quarter, replacing the credit agreement with Credit Suisse AG that was terminated on November 18, 2011. The company indicated that the terminated facility did not meet the needs of its growing business.
The company will immediately retire the shares purchased through the ASR. This will have an impact on EPS for the fiscal 2012 year, as the weighted average share count will be reduced. The company will factor the new share count into the updated FY 2012 guidance it provides on its next quarterly conference call in early February. The increase in EPS for Q3 fiscal 2012 due to the reduction in shares outstanding is expected to be offset by the cost related to the early termination of the credit facility.
About GT Advanced Technologies Inc.
GT Advanced Technologies, Inc. is a global provider of polysilicon production technology, and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets. The company's products and services allow its customers to optimize their manufacturing environments and lower their cost of ownership. For additional information about GT Advanced Technologies, please visit www.gtat.com.
Forward-Looking Statements
Some of the information in this press release are “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 terms of the settlement of the accelerated share repurchase, the Company’s intent to retire the shares acquired in connection with the accelerated share repurchase, the Company’s expectation that the increase in EPS for Q3 fiscal 2012 due to the reduction in shares outstanding will be offset by the cost related to the early termination of the credit facility. These statements are based on management’s current expectations or beliefs. 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 second fiscal quarter, 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 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 2012 second quarter filed on November 9, 2011. Statements in this press release should be evaluated in light of these important factors. 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.