EX-99.1 2 axti-20151029ex9911ff5f9.htm EX-99.1 axti_Ex99_1

 

 

 

 

FOR IMMEDIATE RELEASE

Picture 4

 

Contacts:

Gary Fischer

Chief Financial Officer

(510) 438-4700

 

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

 

AXT, Inc. Announces Third Quarter 2015 Financial Results

FREMONT, Calif., October 29, 2015 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter ended September 30, 2015.

 

Third Quarter 2015 Results

 

Revenue for the third quarter of 2015 was $18.4 million compared with $21.0 million in the second quarter of 2015.

   

Gross margin was 25.1 percent of revenue for the third quarter of 2015, compared with 20.9 percent of revenue in the second quarter of 2015.

 

Operating expenses were $5.3 million in the third quarter of 2015, compared with $5.2 million in the second quarter of 2015. 

 

Operating loss for the third quarter of 2015 was $0.7 million compared with $0.8 million in the second quarter of 2015. 

 

Net interest and other income for the third quarter of 2015 was $0.8 million, compared with $1.1 million in the second quarter of 2015.

 

Net profit in the third quarter of 2015 was $42,000 compared with a net loss of $3,000 the second quarter of 2015.

 

 

 

 

AXT, Inc. Announces Third Quarter 2015 Results

October 29, 2015

Page 2 of 5

 

Management Qualitative Comments

 

"Our business has continued to evolve as a direct reflection of the transformation in our industry," said Morris Young, chief executive officer.  "We are seeing a growing shift within our revenue base towards indium phosphide, which has surpassed both semi-insulating gallium arsenide and semi-conducting gallium arsenide as the single largest segment of substrates in our sales composition.  Its growth as a percentage of our revenues has had a favorable effect on our results.  This was evident in Q3 as softness in other parts of our business caused us to fall short of our revenue guidance, but we outperformed our bottom line guidance to achieve break even profitability.  We continue to actively invest in our future through focused R&D, technology M&A and the upgrade of our manufacturing infrastructure. We believe we are making the right investments to maximize our business opportunity and drive increased value for our shareholders."

 

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) 457-2083 (passcode 968071). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 968071) until November 5, 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.

 

 

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AXT, Inc.

4281 Technology Drive

Fremont, CA 94538

Tel: 510.683.5900

Fax: 510.353.0668

www.axt.com.

 

 

AXT, Inc. Announces Third Quarter 2015 Results

October 29, 2015

Page 3 of 5

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.

 

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FINANCIAL TABLES TO FOLLOW

 

AXT, Inc. Announces Third Quarter 2015 Results

October 29, 2015

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,

 

 

    

2015

    

2014

    

2015

    

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$
18,371

 

$
23,138

 

$
59,445

 

$
63,932

 

Cost of revenue

 

 
13,766

 

 
17,820

 

 
45,706

 

 
51,736

 

Gross profit

 

 
4,605

 

 
5,318

 

 
13,739

 

 
12,196

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 
3,659

 

 
3,505

 

 
12,685

 

 
10,629

 

Research and development

 

 
1,657

 

 
1,160

 

 
4,287

 

 
2,922

 

Restructuring charge

 

 

 —

 

 

 —

 

 

 —

 

 
907

 

Total operating expenses

 

 
5,316

 

 
4,665

 

 
16,972

 

 
14,458

 

Income (loss) from operations

 

 
(711)

 

 
653

 

 
(3,233)

 

 
(2,262)

 

Interest income, net

 

 
102

 

 
106

 

 
307

 

 
360

 

Equity in earnings of unconsolidated joint ventures

 

 
167

 

 
390

 

 
777

 

 
1,502

 

Other income (expense), net

 

 
496

 

 
(236)

 

 
1,755

 

 
250

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before provision for income taxes

 

 
54

 

 
913

 

 
(394)

 

 
(150)

 

Provision for income taxes

 

 
7

 

 
43

 

 
334

 

 
254

 

Net income (loss)

 

 
47

 

 
870

 

 
(728)

 

 
(404)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interest

 

 
(5)

 

 
(226)

 

 
(257)

 

 
(673)

 

Net income (loss) attributable to AXT, Inc.

 

$
42

 

$
644

 

$
(985)

 

$
(1,077)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to AXT, Inc. per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$
(0.00)

 

$
0.02

 

$
(0.03)

 

$
(0.04)

 

Diluted

 

$
(0.00)

 

$
0.02

 

$
(0.03)

 

$
(0.04)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 
31,988

 

 
32,504

 

 
32,262

 

 
32,416

 

Diluted

 

 
31,988

 

 
32,738

 

 
32,262

 

 
32,416

 

 

 

AXT, Inc. Announces Third Quarter 2015 Results

October 29, 2015

Page 5 of 5

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

    

2015

    

2014

 

Assets:

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
26,185

 

$
28,814

 

Short-term investments

 

 
8,551

 

 
12,340

 

Accounts receivable, net

 

 
17,110

 

 
17,864

 

Inventories

 

 
38,087

 

 
38,574

 

Related party notes receivable - current

 

 

 —

 

 
171

 

Prepaid expenses and other current assets

 

 
3,619

 

 
5,430

 

Total current assets

 

 
93,552

 

 
103,193

 

 

 

 

 

 

 

 

 

Long-term investments

 

 
10,713

 

 
7,783

 

Property, plant and equipment, net

 

 
32,346

 

 
33,862

 

Related party notes receivable - long-term

 

 
1,813

 

 
1,704

 

Other assets

 

 
14,721

 

 
14,975

 

 

 

 

 

 

 

 

 

Total assets

 

$
153,145

 

$
161,517

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

 

$
5,959

 

$
7,137

 

Accrued liabilities

 

 
5,513

 

 
7,634

 

Total current liabilities

 

 
11,472

 

 
14,771

 

 

 

 

 

 

 

 

 

Long-term portion of royalty payments

 

 
1,294

 

 
1,725

 

Other long-term liabilities

 

 
345

 

 
333

 

Total liabilities

 

 
13,111

 

 
16,829

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Preferred stock

 

 
3,532

 

 
3,532

 

Common stock

 

 
32

 

 
32

 

Additional paid-in capital

 

 
194,381

 

 
195,419

 

Accumulated deficit

 

 
(69,378)

 

 
(68,393)

 

Accumulated other comprehensive income

 

 
5,166

 

 
7,673

 

Total AXT, Inc. stockholders' equity

 

 
133,733

 

 
138,263

 

 

 

 

 

 

 

 

 

Noncontrolling interest

 

 
6,301

 

 
6,425

 

Total stockholders' equity

 

 
140,034

 

 
144,688

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$
153,145

 

$
161,517