axti_Current Folio_8K

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): February 21, 2018

 

 

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.

 

 


 

Item 2.02 Results of Operations and Financial Condition

 

On February 21, 2018, AXT, Inc. issued a press release announcing its financial results for the quarter and fiscal year ended December 31, 2017.  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, 2017, 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 21, 2018, regarding the financial results of AXT, Inc. for the quarter and fiscal year ended December 31, 2017.


 

 

EXHIBIT INDEX

 

Eptem

 

 

Exhibit
Number

 

Description

 

 

 

99.1

 

Press release dated February 21, 2018, regarding the financial results of AXT, Inc. for the quarter and fiscal year ended December 31, 2017.

 

 


 

 

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:  February 21, 2018

By:

/s/ Gary L. Fischer

 

 

Gary L. Fischer

 

 

Chief Financial Officer and Corporate Secretary

 


axti_Ex99_1

 

 

Picture 1

Exhibit 99.1

 

AXT, Inc. Fourth Quarter and Year End 2017 Results

 

February 21, 2018

 

Page 1 of 5

 

AXT, Inc. Announces Fourth Quarter and Fiscal Year 2017 Financial Results

 

FREMONT, Calif., February 21, 2018 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal Year 2017, ended December 31, 2017 .

 

Fourth Quarter 2017 Results

 

Revenue for the fourth quarter of 2017 was $26.3 million, compared with $28.2 million in the third quarter of 2017 and $20.3 million for the fourth quarter of 2016.  This is a 30% increase in quarterly revenue as compared to the fourth quarter of 2016.

   

Gross margin was 37.2 percent of revenue for the fourth quarter of 2017, compared with 39.5 percent of revenue in the third quarter of 2017 and 37.1 percent for the fourth quarter of 2016.

 

Operating expenses were $6.1 million in the fourth quarter of 2017, compared with $5.9 million in the third quarter of 2017 and $5.2 million for the fourth quarter of 2016. 

 

Operating profit for the fourth quarter of 2017 was $3.7 million compared with operating profit of $5.2 million in the third quarter of 2017 and $2.3 million for the fourth quarter of 2016.  

 

Interest and other, net was a loss of $0.3 million for the fourth quarter of 2017, compared with a loss of $0.5 million in the third quarter of 2017 and a loss of $0.3 million for the fourth quarter of 2016.  Interest and other, net for the fourth quarter of 2017 included interest earnings of $0.1 million, a foreign exchange loss of $0.1 million and a net loss of $0.3 million from the seven partially owned companies in the company’s supply chain accounted for under the equity method.

 

Income tax expense in the fourth quarter of 2017 was $0.1 million compared with $0.2 million in the third quarter of 2017 and $0.0 million for the fourth quarter of 2016.

 

Net income in the fourth quarter of 2017 was $3.1 million, or $0.08 per diluted share, compared with a net income of $4.4 million or $0.11 per diluted share in the third quarter of 2017 and $2.2 million or $0.06 per diluted share for the fourth quarter of 2016.

 


 

 

 

 

AXT, Inc. Fourth Quarter and Year End 2017 Results

 

February 21, 2018

 

Page 2 of 5

 

Fiscal Year 2017 Results (January 1 to December 31)

 

Revenue for fiscal year 2017 was $98.7 million, compared with $81.3 million in fiscal year 2016.  This is a 21% increase in annual revenue as compared to fiscal year 2016.

 

Gross margin for fiscal year 2017 was 34.9 percent of revenue, compared with 32.4 percent of revenue in fiscal year 2016.

 

Operating expenses for fiscal year 2017 were $21.8 million, compared with $20.0 million in fiscal year 2016.

 

Net interest and other income for fiscal year 2017 was a loss of $1.8 million, compared with a loss of $0.7 million in fiscal year 2016.

 

Income tax expense for fiscal 2017 was $0.8 million compared with $0.7 million in fiscal year 2016.

 

Net income in fiscal year 2017 was $10.1 million, or $0.26 per diluted share, compared with a net income of $5.6 million, or $0.17 per diluted share, in fiscal year 2016.  This is an 80% increase in net income as compared to fiscal year 2016.

 

 

Management Qualitative Comments

 

“Our Q4 results capped off a strong year of execution for AXT,” said Morris Young, chief executive officer. “We delivered 21 percent growth in 2017, including record indium phosphide revenue and solid performance across our product portfolio. In addition, we achieved meaningful improvement in key financial metrics, including an 80 percent increase in net profits from the prior year. We are excited to see a resurgence of demand for compound semiconductor substrates in new applications that have the power to reshape the technology landscape over the coming decades. As such, we continue to invest in the advancement of our products and customer support capabilities, and believe that we are positioning the company well for continued growth and new opportunities in 2018 and beyond.”

 

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 7887748). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (855) 859-2056 (passcode 7887748) until February 27, 2018. 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.


 

 

 

 

AXT, Inc. Fourth Quarter and Year End 2017 Results

 

February 21, 2018

 

Page 3 of 5

 

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge) through its manufacturing facilities in Beijing, China.   AXT’s worldwide headquarters are in Fremont, California where the company maintains its sales, administration and customer service functions.  The company’s substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell applications. Its vertical gradient freeze (VGF) process technology 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, 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 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 growth prospects and opportunities for continued business expansion, our market opportunity, our schedule and timelines regarding our relocation plans 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.

 

###

FINANCIAL TABLES TO FOLLOW

 

 

 


 

 

 

 

AXT, Inc. Fourth Quarter and Year End 2017 Results

 

February 21, 2018

 

Page 4 of 5

 

AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Three Months Ended

    

Year Ended

 

 

 

December 31, 

 

December 31,

 

 

 

2017

    

2016

 

2017

    

2016

    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

26,332

 

$

20,269

 

$

98,673

 

$

81,349

 

Cost of revenue

 

 

16,534

 

 

12,746

 

 

64,198

 

 

54,968

 

Gross profit

 

 

9,798

 

 

7,523

 

 

34,475

 

 

26,381

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

4,790

 

 

3,774

 

 

17,009

 

 

13,880

 

Research and development

 

 

1,274

 

 

1,431

 

 

4,827

 

 

5,850

 

Restructuring charge

 

 

 —

 

 

 —

 

 

 —

 

 

226

 

Total operating expenses

 

 

6,064

 

 

5,205

 

 

21,836

 

 

19,956

 

Income from operations

 

 

3,734

 

 

2,318

 

 

12,639

 

 

6,425

 

Interest income, net

 

 

127

 

 

106

 

 

461

 

 

409

 

Equity in loss of unconsolidated joint ventures

 

 

(307)

 

 

(558)

 

 

(1,694)

 

 

(1,995)

 

Other (expense) income, net

 

 

(150)

 

 

178

 

 

(553)

 

 

860

 

Income before provision for income taxes

 

 

3,404

 

 

2,044

 

 

10,853

 

 

5,699

 

Provision for income taxes

 

 

131

 

 

20

 

 

792

 

 

733

 

Net income

 

 

3,273

 

 

2,024

 

 

10,061

 

 

4,966

 

Less: Net (income) loss attributable to noncontrolling interests

 

 

(139)

 

 

190

 

 

87

 

 

670

 

Net income attributable to AXT, Inc.

 

$

3,134

 

$

2,214

 

$

10,148

 

$

5,636

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

$

0.07

 

$

0.27

 

$

0.17

 

Diluted

 

$

0.08

 

$

0.06

 

$

0.26

 

$

0.17

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

38,766

 

 

32,431

 

 

37,444

 

 

32,139

 

Diluted

 

 

40,448

 

 

33,734

 

 

38,966

 

 

32,894

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

 

AXT, Inc. Fourth Quarter and Year End 2017 Results

 

February 21, 2018

 

Page 5 of 5

 

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

 

 

 

 

 

 

 

 

 

 

    

December 31, 

    

December 31, 

 

 

 

2017

 

2016

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

44,352

 

$

36,152

 

Short-term investments

 

 

20,032

 

 

11,415

 

Accounts receivable, net

 

 

22,778

 

 

14,453

 

Inventories

 

 

45,840

 

 

40,152

 

Prepaid expenses and other current assets

 

 

7,519

 

 

5,114

 

Total current assets

 

 

140,521

 

 

107,286

 

Long-term investments

 

 

12,576

 

 

6,156

 

Property, plant and equipment, net

 

 

46,530

 

 

27,805

 

Related party notes receivable – long-term

 

 

 —

 

 

157

 

Other assets

 

 

11,573

 

 

12,842

 

Total assets

 

$

211,200

 

$

154,246

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

$

11,445

 

$

6,691

 

Accrued liabilities

 

 

11,149

 

 

9,260

 

Total current liabilities

 

 

22,594

 

 

15,951

 

Long-term portion of royalty payments

 

 

 —

 

 

575

 

Other long-term liabilities

 

 

289

 

 

330

 

Total liabilities

 

 

22,883

 

 

16,856

 

Stockholders’ equity:

 

 

 

 

 

 

 

Preferred stock

 

 

3,532

 

 

3,532

 

Common stock

 

 

39

 

 

33

 

Additional paid-in capital

 

 

231,679

 

 

194,177

 

Accumulated deficit

 

 

(54,837)

 

 

(64,985)

 

Accumulated other comprehensive income

 

 

3,407

 

 

253

 

Total AXT, Inc. stockholders’ equity

 

 

183,820

 

 

133,010

 

Noncontrolling interests

 

 

4,497

 

 

4,380

 

Total stockholders’ equity

 

 

188,317

 

 

137,390

 

Total liabilities and stockholders’ equity

 

$

211,200

 

$

154,246