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FREMONT, Calif., Oct. 28, 2020 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter, ended September 30, 2020.
Management Qualitative Comments
“We are pleased to report 28 percent year-over-year revenue growth in Q3 and earnings above our guidance range,” said Morris Young, chief executive officer. “These results were driven by meaningful contribution from strategic applications such as 5G telecommunications, passive optical networks, and data center connectivity, where our indium phosphide substrates play an important role in enabling ongoing technological advancement. We are excited to see so many of the applications and customer opportunities for which we have been preparing over the last two years beginning to take shape. With our gallium arsenide manufacturing relocation largely complete and the success of our efforts visible in customer acceptance, our new facilities are poised to be a cornerstone of our growth and market differentiation.”
Third Quarter 2020 Results
Revenue for the third quarter of 2020 was $25.5 million, compared with $22.1 million in the second quarter of 2020 and $19.8 million for the third quarter of 2019.
Gross margin was 34.6 percent of revenue for the third quarter of 2020, compared with 30.6 percent of revenue in the second quarter of 2020 and 29.0 percent for the third quarter of 2019.
Operating expenses were $6.6 million in the third quarter of 2020, compared with $6.3 million in the second quarter of 2020, and $6.2 million for the third quarter of 2019.
Operating profit for the third quarter of 2020 was $2.2 million, compared with an operating profit of $0.5 million in the second quarter of 2020, and an operating loss of $0.5 million for the third quarter of 2019.
Other expense, provision for income taxes and income attributable to noncontrolling interests, net for the third quarter of 2020 was a charge of $1.2 million. This includes a gain from our unconsolidated joint ventures and other income, together totaling $0.1 million, a foreign exchange charge of $0.1 million, $0.7 million for taxes and $0.5 million attributable to noncontrolling interests.
Net income in the third quarter of 2020 was $1.0 million, or $0.02 per diluted share, compared with net income of $0.4 million or $0.01 per diluted share in the second quarter of 2020, and a net loss of $0.9 million or $0.02 per basic share for the third quarter of 2019.
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 7497220). The call will also be simulcast at www.axt.com. Replays will be available at (855) 859-2056 (passcode 7497220) until November 3, 2020. 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 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 its sales, administration and customer service functions. 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.
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 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 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.
FINANCIAL TABLES TO FOLLOW
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended
Nine Months Ended
Cost of revenue
Selling, general and administrative
Research and development
Total operating expenses
Income (loss) from operations
Interest income (expense), net
Equity in income (loss) of unconsolidated joint ventures
Other income (expense), net
Income (loss) before provision for income taxes
Provision for income taxes
Net income (loss)
Less: Net income attributable to noncontrolling interests
Net income (loss) attributable to AXT, Inc.
Net income (loss) attributable to AXT, Inc. per common share:
Weighted-average number of common shares outstanding:
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
Cash and cash equivalents
Accounts receivable, net
Prepaid expenses and other current assets
Total current assets
Property, plant and equipment, net
Operating lease right-of-use assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total current liabilities
Long-term portion of royalty payments
Noncurrent operating lease liabilities
Other long-term liabilities
Additional paid-in capital
Accumulated other comprehensive loss
Total AXT, Inc. stockholders’ equity
Total stockholders’ equity
Total liabilities and stockholders’ equity
Chief Financial Officer
Green Communications Consulting, LLC