Net Income Per Share

9 Months Ended

Sep. 30, 2012

Net Income Per Share [Abstract]

Net Income Per Share

Note 7. 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 and vesting of restricted stock awards.

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						Nine Months Ended
	September 30,						September 30,
	2012			2011			2012			2011
Numerator:
Net income attributable to AXT, Inc.	$	932		$	6,484		$	3,866		$	17,754
Less: Preferred stock dividends		(44	)		(44	)		(132	)		(132	)
Net income available to common stockholders	$	888		$	6,440		$	3,734		$	17,622
Denominator:
Denominator for basic net income per share - weighted average common shares		32,183			31,944			32,118			31,832
Effect of dilutive securities:
Common stock options		582			1,094			754			1,192
Restricted stock awards		4			88			39			116
Denominator for dilutive net income per common share		32,769			33,126			32,911			33,140
Net income attributable to AXT, Inc. per common share:
Basic	$	0.03		$	0.20		$	0.12		$	0.55
Diluted	$	0.03		$	0.19		$	0.11		$	0.53
Options excluded from diluted net income per share as the impact is anti-dilutive		992			407			977			403
Restricted stock excluded from diluted net income per share as the impact is anti-dilutive		172			163			14			163

The 883,000 shares of $0.001 par value Series A preferred stock issued and outstanding as of both September 30, 2012 and December 31, 2011, valued at $3,532,000 are non-voting 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, which 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.