AXT, Inc. Announces First Quarter 2022 Financial Results
April 28 2022 - 04:05PM
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound
semiconductor wafer substrates, today reported financial results
for the first quarter, ended March 31, 2022.
Management Qualitative
Comments
“Q1 was another strong quarter for AXT,” said
Morris Young, chief executive officer. “As our growth demonstrates,
we have reached an inflection point in our business, where our
investments in technology, business operations, and customer
relationships are contributing to our growth. Market share gains,
and expansion into new applications and Tier-one opportunities
enabled us to post a 26 percent revenue increase in Q1 from the
prior year. We are particularly pleased with the continued strong
growth of our indium phosphide products. Total revenue growth is
coming from a diverse set of applications and customers across
telecom infrastructure, data center, industrial, consumer,
healthcare, automotive, and other markets – giving us confidence in
the sustainability of our business model throughout 2022 and
beyond.”
First Quarter 2022 Results
- Revenue for the first quarter of
2022 was $39.7 million, compared with $37.7 million for the fourth
quarter of 2021 and $31.4 million for the first quarter of 2021.
This is an approximately 26 percent increase over the first quarter
of 2021 and is our ninth consecutive quarter of revenue
growth.
- GAAP gross margin was 33.6 percent
of revenue for the first quarter of 2022, compared with 32.2
percent of revenue for the fourth quarter of 2021 and 36.8 percent
for the first quarter of 2021.
- Non-GAAP gross margin was 33.8
percent of revenue for the first quarter of 2022, compared with
32.4 percent of revenue for the fourth quarter of 2021 and 36.9
percent for the first quarter of 2021.
- GAAP operating expenses were $9.6
million for the first quarter of 2022, compared with $9.1 million
for the fourth quarter of 2021 and $8.0 million for the first
quarter of 2021.
- Non-GAAP operating expenses were
$8.6 million for the first quarter of 2022, compared with $8.1
million for the fourth quarter of 2021 and $7.2 million for the
first quarter of 2021.
- GAAP operating profit for the first
quarter of 2022 was $3.7 million, compared with $3.0 million for
the fourth quarter of 2021 and $3.6 million for the first quarter
of 2021.
- Non-GAAP operating profit for the
first quarter of 2022 was $4.8 million, compared with $4.1 million
for the fourth quarter of 2021 and $4.4 million for the first
quarter of 2021.
- Non-operating income and expense,
net (including income attributable to noncontrolling interests and
redeemable noncontrolling interests) for the first quarter of 2022
was an expense of $0.5 million, compared with an expense of $0.1
million in the fourth quarter of 2021 and an expense of $0.1
million for the first quarter of 2021.
- GAAP net income, after minority
interests, for the first quarter of 2022 was $3.2 million, or $0.07
per share, compared with net income of $3.0 million or $0.07 per
share for the fourth quarter of 2021 and net income of $3.4 million
or $0.08 per share for the first quarter of 2021.
- Non-GAAP net income for the first
quarter of 2022 was $4.3 million, or $0.10 per share, compared with
net income of $4.1 million or $0.09 per share for the fourth
quarter of 2021 and net income of $4.2 million or $0.10 per share
for the first quarter of 2021.
STAR Market Listing Update
On January 10, 2022 AXT announced that Tongmei,
its subsidiary in Beijing, China, submitted to the Shanghai Stock
Exchange in late December 2021 its application to go public on the
STAR Market. The application was accepted for consideration on
January 10, 2022. Subsequently Tongmei responded to questions
received from the Shanghai Stock Exchange and submitted a revised
application, which was accepted for review by the Shanghai Stock
Exchange on April 18, 2022. The process of going public on the STAR
Market includes several periods of review and, therefore, is a
lengthy process. Tongmei expects to accomplish this goal in the
second half of 2022. AXT has posted a brief summary of the plan and
the process on its website at http://www.axt.com.
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 4697118). The call will
also be simulcast at www.axt.com. Replays will be available at
(855) 859-2056 (passcode 4697118) until May 4, 2022. 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 and includes sales, administration and customer
service functions. AXT has its Asia headquarters in Beijing,
China and manufacturing facilities in three separate locations
in China. In addition, as part of its supply chain strategy, the
Company has partial ownership in ten companies in China producing
raw materials for its manufacturing process. For more information,
see AXT’s website at http://www.axt.com.
Forward-Looking Statements
The foregoing paragraphs contain forward-looking
statements within the meaning of the Federal securities laws,
including, for example, statements regarding the timing and
completion of the proposed listing of shares of Tongmei on the STAR
Market. Additional examples of forward-looking statements include
statements regarding the market demand for our products, our growth
prospects and opportunities for continued business expansion,
including technology trends and new applications, our market
opportunity, our ability to lead our industry, 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 requests for redemptions by private equity
funds in China of investments in Tongmei, the administrative
challenges in satisfying the requirements of various government
agencies in China in connection with the listing of shares of
Tongmei on the STAR Market, continued open access to companies to
list shares on the STAR Market, investor enthusiasm for new
listings of shares on the STAR Market and geopolitical tensions
between China and the United States. Additional 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 or COVID-19; 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.
Contacts:Gary FischerChief
Financial Officer(510) 438-4700
Leslie
Green Green
Communications Consulting, LLC(650) 312-9060
FINANCIAL TABLES TO FOLLOW
AXT, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited,
in thousands, except per share data)
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 31, |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
Revenue |
|
$ |
39,653 |
|
|
$ |
31,350 |
|
Cost of revenue |
|
|
26,345 |
|
|
|
19,814 |
|
Gross profit |
|
|
13,308 |
|
|
|
11,536 |
|
Operating expenses: |
|
|
|
|
|
|
Selling, general and administrative |
|
|
6,450 |
|
|
|
5,570 |
|
Research and development |
|
|
3,159 |
|
|
|
2,405 |
|
Total operating expenses |
|
|
9,609 |
|
|
|
7,975 |
|
Income from operations |
|
|
3,699 |
|
|
|
3,561 |
|
Interest expense, net |
|
|
(183 |
) |
|
|
(50 |
) |
Equity in income of
unconsolidated joint ventures |
|
|
1,125 |
|
|
|
1,111 |
|
Other expense, net |
|
|
(9 |
) |
|
|
(111 |
) |
Income before provision for
income taxes |
|
|
4,632 |
|
|
|
4,511 |
|
Provision for income
taxes |
|
|
660 |
|
|
|
746 |
|
Net income |
|
|
3,972 |
|
|
|
3,765 |
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interests |
|
|
(807 |
) |
|
|
(340 |
) |
Net income attributable to
AXT, Inc. |
|
$ |
3,165 |
|
|
$ |
3,425 |
|
Net income attributable to
AXT, Inc. per common share: |
|
|
|
|
|
|
Basic |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
Diluted |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
Weighted-average number of
common shares outstanding: |
|
|
|
|
|
|
Basic |
|
|
41,871 |
|
|
|
41,004 |
|
Diluted |
|
|
42,662 |
|
|
|
42,726 |
|
AXT, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited, in
thousands)
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
2022 |
|
2021 |
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
29,494 |
|
|
$ |
36,763 |
|
Short-term investments |
|
|
5,400 |
|
|
|
5,419 |
|
Accounts receivable, net |
|
|
39,848 |
|
|
|
34,839 |
|
Inventories |
|
|
68,821 |
|
|
|
65,912 |
|
Prepaid expenses and other current assets |
|
|
16,501 |
|
|
|
17,252 |
|
Total current assets |
|
|
160,064 |
|
|
|
160,185 |
|
Long-term investments |
|
|
9,400 |
|
|
|
9,576 |
|
Property, plant and equipment,
net |
|
|
147,286 |
|
|
|
142,415 |
|
Operating lease right-of-use
assets |
|
|
2,223 |
|
|
|
2,324 |
|
Other assets |
|
|
19,426 |
|
|
|
17,941 |
|
Total assets |
|
$ |
338,399 |
|
|
$ |
332,441 |
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
14,399 |
|
|
$ |
16,649 |
|
Accrued liabilities |
|
|
12,213 |
|
|
|
17,057 |
|
Short-term loan, related party |
|
|
— |
|
|
|
1,887 |
|
Bank loan |
|
|
20,192 |
|
|
|
12,229 |
|
Total current liabilities |
|
|
46,804 |
|
|
|
47,822 |
|
Noncurrent operating lease
liabilities |
|
|
1,810 |
|
|
|
1,935 |
|
Other long-term
liabilities |
|
|
2,263 |
|
|
|
2,453 |
|
Total liabilities |
|
|
50,877 |
|
|
|
52,210 |
|
|
|
|
|
|
|
|
Redeemable noncontrolling
interests |
|
|
50,971 |
|
|
|
50,385 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock |
|
|
3,532 |
|
|
|
3,532 |
|
Common stock |
|
|
43 |
|
|
|
43 |
|
Additional paid-in capital |
|
|
232,311 |
|
|
|
231,622 |
|
Accumulated deficit |
|
|
(26,805 |
) |
|
|
(29,970 |
) |
Accumulated other comprehensive income |
|
|
6,629 |
|
|
|
6,302 |
|
Total AXT, Inc. stockholders’ equity |
|
|
215,710 |
|
|
|
211,529 |
|
Noncontrolling interests |
|
|
20,841 |
|
|
|
18,317 |
|
Total stockholders’ equity |
|
|
236,551 |
|
|
|
229,846 |
|
Total liabilities, redeemable noncontrolling interests and
stockholders’ equity |
|
$ |
338,399 |
|
|
$ |
332,441 |
|
AXT, INC.Reconciliation
of Statements of Operations Under GAAP and
Non-GAAP(Unaudited, in thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2022 |
|
|
2021 |
|
GAAP gross profit |
|
$ |
13,308 |
|
|
$ |
11,536 |
|
Stock compensation
expense |
|
|
113 |
|
|
|
39 |
|
Non-GAAP gross profit |
|
$ |
13,421 |
|
|
$ |
11,575 |
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses |
|
$ |
9,609 |
|
|
$ |
7,975 |
|
Stock compensation
expense |
|
|
975 |
|
|
|
777 |
|
Non-GAAP operating
expenses |
|
$ |
8,634 |
|
|
$ |
7,198 |
|
|
|
|
|
|
|
|
|
|
GAAP income from
operations |
|
$ |
3,699 |
|
|
$ |
3,561 |
|
Stock compensation
expense |
|
|
1,088 |
|
|
|
816 |
|
Non-GAAP income from
operations |
|
$ |
4,787 |
|
|
$ |
4,377 |
|
|
|
|
|
|
|
|
|
|
GAAP net income |
|
$ |
3,165 |
|
|
$ |
3,425 |
|
Stock compensation
expense |
|
|
1,088 |
|
|
|
816 |
|
Non-GAAP net income |
|
$ |
4,253 |
|
|
$ |
4,241 |
|
|
|
|
|
|
|
|
|
|
GAAP net income per diluted
share |
|
$ |
0.07 |
|
|
$ |
0.08 |
|
Stock compensation expense per
diluted share |
|
$ |
0.03 |
|
|
$ |
0.02 |
|
Non-GAAP net income per
diluted share |
|
$ |
0.10 |
|
|
$ |
0.10 |
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted
net income per share |
|
|
42,662 |
|
|
|
42,726 |
|
AXT (NASDAQ:AXTI)
Historical Stock Chart
From Feb 2024 to Mar 2024
AXT (NASDAQ:AXTI)
Historical Stock Chart
From Mar 2023 to Mar 2024