FREMONT, CA--(Marketwire - April 28, 2010) - AXT, Inc. (
NASDAQ:
AXTI), a leading
manufacturer of compound semiconductor substrates, today reported financial
results for the first quarter ended March 31, 2010.
First Quarter 2010 Results
Revenue for the first quarter of 2010 was $18.6 million, compared with
$17.8 million in the fourth quarter of 2009, and $7.7 million in the first
quarter of 2009. Total gallium arsenide (GaAs) substrate revenue was $13.4
million for the first quarter of 2010, compared with $12.6 million in the
fourth quarter of 2009, and $5.0 million in the first quarter of 2009.
Indium phosphide (InP) substrate revenue was $875,000 for the first quarter
of 2010, compared with $513,000 in the fourth quarter of 2009, and $490,000
in the first quarter of 2009. Germanium (Ge) substrate revenue was $1.64
million compared with $1.85 million in the fourth quarter of 2009 and
$622,000 in the first quarter of 2009. Raw materials sales were $2.7
million for the first quarter of 2010, compared with $2.8 million in the
fourth quarter of 2009 and $1.5 million in the first quarter of 2009.
Gross margin was 36.1 percent of revenue for the first quarter of 2010. By
comparison, gross margin in the fourth quarter of 2009 was 33.9 percent of
revenue. Gross margin was negative 3.1 percent of revenue for the first
quarter of 2009.
Operating expenses were $3.9 million in the first quarter of 2010, compared
with $3.0 million in the fourth quarter of 2009, which included
approximately $500,000 in one-time favorable year-end adjustments for
professional fees, China pension funds and China union fees. Operating
expenses in the first quarter of 2009 were $5.0 million, and included
approximately $629,000 severance and stock compensation accrual for the
company's former chief executive officer, and a $507,000 restructuring
charge as a result of its reduction in force.
Income from operations for the first quarter of 2010 was $2.9 million
compared with income from operations of $3.1 million in the fourth quarter
of 2009, and loss from operations of $5.2 million in the first quarter of
2009.
Net interest and other income for the first quarter of 2010 was $94,000,
which included $120,000 gain on investment notes that matured and an
unrealized foreign exchange loss of $68,000. This compares with net
interest and other expense of $92,000 in the fourth quarter of 2009, which
included an unrealized foreign exchange loss of $140,000, and net interest
and other expense of $378,000 in the first quarter of 2009, which included
an unrealized foreign exchange loss of $409,000.
Net income in the first quarter of 2010 was $2.6 million or $0.08 per
diluted share, compared with net income of $2.8 million or $0.09 per
diluted share in the fourth quarter of 2009, and with a net loss of $5.5
million, or loss of $0.18 per diluted share in the first quarter of 2009.
Management Qualitative Comments
"This was another very good quarter for AXT," said Morris Young, chief
executive officer. "We have continued to experience solid demand for our
products across all of our primary markets, driven by significant and
extended market trends, such as the rapid expansion of wireless devices and
subscribers, the increasing momentum in the adoption of LED technology and
the growing interest in solar energy. Further, our own execution has been
strong throughout our engineering, manufacturing, sales and administrative
functions. We have had tremendous success in continuing to develop our
valuable, long-term customer relationships as well as penetrating new
customers and new opportunities to drive our growth and diversify our base.
In addition, our efforts to restructure and refocus our organization over
the past nine months are resulting in tangible benefits in our efficiency,
productivity and profitability -- creating a solid foundation for our
success in quarters to come."
Outlook for Second Quarter, Ending June 30, 2010
AXT estimates revenue for the second quarter will increase to between $20.7
million and $21.5 million. The company estimates that net income per share
will be between $0.08 and $0.09, which takes into account our weighted
average share count of approximately 31.9 million shares.
Conference Call
The Company will also host a conference call to discuss these results on
April 28, 2010 at 1:30 p.m. PDT. The conference call can be accessed at
(719) 457-2705 (passcode 8474153). The call will also be simulcast on the
Internet at
www.axt.com. Replays will be available at (719) 457-0820
(passcode 8474153) until May 5, 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 second 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
March 31,
----------------------
2010 2009
---------- ----------
Revenue $ 18,641 $ 7,654
Cost of revenue 11,909 7,891
---------- ----------
Gross profit (loss) 6,732 (237)
---------- ----------
Operating expenses:
Selling, general and administrative 3,419 4,006
Research and development 451 460
Restructuring charge - 507
---------- ----------
Total operating expenses 3,870 4,973
---------- ----------
Income (loss) from operations 2,862 (5,210)
Interest income, net 15 44
Other income (loss), net 79 (422)
---------- ----------
Income (loss) before provision (benefit) for income
taxes 2,956 (5,588)
Provision (benefit) for income taxes 246 4
---------- ----------
Net income (loss) 2,710 (5,592)
Less: Net income (loss) attributable to
noncontrolling interest (130) 76
---------- ----------
Net income (loss) attributable to AXT, Inc. $ 2,580 $ (5,516)
========== ==========
Net income (loss) attributable to AXT, Inc. per
common share:
Basic $ 0.08 $ (0.18)
========== ==========
Diluted $ 0.08 $ (0.18)
========== ==========
Weighted average number of common shares
outstanding:
Basic 30,743 30,434
========== ==========
Diluted 31,792 30,434
========== ==========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
March 31, December 31,
2010 2009
---------- ----------
Assets:
Current assets
Cash and cash equivalents $ 20,607 $ 16,934
Short-term investments 18,734 18,469
Accounts receivable, net 15,166 15,362
Inventories, net 28,141 27,718
Prepaid expenses and other current assets 3,067 2,411
---------- ----------
Total current assets 85,715 80,894
Property, plant and equipment, net 20,293 20,853
Other assets 6,160 6,199
---------- ----------
Total assets $ 112,168 $ 107,946
========== ==========
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 6,894 $ 5,571
Accrued liabilities 4,976 4,566
Current portion of long-term debt 77 76
---------- ----------
Total current liabilities 11,947 10,213
Long-term debt, net of current portion 401 420
Other long-term liabilities 29 62
---------- ----------
Total liabilities 12,377 10,695
---------- ----------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 188,148 187,901
Accumulated deficit (98,551) (101,130)
Other comprehensive income 4,076 4,300
---------- ----------
Total AXT, Inc. stockholders' equity 97,205 94,603
Noncontrolling interest 2,586 2,648
---------- ----------
Total stockholders' equity 99,791 97,251
---------- ----------
Total liabilities and stockholders' equity $ 112,168 $ 107,946
========== ==========
Contact Information: Contacts:
Raymond A. Low
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060