FREMONT, Calif., Feb. 16, 2022 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year, ended December 31, 2021.

Management Qualitative Comments

“2021 was a pivotal year for our business,” said Morris Young, chief executive officer. “We achieved 44 percent revenue growth, driven by market expansion and strategic customer wins, and delivered a more than 350 percent increase in our profitability. We believe we are hitting an inflection point in which applications that were once considered early stage technologies are now moving to mainstream adoption. And as we look ahead, we expect our momentum to continue. With our current growth drivers, we believe we can deliver healthy double-digit revenue growth in 2022. Our investments in capacity, R&D for larger diameter substrates, and the STAR Market IPO of our Tongmei subsidiary give us significant competitive advantages in our ability to scale our business, and meet the needs of Tier-1 customers and emerging high-volume applications. We have a strong foundation in place and believe that the stage is set for another year of meaningful achievement in 2022.”

Fourth Quarter 2021 Results

• Revenue for the fourth quarter of 2021 was $37.7 million, compared with $34.6 million in the third quarter of 2021 and $27.0 million for the fourth quarter of 2020.   This is 40% quarterly growth over the fourth quarter of 2020.
  
  
• GAAP gross margin was 32.2 percent of revenue for the fourth quarter of 2021, compared with 33.3 percent of revenue in the third quarter of 2021 and 33.9 percent for the fourth quarter of 2020.
  
  
• Non-GAAP gross margin, after eliminating charges for stock compensation, was 32.4 percent of revenue for the fourth quarter of 2021, compared with 33.8 percent of revenue in the third quarter of 2021 and 34.0 percent for the fourth quarter of 2020.
  
  
• GAAP operating expenses were $9.1 million in the fourth quarter of 2021. This compares with $9.1 million in the third quarter of 2021 and $7.2 million for the fourth quarter of 2020.  
  
  
• Non-GAAP operating expenses were $8.1 million in the fourth quarter of 2021. This compares with $7.7 million in the third quarter of 2021 and $6.6 million for the fourth quarter of 2020.
  
  
• GAAP operating profit for the fourth quarter of 2021 was $3.0 million, compared with operating profit of $2.4 million in the third quarter of 2021 and an operating profit of $1.9 million for the fourth quarter of 2020.
  
  
• Non-GAAP operating profit for the fourth quarter of 2021 was $4.1 million, compared with operating profit of $4.0 million in the third quarter of 2021 and an operating profit of $2.6 million for the fourth quarter of 2020.
  
  
• Non-operating income and expense, net (including income attributable to noncontrolling interests and redeemable noncontrolling interests) for the fourth quarter of 2021 was an expense of $0.1 million, compared with income of $1.4 million in the third quarter of 2021 and income of $0.1 million for the fourth quarter of 2020.
  
  
• GAAP net income in the fourth quarter of 2021 was $3.0 million, or $0.07 per share, compared with net income of $3.8 million or $0.09 per share in the third quarter of 2021, and net income of $2.1 million or $0.05 per share for the fourth quarter of 2020.
  
  
• Non-GAAP net income in the fourth quarter of 2021 was $4.1 million, or $0.09 per share, compared with net income of $5.4 million or $0.13 per share in the third quarter of 2021, and net income of $2.8 million or $0.06 per share for the fourth quarter of 2020.
  

Fiscal Year 2021 Results (January 1 to December 31, 2021)

• Revenue for fiscal year 2021 was $137.4 million, an increase of 44 percent from $95.4 million in fiscal year 2020.  
  
  
• GAAP gross margin for fiscal year 2021 was 34.5 percent of revenue, up from 31.7 percent of revenue in fiscal year 2020.
  
  
• Non-GAAP gross margin for fiscal year 2021 was 34.8 percent of revenue, up from 31.9 percent of revenue in fiscal year 2020.
  
  
• GAAP operating expenses for fiscal year 2021 were $34.5 million, compared with $26.3 million in fiscal year 2020.
  
  
• Non-GAAP operating expenses for fiscal year 2021 were $30.4 million, compared with $23.8 million in fiscal year 2020.
  
  
• GAAP operating income for fiscal year 2021 was $12.9 million compared with $3.9 million in fiscal 2020.
  
  
• Non-GAAP operating income for fiscal year 2021 was $17.4 million compared with $6.6 million in fiscal 2020.
  
  
• GAAP net income for fiscal 2021 was $14.6 million, or $0.34 per share, compared with $3.2 million, or $0.07 per share for fiscal 2020.
  
  
• Non-GAAP net income for fiscal 2021 was $19.1 million, or $0.44 per share, compared with $5.9 million, or $0.14 per share for fiscal 2020.
  

STAR Market Listing Update

On January 10, 2022 AXT announced that Tongmei, their subsidiary in Beijing, China, submitted to the Shanghai Stock Exchange in late December 2021 their application to go public on the STAR Market. The application was accepted for consideration on January 10, 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 7427708). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (855) 859-2056 (passcode 7427708) until February 24, 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 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.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, our belief that we can deliver healthy double-digit revenue growth in 2022, statements regarding completing other preliminary steps in connection with the proposed listing of shares of Tongmei on the STAR Market, being accepted to list shares of Tongmei on the STAR Market and the timing and completion of such 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 withdrawal, cancellations or 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 investments in Tongmei and 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; 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

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)

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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)

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Reconciliation of Statements of Operations Under GAAP and Non-GAAP
(Unaudited, in thousands)

Contacts:

Gary Fischer
Chief Financial Officer
(510) 438-4700

Leslie Green                
Green Communications Consulting, LLC
(650) 312-9060

Source: AXT, Inc.