FREMONT, CA--(Marketwire - February 23, 2010) - AXT, Inc. (
NASDAQ:
AXTI), a leading
manufacturer of compound semiconductor substrates, today reported financial
results for the fourth quarter and fiscal year ended Dec. 31, 2009.
Fourth Quarter 2009 Results
Revenue for the fourth quarter of 2009 was $17.8 million, compared with
$16.8 million in the third quarter of 2009, and $15.6 million in the fourth
quarter of 2008. Total gallium arsenide (GaAs) substrate revenue was $12.6
million for the fourth quarter of 2009, compared with $13.3 million in the
third quarter of 2009, and $9.1 million in the fourth quarter of 2008.
Indium phosphide (InP) substrate revenue was $513,000 for the fourth
quarter of 2009, compared with $688,000 in the third quarter of 2009 and
$473,000 in the fourth quarter of 2008. Germanium (Ge) substrate revenue
was $1.9 million for the fourth quarter of 2009 compared with $1.8 million
in the third quarter of 2009 and $684,000 in the fourth quarter of 2008.
Raw materials sales were $2.8 million for the fourth quarter of 2009
compared with $1.0 million in the third quarter of 2009 and $5.3 million in
the fourth quarter of 2008.
Gross margin was 33.9 percent of revenue for the fourth quarter of 2009.
This included a benefit from the net sale of approximately $727,000 in
fully reserved wafers, which positively affected the quarterly gross margin
by 4.1 percentage points. By comparison, gross margin in the third quarter
of 2009 was 32.9 percent. This included a benefit from the net sales of
approximately $94,000 in fully reserved wafers, which positively affected
third quarter gross margin by 0.6 percentage points. Gross margin in the
fourth quarter of 2008 was 4.8 percent, including a benefit from the net
sale of approximately $663,000 in fully reserved wafers, which positively
affected the quarterly gross margins by 4.2 percentage points.
Operating expenses were $3.0 million in the fourth quarter of 2009,
compared with $3.7 million in the third quarter of 2009, and $4.1 million
in the fourth quarter of 2008.
Income from operations for the fourth quarter of 2009 was $3.1 million
compared with income from operations of $1.9 million in the third quarter
of 2009. In the fourth quarter of 2008, the company recorded a loss from
operations of $3.4 million.
Net income in the fourth quarter of 2009 was $2.8 million or $0.09 per
diluted share, compared with net income of $2.1 million or $0.07 per
diluted share in the third quarter of 2009, and net loss of $2.4 million,
or a loss of $0.08 per diluted share in the fourth quarter of 2008.
Fiscal Year 2009 Results
Revenue for fiscal year 2009 was $55.4 million, compared with $73.1 million
in fiscal year 2008. Gross margin for fiscal year 2009 was 25.1 percent of
revenue compared with 24.6 percent of revenue for fiscal year 2008.
Net loss for fiscal year 2009 was $1.9 million or a loss of $0.07 per
diluted share compared with net loss of $689,000 or a loss of $0.03 per
diluted share for fiscal year 2008.
Management Qualitative Comments
"The fourth quarter was another positive quarter for AXT," said Morris
Young, chief executive officer. "Our successful restructuring efforts and
ongoing manufacturing efficiency improvements, coupled with stronger than
expected raw materials revenue, resulted in solid financial results that
were ahead of our expectations. Further, our qualifications with new and
returning customers continued to progress well as we have committed
increased funding to our engineering and customer support efforts. We are
also seeing positive long-term trends in each of our key markets that are
likely to support our growth in 2010 and beyond. AXT is well-positioned to
accommodate this increasing demand with minimal capital requirements, and
we believe that our unique structure will further separate our capabilities
from our competitors as all of these markets develop."
Outlook for First Quarter, Ending March 31, 2010
AXT estimates that the positive demand environment for substrates will
offset normal seasonality resulting in revenue of between $17.8 million and
$18.5 million. The company estimates that net income per diluted share will
be between $0.04 and $0.07, which takes into account its weighted average
share count of approximately 31.7 million shares.
Conference Call
The company will also host a conference call today to discuss these results
at 1:30 p.m. Pacific Time. The conference call can be accessed at (719)
325-2223 (passcode 1457411). The call will also be simulcast on the
Internet at
www.axt.com. Replays will be available at (719) 457-0820
(passcode 1457411) until March 3, 2010. 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, 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 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 2010, our manufacturing efficiency
improvements, our commitment to increased funding for our engineering and
customer support efforts, trends in our key markets, our ability to
accommodate demand for our products, our capital requirements and our
business structures. 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 the factory closures or other delays
by our customers on the timing of sales of 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.
FINANCIAL TABLES TO FOLLOW
AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
Revenue $ 17,836 $ 15,646 $ 55,364 $ 73,075
Cost of revenue 11,784 14,888 41,495 55,115
---------- ---------- ---------- ----------
Gross profit 6,052 758 13,869 17,960
---------- ---------- ---------- ----------
Operating expenses:
Selling, general and
administrative 2,574 3,605 13,389 15,751
Research and development 394 529 1,569 2,164
Impairment on assets held
for sale - - - 83
Restructuring charge - - 507 -
---------- ---------- ---------- ----------
Total operating
expenses 2,968 4,134 15,465 17,998
---------- ---------- ---------- ----------
Income (loss) from
operations 3,084 (3,376) (1,596) (38)
Interest income, net 60 80 177 513
Other income (expense), net (152) 583 385 1,290
---------- ---------- ---------- ----------
Income (loss) before
provision for income taxes 2,992 (2,713) (1,034) 1,765
Provision (benefit) for
income taxes (42) (349) 471 1,023
---------- ---------- ---------- ----------
Net income (loss) 3,034 (2,364) (1,505) 742
Less: Net income (loss)
attributable to
noncontrolling interest (257) (7) (393) (1,431)
---------- ---------- ---------- ----------
Net income (loss)
attributable to AXT, Inc. $ 2,777 $ (2,371) $ (1,898) $ (689)
========== ========== ========== ==========
Net income (loss)
attributable to AXT, Inc.
per common share:
Basic $ 0.09 $ (0.08) $ (0.07) $ (0.03)
========== ========== ========== ==========
Diluted $ 0.09 $ (0.08) $ (0.07) $ (0.03)
========== ========== ========== ==========
Weighted average number of
common shares outstanding:
Basic 30,647 30,434 30,500 30,400
========== ========== ========== ==========
Diluted 31,322 30,434 30,500 30,400
========== ========== ========== ==========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
December 31, December 31,
2009 2008
------------ ------------
Assets:
Current assets
Cash and cash equivalents $ 16,934 $ 13,566
Short-term investments 18,469 17,756
Accounts receivable, net 15,362 11,497
Inventories, net 27,718 35,082
Prepaid expenses and other current assets 2,411 3,131
------------ ------------
Total current assets 80,894 81,032
Property, plant and equipment, net 20,853 22,184
Restricted deposits 0 3,013
Other assets 6,199 5,433
------------ ------------
Total assets $ 107,946 $ 111,662
============ ============
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 5,571 $ 6,657
Accrued liabilities 4,566 4,453
Line of credit 0 3,013
Current portion of long-term debt 76 73
------------ ------------
Total current liabilities 10,213 14,196
Long-term debt, net of current portion 420 496
Other long-term liabilities 62 94
------------ ------------
Total liabilities 10,695 14,786
------------ ------------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 187,901 186,784
Accumulated deficit (101,130) (99,232)
Other comprehensive income 4,300 2,580
------------ ------------
Total AXT, Inc. stockholders' equity 94,603 93,664
Noncontrolling interest 2,648 3,212
------------ ------------
Total stockholders' equity 97,251 96,876
------------ ------------
Total liabilities and stockholders'
equity $ 107,946 $ 111,662
============ ============
Contact Information: Contacts:
Raymond A. Low
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060