TMCnet News
AXT, Inc. Announces First Quarter 2013 Financial Results(Marketwire Via Acquire Media NewsEdge) FREMONT, CA -- (Marketwired) -- 05/01/13 -- AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the first quarter ended March 31, 2013. First Quarter 2013 ResultsRevenue for the first quarter of 2013 was $22.4 million compared with $18.9 million in the fourth quarter of 2012. Total gallium arsenide (GaAs) substrate revenue was $11.7 million for the first quarter of 2013, compared with $11.3 million in the fourth quarter of 2012. Indium phosphide (InP) substrate revenue was $1.8 million for the first quarter of 2013, compared with $1.6 million in the fourth quarter of 2012. Germanium (Ge) substrate revenue was $2.6 million for the first quarter of 2013 compared with $1.7 million in the fourth quarter of 2012. Raw materials sales were $6.3 million for the first quarter of 2013, compared with $4.3 million in the fourth quarter of 2012. Gross margin was 15.6 percent of revenue for the first quarter of 2013. By comparison, gross margin in the fourth quarter of 2012 was 19.5 percent of revenue. The decrease of 3.9 percentage points in gross margin in the first quarter was expected. Operating expenses were $4.7 million in the first quarter of 2013, compared with $4.6 million in the fourth quarter of 2012. Loss from operations for the first quarter of 2013 was $1.3 million compared with loss from operations of $0.9 million in the fourth quarter of 2012. There was a swing of approximately $1.0 million from last quarter's net interest and other income of $522,000 to this quarter's net interest and other expense of $512,000, which was mainly attributable to $314,000 this quarter of withholding tax in China on dividends declared by our consolidated joint ventures, $213,000 less equity earnings of unconsolidated joint ventures, $285,000 less net interest income this quarter since the prior quarter had interest income in one of our consolidated joint ventures from long term notes that matured in the fourth quarter, $114,000 of one-time net income items in the fourth quarter, and $94,000 greater foreign exchange loss this quarter. Net loss in the first quarter of 2013 was $2.4 million or $0.08 per diluted share compared with net loss of $0.8 million or $0.02 per diluted share in the fourth quarter of 2012. Management Qualitative Comments "Revenue trends in the first quarter came in largely as expected in each of our product categories, although our performance in germanium substrates and raw materials outperformed our plan," said Morris Young, chief executive officer. "With our industry continuing to evolve, both in terms of the customer landscape and technology trends, we experienced a continuation of the softness in semi-insulating substrates that we began to see in the second half of 2012. The wireless industry, while growing in terms of devices, is transitioning to new technologies for certain devices in order to maximize cost efficiency, reduce size requirements and increase performance capabilities. These transitions are likely to occur throughout 2013, and continue to constrain our semi-insulating substrate results as customers evaluate their ongoing requirements. However, we are seeing renewed growth in our semi-conducting gallium substrate business as well as improving demand for our indium phosphide substrates, germanium substrates and raw materials. While the changes to the wireless side of our business have been challenging, we remain optimistic that new opportunities, coupled with improving market conditions in other product lines will allow us to drive improved shareholder value in 2013." Conference CallThe company will also host a conference call to discuss these results on May 1, 2013 at 1:30 p.m. PDT. The conference call can be accessed at (719) 457-2627 (passcode 3064379). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 3064379) until May 8, 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 StatementThe foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws, including statements regarding our customers and potential customers transition to new technologies to reduce size requirements and increase performance capabilities being likely to occur throughout 2013, and continuing to constrain our semi-insulating substrate results and our current expectations regarding long-term growth and trends in the demand for our products, our progress in our strategic plans, and the positioning of the company. 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 March 31, ---------------------- 2013 2012 ---------- ---------- Revenue $ 22,380 $ 23,486 Cost of revenue 18,896 15,292 ---------- ---------- Gross profit 3,484 8,194 ---------- ---------- Operating expenses: Selling, general and administrative 3,904 3,785 Research and development 822 835 ---------- ---------- Total operating expenses 4,726 4,620 ---------- ---------- Income (loss) from operations (1,242) 3,574 Interest income, net 31 88 Equity in earnings of unconsolidated joint ventures 282 154 Other expense, net (825) (489) ---------- ---------- Income (loss) before provision for income taxes (1,754) 3,327 Provision for income taxes 184 375 ---------- ---------- Net income (loss) (1,938) 2,952 Less: Net income attributable to noncontrolling interest (441) (1,317) ---------- ---------- Net income (loss) attributable to AXT, Inc. $ (2,379) $ 1,635 ========== ========== Net income (loss) attributable to AXT, Inc. per common share: Basic $ (0.0750) $ 0.05 ========== ========== Diluted $ (0.08) $ 0.05 ========== ========== Weighted average number of common shares outstanding: Basic 32,297 32,034 ========== ========== Diluted 32,297 33,018 ========== ========== - more - AXT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands) March 31, December 31, 2013 2012 ------------- ------------- Assets: Current assets Cash and cash equivalents $ 25,792 $ 30,634 Short-term investments 6,540 10,270 Accounts receivable, net 17,014 17,912 Inventories 38,768 40,352 Related party notes receivable - current 2,047 2,036 Prepaid expenses and other current assets 7,034 5,268 ------------- ------------- Total current assets 97,195 106,472 Long-term investments 17,038 9,191 Property, plant and equipment, net 37,477 37,235 Related party notes receivable - long-term 418 416 Other assets 14,196 14,275 ------------- ------------- Total assets $ 166,324 $ 167,589 ============= ============= Liabilities and stockholders' equity: Current liabilities Accounts payable $ 6,581 $ 5,894 Accrued liabilities 9,434 7,202 ------------- ------------- Total current liabilities 16,015 13,096 Long-term portion of royalty payments 3,125 3,325 Other long-term liabilities 148 254 ------------- ------------- Total liabilities 19,288 16,675 ------------- ------------- Stockholders' equity: Preferred stock 3,532 3,532 Common stock 32 32 Additional paid-in capital 193,651 193,063 Accumulated deficit (61,447) (59,047) Accumulated other comprehensive income 6,366 6,033 ------------- ------------- Total AXT, Inc. stockholders' equity 142,134 143,613 Noncontrolling interest 4,902 7,301 ------------- ------------- Total stockholders' equity 147,036 150,914 ------------- ------------- Total liabilities and stockholders' equity $ 166,324 $ 167,589 ============= ============= Contacts: Raymond A. Low Chief Financial Officer (510) 683-5900 Leslie Green Green Communications Consulting, LLC (650) 312-9060 Source: AXT,Inc. |