FREMONT, CA--(Marketwire - July 29, 2010) - AXT, Inc. (
NASDAQ:
AXTI)
-- Q2 FY 2010 Net Revenues: $23.2 million
-- Q2 FY 2010 GAAP Gross Margin: 36.8 percent
-- Q2 FY 2010 GAAP Net Income: $5.5 million; $0.17 per share (diluted)
AXT, Inc. (
NASDAQ:
AXTI), a leading manufacturer of compound semiconductor
substrates, today reported financial results for the second quarter ended
June 30, 2010.
Second Quarter 2010 Results
Revenue for the second quarter of 2010 was $23.2 million, compared with
$18.6 million in the first quarter of 2010, and $13.1 million in the second
quarter of 2009.
Total gallium arsenide (GaAs) substrate revenue was $16.2 million for the
second quarter of 2010, compared with $13.4 million in the first quarter of
2010, and $10.1 million in the second quarter of 2009. Indium phosphide
(InP) substrate revenue was $1.1 million for the second quarter of 2010,
compared with $875,000 in the first quarter of 2010, and $684,000 in the
second quarter of 2009. Germanium (Ge) substrate revenue was $1.60 million
for the second quarter of 2010 compared with $1.64 million in the first
quarter of 2010 and $1.22 million in the second quarter of 2009. Raw
materials sales were $4.2 million for the second quarter of 2010, compared
with $2.7 million in the first quarter of 2010 and $1.0 million in the
second quarter of 2009.
Gross margin was 36.8 percent of revenue for the second quarter of 2010. By
comparison, gross margin in the first quarter of 2010 was 36.1 percent of
revenue. Gross margin was 19.3 percent of revenue for the second quarter of
2009.
Operating expenses were $3.6 million in the second quarter of 2010,
compared with $3.9 million in the first quarter of 2010. Operating expenses
in the second quarter of 2009 were $3.8 million.
Income from operations for the second quarter of 2010 was $5.0 million
compared with income from operations of $2.9 million in the first quarter
of 2010, and loss from operations of $1.3 million in the second quarter of
2009.
Net interest and other income for the second quarter of 2010 was $1.6
million, which included $1.2 million, net, sales tax refund and an
unrealized foreign exchange gain of $230,000. This compares with net
interest and other income of $94,000 in the first quarter of 2010, which
included $120,000 gain on investment notes that matured and an unrealized
foreign exchange loss of $68,000, and net interest and other income of
$321,000 in the second quarter of 2009, which included an unrealized
foreign exchange gain of $183,000 and an investment gain of $138,000 from
our equity in our two unconsolidated joint ventures.
Net income in the second quarter of 2010 was $5.5 million or $0.17 per
diluted share. Excluding the $1.2 million, net, sales tax refund or $0.04
per diluted share, our net income in the second quarter of 2010 was $4.3
million or $0.13 per diluted share compared with net income of $2.6 million
or $0.08 per diluted share in the first quarter of 2010, and with a net
loss of $1.3 million, or loss of $0.05 per diluted share in the second
quarter of 2009.
Management Qualitative Comments
"This is an exciting time for AXT," said Morris Young, chief executive
officer. "The demand for gallium arsenide substrates continues to grow at
a healthy pace, fueled by strong sales of wireless devices and the
increasing worldwide adoption and investment into LED technology in many
applications. As a result, we are enjoying solid increases in our sales of
semi-insulating and semi-conducting gallium arsenide substrates and strong
increases in the sales of gallium raw material. In addition, the demand
for our indium phosphide substrates is also growing, reaching nearly 5
percent of our total revenues in the second quarter, and we expect to see
increasing contribution from germanium substrates in the second half of the
year. We believe that the trends fueling growth in all of these areas will
create meaningful opportunity for AXT and we are strongly positioned to
benefit given our raw material access and attractive cost-structure."
Outlook for Third Quarter, Ending September 30, 2010
AXT estimates revenue for the third quarter will increase to between $24.7
million and $25.5 million. The company estimates that net income per share
will be between $0.12 and $0.14, which takes into account our weighted
average share count of approximately 32.2 million shares.
Conference Call
The company will also host a conference call to discuss these results on
July 29, 2010 at 1:30 p.m. PDT. The conference call can be accessed at
(719) 457-2628 (passcode 4348886). The call will also be simulcast on the
Internet at
www.axt.com. Replays will be available at (719) 457-0820
(passcode 4348886) until August 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 third quarter of 2010, the current and long-term growth and
trends in the demand for our products, the outlook for sales of wireless
devices and the adoption of and investment in LED technology, the change in
the composition of our revenues by product, and the positioning of the
company in terms of capacity, raw material access and cost-structure within
the industry. 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.
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,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenue $ 23,177 $ 13,055 $ 41,818 $ 20,709
Cost of revenue 14,642 10,539 26,551 18,430
-------- -------- -------- --------
Gross profit 8,535 2,516 15,267 2,279
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 3,039 3,486 6,458 7,492
Research and development 515 355 966 815
Impairment on assets held for
sale - - - -
Restructuring charge - - - 507
-------- -------- -------- --------
Total operating expenses 3,554 3,841 7,424 8,814
-------- -------- -------- --------
Income (loss) from operations 4,981 (1,325) 7,843 (6,535)
Interest income (expense), net (25) 34 (10) 78
Other income (expense), net 1,556 321 1,635 (101)
-------- -------- -------- --------
Income (loss) before provision for
income taxes 6,512 (970) 9,468 (6,558)
Provision for income taxes 560 308 806 312
-------- -------- -------- --------
Net income (loss) 5,952 (1,278) 8,662 (6,870)
Less: Net income (loss)
attributable to noncontrolling
interest (417) (2) (547) 74
-------- -------- -------- --------
Net income (loss) attributable to
AXT, Inc. $ 5,535 $ (1,280) $ 8,115 $ (6,796)
======== ======== ======== ========
Net income (loss) attributable to
AXT, Inc. per common share:
Basic $ 0.18 $ (0.04) $ 0.26 $ (0.23)
======== ======== ======== ========
Diluted $ 0.17 $ (0.04) $ 0.25 $ (0.23)
======== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 30,834 30,439 30,789 30,437
======== ======== ======== ========
Diluted 32,172 30,439 31,982 30,437
======== ======== ======== ========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
June 30, December 31,
2010 2009
-------------- --------------
Assets:
Current assets
Cash and cash equivalents $ 20,394 $ 16,934
Short-term investments 18,531 18,469
Accounts receivable, net 18,640 15,362
Inventories, net 27,247 27,718
Prepaid expenses and other current assets 4,032 2,411
-------------- --------------
Total current assets 88,844 80,894
Property, plant and equipment, net 20,314 20,853
Other assets 6,199 6,199
-------------- --------------
Total assets $ 115,357 $ 107,946
============== ==============
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 4,008 $ 5,571
Accrued liabilities 5,424 4,566
Current portion of long-term debt 77 76
-------------- --------------
Total current liabilities 9,509 10,213
Long-term debt, net of current portion 381 420
Other long-term liabilities 3 62
-------------- --------------
Total liabilities 9,893 10,695
-------------- --------------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 188,300 187,901
Accumulated deficit (93,015) (101,130)
Other comprehensive income 3,644 4,300
-------------- --------------
Total AXT, Inc. stockholders' equity 102,461 94,603
Noncontrolling interest 3,003 2,648
-------------- --------------
Total stockholders' equity 105,464 97,251
-------------- --------------
Total liabilities and stockholders'
equity $ 115,357 $ 107,946
============== ==============
Contact Information: Contacts:
Raymond A. Low
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060