FREMONT, CA--(Marketwired - Jul 31, 2013) - AXT, Inc. (
Second Quarter 2013 Results
Revenue for the second quarter of 2013 was $23.8 million compared with $22.4 million in the first quarter of 2013. Total gallium arsenide (GaAs) substrate revenue was $10.6 million for the second quarter of 2013, compared with $11.7 million in the first quarter of 2013. Indium phosphide (InP) substrate revenue was $2.0 million for the second quarter of 2013, compared with $1.8 million in the first quarter of 2013. Germanium (Ge) substrate revenue was $5.3 million for the second quarter of 2013, up 110% compared with $2.6 million in the first quarter of 2013. Raw materials sales were $5.8 million for the second quarter of 2013, compared with $6.3 million in the first quarter of 2013.
Gross margin was 12.9 percent of revenue for the second quarter of 2013. By comparison, gross margin in the first quarter of 2013 was 15.6 percent of revenue.
Operating expenses were $5.2 million in the second quarter of 2013, compared with $4.7 million in the first quarter of 2013.
Loss from operations for the second quarter of 2013 was $2.2 million compared with loss from operations of $1.3 million in the first quarter of 2013.
There was a positive swing of approximately $1.4 million from last quarter's net interest and other expense of $512,000 to this quarter's net interest and other income of $902,000, which was mainly attributable to an $811,000 gain on a minority investment in a privately-held company, $289,000 less foreign exchange loss, $189,000 more equity earnings of unconsolidated joint ventures, and $86,000 less withholding tax in China on dividends declared by our consolidated joint ventures.
Net loss in the second quarter of 2013 was $2.0 million or $0.06 per diluted share compared with net loss of $2.4 million or $0.08 per diluted share in the first quarter of 2013.
Management Qualitative Comments
"Our results for the second quarter came in within our guidance range, with revenue improving modestly from the prior quarter," said Morris Young, chief executive officer. "We continued to see an evolution of our business as our revenues further diversified across our substrate product portfolio. While the wireless market remains soft, germanium substrates showed strong growth in the second quarter. Germanium substrates are gaining momentum with increasing demand from CPV terrestrial solar applications. As we continue to work through challenges in the gallium arsenide substrate side of our business, it is encouraging to see growth in other areas in which we have invested over the past two years. We continue to manage our expenses carefully and plan our business conservatively in order to weather the near-term environment and position ourselves for success as the market improves."
Conference Call
The company will also host a conference call to discuss these results on July 31, 2013 at 1:30 p.m. PDT. The conference call can be accessed at (719) 325-2308 (passcode 8763822). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 8763822) until Aug 7, 2013. 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 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 momentum in the demand for germanium substrates. 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.
| AXT, INC. | ||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
| (Unaudited, in thousands, except per share data) | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||
| June 30, | June 30, | |||||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||||
| Revenue | $ | 23,831 | $ | 25,153 | $ | 46,211 | $ | 48,639 | ||||||||||
| Cost of revenue | 20,746 | 17,645 | 39,642 | 32,937 | ||||||||||||||
| Gross profit | 3,085 | 7,508 | 6,569 | 15,702 | ||||||||||||||
| Operating expenses: | ||||||||||||||||||
| Selling, general and administrative | 4,207 | 3,974 | 8,132 | 7,759 | ||||||||||||||
| Research and development | 1,039 | 914 | 1,861 | 1,749 | ||||||||||||||
| Total operating expenses | 5,246 | 4,888 | 9,993 | 9,508 | ||||||||||||||
| Income (loss) from operations | (2,161 | ) | 2,620 | (3,424 | ) | 6,194 | ||||||||||||
| Interest income, net | 50 | 62 | 81 | 150 | ||||||||||||||
| Equity in earnings of unconsolidated joint ventures | 471 | 284 | 753 | 438 | ||||||||||||||
| Other income (expense), net | 381 | (127 | ) | (444 | ) | (616 | ) | |||||||||||
| Income (loss) before provision for income taxes | (1,259 | ) | 2,839 | (3,034 | ) | 6,166 | ||||||||||||
| Provision for income taxes | (342 | ) | (412 | ) | (526 | ) | (787 | ) | ||||||||||
| Net income (loss) | (1,601 | ) | 2,427 | (3,560 | ) | 5,379 | ||||||||||||
| Less: Net income attributable to noncontrolling interest | (434 | ) | (1,128 | ) | (875 | ) | (2,445 | ) | ||||||||||
| Net income (loss) attributable to AXT, Inc. | $ | (2,035 | ) | $ | 1,299 | $ | (4,435 | ) | $ | 2,934 | ||||||||
| Net income (loss) attributable to AXT, Inc. per common share: | ||||||||||||||||||
| Basic | $ | (0.06 | ) | $ | 0.04 | $ | (0.14 | ) | $ | 0.09 | ||||||||
| Diluted | $ | (0.06 | ) | $ | 0.04 | $ | (0.14 | ) | $ | 0.09 | ||||||||
| Weighted average number of common shares outstanding: | ||||||||||||||||||
| Basic | 32,382 | 32,138 | 32,340 | 32,086 | ||||||||||||||
| Diluted | 32,382 | 32,944 | 32,340 | 32,981 | ||||||||||||||
| AXT, INC. | ||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited, in thousands) | ||||||||||
| June 30, | December 31, | |||||||||
| 2013 | 2012 | |||||||||
| Assets: | ||||||||||
| Current assets | ||||||||||
| Cash and cash equivalents | $ | 21,959 | $ | 30,634 | ||||||
| Short-term investments | 6,581 | 10,270 | ||||||||
| Accounts receivable, net | 20,091 | 17,912 | ||||||||
| Inventories | 36,836 | 40,352 | ||||||||
| Related party notes receivable - current | 2,502 | 2,036 | ||||||||
| Prepaid expenses and other current assets | 7,022 | 5,268 | ||||||||
| Total current assets | 94,991 | 106,472 | ||||||||
| Long-term investments | 16,886 | 9,191 | ||||||||
| Property, plant and equipment, net | 37,301 | 37,235 | ||||||||
| Related party notes receivable - long-term | - | 416 | ||||||||
| Other assets | 14,352 | 14,275 | ||||||||
| Total assets | $ | 163,530 | $ | 167,589 | ||||||
| Liabilities and stockholders' equity: | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable | $ | 5,375 | $ | 5,894 | ||||||
| Accrued liabilities | 9,136 | 7,202 | ||||||||
| Total current liabilities | 14,511 | 13,096 | ||||||||
| Long-term portion of royalty payments | 2,925 | 3,325 | ||||||||
| Other long-term liabilities | 157 | 254 | ||||||||
| Total liabilities | 17,593 | 16,675 | ||||||||
| Stockholders' equity: | ||||||||||
| Preferred stock | 3,532 | 3,532 | ||||||||
| Common stock | 32 | 32 | ||||||||
| Additional paid-in capital | 193,720 | 193,063 | ||||||||
| Accumulated deficit | (63,482 | ) | (59,047 | ) | ||||||
| Accumulated other comprehensive income | 6,650 | 6,033 | ||||||||
| Total AXT, Inc. stockholders' equity | 140,452 | 143,613 | ||||||||
| Noncontrolling interest | 5,485 | 7,301 | ||||||||
| Total stockholders' equity | 145,937 | 150,914 | ||||||||
| Total liabilities and stockholders' equity | $ | 163,530 | $ | 167,589 | ||||||
Contact Information:
Contacts:
Raymond A. Low
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060