FREMONT, CA--(Marketwire - February 23, 2011) - AXT, Inc. (
NASDAQ:
AXTI)
-- Q4 FY 2010 Net Revenues: $26.9 million
-- Q4 FY 2010 GAAP Gross Margin: 39.8 percent
-- Q4 FY 2010 GAAP Net Income: $4.9 million; $0.15 per share (diluted)
AXT, Inc. (
NASDAQ:
AXTI), a leading manufacturer of compound semiconductor
substrates, today reported financial results for the fourth quarter ended
December 31, 2010.
Fourth Quarter 2010 Results
Revenue for the fourth quarter of 2010 was $26.9 million, flat compared
with $26.8 million in the third quarter of 2010, and 51% up from $17.8
million in the fourth quarter of 2009.
Total gallium arsenide (GaAs) substrate revenue was $18.7 million for the
fourth quarter of 2010, compared with $19.2 million in the third quarter of
2010, and $12.6 million in the fourth quarter of 2009. Indium phosphide
(InP) substrate revenue was $1.1 million for the fourth quarter of 2010,
compared with $955,000 in the third quarter of 2010, and $513,000 in the
fourth quarter of 2009. Germanium (Ge) substrate revenue was $3.4 million
for the fourth quarter of 2010 compared with $2.3 million in the third
quarter of 2010 and $1.9 million in the fourth quarter of 2009. Raw
materials sales were $3.5 million for the fourth quarter of 2010, compared
with $4.4 million in the third quarter of 2010 and $2.8 million in the
fourth quarter of 2009.
Gross margin was 39.8 percent of revenue for the fourth quarter of 2010. By
comparison, gross margin in the third quarter of 2010 was 39.3 percent of
revenue. Gross margin was 33.9 percent of revenue for the fourth quarter of
2009.
Operating expenses were $5.1 million in the fourth quarter of 2010,
compared with $3.8 million in the third quarter of 2010. Operating expenses
in the fourth quarter of 2009 were $3.0 million.
Income from operations for the fourth quarter of 2010 was $5.6 million
compared with income from operations of $6.7 million in the third quarter
of 2010, and income from operations of $3.1 million in the fourth quarter
of 2009.
Net interest and other income for the fourth quarter of 2010 was $422,000,
which included an unrealized foreign exchange gain of $242,000. This
compares with net interest and other income of $468,000 in the third
quarter of 2010, which included an unrealized foreign exchange gain of
$210,000, and net interest and other expense of $92,000 in the fourth
quarter of 2009, which included an unrealized foreign exchange loss of
$163,000.
Net income in the fourth quarter of 2010 was $4.9 million or $0.15 per
diluted share compared with net income of $5.6 million or $0.17 per diluted
share in the third quarter of 2010, and with a net income of $2.8 million
or $0.09 per diluted share in the fourth quarter of 2009.
Management Qualitative Comments
"2010 was a year of tremendous execution for AXT," said Morris Young, chief
executive officer. "Revenue for the year increased by more than 72 percent
from 2009; our gross margins performance improved by more than 1300 basis
points and our net income grew by $20.5 million. These results reflect
healthy growth in our markets as well as continued gains, outstanding
product quality and tremendous operational execution across our entire
organization. While we are experiencing some near-term softness in the
Taiwanese LED market and expect seasonality in our first quarter
semi-insulating gallium arsenide revenues, we believe that we will see
sequential growth in our business beginning again in the second quarter,
driven by positive secular trends in the demand for wireless devices, LEDs
and photovoltaics, as well as gains in our positioning within various
customers in our market."
Outlook for First Quarter, Ending March 31, 2011
AXT estimates revenue for the first quarter for 2011 will be between $24.0
million and $25.0 million, which is 28% greater than the actual first
quarter of 2010. The company estimates that net income per share will be
between $0.11 and $0.13, which takes into account our weighted average
share count of approximately 32.6 million shares.
Conference Call
The company will host a conference call to discuss these results on
February 23, 2011 at 1:30 p.m. PST. The conference call can be accessed at
(719) 325-2467 (passcode 3611456). The call will also be simulcast on the
Internet at
www.axt.com. Replays will be available at (719) 457-0820
(passcode 3611456) until March 2, 2011. 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 in China 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 2011, 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)
Twelve Months
Three Months Ended Ended
December 31, December 31,
------------------ ------------------
2010 2009 2010 2009
-------- -------- -------- --------
Revenue $ 26,866 $ 17,836 $ 95,493 $ 55,364
Cost of revenue 16,169 11,784 58,998 41,495
-------- -------- -------- --------
Gross profit 10,697 6,052 36,495 13,869
-------- -------- -------- --------
Operating expenses:
Selling, general and
administrative 4,167 2,574 13,972 13,389
Research and development 911 394 2,339 1,569
Restructuring charge - - - 507
-------- -------- -------- --------
Total operating expenses 5,078 2,968 16,311 15,465
-------- -------- -------- --------
Income (loss) from operations 5,619 3,084 20,184 (1,596)
Interest income (expense), net 37 60 53 177
Other income (expense), net 385 (152) 2,462 385
-------- -------- -------- --------
Income (loss) before provision for
income taxes 6,041 2,992 22,699 (1,034)
Provision for income taxes 646 (42) 2,323 471
-------- -------- -------- --------
Net income (loss) 5,395 3,034 20,376 (1,505)
Less: Net income (loss)
attributable to noncontrolling
interest (496) (257) (1,723) (393)
-------- -------- -------- --------
Net income (loss) attributable to
AXT, Inc. $ 4,899 $ 2,777 $ 18,653 $ (1,898)
======== ======== ======== ========
Net income (loss) attributable to
AXT, Inc. per common share:
Basic $ 0.16 $ 0.09 $ 0.60 $ (0.07)
======== ======== ======== ========
Diluted $ 0.15 $ 0.09 $ 0.57 $ (0.07)
======== ======== ======== ========
Weighted average number of common
shares outstanding:
Basic 31,061 30,647 31,008 30,500
======== ======== ======== ========
Diluted 32,614 31,322 32,512 30,500
======== ======== ======== ========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
December December
31, 31,
2010 2009
--------- ---------
Assets:
Current assets
Cash and cash equivalents $ 23,724 $ 16,934
Short-term investments 17,251 18,469
Accounts receivable, net 23,076 15,362
Inventories, net 35,986 27,718
Prepaid expenses and other current assets 4,090 2,411
--------- ---------
Total current assets 104,127 80,894
Property, plant and equipment, net 24,240 20,853
Other assets 11,884 6,199
--------- ---------
Total assets $ 140,251 $ 107,946
========= =========
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 7,094 $ 5,571
Accrued liabilities 7,745 4,566
Current portion of long-term debt - 76
--------- ---------
Total current liabilities 14,839 10,213
Long-term debt, net of current portion - 420
Other long-term liabilities 5,608 62
--------- ---------
Total liabilities 20,447 10,695
--------- ---------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 190,053 187,901
Accumulated deficit (82,477) (101,130)
Other comprehensive income 4,652 4,300
--------- ---------
Total AXT, Inc. stockholders' equity 115,760 94,603
Noncontrolling interest 4,044 2,648
--------- ---------
Total stockholders' equity 119,804 97,251
--------- ---------
Total liabilities and stockholders' equity $ 140,251 $ 107,946
========= =========
Contact Information: Contacts:
Raymond A. Low
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060