AXT, Inc. Announces Second Quarter 2018 Financial Results
July 25 2018 - 4:10PM
AXT, Inc. (Nasdaq:AXTI), a leading manufacturer of compound
semiconductor substrates, today reported financial results for the
second quarter, ended June 30, 2018.
Second Quarter 2018 Results
Revenue in the second quarter of 2018 was $27.1
million, compared with $24.4 million in the first quarter of 2018
and $23.6 million in the second quarter of 2017.
Gross margin was 40.6 percent of revenue in the
second quarter of 2018, compared with 39.2 percent of revenue in
the first quarter of 2018 and 30.8 percent in the second quarter of
2017.
Operating expenses were $6.5 million in the
second quarter of 2018, compared with $5.6 million in the first
quarter of 2018 and $5.0 million in the second quarter of
2017.
Operating profit in the second quarter of 2018
was $4.5 million, compared with operating profit of $3.9 million in
the first quarter of 2018 and $2.3 million in the second quarter of
2017.
Interest and other, net was a gain of $0.4
million in the second quarter of 2018, compared with a loss of $0.4
million in the first quarter of 2018, and a loss of $0.2 million in
the second quarter of 2017. Interest and other, net for the
second quarter of 2018 included interest income and other of $0.2
million, a foreign exchange loss of $0.1 million and a net gain of
$0.3 million from the seven partially owned companies in the
company’s supply chain, accounted for under the equity method.
Income tax expense in the second quarter of 2018
was $0.4 million, compared with $0.3 million in the first quarter
of 2018 and $0.3 million in the second quarter of 2017.
Net income in the second quarter of 2018 was
$3.9 million, or $0.10 per diluted share, compared with a net
income of $2.9 million or $0.07 per diluted share in the first
quarter of 2018, and $1.9 million or $0.05 per diluted share in the
second quarter of 2017.
Management Qualitative
Comments
“Our financial results for Q2 reflect solid
demand in each of our primary product categories,” said Morris
Young, chief executive officer. “Broadly, the demand
environment for our wafers remains strong, and we continue to focus
on producing high-quality products that meet rigorous application
requirements, as well as achieving greater efficiency in our
manufacturing process. We have also seen an uptick in the
price of raw materials, and this has enabled a financial
improvement in some of the raw material companies in which we have
partial ownership. We are making good progress in the
relocation of our gallium arsenide manufacturing line and are
encouraged by our success to date.”
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 (844) 892-6598 (passcode 2293858). The call will
also be simulcast on the Internet at www.axt.com. Replays will be
available at (855) 859-2056 (passcode 2293858) until July 31, 2018.
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. AXT’s worldwide
headquarters are in Fremont, California where the company maintains
its sales, administration and customer service functions. 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)
process technology 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, as part of its
supply chain strategy, has partial ownership in ten companies 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 growth prospects and opportunities for continued
business expansion, our market opportunity, our relocation 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: the
timing and receipt of significant orders; the cancellation of
orders and return of product; emerging applications using chips or
devices fabricated on our substrates; end-user acceptance of
products containing chips or devices fabricated on our substrates;
the ability of the Company to bring new products to market; product
announcements by our competitors; the ability to control costs and
improve efficiency; the ability to utilize our manufacturing
capacity; product yields and their impact on gross margins; the
relocation of manufacturing lines; possible factory shutdowns as a
result of air pollution in China; policies and regulations in China
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 |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
27,120 |
|
|
$ |
23,557 |
|
|
$ |
51,539 |
|
|
$ |
44,173 |
|
|
Cost of revenue |
|
|
16,110 |
|
|
|
16,301 |
|
|
|
30,956 |
|
|
|
30,629 |
|
|
Gross profit |
|
|
11,010 |
|
|
|
7,256 |
|
|
|
20,583 |
|
|
|
13,544 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative |
|
|
4,987 |
|
|
|
3,942 |
|
|
|
9,209 |
|
|
|
7,735 |
|
|
Research
and development |
|
|
1,500 |
|
|
|
1,019 |
|
|
|
2,920 |
|
|
|
2,143 |
|
|
Total
operating expenses |
|
|
6,487 |
|
|
|
4,961 |
|
|
|
12,129 |
|
|
|
9,878 |
|
|
Income from
operations |
|
|
4,523 |
|
|
|
2,295 |
|
|
|
8,454 |
|
|
|
3,666 |
|
|
Interest income,
net |
|
|
139 |
|
|
|
114 |
|
|
|
281 |
|
|
|
212 |
|
|
Equity in earnings
(loss) of unconsolidated joint ventures |
|
|
307 |
|
|
|
(188 |
) |
|
|
(27 |
) |
|
|
(1,121 |
) |
|
Other expense, net |
|
|
(51 |
) |
|
|
(102 |
) |
|
|
(266 |
) |
|
|
(54 |
) |
|
Income before provision
for income taxes |
|
|
4,918 |
|
|
|
2,119 |
|
|
|
8,442 |
|
|
|
2,703 |
|
|
Provision for income
taxes |
|
|
367 |
|
|
|
321 |
|
|
|
701 |
|
|
|
480 |
|
|
Net income |
|
|
4,551 |
|
|
|
1,798 |
|
|
|
7,741 |
|
|
|
2,223 |
|
|
Less: Net
(income) loss attributable to noncontrolling interests |
|
|
(650 |
) |
|
|
132 |
|
|
|
(965 |
) |
|
|
372 |
|
|
Net income attributable
to AXT, Inc. |
|
$ |
3,901 |
|
|
$ |
1,930 |
|
|
$ |
6,776 |
|
|
$ |
2,595 |
|
|
Net income attributable
to AXT, Inc. per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.10 |
|
|
$ |
0.05 |
|
|
$ |
0.17 |
|
|
$ |
0.07 |
|
|
Diluted |
|
$ |
0.10 |
|
|
$ |
0.05 |
|
|
$ |
0.17 |
|
|
$ |
0.07 |
|
|
Weighted-average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
39,001 |
|
|
|
38,306 |
|
|
|
38,970 |
|
|
|
36,238 |
|
|
Diluted |
|
|
40,216 |
|
|
|
39,706 |
|
|
|
40,289 |
|
|
|
37,645 |
|
|
AXT, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
29,698 |
|
|
$ |
44,352 |
|
|
Short-term investments |
|
|
18,802 |
|
|
|
20,032 |
|
|
Accounts
receivable, net |
|
|
22,434 |
|
|
|
22,778 |
|
|
Inventories |
|
|
57,038 |
|
|
|
45,840 |
|
|
Prepaid
expenses and other current assets |
|
|
9,416 |
|
|
|
7,519 |
|
|
Total
current assets |
|
|
137,388 |
|
|
|
140,521 |
|
|
Long-term
investments |
|
|
5,714 |
|
|
|
12,576 |
|
|
Property, plant and
equipment, net |
|
|
65,174 |
|
|
|
46,530 |
|
|
Other assets |
|
|
11,323 |
|
|
|
11,573 |
|
|
Total
assets |
|
$ |
219,599 |
|
|
$ |
211,200 |
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
14,059 |
|
|
$ |
11,445 |
|
|
Accrued
liabilities |
|
|
11,711 |
|
|
|
11,149 |
|
|
Total
current liabilities |
|
|
25,770 |
|
|
|
22,594 |
|
|
Other long-term
liabilities |
|
|
296 |
|
|
|
289 |
|
|
Total
liabilities |
|
|
26,066 |
|
|
|
22,883 |
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
|
|
|
Preferred
stock |
|
|
3,532 |
|
|
|
3,532 |
|
|
Common
stock |
|
|
39 |
|
|
|
39 |
|
|
Additional paid-in capital |
|
|
232,984 |
|
|
|
231,679 |
|
|
Accumulated deficit |
|
|
(48,061 |
) |
|
|
(54,837 |
) |
|
Accumulated other comprehensive income |
|
|
1,172 |
|
|
|
3,407 |
|
|
Total
AXT, Inc. stockholders’ equity |
|
|
189,666 |
|
|
|
183,820 |
|
|
Noncontrolling interests |
|
|
3,867 |
|
|
|
4,497 |
|
|
Total
stockholders’ equity |
|
|
193,533 |
|
|
|
188,317 |
|
|
Total
liabilities and stockholders’ equity |
|
$ |
219,599 |
|
|
$ |
211,200 |
|
|
Contacts:Gary FischerChief Financial Officer(510) 683-5900
Leslie
Green
Green Communications Consulting, LLC(650) 312-9060
AXT (NASDAQ:AXTI)
Historical Stock Chart
From Mar 2024 to Apr 2024
AXT (NASDAQ:AXTI)
Historical Stock Chart
From Apr 2023 to Apr 2024