FREMONT, Calif., Oct. 26, 2016 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS:AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter, ended September 30, 2016.
Third Quarter 2016 Results
Revenue for the third quarter of 2016 was $21.9 million, compared with $20.5 million in the second quarter of 2016.
Gross margin was 34.6 percent of revenue for the third quarter of 2016, compared with 29.4 percent of revenue in the second quarter of 2016.
Operating expenses were $4.9 million in the third quarter of 2016, compared with $5.1 million in the second quarter of 2016.
Operating profit for the third quarter of 2016 was $2.7 million compared with operating profit of $0.9 million in the second quarter of 2016.
Net interest and other income for the third quarter of 2016 was a loss of $0.3 million, compared with $0.0 million in the second quarter of 2016.
Net profit in the third quarter of 2016 was $2.2 million, or $0.07 per diluted share, compared with a net profit of $1.2 million or $0.03 per diluted share in the second quarter of 2016.
Management Qualitative Comments
“We are pleased to again show meaningful progress in our business, achieving revenue and profits that exceeded our guidance range. In addition, our gross margin was 34.6% as a result yield improvements, manufacturing efficiencies, and higher production volume. We also generated positive cash flow. Cash, cash equivalents and investments increased by $2.4 million. We continue to seek out interesting market opportunities where our substrates can provide value to our customers.”
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 (844) 892-6598 (passcode 96094142). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (855) 859-2056 (passcode 96094142) until October 31, 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
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(Unaudited, in thousands, except per share data)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|Cost of revenue||14,294||13,766||42,222||45,706|
|Selling, general, and administrative||3,313||3,659||10,106||12,685|
|Research and development||1,566||1,657||4,419||4,287|
|Total operating expenses||4,879||5,316||14,751||16,972|
|Income (loss) from operations||2,699||(711||)||4,107||(3,233||)|
|Interest income, net||105||102||303||307|
|Equity in (loss) earnings of unconsolidated joint ventures||(581||)||167||(1,437||)||777|
|Other income, net||164||496||682||1,755|
|Income (loss) before provision for income taxes||2,387||54||3,655||(394||)|
|Provision for income taxes||176||7||713||334|
|Net income (loss)||2,211||47||2,942||(728||)|
|Less: Net (income) loss attributable to noncontrolling interests||18||(5||)||480||(257||)|
|Net income (loss) attributable to AXT, Inc.||$||2,229||$||42||$||3,422||$||(985||)|
|Net income (loss) attributable to AXT, Inc. per common share:|
|Weighted average number of common shares outstanding:|
|- more -|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Unaudited, in thousands)|
|September 30,||December 31,|
|Cash and cash equivalents||$||29,661||$||24,875|
|Accounts receivable, net||18,380||18,468|
|Related party notes receivable – current||—||—|
|Prepaid expenses and other current assets||5,265||4,096|
|Total current assets||101,600||96,888|
|Property, plant and equipment, net||29,385||31,422|
|Related party notes receivable – long-term||1,735||1,781|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Total current liabilities||12,288||12,841|
|Long-term portion of royalty payments||719||1,150|
|Other long-term liabilities||307||344|
|Accumulated other comprehensive income||2,529||4,382|
|Total AXT, Inc. stockholders’ equity||134,757||131,971|
|Total stockholders’ equity||139,614||137,561|
|Total liabilities and stockholders’ equity||$||152,928||$||151,896|
Contact: Gary Fischer Chief Financial Officer (510) 438-4700