FREMONT, Calif., Oct. 27, 2022 (GLOBE NEWSWIRE) — AXT, Inc. (NasdaqGS: AXTI), a number one producer of compound semiconductor wafer substrates, at present reported monetary outcomes for the third quarter, ended September 30, 2022.
Management Qualitative Comments
“Although revenue decreased quarter over quarter, EPS remains solid. We have confidence in the fundamental market trends that drive our revenue, customer, and application adoption.” mentioned Morris Young, chief govt officer. “Our Q3 results demonstrate several key factors: First, indium phosphide applications are expanding and indium phosphide is becoming an increasingly strategic material across the landscape of technology. Despite the overall setback, our indium phosphide revenue grew 12 percent over Q2, setting a new high for quarterly revenue, and grew 48 percent over the same period in 2021. Second, AXT has made meaningful progress in driving our gross margin performance making the revenue more profitable and contributing to EPS strength. And third, with the strong ramp of our new consumer applications, we continue to demonstrate our success in supporting the requirements of some of the most discerning Tier-1 companies in the world today. These factors illustrate how we have evolved as a company, and demonstrate our readiness for continued growth and market leadership.”
Third Quarter 2022 Results
In order to offer higher readability on its operational and monetary outcomes, AXT started reporting its monetary outcomes on each a GAAP and non-GAAP foundation within the third quarter of 2021. Non-GAAP outcomes exclude stock-based compensation. Investors can discover GAAP to non-GAAP reconciliation tables within the monetary statements on this earnings launch.
- Revenue for the third quarter of 2022 was $35.2 million, in contrast with $39.5 million for the second quarter of 2022 and $34.6 million for the third quarter of 2021.
- GAAP gross margin was 42.0 % of income for the third quarter of 2022, in contrast with 39.1 % of income for the second quarter of 2022 and 33.3 % for the third quarter of 2021.
- Non-GAAP gross margin was 42.2 % of income for the third quarter of 2022, in contrast with 39.4 % of income for the second quarter of 2022 and 33.8 % for the third quarter of 2021.
- GAAP working bills have been $10.2 million for the third quarter of 2022, in contrast with $10.1 million for the second quarter of 2022 and $9.1 million for the third quarter of 2021.
- Non-GAAP working bills have been $9.2 million for the third quarter of 2022, in contrast with $9.1 million for the second quarter of 2022 and $7.7 million for the third quarter of 2021.
- GAAP working revenue for the third quarter of 2022 was $4.6 million, in contrast with $5.3 million for the second quarter of 2022 and $2.4 million for the third quarter of 2021.
- Non-GAAP working revenue for the third quarter of 2022 was $5.6 million, in contrast with $6.4 million for the second quarter of 2022 and $4.0 million for the third quarter of 2021.
- Non-operating revenue and expense, taxes and minority curiosity for the third quarter of 2022 was a achieve of $1.2 million, in contrast with a achieve of $0.3 million within the second quarter of 2022 and a achieve of $1.4 million for the third quarter of 2021.
- GAAP web revenue, after minority pursuits, for the third quarter of 2022 was $5.8 million, or $0.13 per share, in contrast with web revenue of $5.5 million or $0.13 per share for the second quarter of 2022 and web revenue of $3.8 million or $0.09 per share for the third quarter of 2021.
- Non-GAAP web revenue for the third quarter of 2022 was $6.8 million, or $0.16 per share, in contrast with web revenue of $6.7 million or $0.16 per share for the second quarter of 2022 and web revenue of $5.4 million or $0.13 per share for the third quarter of 2021.
STAR Market Listing Update
On January 10, 2022, AXT introduced that Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), its subsidiary in Beijing, China, submitted to the Shanghai Stock Exchange (the “SSE”) its software to checklist its shares in an preliminary public providing (the “IPO”) on the SSE’s Sci-Tech innovAtion boaRd (the “STAR Market”) and the applying was accepted for overview. Subsequently, Tongmei responded to a number of rounds of questions acquired from the SSE. On July 12, 2022, the SSE accepted the itemizing of Tongmei’s shares in an IPO on the STAR Market. On August 1, 2022, the China Securities Regulatory Commission (the “CSRC”) accepted for overview Tongmei’s IPO software. The STAR Market IPO stays topic to overview and approval by the CSRC and different authorities. The strategy of going public on the STAR Market contains a number of durations of overview and, subsequently, is a prolonged course of. Subject to overview and approval by the CSRC and different authorities, Tongmei hopes to perform this objective as early as This autumn 2022. AXT has posted a short abstract of the plan and the method on its web site at http://www.axt.com.
Conference Call
The firm will host a convention name to debate these outcomes on October 27, 2022 at 1:30 p.m. PT. To entry the decision by cellphone, please go to this hyperlink to register and you may be supplied with dial in particulars:
https://register.vevent.com/register/BIdbf7aee0a4da485ab0623751b90236cf. A webcast hyperlink for the decision may also be out there on the investor relations web page at www.axt.com. Additional investor info could be accessed at http://www.axt.com or by calling the corporate’s Investor Relations Department at (510) 438-4700.
About AXT, Inc.
AXT is a fabric science firm that develops and manufactures high-performance compound and single aspect semiconductor substrate wafers comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). The firm’s substrate wafers are used when a typical silicon substrate wafer can not meet the efficiency necessities of a semiconductor or optoelectronic machine. End markets embody 5G infrastructure, knowledge heart connectivity (silicon photonics), passive optical networks, LED lighting, lasers, sensors, energy amplifiers for wi-fi units and satellite tv for pc photo voltaic cells. AXT’s worldwide headquarters are in Fremont, California and contains gross sales, administration and customer support capabilities. AXT has its Asia headquarters in Beijing, China and manufacturing amenities in three separate places in China. In addition, as a part of its provide chain technique, the Company has partial possession in ten firms in China producing uncooked supplies for its manufacturing course of. For extra info, see AXT’s web site at http://www.axt.com.
Note Regarding Use of Non-GAAP Financial Measures
As mentioned above, the corporate offers sure non-GAAP monetary measures that exclude stock-based compensation along with, and never as an alternative to, or as a result of it believes that such info is superior to, monetary measures calculated in accordance with GAAP. The firm believes that non-GAAP monetary measures, when taken collectively, could also be useful to traders as a result of they supply consistency and comparability with previous monetary efficiency and supply higher comparability with our peer firms, lots of which additionally use comparable non-GAAP monetary measures. Further, the corporate believes that these non-GAAP monetary measures supply an necessary analytical device to assist traders perceive the corporate’s core working outcomes and developments. In addition, administration makes use of non-GAAP monetary measures to check the corporate’s efficiency relative to forecasts and strategic plans and to benchmark its efficiency externally towards peer firms. However, non-GAAP monetary info is introduced for supplemental informational functions solely, has limitations as an analytical device and shouldn’t be thought-about in isolation or as an alternative to monetary info introduced in accordance with GAAP. In addition, different firms could calculate similarly-titled non-GAAP monetary measures in a different way or could use different measures to guage their efficiency, all of which may scale back the usefulness of the corporate’s non-GAAP monetary measures as instruments for comparability. The firm encourages traders to fastidiously contemplate its outcomes underneath GAAP, in addition to its supplemental non‐GAAP info and the reconciliation between these displays, to extra totally perceive its business. A reconciliation of our GAAP consolidated monetary statements to our non-GAAP consolidated monetary statements is supplied under.
Forward-Looking Statements
The foregoing paragraphs include forward-looking statements throughout the that means of the Federal securities legal guidelines, together with, for instance, statements concerning the timing and completion of the proposed itemizing of shares of Tongmei on the STAR Market. Additional examples of forward-looking statements embody statements concerning the market demand for our merchandise, our progress prospects and alternatives for continued business growth, together with expertise developments, new functions and the ramping of Tier-1 prospects, our market alternative, our potential to steer our trade, our relocation, our expectations with respect to our business prospects and monetary outcomes, together with our gross margin efficiency, and our growth of bigger diameter substrates that we consider will allow the following era of expertise innovation throughout quite a lot of end-markets. These forward-looking statements are primarily based upon assumptions which might be topic to uncertainties and components regarding the corporate’s operations and business surroundings, which may trigger precise outcomes to vary materially from these expressed or implied within the forward-looking statements contained within the foregoing dialogue. These uncertainties and components embody however should not restricted to: the requests for redemptions by non-public fairness funds in China of investments in Tongmei, the executive challenges in satisfying the necessities of assorted authorities businesses in China in reference to the itemizing of shares of Tongmei on the STAR Market, continued open entry to firms to checklist shares on the STAR Market, investor enthusiasm for brand new listings of shares on the STAR Market and geopolitical tensions between China and the United States. Additional uncertainties and components embody, however should not restricted to: the timing and receipt of serious orders; the cancellation of orders and return of product; rising functions utilizing chips or units fabricated on our substrates; end-user acceptance of merchandise containing chips or units fabricated on our substrates; our potential to deliver new merchandise to market; product bulletins by our rivals; the flexibility to regulate prices and enhance effectivity; the flexibility to make the most of our manufacturing capability; product yields and their affect on gross margins; the relocation of producing strains and ramping of manufacturing; potential manufacturing facility shutdowns because of air air pollution in China or COVID-19; COVID-19 or different outbreaks of a contagious illness; tariffs and different commerce conflict points; the monetary efficiency of our partially owned provide chain firms; insurance policies and laws in China; and different components as set forth within the firm’s Annual Report on Form 10-Okay, quarterly experiences on Form 10-Q and different filings made with the Securities and Exchange Commission. Each of those components is tough to foretell and plenty of are past the corporate’s management. The firm doesn’t undertake any obligation to replace any forward-looking assertion, because of new info, future occasions or in any other case.
FINANCIAL TABLES TO FOLLOW
AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in hundreds, besides per share knowledge)
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Revenue | $ | 35,183 | $ | 34,576 | $ | 114,323 | $ | 99,661 | |||||||||
| Cost of income | 20,401 | 23,075 | 70,798 | 64,386 | |||||||||||||
| Gross revenue | 14,782 | 11,501 | 43,525 | 35,275 | |||||||||||||
| Operating bills: | |||||||||||||||||
| Selling, normal and administrative | 6,576 | 6,476 | 19,719 | 17,841 | |||||||||||||
| Research and growth | 3,639 | 2,629 | 10,251 | 7,571 | |||||||||||||
| Total working bills | 10,215 | 9,105 | 29,970 | 25,412 | |||||||||||||
| Income from operations | 4,567 | 2,396 | 13,555 | 9,863 | |||||||||||||
| Interest expense, web | (299 | ) | (44 | ) | (670 | ) | (55 | ) | |||||||||
| Equity in revenue of unconsolidated joint ventures | 2,006 | 1,061 | 5,308 | 3,674 | |||||||||||||
| Other revenue, web | 957 | 948 | 1,242 | 898 | |||||||||||||
| Income earlier than provision for revenue taxes | 7,231 | 4,361 | 19,435 | 14,380 | |||||||||||||
| Provision for (profit from) revenue taxes | 501 | (135 | ) | 2,188 | 1,504 | ||||||||||||
| Net revenue | 6,730 | 4,496 | 17,247 | 12,876 | |||||||||||||
| Less: Net revenue attributable to noncontrolling pursuits and redeemable noncontrolling pursuits | (971 | ) | (696 | ) | (2,777 | ) | (1,266 | ) | |||||||||
| Net revenue attributable to AXT, Inc. | $ | 5,759 | $ | 3,800 | $ | 14,470 | $ | 11,610 | |||||||||
| Net revenue attributable to AXT, Inc. per widespread share: | |||||||||||||||||
| Basic | $ | 0.14 | $ | 0.09 | $ | 0.34 | $ | 0.28 | |||||||||
| Diluted | $ | 0.13 | $ | 0.09 | $ | 0.34 | $ | 0.27 | |||||||||
| Weighted-average variety of widespread shares excellent: | |||||||||||||||||
| Basic | 42,163 | 41,460 | 42,011 | 41,237 | |||||||||||||
| Diluted | 42,982 | 42,678 | 42,718 | 42,710 | |||||||||||||
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in hundreds)
| September 30, | December 31, | ||||||||
| 2022 | 2021 | ||||||||
| ASSETS | |||||||||
| Current belongings: | |||||||||
| Cash and money equivalents | $ | 32,918 | $ | 36,763 | |||||
| Restricted Cash | 3,900 | — | |||||||
| Short-term investments | 7,207 | 5,419 | |||||||
| Accounts receivable, web | 38,131 | 34,839 | |||||||
| Inventories | 88,496 | 65,912 | |||||||
| Prepaid bills and different present belongings | 10,804 | 17,252 | |||||||
| Total present belongings | 181,456 | 160,185 | |||||||
| Long-term investments | 4,196 | 9,576 | |||||||
| Property, plant and tools, web | 152,727 | 142,415 | |||||||
| Operating lease right-of-use belongings | 1,820 | 2,324 | |||||||
| Other belongings | 21,577 | 17,941 | |||||||
| Total belongings | $ | 361,776 | $ | 332,441 | |||||
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 13,354 | $ | 16,649 | |||||
| Accrued liabilities | 16,555 | 17,057 | |||||||
| Short-term mortgage, associated occasion | — | 1,887 | |||||||
| Bank mortgage | 42,998 | 12,229 | |||||||
| Total present liabilities | 72,907 | 47,822 | |||||||
| Noncurrent working lease liabilities | 1,384 | 1,935 | |||||||
| Other long-term liabilities | 2,128 | 2,453 | |||||||
| Total liabilities | 76,419 | 52,210 | |||||||
| Redeemable noncontrolling pursuits | 45,198 | 50,385 | |||||||
| Stockholders’ fairness: | |||||||||
| Preferred inventory | 3,532 | 3,532 | |||||||
| Common inventory | 43 | 43 | |||||||
| Additional paid-in capital | 234,532 | 231,622 | |||||||
| Accumulated deficit | (15,500 | ) | (29,970 | ) | |||||
| Accumulated different complete revenue | (5,457 | ) | 6,302 | ||||||
| Total AXT, Inc. stockholders’ fairness | 217,150 | 211,529 | |||||||
| Noncontrolling pursuits | 23,009 | 18,317 | |||||||
| Total stockholders’ fairness | 240,159 | 229,846 | |||||||
| Total liabilities, redeemable noncontrolling pursuits and stockholders’ fairness | $ | 361,776 | $ | 332,441 | |||||
AXT, INC.
Reconciliation of Statements of Operations Under GAAP and Non-GAAP
(Unaudited, in hundreds)
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| GAAP gross revenue | $ | 14,782 | $ | 11,501 | $ | 43,525 | $ | 35,275 | ||||
| Stock compensation expense | 51 | 188 | 277 | 263 | ||||||||
| Non-GAAP gross revenue | $ | 14,833 | $ | 11,689 | $ | 43,802 | $ | 35,538 | ||||
| GAAP working bills | $ | 10,215 | $ | 9,105 | $ | 29,970 | $ | 25,412 | ||||
| Stock compensation expense | 985 | 1,451 | 2,981 | 3,168 | ||||||||
| Non-GAAP working bills | $ | 9,230 | $ | 7,654 | $ | 26,989 | $ | 22,244 | ||||
| GAAP revenue from operations | $ | 4,567 | $ | 2,396 | $ | 13,555 | $ | 9,863 | ||||
| Stock compensation expense | 1,036 | 1,639 | 3,258 | 3,431 | ||||||||
| Non-GAAP revenue from operations | $ | 5,603 | $ | 4,035 | $ | 16,813 | $ | 13,294 | ||||
| GAAP web revenue | $ | 5,759 | $ | 3,800 | $ | 14,470 | $ | 11,610 | ||||
| Stock compensation expense | 1,036 | 1,639 | 3,258 | 3,431 | ||||||||
| Non-GAAP web revenue | $ | 6,795 | $ | 5,439 | $ | 17,728 | $ | 15,041 | ||||
| GAAP web revenue per diluted share | $ | 0.13 | $ | 0.09 | $ | 0.34 | $ | 0.27 | ||||
| Stock compensation expense per diluted share | $ | 0.02 | $ | 0.04 | $ | 0.08 | $ | 0.08 | ||||
| Non-GAAP web revenue per diluted share | $ | 0.16 | $ | 0.13 | $ | 0.41 | $ | 0.35 | ||||
| Shares used to compute diluted web revenue per share | 42,982 | 42,678 | 42,718 | 42,710 | ||||||||
Contacts:
Gary Fischer
Chief Financial Officer
(510) 438-4700
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060
