AXTI AXT Inc

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 23, 2015

 

AXT, INC.

(Exact name of registrant as specified in its charter)

 

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4281 Technology Drive

Fremont, California  94538

(Address of principal executive offices) (Zip Code)

 

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Registrant’s telephone number, including area code:  (510) 683-5900

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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Item 2.02

Results of Operations and Financial Condition

On February 23, 2015, AXT, Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2014.  A copy of the Company’s press release, announcing the results, is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The information in Exhibit 99.1 hereto discussing the Company’s results of operations and financial condition for the quarter and fiscal year ended December 31, 2014, is being “furnished” in accordance with General Instruction B.2 of Form 8-K and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.  The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits

99.1	Press release dated February 23, 2015, regarding the financial results of AXT, Inc. for the quarter and fiscal year ended December 31, 2014.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

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EXHIBIT INDEX

 

 

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE   Contacts:

Gary Fischer

Chief Financial Officer

(510) 683-5900

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

AXT, Inc. Announces Fourth Quarter and Fiscal 2014 Financial Results

FREMONT, Calif., Feb. 23, 2015 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year ended Dec. 31, 2014.

Fourth Quarter 2014 Results

Revenue for the fourth quarter of 2014 was $19.6 million compared with $23.1 million in the third quarter of 2014.

Gross margin was 25.4 percent of revenue for the fourth quarter of 2014, compared with 23.0 percent of revenue in the third quarter of 2014.

Operating expenses were $5.6 million in the fourth quarter of 2014, up from $4.7 million in the third quarter of 2014.  The increase was largely the result of professional fees associated with a recently completed internal investigation, initiated during the fourth quarter, of certain potential related-party transactions.

Operating loss for the fourth quarter of 2014 was $592,000 compared with an operating profit of $653,000 in the third quarter of 2014.

Net interest and other income for the fourth quarter of 2014 was $260,000.   This was primarily attributable to $26,000 from equity earnings of the company’s unconsolidated joint ventures, $637,000 from the sale of IntelliEpi stock, $618,000 from a loss on foreign exchange and $123,000 from interest income.

Net loss in the fourth quarter of 2014 was $311,000 or a loss of $0.01 per diluted share compared with a net income of $644,000 or a profit of $0.02 per diluted share in the third quarter of 2014.

Fiscal Year 2014 Results

Revenue for fiscal 2014 was $83.5 million, down slightly from $85.3 million in fiscal year 2013.

 

AXT, Inc. 4281 Technology Drive Fremont, CA 94538 Tel: 510.683.5900 Fax: 510.353.0668 www.axt.com.

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Gross margin for fiscal year 2014 was 20.6 percent of revenue, a significant improvement from 13.9 percent of revenue for fiscal year 2013.

Net loss for fiscal year 2014 also improved to $1.4 million or $0.05 per share compared with net loss of $8.0 million or $0.25 per diluted share for fiscal year 2013.

Management Qualitative Comments

“While the fourth quarter demand weakness contributed to a modest decline in our annual revenue from the prior year, meaningful improvements in our cost structure early in the year, coupled with ongoing discipline in our spending throughout the year, and a positive shift in our revenue mix resulted in a significant improvement year-over-year to our bottom line,” said Morris Young, chief executive officer.  “Further, we grew our cash and investments by $1.3 million, ending the year with a balance of $48.9 million.  As we enter 2015, we are well positioned to drive growth in our business and to continue executing on our strategic priorities.”

Conference Call

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising gallium arsenide (GaAs), indium phosphide (InP) 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 are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell. 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 invests in joint ventures 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.

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		Three Months Ended								Twelve Months Ended
		December 31,								December 31,
		2014				2013				2014				2013
Revenue		$	19,567			$	18,603			$	83,499			$	85,335
Cost of revenue			14,596				15,790				66,332				73,507
Gross profit			4,971				2,813				17,167				11,828
Operating expenses:
Selling, general and administrative			4,341				3,631				14,970				16,066
Research and development			1,222				797				4,144				3,424
Restructuring charge			0				0				907				0
Total operating expenses			5,563				4,428				20,021				19,490
Income (loss) from operations			(592	)			(1,615	)			(2,854	)			(7,662	)
Interest income, net			123				272				483				408
Equity in earnings of unconsolidated joint ventures			26				278				1,528				1,377
Other income (expense), net			111				(257	)			361				(748	)
Income (loss) before provision for income taxes			(332	)			(1,322	)			(482	)			(6,625	)
Provision for (benefit from) income taxes			(39	)			(134	)			215				188
Net income (loss)			(293	)			(1,188	)			(697	)			(6,813	)
Less: Net income (loss) attributable to noncontrolling interest			(18	)			(40	)			(691	)			(1,145	)
Net income (loss) attributable to AXT, Inc.		$	(311	)		$	(1,228	)		$	(1,388	)		$	(7,958	)
Net income (loss) attributable to AXT, Inc. per common share:
Basic		$	(0.01	)		$	(0.04	)		$	(0.05	)		$	(0.25	)
Diluted		$	(0.01	)		$	(0.04	)		$	(0.05	)		$	(0.25	)
Weighted average number of common shares outstanding:
Basic			32,558				32,628				32,452				32,700
Diluted			32,558				32,628				32,452				32,700

		December 31, 2,014				December 31, 2013
Assets:
Current assets
Cash and cash equivalents		$	28,814			$	24,961
Short-term investments			12,340				12,499
Accounts receivable, net			17,864				14,943
Inventories			38,574				39,127
Related party notes receivable - current			171				0
Prepaid expenses and other current assets			5,430				8,010
Total current assets			103,193				99,540
Long-term investments			7,783				10,145
Property, plant and equipment, net			33,862				37,621
Related party notes receivable - long-term			1,704				1,715
Other assets			14,975				14,801
Total assets		$	161,517			$	163,822
Liabilities and stockholders' equity:
Current liabilities
Accounts payable		$	7,137			$	8,140
Accrued liabilities			7,634				7,286
Total current liabilities			14,771				15,426
Long-term portion of royalty payments			1,725				2,525
Other long-term liabilities			333				325
Total liabilities			16,829				18,276
Stockholders' equity:
Preferred stock			3,532				3,532
Common stock			32				32
Additional paid-in capital			195,419				194,156
Accumulated deficit			(68,393	)			(67,005	)
Accumulated other comprehensive income			7,673				8,953
Total AXT, Inc. stockholders' equity			138,263				139,668
Noncontrolling interest			6,425				5,878
Total stockholders' equity			144,688				145,546
Total liabilities and stockholders' equity		$	161,517			$	163,822

 

 

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