EX-99.1 2 ex99_1.htm EXHIBIT 99.1
Exhibit 99.1
FOR IMMEDIATE RELEASE
 
Contacts:
Morris S. Young
Chief Executive Officer
(510) 683-5900
 
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060

AXT, Inc. Announces Third Quarter 2013 Financial Results

 
•
Q3 FY 2013 Net Revenue: $20.5 million

 
•
Q3 FY 2013 GAAP Net Loss: $(2.3) million; $(0.07) per share

FREMONT, Calif., Oct. 30, 2013 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter ended Sept. 30, 2013.

Third Quarter 2013 Results
Revenue for the third quarter of 2013 was $20.5 million compared with $23.8 million in the second quarter of 2013. Total gallium arsenide (GaAs) substrate revenue was $9.0 million for the third quarter of 2013, compared with $10.7 million in the second quarter of 2013. Indium phosphide (InP) substrate revenue was $1.4 million for the third quarter of 2013, compared with $2.0 million in the second quarter of 2013.  Germanium (Ge) substrate revenue was $5.5 million for the third quarter of 2013, compared with $5.3 million in the second quarter of 2013.   Raw materials sales were $4.6 million for the third quarter of 2013, compared with $5.8 million in the second quarter of 2013.

Gross margin was 11.9 percent of revenue for the third quarter of 2013, compared with 12.9 percent of revenue in the second quarter of 2013.

Operating expenses were $5.1 million in the third quarter of 2013, compared with $5.2 million in the second quarter of 2013.

Loss from operations for the third quarter of 2013 was $2.6 million compared with loss from operations of $2.2 million in the second quarter of 2013.

Net interest and other income for the third quarter was $354,000, which was mainly attributable to $346,000 from equity earnings of the company’s unconsolidated joint ventures, partially offset by $67,000 foreign exchange losses. This compares with net interest and other income of $902,000 in the second quarter, which was mainly attributable to an $811,000 gain on the sale of a minority investment in a privately-held company, $471,000 equity earnings of the company’s unconsolidated joint ventures, $105,000 from other joint venture income and dividend income, partially offset by $304,000 foreign exchange losses and $229,000 withholding tax in China on dividends declared by AXT’s consolidated joint ventures.
 
   
AXT, Inc.
4281 Technology Drive
Fremont, CA 94538
Tel: 510.683.5900
Fax: 510.353.0668
www.axt.com.
AXT, Inc. Announces Third Quarter 2013 Results
October 30, 2013
Page 2 of  5
 
Net loss in the third quarter of 2013 was $2.3 million or $0.07 per diluted share compared with net loss of $2.0 million or $0.06 per diluted share in the second quarter of 2013.

Management Qualitative Comments
“This has been a challenging year,” said Morris Young, chief executive officer.  “The market for wireless devices has undergone significant transition with consolidation and new technologies, but as we near the end of the year, we are getting more clarity on the landscape and opportunity and are executing on a strategy for growth.  The semiconducting gallium arsenide market is poised for a turnaround.  In addition, we are seeing exciting opportunities  in both the indium phosphide and germanium substrate markets.  We continue to take a conservative approach to the planning and management of our business, working diligently to control expenses and maximize our cash.  But we remain cautiously optimistic about our prospects for the coming year and believe that we are doing the right things to take advantage of business opportunities in our key markets.”

Conference Call
The company will also host a conference call to discuss these results on Oct. 30, 2013 at 1:30 p.m. PDT. The conference call can be accessed at (719) 457-1035 (passcode 1570385). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 1570385) until Nov 6, 2013. 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.

AXT will provide highlights of its third quarter results on today’s conference call, but investors can find the full financial summary on the investor relations portion of the company’s website at www.axt.com.

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.
­AXT, Inc. Announces Third Quarter 2013 Results
October 30, 2013
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Safe Harbor Statement
The foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws, including statements regarding the market demand for our products, our market opportunity, our business planning and management approach and our expectations with respect to our business prospects. 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; global financial conditions and uncertainties; 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; 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 any forward-looking statement, as a result of new information, future events or otherwise.

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AXT, Inc. Announces Third Quarter 2013 Results
October 30, 2013
Page 4 of  5

AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)

 
  
Three Months Ended
    
Nine Months Ended
  
 
  
September 30,
    
September 30,
  
 
  
2013
    
2012
    
2013
    
2012
  
 
  
   
   
   
 
Revenue
  
$
20,521
    
$
20,808
    
$
66,732
    
$
69,447
  
Cost of revenue
    
18,075
      
15,342
      
57,717
      
48,279
  
Gross profit
    
2,446
      
5,466
      
9,015
      
21,168
  
 
                                
Operating expenses:
                                
Selling, general and administrative
    
4,303
      
3,950
      
12,435
      
11,709
  
Research and development
    
766
      
844
      
2,627
      
2,593
  
Total operating expenses
    
5,069
      
4,794
      
15,062
      
14,302
  
Income (loss) from operations
    
(2,623
)
    
672
      
(6,047
)
    
6,866
  
Interest income, net
    
55
      
52
      
136
      
202
  
Equity in earnings of unconsolidated joint ventures
    
346
      
348
      
1,099
      
786
  
Other income (expense), net
    
(47
)
    
144
      
(491
)
    
(472
)
 
                                
Income (loss) before provision for income taxes
    
(2,269
)
    
1,216
      
(5,303
)
    
7,382
  
Provision for (benefit from) income taxes
    
(204
)
    
(228
)
    
322
      
559
  
Net income (loss)
    
(2,065
)
    
1,444
      
(5,625
)
    
6,823
  
 
                                
Less: Net income (loss) attributable to noncontrolling interest
    
(230
)
    
(512
)
    
(1,105
)
    
(2,957
)
Net income (loss) attributable to AXT, Inc.
  
$
(2,295
)
  
$
932
    
$
(6,730
)
  
$
3,866
  
 
                                
Net income (loss) attributable to AXT, Inc. per common share:
                                
Basic
  
$
(0.07
)
  
$
0.03
    
$
(0.21
)
  
$
0.12
  
Diluted
  
$
(0.07
)
  
$
0.03
    
$
(0.21
)
  
$
0.11
  
 
                                
Weighted average number of common shares outstanding:
                                
Basic
    
32,366
      
32,183
      
32,407
      
32,118
  
Diluted
    
32,366
      
32,769
      
32,407
      
32,911
  

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AXT, Inc. Announces Third Quarter 2013 Results
October 30, 2013
Page 5 of  5
 
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)

 
  
September 30,
    
December 31,
  
 
  
2013
    
2012
  
Assets:
  
   
 
Current assets
  
   
 
Cash and cash equivalents
  
$
27,723
    
$
30,634
  
Short-term investments
    
8,412
      
10,270
  
Accounts receivable, net
    
16,266
      
17,912
  
Inventories
    
38,376
      
40,352
  
Related party notes receivable - current
    
2,517
      
2,036
  
Prepaid expenses and other current assets
    
7,412
      
5,268
  
Total current assets
    
100,706
      
106,472
  
 
                
Long-term investments
    
12,287
      
9,191
  
Property, plant and equipment, net
    
37,450
      
37,235
  
Related party notes receivable - long-term
    
-
      
416
  
Other assets
    
14,830
      
14,275
  
 
                
Total assets
  
$
165,273
    
$
167,589
  
 
                
Liabilities and stockholders' equity:
                
Current liabilities
                
Accounts payable
  
$
8,596
    
$
5,894
  
Accrued liabilities
    
9,208
      
7,202
  
Total current liabilities
    
17,804
      
13,096
  
 
                
Long-term portion of royalty payments
    
2,725
      
3,325
  
Other long-term liabilities
    
155
      
254
  
Total liabilities
    
20,684
      
16,675
  
 
                
Stockholders' equity:
                
Preferred stock
    
3,532
      
3,532
  
Common stock
    
32
      
32
  
Additional paid-in capital
    
194,058
      
193,063
  
Accumulated deficit
    
(65,777
)
    
(59,047
)
Accumulated other comprehensive income
    
6,988
      
6,033
  
Total AXT, Inc. stockholders' equity
    
138,833
      
143,613
  
 
                
Noncontrolling interest
    
5,756
      
7,301
  
Total stockholders' equity
    
144,589
      
150,914
  
 
                
Total liabilities and stockholders' equity
  
$
165,273
    
$
167,589