FREMONT, Calif., July 22, 2020 (GLOBE NEWSWIRE) — AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the second quarter, ended June 30, 2020.

Management Qualitative Comments

“We view 2020 as a turning point in our business,” said Morris Young, chief executive officer. “There are clear signs in the marketplace that strategic applications like 5G, data centers, and passive optical networks (PON) are strengthening. In addition, we believe new applications across our portfolio are creating exciting incremental opportunities beginning later this year. Further, with the relocation of our gallium arsenide manufacturing largely completed and production ramping, we are now focusing on elevating our manufacturing and business processes to serve the needs of increasingly sophisticated applications and customer requirements. In total, we believe we are positioning ourselves for renewed revenue expansion and improving profitability.”

Second Quarter 2020 Results

Revenue for the second quarter of 2020 was $22.1 million, compared with $20.7 million in the first quarter of 2020 and $24.8 million for the second quarter of 2019.   

Gross margin was 30.6 percent of revenue for the second quarter of 2020, compared with 26.6 percent of revenue in the first quarter of 2020 and 34.3 percent for the second quarter of 2019.

Operating expenses were $6.3 million in the second quarter of 2020, compared with $6.2 million in the first quarter of 2020, and $6.2 million for the second quarter of 2019. 

Operating profit for the second quarter of 2020 was $0.5 million, compared with an operating loss of $0.6 million in the first quarter of 2020, and an operating profit of $2.3 million for the second quarter of 2019.

Other income, after deducting for associated taxes and the portion attributable to noncontrolling interests, net for the second quarter of 2020 was a charge of $0.1 million. This includes a grant of $1.6 million from a provincial government agency as an award for relocating to its province, $0.9 million for taxes and $0.6 million attributable to noncontrolling interests and a loss of $0.2 million from our unconsolidated joint ventures.

Net income in the second quarter of 2020 was $0.4 million, or $0.01 per share, compared with a net loss of $0.2 million or ($0.01) per share in the first quarter of 2020, and net income of $1.5 million or $0.04 per share for the second quarter of 2019.

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 2378158). The call will also be simulcast at Replays will be available at (855) 859-2056 (passcode 2378158) until July 28, 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 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

Forward-Looking Statements

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.


(Unaudited, in thousands, except per share data)

    Three Months Ended   Six Months Ended
    June 30,   December 31,
    2020     2019     2020     2019  
Revenue   $ 22,134     $ 24,797     $ 42,857     $ 45,005  
Cost of revenue     15,366       16,291       30,567       29,804  
Gross profit     6,768       8,506       12,290       15,201  
Operating expenses:                        
Selling, general and administrative     4,747       4,769       9,496       9,492  
Research and development     1,543       1,399       2,950       2,745  
Total operating expenses     6,290       6,168       12,446       12,237  
Income (loss) from operations     478       2,338       (156 )     2,964  
Interest income (expense), net     (39 )     79       (68 )     174  
Equity in income (loss) of unconsolidated joint ventures     (168 )     8       (288 )     (1,446 )
Other income (expense), net     1,608       (90 )     2,974       (224 )
Income before provision for income taxes     1,879       2,335       2,462       1,468  
Provision for income taxes     920       597       1,286       753  
Net income     959       1,738       1,176       715  
Less: Net income attributable to noncontrolling interests     (598 )     (287 )     (993 )     (368 )
Net income attributable to AXT, Inc.   $ 361     $ 1,451     $ 183     $ 347  
Net income attributable to AXT, Inc. per common share:                        
Basic   $ 0.01     $ 0.04     $ 0.00     $ 0.01  
Diluted   $ 0.01     $ 0.04     $ 0.00     $ 0.01  
Weighted-average number of common shares outstanding:                        
Basic     39,973       39,447       39,891       39,399  
Diluted     40,750       40,123       40,543       40,045  

(Unaudited, in thousands)

    June 30,   December 31, 
    2020   2019
Current assets:            
Cash and cash equivalents   $ 26,515     $ 26,892  
Short-term investments     5,247       9,427  
Accounts receivable, net     19,760       19,031  
Inventories     49,586       49,152  
Prepaid expenses and other current assets     9,621       8,703  
Total current assets     110,729       113,205  
Long-term investments     720        
Property, plant and equipment, net     101,031       97,403  
Operating lease right-of-use assets     2,722       2,938  
Other assets     11,018       9,803  
Total assets   $ 226,220     $ 223,349  
Current liabilities:            
Accounts payable   $ 11,540     $ 10,098  
Accrued liabilities     10,511       11,681  
Bank loan     6,087       5,747  
Total current liabilities     28,138       27,526  
Long-term portion of royalty payments     1,177        
Noncurrent operating lease liabilities     2,455       2,695  
Other long-term liabilities      396        366  
Total liabilities      32,166        30,587  
Stockholders’ equity:            
Preferred stock      3,532        3,532  
Common stock      41        41  
Additional paid-in capital      238,754        236,957  
Accumulated deficit      (47,600 )      (47,783 )
Accumulated other comprehensive loss      (6,365 )      (4,862 )
Total AXT, Inc. stockholders’ equity      188,362        187,885  
Noncontrolling interests      5,692        4,877  
Total stockholders’ equity      194,054        192,762  
Total liabilities and stockholders’ equity   $  226,220     $  223,349  

Gary Fischer
Chief Financial Officer
(510) 438-4700

Leslie Green
Green Communications Consulting, LLC
(650) 312-9060

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