SOURCE: AXT, Inc.

AXT, Inc.

February 24, 2016 16:10 ET

AXT, Inc. Announces Fourth Quarter 2015 Financial Results

FREMONT, CA--(Marketwired - Feb 24, 2016) - AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter ended December 31, 2015.

Fourth Quarter 2015 Results

Revenue for the fourth quarter of 2015 was $18.1 million compared with $18.4 million in the third quarter of 2015.

Gross margin was 17.1 percent of revenue for the fourth quarter of 2015, compared with 25.1 percent of revenue in the third quarter of 2015.

Operating expenses were $4.8 million in the fourth quarter of 2015, compared with $5.3 million in the third quarter of 2015. 

Operating loss for the fourth quarter of 2015 was $1.7 million compared with $0.7 million in the third quarter of 2015. 

Net interest and other income for the fourth quarter of 2015 was $0.1 million, compared with $0.8 million in the third quarter of 2015.

Net loss in the fourth quarter of 2015 was $1.2 million compared with a net profit of $42,000 the third quarter of 2015.

Management Qualitative Comments
"2015 was a year of transformation for AXT as we continued to realign our business with the trends that are driving growth in compound semiconductor substrates," said Morris Young, chief executive officer. "We focused on strategic investments in our technology and manufacturing capabilities that would improve our competitive positioning, and enable us to drive better consistency and efficiency across our substrate portfolio. We are pleased with these investments, and in the early results of our efforts. Although raw material pricing is providing a near-term headwind, we expect to continue to see a positive shift in our revenue mix in 2016 driven by InP, providing the potential for both revenue and margin expansion."

Conference Call
The company will host a conference call to discuss these results today at 1:30 p.m. PT. The conference call can be accessed at (719) 325-2323 (passcode 5401451). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 5401451) until March 1, 2016. Financial and statistical information to be discussed in the call will be available on the company's website immediately prior to commencement of the call. Additional investor information can be accessed at http://www.axt.com or by calling the company's Investor Relations Department at (510) 438-4700.

About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge) through its manufacturing facilities in Beijing, China. In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California. The company's substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell applications. Its vertical gradient freeze (VGF) technique for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates. AXT has manufacturing facilities in China and invests in joint ventures in China producing raw materials. For more information, see AXT's website at http://www.axt.com.

Safe Harbor Statement
The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the market demand for our products, our market opportunity, and our expectations with respect to our business prospects. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company's operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: overall conditions in the markets in which the company competes; global financial conditions and uncertainties; policies and regulations in China; market acceptance and demand for the company's products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; our ability to control costs, our ability to utilize our manufacturing capacity; product yields and their impact on gross margins; and other factors as set forth in the company's annual report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company's control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

FINANCIAL TABLES TO FOLLOW

   
AXT, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited, in thousands)  
   
    December 31,     December 31,  
    2015     2014  
Assets:                
Current assets                
  Cash and cash equivalents   $ 24,875     $ 28,814  
  Short-term investments     11,437       12,340  
  Accounts receivable, net     18,468       17,864  
  Inventories     38,012       38,574  
  Related party notes receivable - current     --       171  
  Prepaid expenses and other current assets     4,096       5,430  
    Total current assets     96,888       103,193  
                 
Long-term investments     7,691       7,783  
Property, plant and equipment, net     31,422       33,862  
Related party notes receivable - long-term     1,781       1,704  
Other assets     14,114       14,975  
                 
    Total assets   $ 151,896     $ 161,517  
                 
Liabilities and stockholders' equity:                
Current liabilities                
  Accounts payable   $ 6,460     $ 7,137  
  Accrued liabilities     6,381       7,634  
    Total current liabilities     12,841       14,771  
                 
Long-term portion of royalty payments     1,150       1,725  
Other long-term liabilities     344       333  
    Total liabilities     14,335       16,829  
                 
Stockholders' equity:                
  Preferred stock     3,532       3,532  
  Common stock     32       32  
  Additional paid-in capital     194,646       195,419  
  Accumulated deficit     (70,621 )     (68,393 )
  Accumulated other comprehensive income     4,382       7,673  
    Total AXT, Inc. stockholders' equity     131,971       138,263  
                 
Noncontrolling interest     5,590       6,425  
    Total stockholders' equity     137,561       144,688  
                 
    Total liabilities and stockholders' equity   $ 151,896     $ 161,517  
                 
   
AXT, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Unaudited, in thousands, except per share data)  
                         
    Three Months Ended     Tweleve Months Ended  
    December 31,     December 31,  
    2015     2014     2015     2014  
                                 
Revenue   $ 18,057     $ 19,567     $ 77,502     $ 83,499  
Cost of revenue     14,967       14,596       60,673       66,332  
Gross profit     3,090       4,971       16,829       17,167  
                                 
Operating expenses:                                
  Selling, general and administrative     3,379       4,341       16,064       14,970  
  Research and development     1,377       1,222       5,664       4,144  
  Restructuring charge     --       --       --       907  
    Total operating expenses     4,756       5,563       21,728       20,021  
Income (loss) from operations     (1,666 )     (592 )     (4,899 )     (2,854 )
Interest income, net     105       123       412       483  
Equity in earnings of unconsolidated joint ventures     (315 )     26       462       1,528  
Other income (expense), net     268       111       2,023       361  
                                 
Income (loss) before provision for income taxes     (1,608 )     (332 )     (2,002 )     (482 )
Provision for (benefit from) income taxes     197       (39 )     531       215  
Net income (loss)     (1,805 )     (293 )     (2,533 )     (697 )
                                 
Less: Net income (loss) attributable to noncontrolling interest     562       (18 )     305       (691 )
Net income (loss) attributable to AXT, Inc.   $ (1,243 )   $ (311 )   $ (2,228 )   $ (1,388 )
                                 
Net income (loss) attributable to AXT, Inc. per common share:                                
  Basic   $ (0.04 )   $ (0.01 )   $ (0.07 )   $ (0.05 )
  Diluted   $ (0.04 )   $ (0.01 )   $ (0.07 )   $ (0.05 )
                                 
Weighted average number of common shares outstanding:                                
  Basic     31,951       32,558       32,183       32,452  
  Diluted     31,951       32,558       32,183       32,452  
                                 

Contact Information

  • Contacts:
    Gary Fischer
    Chief Financial Officer
    (510) 438-4700

    Leslie Green
    Green Communications Consulting, LLC
    (650) 312-9060