FREMONT, CA--(Marketwire - February 26, 2008) - AXT, Inc. (
NASDAQ:
AXTI), a leading
manufacturer of compound semiconductor substrates, today reported financial
results for the fourth quarter and fiscal year ended December 31, 2007.
Fourth Quarter 2007 Results
Revenue for the fourth quarter of 2007 was $17.6 million, compared with
$14.5 million in the third quarter of 2007, and $13.1 million in the fourth
quarter of 2006. Total gallium arsenide (GaAs) substrate revenue was $12.2
million for the fourth quarter of 2007, compared with $9.9 million in the
third quarter of 2007, and $11.1 million in the fourth quarter of 2006.
Indium phosphide (InP) substrate revenue was $330,000 for the fourth
quarter of 2007, compared with $408,000 in the third quarter of 2007, and
compared with $456,000 in the fourth quarter of 2006. Germanium (Ge)
substrate revenue was $747,000, compared with $536,000 in the third quarter
of 2007, and $318,000 in the fourth quarter of 2006. Raw materials sales
were $4.3 million for the fourth quarter of 2007, compared with $3.6
million in the third quarter of 2007, and $1.2 million in the fourth
quarter of 2006.
Gross margin was 30.1 percent of revenue for the fourth quarter of 2007.
This included a benefit from the sale of approximately $466,000 in fully
reserved wafers, which positively affected the quarterly gross margin by
2.7 percentage points. By comparison, gross margin in the third quarter of
2007 was 31.3 percent. This included a benefit from the sales of
approximately $556,000 in fully reserved wafers, which positively affected
third quarter gross margin by 3.8 percentage points. Gross margin in the
fourth quarter of 2006 was 38.2 percent, including a benefit from the sale
of approximately $730,000 in fully reserved wafers, which positively
affected the quarterly gross margins by 5.6 percentage points.
Operating expenses were $3.7 million in the fourth quarter of 2007,
compared with $3.5 million in the third quarter of 2007, and $3.8 million
in the fourth quarter of 2006.
Income from operations for the fourth quarter of 2007 was $1.6 million
compared with income from operations of $1.1 million in the third quarter
of 2007, and income from operations of $1.2 million in the fourth quarter
of 2006.
Net interest and other income for the fourth quarter of 2007 was $608,000,
which included a gain on sale of investment of $1.1 million, compared with
net interest and other expense of $54,000 for the third quarter of 2007,
and net interest and other income of $1.1 million in the fourth quarter of
2006, which included a gain on sale of Finisar stock of $1.3 million.
Net income in the fourth quarter of 2007 was $1.9 million or $0.06 per
diluted share, compared with a net income of $858,000 or $0.03 per diluted
share in the third quarter of 2007, and a net income of $3.4 million, or
$0.13 per diluted share in the fourth quarter of 2006, which included
approximately $0.05 per diluted share from the gain on sale of Finisar
stock, and $0.04 per diluted share from our net income tax benefit.
Fiscal Year 2007 Results
Revenue for fiscal year 2007 was $58.2 million, compared with $44.4 million
in fiscal year 2006. Gross margin for fiscal year 2007 was 34.8 percent of
revenue compared with 28.7 percent of revenue for fiscal year 2006.
Net income for fiscal year 2007 was $5.3 million or $0.16 per diluted share
compared with net income of $944,000 or $0.03 per diluted share for fiscal
year 2006.
Management Qualitative Comments
"Our strong fourth quarter results concluded what was another solid year
for AXT," said Phil Yin, chairman and CEO. "In addition to posting very
meaningful gains in revenue, gross profit, operating income, net income and
positive cash flow from operations, we have continued to grow our customer
base, significantly increase our market share and make strategic
investments into the technologies and products that will expand our
addressable market. We are excited by the long-term trends in all of the
markets that we serve, including the growth of the handset market, the
increasing prevalence of LED's in a wide variety of lighting applications
and the worldwide adoption of solar energy. We believe that our unique
business model is allowing us to convert these exciting opportunities into
tangible results."
Outlook for First Quarter, Ending March 31, 2008
AXT estimates revenue for the first quarter will increase to between $17.6
million and $18.0 million. The company estimates that net income per
diluted share will be between $0.03 and $0.05, which takes into account our
diluted weighted average share count of approximately 31.6 million shares.
Conference Call
The company will also host a conference call today to discuss these results
at 1:30 p.m. PT. The conference call can be accessed at (416) 641-6106
(conference ID 3248721). The call will also be simulcast on the Internet at
www.axt.com. Replays will be available at (416) 695-5800 until March 4,
2008. 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) 683-5900.
About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance
compound and single element semiconductor substrates comprising gallium
arsenide (GaAs), indium phosphide (InP) 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, and fiber optic
communications. 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, particularly in optoelectronics applications. AXT has
manufacturing facilities in China and invests in five joint ventures
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 statements regarding our
outlook for the first quarter of 2008, growth in our customer base and
expansion of our addressable markets, increasing market share, industry
trends that are driving increasing demand for our products, the growth in
the handset market, increasing prevalence of LED's in a wide variety of
lighting applications, the worldwide adoption of solar energy, and
opportunities for growth in the coming years. These forward-looking
statements are based upon specific assumptions that are subject to
uncertainties and factors relating to the company's operations and business
environment, which could cause actual results of the company 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; market acceptance and demand for the company's
products; and other factors as set forth in the company's annual report on
Form 10-K 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 publicly any forward-looking statement, as a result of new
information, future events or otherwise.
AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ------------------
2007 2006 2007 2006
--------- -------- -------- --------
Revenue $ 17,564 $ 13,072 $ 58,203 $ 44,445
Cost of revenue 12,270 8,084 37,942 31,709
--------- -------- -------- --------
Gross profit 5,294 4,988 20,261 12,736
--------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 3,217 2,926 13,746 12,650
Research and development 509 854 1,699 2,351
Impairment (recovery) on assets
held for sale - - (481) 1,417
Restructuring benefit - - - (2)
--------- -------- -------- --------
Total operating expenses 3,726 3,780 14,964 16,416
--------- -------- -------- --------
Income (loss) from continuing
operations 1,568 1,208 5,297 (3,680)
Interest income, net 153 101 704 443
Other income, net 455 1,016 16 2,709
--------- -------- -------- --------
Income (loss) from continuing
operations before provision
for income taxes 2,176 2,325 6,017 (528)
Provision (benefit) for income
taxes 302 (1,048) 728 (1,454)
--------- -------- -------- --------
Income from continuing operations 1,874 3,373 5,289 926
Discontinued operations:
Gain from discontinued
operations, net of tax - 11 - 18
--------- -------- -------- --------
Net income $ 1,874 $ 3,384 $ 5,289 $ 944
========= ======== ======== ========
Basic income per share:
Income from continuing operations $ 0.06 $ 0.14 $ 0.17 $ 0.03
Gain from discontinued
operations, net of tax - - - -
--------- -------- -------- --------
Net income per share - basic $ 0.06 $ 0.14 $ 0.17 $ 0.03
========= ======== ======== ========
Shares used in computing basic
income per share 30,337 24,009 30,035 23,303
========= ======== ======== ========
Diluted income per share:
Income from continuing operations $ 0.06 $ 0.13 $ 0.16 $ 0.03
Gain from discontinued
operations, net of tax - - - -
--------- -------- -------- --------
Net income per share - diluted $ 0.06 $ 0.13 $ 0.16 $ 0.03
========= ======== ======== ========
Shares used in computing diluted
income per share 31,550 25,543 31,348 24,600
========= ======== ======== ========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
December 31, December 31,
2007 2006
------------ ------------
Assets:
Current assets
Cash and cash equivalents $ 18,380 $ 16,116
Short-term investments 20,825 19,428
Accounts receivable, net 12,149 9,658
Inventories, net 24,781 20,263
Prepaid expenses and other current assets 3,569 3,985
Assets held for sale 5,140 4,659
------------ ------------
Total current assets 84,844 74,109
Property, plant and equipment, net 15,986 12,775
Other assets 5,242 4,298
Restricted deposits 6,700 7,150
------------ ------------
Total assets $ 112,772 $ 98,332
============ ============
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 4,328 $ 3,764
Accrued liabilities 4,716 3,536
Current portion of long-term debt 450 450
------------ ------------
Total current liabilities 9,494 7,750
Long-term debt, net of current portion 6,273 6,839
Other long-term liabilities 3,755 2,543
------------ ------------
Total liabilities 19,522 17,132
------------ ------------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 185,979 180,965
Accumulated deficit (98,543) (103,832)
Other comprehensive income 2,282 535
------------ ------------
Total stockholders' equity 93,250 81,200
------------ ------------
Total liabilities and stockholders'
equity $ 112,772 $ 98,332
============ ============
Contact Information: Contacts:
Wilson W. Cheung
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060