SOURCE: AXT, Inc.

AXT, Inc.

July 30, 2015 16:10 ET

AXT, Inc. Announces Second Quarter 2015 Financial Results

FREMONT, CA--(Marketwired - Jul 30, 2015) -  AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the second quarter ended June 30, 2015.

Second Quarter 2015 Results
Revenue for the second quarter of 2015 was $21.0 million compared with $20.1 million in the first quarter of 2015.

Gross margin was 20.9 percent of revenue for the second quarter of 2015, compared with 23.7 percent of revenue in the first quarter of 2015.

Operating expenses were $5.2 million in the second quarter of 2015, compared with $6.5 million in the first quarter of 2015. The decrease was largely the result of professional fees in the first quarter totaling $1.2 million. 

Operating loss for the second quarter of 2015 was $0.8 million compared with $1.7 million in the first quarter of 2015. 

Net interest and other income for the second quarter of 2015 was $1.1 million, compared with $0.9 million in the first quarter of 2015.

Net loss in the second quarter of 2015 was $3,000 or a loss of $0.00 per diluted share compared with a net loss of $1.0 million or $0.03 per diluted share in the first quarter of 2015.

Management Qualitative Comments
"Our financial results in the second quarter were in line with our expectations and we continue to invest and build for the future," said Morris Young, chief executive officer. "We were delighted to welcome Dr. Hong Hou to our executive team as chief operating officer and view our acquisition of Crystacomm's indium phosphide technology and equipment as a strategic building block for our indium phosphide substrate product line."

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) 325-2458 (passcode 8519289). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 8519289) until August 6, 2015. 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 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, fiber optic communications and solar cell. 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 STATEMENTS OF OPERATIONS  
(Unaudited, in thousands, except per share data)  
                         
    Three Months Ended     Six Months Ended  
    June 30,     June 30,  
    2015     2014     2015     2014  
                                 
Revenue   $ 21,010     $ 21,449     $ 41,074     $ 40,794  
Cost of revenue     16,625       17,289       31,940       33,916  
Gross profit     4,385       4,160       9,134       6,878  
                                 
Operating expenses:                                
  Selling, general and administrative     3,775       3,688       9,026       7,124  
  Research and development     1,389       987       2,630       1,762  
  Restructuring charge     -       -       -       907  
    Total operating expenses     5,164       4,675       11,656       9,793  
Income (loss) from operations     (779 )     (515 )     (2,522 )     (2,915 )
Interest income, net     108       127       205       254  
Equity in earnings of unconsolidated joint ventures     410       625       610       1,112  
Other income (expense), net     626       476       1,259       486  
                                 
Income (loss) before provision for income taxes     365       713       (448 )     (1,063 )
Provision (benefit) for income taxes     241       152       327       211  
Net income (loss)     124       561       (775 )     (1,274 )
                                 
Less: Net income (loss) attributable to noncontrolling interest     (127 )     (242 )     (252 )     (447 )
Net income (loss) attributable to AXT, Inc.   $ (3 )   $ 319     $ (1,027 )   $ (1,721 )
                                 
Net income (loss) attributable to AXT, Inc. per common share:                                
  Basic   $ (0.00 )   $ 0.01     $ (0.03 )   $ (0.06 )
  Diluted   $ (0.00 )   $ 0.01     $ (0.03 )   $ (0.06 )
                                 
Weighted average number of common shares outstanding:                                
  Basic     32,242       32,381       32,399       32,407  
  Diluted     32,242       32,597       32,399       32,407  
                                 
                                 
                                 
AXT, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(Unaudited, in thousands)  
             
    June 30,     December 31,  
    2015     2014  
Assets:                
Current assets                
  Cash and cash equivalents   $ 28,640     $ 28,814  
  Short-term investments     3,932       12,340  
  Accounts receivable, net     19,312       17,864  
  Inventories     38,901       38,574  
  Related party notes receivable - current     174       171  
  Prepaid expenses and other current assets     3,481       5,430  
    Total current assets     94,440       103,193  
                 
Long-term investments     13,699       7,783  
Property, plant and equipment, net     33,366       33,862  
Related party notes receivable - long-term     1,711       1,704  
Other assets     15,000       14,975  
                 
    Total assets   $ 158,216     $ 161,517  
                 
Liabilities and stockholders' equity:                
Current liabilities                
  Accounts payable   $ 7,323     $ 7,137  
  Accrued liabilities     6,043       7,634  
    Total current liabilities     13,366       14,771  
                 
Long-term portion of royalty payments     1,438       1,725  
Other long-term liabilities     332       333  
    Total liabilities     15,136       16,829  
                 
Stockholders' equity:                
  Preferred stock     3,532       3,532  
  Common stock     32       32  
  Additional paid-in capital     194,714       195,419  
  Accumulated deficit     (69,420 )     (68,393 )
  Accumulated other comprehensive income     7,586       7,673  
    Total AXT, Inc. stockholders' equity     136,444       138,263  
                 
  Noncontrolling interest     6,636       6,425  
    Total stockholders' equity     143,080       144,688  
                 
    Total liabilities and stockholders' equity   $ 158,216     $ 161,517  
                     

Contact Information

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

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