During the second quarter revenue was $58.0 million including $44.1 million in sapphire equipment and materials, $11.0 million in photovoltaic (PV), and $2.9 million in polysilicon. Revenue for the first six months of 2014 was $80.5 million including $49.7 million in sapphire equipment and materials, $24.2 million in photovoltaic (PV) and $6.6 million in polysilicon.
Non-GAAP gross profit for the second quarter was $14.6 million, or 25.2 percent of revenue. Non-GAAP gross profit for the first six months of 2014 was $16.5 million, or 20.5 percent of revenue.
During the second quarter, PV and polysilicon non-GAAP gross margins were 45 percent and 12 percent, respectively. Sapphire gross margins were 20 percent, reflecting the contribution of higher margin equipment sales partially offset by negative margins associated with the company's materials operation in Arizona.
During the quarter, the company incurred non-GAAP operating expenses of $33.6 million and for the six months ended June 28, 2014, non-GAAP operating expenses were $76.3 million.
Non-GAAP loss per share was $0.16 in the second quarter. Non-GAAP loss per share for the first six months of 2014 was $0.48.
Management Commentary
"Results during the second quarter were in line with our guidance," said Tom Gutierrez, president and chief executive officer. "We have continued to see strong interest in our suite of sapphire production tools, including our ASF(TM) equipment. In fact, the sapphire segment of our business accounted for over 75% of the revenue in the quarter, with the majority of it related to the sale of sapphire production equipment.
"The build-out of our Arizona facility, which has involved taking a 1.4 million square foot facility from a shell to a functional structure as well as the installation of sapphire growth and fabrication equipment, is nearly complete and we are commencing the transition to volume production," Gutierrez continued. "We remain confident about the long-term potential of the sapphire materials business for GT.
"The response from partners and potential customers for Merlin(TM) and Hyperion(TM), two of our high growth opportunities, has been very strong. We remain confident in our ability to achieve our 2016 non-GAAP earnings per share target of at or above $1.50. This is driven by the expected contributions of Merlin, Hyperion and our other new technology platforms, along with the growth of our sapphire, polysilicon and PV businesses," Gutierrez concluded.
Cash, Backlog and Orders
The company ended the second quarter with $333 million of cash, cash equivalents and restricted cash, compared to $509 million at the end of the first quarter of fiscal year 2014. The second quarter ending cash balance reflects the receipt of $103 million of prepayments for the Arizona sapphire materials project.
The fourth prepayment from Apple is contingent upon the achievement of certain operational targets by GT. GT expects to achieve these targets and receive the final $139 million prepayment by the end of October 2014.
Equipment orders booked during the quarter were $75 million, including $72 million in sapphire equipment. The company ended the quarter with $628 million of equipment backlog, consisting of $333 million of sapphire equipment, $292 million of polysilicon and $3 million of PV.
Business Outlook
The company is updating its guidance for fiscal year 2014, which ends December 31, 2014, as follows:
Revenue of $600 to $700 million, the lower end of the previously provided guidance range.
Fully diluted non-GAAP earnings per share of $0.12 to $0.18, the higher end of the previously provided guidance range reflecting an expected change in mix and more favorable gross margins in the second half of the year.
The company also reiterated its 2016 non-GAAP EPS target at or above $1.50.