EX-99.1 2 axti_ex991.htm EX-99.1 axti_Ex99_1

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 1 of 5

 

 

 

FOR IMMEDIATE RELEASE

C:\Users\aycchan\Desktop\axtlogo.jpg

 

 

Contacts:

Gary Fischer

Chief Financial Officer

(510) 438-4700

 

 

 

 

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Financial Results

FREMONT, Calif., February 22, 2017 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year, ended December 31, 2016.

 

 

 

Picture 1

AXT, Inc.

4281 Technology Drive

Fremont, CA 94538

Tel: 510.683.5900

Fax: 510.353.0668

www.axt.com.

 

 

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 2 of 5

Fourth Quarter 2016 Results

 

Revenue for the fourth quarter of 2016 was $20.3 million, compared with $21.9 million in the third quarter of 2016.

   

Gross margin was 37.1 percent of revenue for the fourth quarter of 2016, compared with 34.6 percent of revenue in the third quarter of 2016.

 

Operating expenses were $5.2 million in the fourth quarter of 2016, compared with $4.9 million in the third quarter of 2016. 

 

Operating profit for the fourth quarter of 2016 was $2.3 million compared with operating profit of $2.7 million in the third quarter of 2016. 

 

Net interest and other income for the fourth quarter of 2016 was a loss of $0.3 million, compared with a loss of $0.3 million in the third quarter of 2016.

 

Net profit in the fourth quarter of 2016 was $2.2 million, or $0.06 per diluted share, compared with a net profit of $2.2 million or $0.07 per diluted share in the third quarter of 2016.

 

Fiscal Year 2016 Results (January 1 to December 31)

 

Revenue for fiscal year 2016 was $81.3 million, compared with $77.5 million in fiscal year 2015.

 

Gross margin for fiscal year 2016 was 32.4%, compared with 21.7% in fiscal year 2015.

 

Operating expenses for fiscal year 2016 were $20.0 million, compared with $21.7 million in fiscal year 2015.

 

Net interest and other income for fiscal year 2016 was a charge of ($0.7), compared with a gain of $2.9 million in fiscal year 2015.

 

Net profit in fiscal year 2016 was $5.6 million, or $0.17 per diluted share, compared with a net loss of ($2.2) million, or ($0.07) per basic share, in fiscal year 2015.

 

Management Qualitative Comments

 

“Our positive Q4 results capped off a year of growth and diversification for AXT,” said Morris Young, chief executive officer. “We saw healthy demand across our substrate product portfolio, driven by a growing number of exciting technology applications. In addition, we continued to demonstrate improvement in our business model, achieving meaningful gross margin expansion and delivering solid profitability and positive cash flow. As we look ahead in 2017, we believe sales of indium phosphide substrates will continue to be a key driver for our business, and we hope to see traction in the 3-D sensing market later this year.”

 

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 3 of 5

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 70205575). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (855) 859-2056 (passcode 70205575) until February 28, 2017. 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 can be used primarily in fiber optic communications, 3-D sensing, solar cell, lighting display applications and wireless communications. 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, as part of it’s 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 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.

 

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 4 of 5

 

###

FINANCIAL TABLES TO FOLLOW

 

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 5 of 5

AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Month Ended

 

 

 

 

 

 

 

 

 

December 31,

 

Year Ended December 31, 

 

 

 

2016

    

2015

    

2016

    

2015

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$
20,269

 

$
18,057

 

$
81,349

 

$
77,502

 

Cost of revenue

 

 
12,746

 

 
14,967

 

 
54,968

 

 
60,673

 

Gross profit

 

 
7,523

 

 
3,090

 

 
26,381

 

 
16,829

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 
3,774

 

 
3,379

 

 
13,880

 

 
16,064

 

Research and development

 

 
1,431

 

 
1,377

 

 
5,850

 

 
5,664

 

Restructuring charge

 

 

 —

 

 

 —

 

 
226

 

 

 —

 

Total operating expenses

 

 
5,205

 

 
4,756

 

 
19,956

 

 
21,728

 

Income (loss) from operations

 

 
2,318

 

 
(1,666)

 

 
6,425

 

 
(4,899)

 

Interest income, net

 

 
106

 

 
105

 

 
409

 

 
412

 

Equity in earnings (loss) of unconsolidated joint ventures

 

 
(558)

 

 
(315)

 

 
(1,995)

 

 
462

 

Other income, net

 

 
178

 

 
268

 

 
860

 

 
2,023

 

Income (loss) before provision for income taxes

 

 
2,044

 

 
(1,608)

 

 
5,699

 

 
(2,002)

 

Provision for income taxes

 

 
20

 

 
197

 

 
733

 

 
531

 

Net income (loss)

 

 
2,024

 

 
(1,805)

 

 
4,966

 

 
(2,533)

 

Less: Net (income) loss attributable to noncontrolling interests

 

 
190

 

 
562

 

 
670

 

 
305

 

Net income (loss) attributable to AXT, Inc.

 

$
2,214

 

$
(1,243)

 

$
5,636

 

$
(2,228)

 

Net income (loss) attributable to AXT, Inc. per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$
0.07

 

$
(0.04)

 

$
0.17

 

$
(0.07)

 

Diluted

 

$
0.06

 

$
(0.04)

 

$
0.17

 

$
(0.07)

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 
32,431

 

 
31,951

 

 
32,139

 

 
32,183

 

Diluted

 

 
33,734

 

 
31,951

 

 
32,894

 

 
32,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 99.1

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2016 Results

Feb. 22, 2017

Page 6 of 5

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

    

December 31, 

 

 

 

2016

 

2015

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$
36,152

 

$
24,875

 

Short-term investments

 

 
11,415

 

 
11,437

 

Accounts receivable, net

 

 
14,453

 

 
18,468

 

Inventories

 

 
40,152

 

 
38,012

 

Prepaid expenses and other current assets

 

 
5,114

 

 
4,096

 

Total current assets

 

 
107,286

 

 
96,888

 

Long-term investments

 

 
6,156

 

 
7,691

 

Property, plant and equipment, net

 

 
27,805

 

 
31,422

 

Related party notes receivable – long-term

 

 
157

 

 
166

 

Other assets

 

 
12,842

 

 
15,729

 

Total assets

 

$
154,246

 

$
151,896

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$
6,691

 

$
6,460

 

Accrued liabilities

 

 
6,359

 

 
6,381

 

Total current liabilities

 

 
13,050

 

 
12,841

 

Long-term portion of royalty payments

 

 
575

 

 
1,150

 

Other long-term liabilities

 

 
330

 

 
344

 

Total liabilities

 

 
13,955

 

 
14,335

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock

 

 
3,532

 

 
3,532

 

Common stock

 

 
32

 

 
32

 

Additional paid-in-capital

 

 
197,079

 

 
194,646

 

Accumulated deficit

 

 
(64,985)

 

 
(70,621)

 

Accumulated other comprehensive income

 

 
253

 

 
4,382

 

Total AXT, Inc. stockholders’ equity

 

 
135,911

 

 
131,971

 

Noncontrolling interests

 

 
4,380

 

 
5,590

 

Total stockholders’ equity

 

 
140,291

 

 
137,561

 

Total liabilities and stockholders’ equity

 

$
154,246

 

$
151,896