FREMONT, CA--(Marketwire - April 30, 2008) - AXT, Inc. (
NASDAQ:
AXTI), a leading
manufacturer of compound semiconductor substrates, today reported financial
results for the first quarter ended March 31, 2008.
First Quarter 2008 Results
Revenue for the first quarter of 2008 was $19.6 million, compared with
$17.6 million in the fourth quarter of 2007, and $12.5 million in the first
quarter of 2007. Total gallium arsenide (GaAs) substrate revenue was $13.7
million for the first quarter of 2008, compared with $12.2 million in the
fourth quarter of 2007, and $8.8 million in the first quarter of 2007.
Indium phosphide (InP) substrate revenue was $477,000 for the first quarter
of 2008, compared with $330,000 in the fourth quarter of 2007, and $518,000
in the first quarter of 2007. Germanium (Ge) substrate revenue was $1.4
million compared with $747,000 in the fourth quarter of 2007 and $541,000
in the first quarter of 2007. Raw materials sales were $4.0 million for
the first quarter of 2008, compared with $4.3 million in the fourth quarter
of 2007 and $2.6 million in the first quarter of 2007.
Gross margin was 31.7 percent of revenue for the first quarter of 2008.
This included a benefit from the sale of approximately $620,000 in fully
reserved wafers, which positively affected the quarterly gross margin by
3.2 percentage points. By comparison, gross margin in the fourth quarter
of 2007 was 30.1 percent. This included a benefit from the sales of
approximately $466,000 in fully reserved wafers, which positively affected
fourth quarter gross margin by 2.7 percentage points. Gross margin in the
first quarter of 2007 was 43.2 percent, including a benefit from the sale
of approximately $785,000 in fully reserved wafers, which positively
affected the quarterly gross margins by 6.3 percentage points.
Operating expenses were $4.3 million in the first quarter of 2008, compared
with $3.7 million in the fourth quarter of 2007, and $4.2 million in the
first quarter of 2007.
Income from operations for the first quarter of 2008 was $2.0 million
compared with $1.6 million in the fourth quarter of 2007, and $1.2 million
in the first quarter of 2007.
Net interest and other income for the first quarter of 2008 was $552,000,
which included a gain on sale of investment of $459,000 compared with net
interest and other income of $608,000 for the fourth quarter of 2007, which
included a gain on sale of investment of $1.1 million, and net interest and
other income of $213,000 in the first quarter of 2007.
Net income in the first quarter of 2008 was $2.0 million or $0.06 per
diluted share, compared with net income of $1.9 million or $0.06 per
diluted share in the fourth quarter of 2007, and net income of $1.3
million, or $0.04 per diluted share in the first quarter of 2007.
Management Qualitative Comments
"We are very pleased to report another solid quarter of growth, including
strong increases in revenue from strategically important areas of our
business such as 6-inch gallium arsenide and germanium substrates," said
Phil Yin, chairman and CEO. "Much of our increases are coming from market
share gains as key customer qualifications are beginning to generate
revenue. Further, our customer engagement and qualification activity is
very high and we are pleased to see progression with a number of key
companies in our space as a result of significant competitive
differentiators. While we remain cautious in the way that we plan and
forecast our business, we believe that the industry trends support positive
growth opportunities in the coming quarters."
Outlook for Second Quarter, Ending June 30, 2008
AXT estimates revenue for the second quarter will increase to between $19.7
million and $20.0 million. The company estimates that net income per
diluted share will be between $0.04 and $0.06, which takes into account our
diluted weighted average share count of approximately 31.6 million shares.
Conference Call
The company will also host a conference call today to discuss these results
at 1:30 p.m. PT. The conference call can be accessed at (416) 641-6143
(conference ID 325929). The call will also be simulcast on the Internet at
www.axt.com. Replays will be available at (416) 695-5800 until May 7, 2008.
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, and fiber optic
communications. 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, particularly in optoelectronics applications. 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 2008, growth in our customer base and
expansion of our addressable markets, increasing market share, industry
trends that are driving increasing demand for our products, and
opportunities for growth in the coming years. 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; market acceptance and demand for the company's
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.
AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended
March 31,
--------------------
2008 2007
---------- ---------
Revenue $ 19,634 $ 12,526
Cost of revenue 13,413 7,121
---------- ---------
Gross profit 6,221 5,405
---------- ---------
Operating expenses:
Selling, general and administrative 3,667 3,703
Research and development 504 460
Impairment on assets held for sale 83 -
---------- ---------
Total operating expenses 4,254 4,163
---------- ---------
Income from operations 1,967 1,242
Interest income, net 124 224
Other income (expense), net 428 (11)
---------- ---------
Income before provision for income taxes 2,519 1,455
Provision for income taxes 560 111
---------- ---------
Net income $ 1,959 $ 1,344
========== =========
Net income per share:
Basic $ 0.06 $ 0.04
========== =========
Diluted $ 0.06 $ 0.04
========== =========
Shares used in computing net income per share:
Basic 30,367 29,798
========== =========
Diluted 31,585 31,324
========== =========
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
March 31, December 31,
2008 2007
--------- ---------
Assets:
Current assets
Cash and cash equivalents $ 23,225 $ 18,380
Short-term investments 16,217 20,825
Accounts receivable, net 16,693 12,149
Inventories, net 29,077 24,781
Prepaid expenses and other current assets 5,405 3,569
Assets held for sale - 5,140
--------- ---------
Total current assets 90,617 84,844
Property, plant and equipment, net 17,120 15,986
Restricted deposits 6,550 6,700
Other assets 5,468 5,242
--------- ---------
Total assets $ 119,755 $ 112,772
========= =========
Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 8,973 $ 4,328
Accrued liabilities 4,912 4,716
Current portion of long-term debt 735 450
--------- ---------
Total current liabilities 14,620 9,494
Long-term debt, net of current portion 6,100 6,250
Other long-term liabilities 2,983 3,778
--------- ---------
Total liabilities 23,703 19,522
--------- ---------
Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 186,217 185,979
Accumulated deficit (96,584) (98,543)
Other comprehensive income 2,887 2,282
--------- ---------
Total stockholders' equity 96,052 93,250
--------- ---------
Total liabilities and stockholders' equity $ 119,755 $ 112,772
========= =========
Contact Information: Contacts:
Wilson W. Cheung
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060