0001051627false00010516272023-08-032023-08-03

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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): August 3, 2023

AXT, INC.

(Exact name of registrant as specified in its charter)

Delaware

  

000-24085

  

94-3031310

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

4281 Technology Drive

Fremont, California 94538

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (510) 438-4700

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common Stock, $0.001 par value

AXTI

The NASDAQ Stock Market LLC

Item 2.02 Results of Operations and Financial Condition

On August 3, 2023, AXT, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2023.  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 ended June 30, 2023, 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 August 3, 2023, regarding the financial results of AXT, Inc. for the quarter ended June 30, 2023.

EXHIBIT INDEX

Eptem

Exhibit
Number

 

Description

 

 

 

99.1

Press release dated August 3, 2023, regarding the financial results of AXT, Inc. for the quarter ended June 30, 2023.

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.

AXT, INC.

Date: August 3, 2023

By:

/s/ Gary L. Fischer

Gary L. Fischer

Chief Financial Officer and Corporate Secretary

Y

Graphic

Exhibit 99.1

AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 1 of 7

AXT, Inc. Announces Second Quarter 2023 Financial Results

FREMONT, Calif., August 3, 2023 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the second quarter, ended June 30, 2023.

Management Qualitative Comments


Though the macro environment continues to impact our growth near-term, the trends that have driven our revenue and customer expansion remain very much intact,” said Morris Young, chief executive officer. “We continue to excel in our technical capabilities and are readying our business to support new applications in data center, consumer, and other high growth areas. Further, we continue to expand our recycling program and are focused on improving our efficiency and accelerating our return to profitability.”

Second Quarter 2023 Results

In order to provide better clarity on its operational and financial results, AXT began reporting its financial results on both a GAAP and non-GAAP basis in the third quarter of 2021. Non-GAAP results exclude stock-based compensation expense. Investors can find GAAP to non-GAAP reconciliation tables in the financial statements in this earnings release.  

Revenue for the second quarter of 2023 was $18.6 million, compared with $19.4 million for the first quarter of 2023 and $39.5 million for the second quarter of 2022.

GAAP gross margin was 9.2 percent of revenue for the second quarter of 2023, compared with 26.3 percent of revenue for the first quarter of 2023 and 39.1 percent for the second quarter of 2022.

Non-GAAP gross margin was 9.8 percent of revenue for the second quarter of 2023, compared with 26.9 percent of revenue for the first quarter of 2023 and 39.4 percent for the second quarter of 2022.

GAAP operating expenses were $8.6 million for the second quarter of 2023, compared with $9.5 million for the first quarter of 2023 and $10.1 million for the second quarter of 2022.  

Non-GAAP operating expenses were $7.8 million for the second quarter of 2023, compared with $8.7 million for the first quarter of 2023 and $9.1 million for the second quarter of 2022.  


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 2 of 7

GAAP operating profit/(loss) for the second quarter of 2023 was an operating loss of ($6.8) million, compared with an operating loss of ($4.4) million for the first quarter of 2023 and an operating profit of $5.3 million for the second quarter of 2022.

Non-GAAP operating profit/(loss) for the second quarter of 2023 was an operating loss of ($5.9) million, compared with an operating loss of ($3.5) million for the first quarter of 2023 and an operating profit of $6.4 million for the second quarter of 2022.

Non-operating income and expense, taxes and minority interest for the second quarter of 2023 was a net gain of $1.8 million, compared with a net gain of $1.1 million in the first quarter of 2023 and a net gain of $0.3 million for the second quarter of 2022.

GAAP net income/(loss), after minority interests, for the second quarter of 2023 was a net loss of ($5.1) million, or ($0.12) per share, compared with a net loss of ($3.3) million, or ($0.08) per share, for the first quarter of 2023 and a net income of $5.5 million, or $0.13 per share, for the second quarter of 2022.

Non-GAAP net income/(loss) for the second quarter of 2023 was a net loss of ($4.2) million, or ($0.10) per share, compared with a net loss of ($2.4) million, or ($0.06) per share, for the first quarter of 2023 and a net income of $6.7 million, or $0.16 per share, for the second quarter of 2022.

STAR Market Listing Update

On January 10, 2022, AXT announced that Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), its subsidiary in Beijing, China, submitted to the Shanghai Stock Exchange (the “SSE”) its application to list its shares in an initial public offering (the “IPO”) on the SSE’s Sci-Tech innovAtion boaRd (the “STAR Market”) and the application was accepted for review. Subsequently, Tongmei responded to several rounds of questions received from the SSE. On July 12, 2022, the SSE approved the listing of Tongmei’s shares in an IPO on the STAR Market. On August 1, 2022, the China Securities Regulatory Commission (the “CSRC”) accepted for review Tongmei’s IPO application. The STAR Market IPO remains subject to review and approval by the CSRC and other authorities. The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Subject to review and approval by the CSRC and other authorities, Tongmei hopes to accomplish this goal in the coming months. 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 (888) 300-4150 (passcode 7175811). The call will also be simulcast at www.axt.com. Replays will be available at (800) 770-2030 (passcode 7175811) until August 17, 2023. 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


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 3 of 7

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 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.

Note Regarding Use of Non-GAAP Financial Measures

As discussed above, the company provides certain non-GAAP financial measures that exclude stock-based compensation in addition to, and not as a substitute for, or because it believes that such information is superior to, financial measures calculated in accordance with GAAP. The company believes that non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and provide better comparability with our peer companies, many of which also use similar non-GAAP financial measures. Further, the company believes that these non-GAAP financial measures offer an important analytical tool to help investors understand the company’s core operating results and trends. In addition, management uses non-GAAP financial measures to compare the company’s performance relative to forecasts and strategic plans and to benchmark its performance externally against peer companies. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the company’s non-GAAP financial measures as tools for comparison. The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non‐GAAP information and the reconciliation between these presentations, to more fully understand its business. A reconciliation of our GAAP consolidated financial statements to our non-GAAP consolidated financial statements is provided below.


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 4 of 7

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 product mix, our growth prospects and opportunities for continued business expansion, including trends, new applications and the ramping of Tier-1 customers, our market opportunity, our ability to lead our industry, our relocation, our expectations with respect to our business prospects and financial results, including our gross margin performance, and our development of larger diameter substrates that we believe will enable the next generation of technology innovation across a number of end-markets. 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.

###

FINANCIAL TABLES TO FOLLOW


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 5 of 7

AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

    

Three Months Ended

    

Six Months Ended

June 30,

June 30,

2023

    

2022

2023

    

2022

    

Revenue

$

18,595

$

39,487

$

38,000

$

79,140

Cost of revenue

 

16,880

 

24,052

 

31,175

 

50,397

Gross profit

 

1,715

 

15,435

 

6,825

 

28,743

Operating expenses:

Selling, general and administrative

 

5,820

 

6,693

 

11,772

 

13,143

Research and development

 

2,740

 

3,453

 

6,335

 

6,612

Total operating expenses

 

8,560

 

10,146

 

18,107

 

19,755

Income (loss) from operations

 

(6,845)

 

5,289

 

(11,282)

 

8,988

Interest expense, net

 

(365)

 

(188)

 

(762)

 

(371)

Equity in income of unconsolidated joint ventures

 

941

 

2,177

 

1,975

 

3,302

Other income, net

 

777

 

294

 

1,059

 

285

Income (loss) before provision (benefit) for income taxes

 

(5,492)

 

7,572

 

(9,010)

 

12,204

Provision (benefit) for income taxes

 

(139)

 

1,027

 

9

 

1,687

Net income (loss)

 

(5,353)

 

6,545

 

(9,019)

 

10,517

Less: Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests

 

264

 

(999)

 

582

 

(1,806)

Net income (loss) attributable to AXT, Inc.

$

(5,089)

$

5,546

$

(8,437)

$

8,711

Net income (loss) attributable to AXT, Inc. per common share:

Basic

$

(0.12)

$

0.13

$

(0.20)

$

0.21

Diluted

$

(0.12)

$

0.13

$

(0.20)

$

0.20

Weighted-average number of common shares outstanding:

Basic

 

42,586

 

42,001

 

42,542

 

41,935

Diluted

 

42,586

 

42,511

 

42,542

 

42,586


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 6 of 7

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

    

June 30,

    

December 31,

2023

2022

 

ASSETS

Current assets:

Cash and cash equivalents

$

30,092

$

34,948

Restricted cash

10,794

6,400

Short-term investments

 

7,088

 

9,339

Accounts receivable, net

 

19,857

 

29,252

Inventories

 

87,063

 

89,629

Prepaid expenses and other current assets

 

10,576

 

13,977

Total current assets

 

165,470

 

183,545

Long-term investments

 

1,641

 

2,118

Property, plant and equipment, net

 

158,672

 

161,017

Operating lease right-of-use assets

1,473

1,761

Other assets

 

18,946

 

21,631

Total assets

$

346,202

$

370,072

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

4,692

$

10,084

Accrued liabilities

 

16,949

 

18,164

Bank loans

45,622

47,078

Total current liabilities

 

67,263

 

75,326

Noncurrent operating lease liabilities

1,157

1,322

Other long-term liabilities

 

3,398

 

3,678

Total liabilities

 

71,818

 

80,326

Redeemable noncontrolling interests

41,393

44,846

Stockholders’ equity:

Preferred stock

 

3,532

 

3,532

Common stock

 

44

 

44

Additional paid-in capital

 

236,988

 

235,308

Accumulated deficit

 

(22,596)

 

(14,159)

Accumulated other comprehensive loss

 

(8,175)

 

(3,118)

Total AXT, Inc. stockholders’ equity

 

209,793

 

221,607

Noncontrolling interests

 

23,198

 

23,293

Total stockholders’ equity

 

232,991

 

244,900

Total liabilities, redeemable noncontrolling interests and stockholders’ equity

$

346,202

$

370,072


AXT, Inc. Second Quarter 2023 Results

August 3, 2023

Page 7 of 7

AXT, INC.

Reconciliation of Statements of Operations Under GAAP and Non-GAAP

(Unaudited, in thousands)

    

Three Months Ended

    

Six Months Ended

June 30,

June 30,

2023

    

2022

2023

    

2022

GAAP gross profit

$

1,715

$

15,435

$

6,825

$

28,743

Stock-based compensation expense

103

113

208

226

Non-GAAP gross profit

$

1,818

$

15,548

$

7,033

$

28,969

GAAP operating expenses

$

8,560

$

10,146

$

18,107

$

19,755

Stock-based compensation expense

809

1,021

1,619

1,996

Non-GAAP operating expenses

$

7,751

$

9,125

$

16,488

$

17,759

GAAP income (loss) from operations

$

(6,845)

$

5,289

$

(11,282)

$

8,988

Stock-based compensation expense

912

1,134

1,827

2,222

Non-GAAP income (loss) from operations

$

(5,933)

$

6,423

$

(9,455)

$

11,210

GAAP net income (loss)

$

(5,089)

$

5,546

$

(8,437)

$

8,711

Stock-based compensation expense

912

1,134

1,827

2,222

Non-GAAP net income (loss)

$

(4,177)

$

6,680

$

(6,610)

$

10,933

GAAP net income (loss) per diluted share

$

(0.12)

$

0.13

$

(0.20)

$

0.20

Stock-based compensation expense per diluted share

$

0.02

$

0.03

$

0.04

$

0.05

Non-GAAP net income (loss) per diluted share

$

(0.10)

$

0.16

$

(0.16)

$

0.25

Shares used to compute diluted net income per share

 

42,586

 

42,511

 

42,542

 

42,586


v3.23.2
Document and Entity Information
Aug. 03, 2023
Document and Entity Information [Abstract]  
Document Type 8-K
Document Period End Date Aug. 03, 2023
Entity File Number 000-24085
Entity Registrant Name AXT, INC.
Entity Incorporation, State or Country Code DE
Entity Tax Identification Number 94-3031310
Entity Address, Address Line One 4281 Technology Drive
Entity Address, City or Town Fremont
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94538
City Area Code 510
Local Phone Number 438-4700
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.001 par value
Trading Symbol AXTI
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001051627
Amendment Flag false

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