Net Income Per Share

6 Months Ended

Jun. 30, 2011

Net Income Per Share [Abstract]

Net Income Per Share

Note 6. Net Income Per Share

Basic net income per share is computed using the weighted average number of common shares outstanding during the periods less shares of common stock subject to repurchase and non-vested stock awards. Diluted net income per share is computed using the weighted average number of common shares outstanding and potentially dilutive common shares outstanding during the periods. The dilutive effect of outstanding stock options and restricted stock awards is reflected in diluted earnings per share by application of the treasury stock method. Potentially dilutive common shares consist of common shares issuable upon the exercise of stock options. Potentially dilutive common shares are excluded in net loss periods, as their effect would be anti-dilutive.

A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share data):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2011			2010			2011			2010
Numerator:
Net income attributable to AXT, Inc.	$	7,062		$	5,535		$	11,270		$	8,115
Less: Preferred stock dividends		(44	)		(44	)		(88	)		(88	)
Net income available to common stockholders	$	7,018		$	5,491		$	11,182		$	8,027
Denominator:
Denominator for basic net income per share - weighted average common shares		31,831			30,834			31,775			30,789
Effect of dilutive securities:
Common stock options		1,159			1,338			1,241			1,193
Restricted stock awards		103			-			130			-
Denominator for dilutive net income per common share		33,093			32,172			33,146			31,982
Net income attributable to AXT, Inc. per common share:
Basic	$	0.22		$	0.18		$	0.35		$	0.26
Diluted	$	0.21		$	0.17		$	0.34		$	0.25
Options excluded from diluted net income per share as the impact is anti-dilutive		418			351			406			355
Restricted stock excluded from diluted net income per share as the impact is anti-dilutive		186			154			186			154

The 883,000 shares of $0.001 par value Series A preferred stock issued and outstanding as of both June 30, 2011 and December 31, 2010, valued at $3,532,000 are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by the board of directors and $4 per share liquidation preference over common stock, and must be paid before any distribution is made to common stockholders. These preferred shares were issued to Lyte Optronics, Inc. stockholders in connection with the completion of our acquisition of Lyte Optronics, Inc. on May 28, 1999.