FREMONT, CA--(Marketwired - May 2, 2016) - AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the first quarter, ended March 31, 2016.

First Quarter 2016 Results

Revenue for the first quarter of 2016 was $18.7 million, compared with $18.1 million in the fourth quarter of 2015.

Gross margin was 28.1 percent of revenue for the first quarter of 2016, compared with 17.1 percent of revenue in the fourth quarter of 2015.

Operating expenses were $4.8 million in the first quarter of 2016, compared with $4.8 million in the fourth quarter of 2015. 

Operating profit for the first quarter of 2016 was $0.5 million compared with an operating loss of $1.7 million in the fourth quarter of 2015. 

Net interest and other income for the first quarter of 2016 was a loss of $0.2 million, compared with a gain of $0.1 million in the fourth quarter of 2015.

Net profit in the first quarter of 2016 was $42,000, or $0.00 per share, compared with a net loss of $1.2 million or a loss of $0.04 per diluted share in the fourth quarter of 2015.

Management Qualitative Comments
"Q1 was a strong quarter for AXT in which we exceeded our revenue and profitability guidance, and posted a strong increase in both our gross and operating margins from the prior quarter," said Morris Young, chief executive officer. "Our indium phosphide revenue was our strongest in recent years. In addition, our manufacturing team continues to work on efficiency and yield improvement, and these efforts along with our product mix helped improve our gross margin in the quarter."

Conference Call
The company will host a conference call to discuss these results today at 1:30 p.m. PT. The conference call can be accessed at (719) 325-2469 (passcode 4866670). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 4866670) until May 8, 2016. 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) 438-4700.

About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising indium phosphide (InP), gallium arsenide (GaAs) 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 applications. 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, for example, statements regarding the market demand for our products, our market opportunity, and our expectations with respect to our business prospects. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company's operations and business environment, which could cause actual results 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; policies and regulations in China; 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; our ability to control costs, our ability to utilize our manufacturing capacity; product yields and their impact on gross margins; and other factors as set forth in the company's annual report on Form 10-K, quarterly reports on Form 10-Q 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
				March 31,
				2016				2015
Revenue				$	18,713			$	20,064
Cost of revenue					13,460				15,315
Gross profit					5,253				4,749
Operating expenses:
	Selling, general and administrative				3,374				5,251
	Research and development				1,381				1,241
		Total operating expenses			4,755				6,492
Income (loss) from operations					498				(1,743	)
Interest income, net					98				97
Equity in earnings of unconsolidated joint ventures					(456	)			200
Other income (expense), net					190				633
Income (loss) before provision for income taxes					330				(813	)
Provision for (benefit from) income taxes					397				86
Net income (loss)					(67	)			(899	)
Less: Net income (loss) attributable to noncontrolling interest					109				(125	)
Net income (loss) attributable to AXT, Inc.				$	42			$	(1,024	)
Net income (loss) attributable to AXT, Inc. per common share:
	Basic			$	(0.00	)		$	(0.03	)
	Diluted			$	(0.00	)		$	(0.03	)
Weighted average number of common shares outstanding:
	Basic				32,002				32,553
	Diluted				32,002				32,553

AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
					March 31,				December 31,
					2016				2015
Assets:
Current assets
	Cash and cash equivalents				$	25,067			$	24,875
	Short-term investments					9,053				11,437
	Accounts receivable, net					19,711				18,468
	Inventories					38,822				38,012
	Related party notes receivable - current					-				-
	Prepaid expenses and other current assets					4,386				4,096
			Total current assets			97,039				96,888
Long-term investments						9,211				7,691
Property, plant and equipment, net						31,141				31,422
Related party notes receivable - long-term						1,792				1,781
Other assets						13,544				14,114
		Total assets			$	152,727			$	151,896
Liabilities and stockholders' equity:
Current liabilities
	Accounts payable				$	8,034			$	6,460
	Accrued liabilities					5,357				6,381
		Total current liabilities				13,391				12,841
Long-term portion of royalty payments						1,006				1,150
Other long-term liabilities						308				344
		Total liabilities				14,705				14,335
Stockholders' equity:
	Preferred stock					3,532				3,532
	Common stock					32				32
	Additional paid-in capital					194,899				194,646
	Accumulated deficit					(70,579	)			(70,621	)
	Accumulated other comprehensive income					4,665				4,382
		Total AXT, Inc. stockholders' equity				132,549				131,971
Noncontrolling interest						5,473				5,590
		Total stockholders' equity				138,022				137,561
		Total liabilities and stockholders' equity			$	152,727			$	151,896