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AXTI - AXT Inc News Story

$11.1 -0.5  -4.6%

Last Trade - 18/06/21

Small Cap
Market Cap £340.0m
Enterprise Value £351.6m
Revenue £76.8m
Position in Universe 3706th / 6927

AXT, Inc. Announces First Quarter 2021 Financial Results

Wed 28th April, 2021 9:05pm
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FREMONT, Calif., April 28, 2021 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS:
AXTI), a leading manufacturer of compound semiconductor wafer substrates,
today reported financial results for the first quarter, ended March 31, 2021.

Management Qualitative Comments

“Q1 was an important milestone quarter for AXT,” said Morris Young, chief
executive officer. “We met and exceeded the $30 million dollar quarterly
revenue threshold. Our performance surpassed our expectations with growth in
nearly all of our strategic products. Likewise, we drove significant
improvement in our gross margin and achieved strong growth in profitability.
We continue to see a convergence of major technology trends across our
portfolio, and these are beginning to have a meaningful impact on the demand
for our products. With our new facilities ramping and our successful
development of 8-inch gallium arsenide substrates, we believe we are in a
strong position to enable some of the most exciting new and emerging
applications for specialty materials today.”

First Quarter 2021 Results
* Revenue for the first quarter of 2021 was $31.4 million, compared with $27.0
million in the fourth quarter of 2020 and $20.7 million for the first quarter
of 2020. This is sequential growth of 16 percent over the fourth quarter of
2020 and more than 51 percent growth over Q1 of 2020.

* Gross margin was 36.8 percent of revenue for the first quarter of 2021, up
from 33.9 percent of revenue in the fourth quarter of 2020 and 26.6 percent
for the first quarter of 2020.

* Operating expenses were $8.0 million in the first quarter of 2021, compared
with $7.2 million in the fourth quarter of 2020, and $6.2 million for the
first quarter of 2020. 

* Operating profit for the first quarter of 2021 was $3.6 million, compared
with an operating profit of $1.9 million in the fourth quarter of 2020, and an
operating loss of $0.6 million for the first quarter of 2020.

* Other income, net for the first quarter of 2021 was $1.0 million, compared
with $0.6 million in the fourth quarter of 2020 and $1.2 million for the first
quarter of 2020. 

* Net income in the first quarter of 2021 was $3.4 million, or $0.08 per
share, compared with net income of $2.1 million or $0.05 per share in the
fourth quarter of 2020, and a net loss of $0.2 million or $0.01 per share for
the first quarter of 2020.
STAR Market Listing Update  

AXT previously announced on November 16, 2020 a strategic plan to access
China’s capital markets and progress to an initial public offering by
Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), its wafer
manufacturing company in China, on the Shanghai Stock Exchange’s Sci-Tech
innovAtion boaRd (the “STAR Market”). The first major step in this process
is engaging reputable private equity firms in China to invest funds in

In January 2021, AXT completed the private equity investment funding in
Tongmei. A number of private equity firms have invested approximately $49
million in exchange for an approximately 7.28 percent minority interest in

The process of going public on the STAR Market includes several periods of
review and, therefore, is a lengthy process. Tongmei expects to accomplish
this goal in mid-2022. AXT has posted a brief summary of the plan and the
process on its website at

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
2989288). The call will also be simulcast at Replays will be
available at (855) 859-2056 (passcode 2989288) until May 4, 2021. 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 or by
calling the company’s Investor Relations Department at (510) 438-4700.

About AXT, Inc.
AXT is a material science company that develops and manufactures
high-performance compound and single element semiconductor substrate wafers
comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium
(Ge).  The company’s substrate wafers are used when a typical silicon
substrate wafer cannot meet the performance requirements of a semiconductor or
optoelectronic device. End markets include 5G infrastructure, data center
connectivity (silicon photonics), passive optical networks, LED lighting,
lasers, sensors, power amplifiers for wireless devices and satellite solar
cells. AXT’s worldwide headquarters are in Fremont, California where the
company maintains sales, administration and customer service functions.  AXT
has its Asia headquarters in Beijing, China and manufacturing facilities
in three separate locations in China. In addition, as part of its supply
chain strategy, the Company has partial ownership in ten companies in China
producing raw materials for its manufacturing process. For more information,
see AXT’s website at

Forward-Looking Statements

The foregoing paragraphs contain forward-looking statements within the meaning
of the Federal securities laws, including, for example, statements regarding
completing other preliminary steps in connection with the proposed listing of
shares of Tongmei on the STAR Market, being accepted to list shares of Tongmei
on the STAR Market and the timing and completion of such listing of shares of
Tongmei on the STAR Market. Additional examples of forward-looking statements
include statements regarding the market demand for our products, our growth
prospects and opportunities for continued business expansion, including
technology trends and new applications, our market opportunity, our ability to
lead our industry, our relocation and our expectations with respect to our
business prospects and financial results. 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 withdrawal,
cancellations or requests for redemptions by private equity funds in China of
investments in Tongmei, the administrative challenges in satisfying the
requirements of various government agencies in China in connection with the
investments in Tongmei and the listing of shares of Tongmei on the STAR
Market, continued open access to companies to list shares on the STAR Market,
investor enthusiasm for new listings of shares on the STAR Market and
geopolitical tensions between China and the United States. Additional
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; our ability 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 and ramping of production; possible factory shutdowns as a result of air
pollution in China; COVID-19 or other outbreaks of a contagious disease;
tariffs and other trade war issues; the financial performance of our partially
owned supply chain companies; 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.

   Gary Fischer                          
   Chief Financial Officer               
   (510) 438-4700                        
   Leslie Green                          
   Green Communications Consulting, LLC  
   (650) 312-9060                        

(Unaudited, in thousands, except per share data)

                                                                Three Months Ended                         
                                                                March 31,                                  
                                                                2021                   2020                
 Revenue                                                        $    31,350            $    20,723         
 Cost of revenue                                                     19,814                 15,201         
 Gross profit                                                        11,536                 5,522          
 Operating expenses:                                                                                       
 Selling, general and administrative                                 5,570                  4,749          
 Research and development                                            2,405                  1,407          
 Total operating expenses                                            7,975                  6,156          
 Income (loss) from operations                                       3,561                  (634    )      
 Interest expense, net                                               (50     )              (29     )      
 Equity in income (loss) of unconsolidated joint ventures            1,111                  (120    )      
 Other income (expense), net                                         (111    )              1,366          
 Income before provision for income taxes                            4,511                  583            
 Provision for income taxes                                          746                    366            
 Net income                                                          3,765                  217            
 Less: Net income attributable to noncontrolling interests           (340    )              (395    )      
 Net income (loss) attributable to AXT, Inc.                    $    3,425             $    (178    )      
 Net income (loss) attributable to AXT, Inc. per common share:                                             
 Basic                                                          $    0.08              $    (0.01   )      
 Diluted                                                        $    0.08              $    (0.01   )      
 Weighted-average number of common shares outstanding:                                                     
 Basic                                                               41,004                 39,812         
 Diluted                                                             42,726                 39,812         

(Unaudited, in thousands)

                                                                                    March 31,              December 31,             
                                                                                    2021                   2020                     
 Current assets:                                                                                                                    
 Cash and cash equivalents                                                          $     61,206           $      72,602            
 Short-term investments                                                                   240                     240               
 Accounts receivable, net                                                                 28,423                  24,558            
 Inventories                                                                              54,681                  51,515            
 Prepaid expenses and other current assets                                                18,400                  15,603            
 Total current assets                                                                     162,950                 164,518           
 Long-term investments                                                                    5,463                   5,726             
 Property, plant and equipment, net                                                       119,878                 115,825           
 Operating lease right-of-use assets                                                      2,576                   2,683             
 Other assets                                                                             11,039                  10,110            
 Total assets                                                                       $     301,906          $      298,862           
 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY                                                          
 Current liabilities:                                                                                                               
 Accounts payable                                                                   $     13,399           $      12,669            
 Accrued liabilities                                                                      15,698                  15,995            
 Bank loan                                                                                10,376                  10,411            
 Total current liabilities                                                                39,473                  39,075            
 Noncurrent operating lease liabilities                                                   2,249                   2,374             
 Other long-term liabilities                                                              1,510                   1,881             
 Total liabilities                                                                        43,232                  43,330            
 Redeemable noncontrolling interests                                                      48,212                  47,563            
 Stockholders’ equity:                                                                                                              
 Preferred stock                                                                          3,532                   3,532             
 Common stock                                                                             42                      42                
 Additional paid-in capital                                                               229,617                 230,381           
 Accumulated deficit                                                                      (41,120  )              (44,545  )        
 Accumulated other comprehensive income                                                   3,078                   3,209             
 Total AXT, Inc. stockholders’ equity                                                     195,149                 192,619           
 Noncontrolling interests                                                                 15,313                  15,350            
 Total stockholders’ equity                                                               210,462                 207,969           
 Total liabilities, redeemable noncontrolling interests and stockholders’ equity    $     301,906          $      298,862           


GlobeNewswire, Inc. 2021
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