/EINPresswire.com/ -- FREMONT, CA -- (Marketwired) -- 02/24/16 -- AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter ended December 31, 2015.

Fourth Quarter 2015 Results

Revenue for the fourth quarter of 2015 was $18.1 million compared with $18.4 million in the third quarter of 2015.

Gross margin was 17.1 percent of revenue for the fourth quarter of 2015, compared with 25.1 percent of revenue in the third quarter of 2015.

Operating expenses were $4.8 million in the fourth quarter of 2015, compared with $5.3 million in the third quarter of 2015.

Operating loss for the fourth quarter of 2015 was $1.7 million compared with $0.7 million in the third quarter of 2015.

Net interest and other income for the fourth quarter of 2015 was $0.1 million, compared with $0.8 million in the third quarter of 2015.

Net loss in the fourth quarter of 2015 was $1.2 million compared with a net profit of $42,000 the third quarter of 2015.

Management Qualitative Comments
"2015 was a year of transformation for AXT as we continued to realign our business with the trends that are driving growth in compound semiconductor substrates," said Morris Young, chief executive officer. "We focused on strategic investments in our technology and manufacturing capabilities that would improve our competitive positioning, and enable us to drive better consistency and efficiency across our substrate portfolio. We are pleased with these investments, and in the early results of our efforts. Although raw material pricing is providing a near-term headwind, we expect to continue to see a positive shift in our revenue mix in 2016 driven by InP, providing the potential for both revenue and margin expansion."

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 (719) 325-2323 (passcode 5401451). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 5401451) until March 1, 2016. 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 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. 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 applications. 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.

FINANCIAL TABLES TO FOLLOW

                                 AXT, INC.
                   CONDENSED CONSOLIDATED BALANCE SHEETS
                         (Unaudited, in thousands)

                                                December 31,   December 31,
                                                    2015           2014
                                               -------------  -------------
Assets:
Current assets
  Cash and cash equivalents                    $      24,875  $      28,814
  Short-term investments                              11,437         12,340
  Accounts receivable, net                            18,468         17,864
  Inventories                                         38,012         38,574
  Related party notes receivable - current                --            171
  Prepaid expenses and other current assets            4,096          5,430
                                               -------------  -------------
    Total current assets                              96,888        103,193

Long-term investments                                  7,691          7,783
Property, plant and equipment, net                    31,422         33,862
Related party notes receivable - long-term             1,781          1,704
Other assets                                          14,114         14,975

                                               -------------  -------------
    Total assets                               $     151,896  $     161,517
                                               =============  =============

Liabilities and stockholders' equity:
Current liabilities
  Accounts payable                             $       6,460  $       7,137
  Accrued liabilities                                  6,381          7,634
                                               -------------  -------------
    Total current liabilities                         12,841         14,771

Long-term portion of royalty payments                  1,150          1,725
Other long-term liabilities                              344            333
                                               -------------  -------------
    Total liabilities                                 14,335         16,829
                                               -------------  -------------

Stockholders' equity:
  Preferred stock                                      3,532          3,532
  Common stock                                            32             32
  Additional paid-in capital                         194,646        195,419
  Accumulated deficit                                (70,621)       (68,393)
  Accumulated other comprehensive income               4,382          7,673
                                               -------------  -------------
    Total AXT, Inc. stockholders' equity             131,971        138,263

Noncontrolling interest                                5,590          6,425
                                               -------------  -------------
    Total stockholders' equity                       137,561        144,688

                                               -------------  -------------
    Total liabilities and stockholders' equity $     151,896  $     161,517
                                               =============  =============


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

                                  Three Months Ended   Tweleve Months Ended
                                     December 31,          December 31,
                                 --------------------  --------------------
                                    2015       2014       2015       2014
                                 ---------  ---------  ---------  ---------

Revenue                          $  18,057  $  19,567  $  77,502  $  83,499
Cost of revenue                     14,967     14,596     60,673     66,332
                                 ---------  ---------  ---------  ---------
Gross profit                         3,090      4,971     16,829     17,167
                                 ---------  ---------  ---------  ---------

Operating expenses:
  Selling, general and
   administrative                    3,379      4,341     16,064     14,970
  Research and development           1,377      1,222      5,664      4,144
  Restructuring charge                  --         --         --        907
                                 ---------  ---------  ---------  ---------
    Total operating expenses         4,756      5,563     21,728     20,021
                                 ---------  ---------  ---------  ---------
Income (loss) from operations       (1,666)      (592)    (4,899)    (2,854)
Interest income, net                   105        123        412        483
Equity in earnings of
 unconsolidated joint ventures        (315)        26        462      1,528
Other income (expense), net            268        111      2,023        361
                                 ---------  ---------  ---------  ---------

Income (loss) before provision
 for income taxes                   (1,608)      (332)    (2,002)      (482)
Provision for (benefit from)
 income taxes                          197        (39)       531        215
                                 ---------  ---------  ---------  ---------
Net income (loss)                   (1,805)      (293)    (2,533)      (697)

Less: Net income (loss)
 attributable to noncontrolling
 interest                              562        (18)       305       (691)
                                 ---------  ---------  ---------  ---------
Net income (loss) attributable
 to AXT, Inc.                    $  (1,243) $    (311) $  (2,228) $  (1,388)
                                 =========  =========  =========  =========

Net income (loss) attributable
 to AXT, Inc. per common share:
  Basic                          $   (0.04) $   (0.01) $   (0.07) $   (0.05)
                                 =========  =========  =========  =========
  Diluted                        $   (0.04) $   (0.01) $   (0.07) $   (0.05)
                                 =========  =========  =========  =========

Weighted average number of
 common shares outstanding:
  Basic                             31,951     32,558     32,183     32,452
                                 =========  =========  =========  =========
  Diluted                           31,951     32,558     32,183     32,452
                                 =========  =========  =========  =========

Contacts:
Gary Fischer
Chief Financial Officer
(510) 438-4700

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

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