AXT, Inc. Announces Fourth Quarter and Fiscal Year 2022 Financial Results
16 Febbraio 2023 - 10:14PM
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, 2022.
Management Qualitative
Comments
“2022 was a productive year in which we grew
both our revenue and our profitability, and invested in innovations
that pave the way for an exciting future,” said Morris Young, chief
executive officer. “Though a softening of the macro environment has
reset our growth trajectory, the trends that have driven our
revenue, customer, and application expansion remain very much
intact. We continue to see active development for technology
advancement using our materials across consumer, communications
infrastructure, data center, healthcare, automotive, and more. In
addition, we have made significant progress this year in the
development of next generation large diameter substrates for
gallium arsenide and indium phosphide, which can enable a host of
exciting new applications in our industry. As such, the
fundamentals in our business are solid and we are looking ahead to
our future with optimism.”
Fourth Quarter 2022 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 fourth quarter of
2022 was $26.8 million, compared with $35.2 million in the third
quarter of 2022 and $37.7 million for the fourth quarter of
2021.
- GAAP gross margin was 32.1 percent
of revenue for the fourth quarter of 2022, compared with 42.0
percent of revenue in the third quarter of 2022 and 32.2 percent
for the fourth quarter of 2021.
- Non-GAAP gross margin, after
eliminating charges for stock-based compensation, was 32.5 percent
of revenue for the fourth quarter of 2022, compared with 42.2
percent of revenue in the third quarter of 2022 and 32.4 percent
for the fourth quarter of 2021.
- GAAP operating expenses were $9.6
million in the fourth quarter of 2022. This compares with $10.2
million in the third quarter of 2022 and $9.1 million for the
fourth quarter of 2021.
- Non-GAAP operating expenses were
$9.0 million in the fourth quarter of 2022. This compares with $9.2
million in the third quarter of 2022 and $8.1 million for the
fourth quarter of 2021.
- GAAP operating profit/(loss) for
the fourth quarter of 2022 was an operating loss of ($1.0) million,
compared with an operating profit of $4.6 million in the third
quarter of 2022 and an operating profit of $3.0 million for the
fourth quarter of 2021.
- Non-GAAP operating profit/(loss)
for the fourth quarter of 2022 was an operating loss of ($0.3)
million, compared with operating profit of $5.6 million in the
third quarter of 2022 and an operating profit of $4.1 million for
the fourth quarter of 2021.
- Non-operating income and expense,
taxes and minority interest for the fourth quarter of 2022 was a
net gain of $2.3 million, compared with a net gain of $1.2 million
in the third quarter of 2022 and a net loss of $0.1 million for the
fourth quarter of 2021.
- GAAP net income in the fourth
quarter of 2022 was $1.3 million, or $0.03 per share, compared with
net income of $5.8 million or $0.13 per share in the third quarter
of 2022, and net income of $3.0 million or $0.07 per share for the
fourth quarter of 2021.
- Non-GAAP net income in the fourth
quarter of 2022 was $2.1 million, or $0.05 per share, compared with
net income of $6.8 million or $0.16 per share in the third quarter
of 2022, and net income of $4.1 million or $0.09 per share for the
fourth quarter of 2021.
Fiscal Year 2022 Results (January 1 to
December 31, 2022)
- Revenue for fiscal year 2022 was
$141.1 million, compared with $137.4 million in fiscal year
2021.
- GAAP gross margin for fiscal year
2022 was 36.9 percent of revenue, up from 34.5 percent of revenue
in fiscal year 2021.
- Non-GAAP gross margin for fiscal
year 2022 was 37.2 percent of revenue, up from 34.8 percent of
revenue in fiscal year 2021.
- GAAP operating expenses for fiscal
year 2022 were $39.6 million, compared with $34.5 million in fiscal
year 2021.
- Non-GAAP operating expenses for
fiscal year 2022 were $35.9 million, compared with $30.4 million in
fiscal year 2021.
- GAAP operating income for fiscal
year 2022 was $12.6 million compared with $12.9 million in fiscal
2021.
- Non-GAAP operating income for
fiscal year 2022 was $16.6 million compared with $17.4 million in
fiscal 2021.
- GAAP net income for fiscal 2022 was
$15.8 million, or $0.37 per share, compared with $14.6 million, or
$0.34 per share for fiscal 2021.
- Non-GAAP net income for fiscal 2022
was $19.8 million, or $0.46 per share, compared with $19.1 million,
or $0.44 per share for fiscal 2021.
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 March 2, 2023.
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, 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 technology 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.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, in thousands,
except per share data)
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
26,795 |
|
|
$ |
37,732 |
|
|
$ |
141,118 |
|
|
$ |
137,393 |
|
Cost of revenue |
|
18,199 |
|
|
|
25,593 |
|
|
|
88,997 |
|
|
|
89,979 |
|
Gross profit |
|
8,596 |
|
|
|
12,139 |
|
|
|
52,121 |
|
|
|
47,414 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
5,935 |
|
|
|
6,348 |
|
|
|
25,654 |
|
|
|
24,189 |
|
Research and development |
|
3,662 |
|
|
|
2,757 |
|
|
|
13,913 |
|
|
|
10,328 |
|
Total operating expenses |
|
9,597 |
|
|
|
9,105 |
|
|
|
39,567 |
|
|
|
34,517 |
|
Income (loss) from
operations |
|
(1,001 |
) |
|
|
3,034 |
|
|
|
12,554 |
|
|
|
12,897 |
|
Interest expense, net |
|
(401 |
) |
|
|
(158 |
) |
|
|
(1,071 |
) |
|
|
(213 |
) |
Equity in income of
unconsolidated joint ventures |
|
649 |
|
|
|
735 |
|
|
|
5,957 |
|
|
|
4,409 |
|
Other income (expense),
net |
|
2,245 |
|
|
|
(389 |
) |
|
|
3,487 |
|
|
|
509 |
|
Income before provision for
(benefit from) income taxes |
|
1,492 |
|
|
|
3,222 |
|
|
|
20,927 |
|
|
|
17,602 |
|
Provision for (benefit from)
income taxes |
|
(3 |
) |
|
|
(411 |
) |
|
|
2,185 |
|
|
|
1,093 |
|
Net income |
|
1,495 |
|
|
|
3,633 |
|
|
|
18,742 |
|
|
|
16,509 |
|
Less: Net income attributable to noncontrolling interests and
redeemable noncontrolling interests |
|
(154 |
) |
|
|
(668 |
) |
|
|
(2,931 |
) |
|
|
(1,934 |
) |
Net income attributable to
AXT, Inc. |
$ |
1,341 |
|
|
$ |
2,965 |
|
|
$ |
15,811 |
|
|
$ |
14,575 |
|
Net income attributable to
AXT, Inc. per common share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.37 |
|
|
$ |
0.35 |
|
Diluted |
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.37 |
|
|
$ |
0.34 |
|
Weighted-average number of
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
42,383 |
|
|
|
41,758 |
|
|
|
42,104 |
|
|
|
41,367 |
|
Diluted |
|
42,705 |
|
|
|
42,750 |
|
|
|
42,715 |
|
|
|
42,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AXT, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS(Unaudited, in
thousands)
|
December 31, |
|
December 31, |
|
2022 |
|
2021 |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
34,948 |
|
|
$ |
36,763 |
|
Restricted cash |
|
6,400 |
|
|
|
— |
|
Short-term investments |
|
9,339 |
|
|
|
5,419 |
|
Accounts receivable, net |
|
29,252 |
|
|
|
34,839 |
|
Inventories |
|
89,629 |
|
|
|
65,912 |
|
Prepaid expenses and other current assets |
|
13,977 |
|
|
|
17,252 |
|
Total current assets |
|
183,545 |
|
|
|
160,185 |
|
Long-term investments |
|
2,118 |
|
|
|
9,576 |
|
Property, plant and equipment,
net |
|
161,017 |
|
|
|
142,415 |
|
Operating lease right-of-use
assets |
|
1,761 |
|
|
|
2,324 |
|
Other assets |
|
21,631 |
|
|
|
17,941 |
|
Total assets |
$ |
370,072 |
|
|
$ |
332,441 |
|
LIABILITIES,
REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
10,084 |
|
|
$ |
16,649 |
|
Accrued liabilities |
|
18,164 |
|
|
|
17,057 |
|
Short-term loan, related party |
|
— |
|
|
|
1,887 |
|
Bank loans |
|
47,078 |
|
|
|
12,229 |
|
Total current liabilities |
|
75,326 |
|
|
|
47,822 |
|
Noncurrent operating lease
liabilities |
|
1,322 |
|
|
|
1,935 |
|
Other long-term
liabilities |
|
3,678 |
|
|
|
2,453 |
|
Total liabilities |
|
80,326 |
|
|
|
52,210 |
|
|
|
|
|
|
|
Redeemable noncontrolling
interests |
|
44,846 |
|
|
|
50,385 |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Preferred stock |
|
3,532 |
|
|
|
3,532 |
|
Common stock |
|
44 |
|
|
|
43 |
|
Additional paid-in capital |
|
235,308 |
|
|
|
231,622 |
|
Accumulated deficit |
|
(14,159 |
) |
|
|
(29,970 |
) |
Accumulated other comprehensive income (loss) |
|
(3,118 |
) |
|
|
6,302 |
|
Total AXT, Inc. stockholders’ equity |
|
221,607 |
|
|
|
211,529 |
|
Noncontrolling interests |
|
23,293 |
|
|
|
18,317 |
|
Total stockholders’ equity |
|
244,900 |
|
|
|
229,846 |
|
Total liabilities, redeemable noncontrolling interests and
stockholders’ equity |
$ |
370,072 |
|
|
$ |
332,441 |
|
|
|
|
|
|
|
|
|
AXT, INC.Reconciliation
of Statements of Operations Under GAAP and
Non-GAAP(Unaudited, in thousands)
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
GAAP gross profit |
$ |
8,596 |
|
|
$ |
12,139 |
|
|
$ |
52,121 |
|
|
$ |
47,414 |
|
Stock-based compensation
expense |
|
102 |
|
|
|
105 |
|
|
|
379 |
|
|
|
368 |
|
Non-GAAP gross profit |
$ |
8,698 |
|
|
$ |
12,244 |
|
|
$ |
52,500 |
|
|
$ |
47,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating expenses |
$ |
9,597 |
|
|
$ |
9,105 |
|
|
$ |
39,567 |
|
|
$ |
34,517 |
|
Stock-based compensation
expense |
|
643 |
|
|
|
983 |
|
|
|
3,627 |
|
|
|
4,151 |
|
Non-GAAP operating
expenses |
$ |
8,954 |
|
|
$ |
8,122 |
|
|
$ |
35,940 |
|
|
$ |
30,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP income (loss) from
operations |
$ |
(1,001 |
) |
|
$ |
3,034 |
|
|
$ |
12,554 |
|
|
$ |
12,897 |
|
Stock-based compensation
expense |
|
745 |
|
|
|
1,088 |
|
|
|
4,006 |
|
|
|
4,519 |
|
Non-GAAP income (loss) from
operations |
$ |
(256 |
) |
|
$ |
4,122 |
|
|
$ |
16,560 |
|
|
$ |
17,416 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income |
$ |
1,341 |
|
|
$ |
2,965 |
|
|
$ |
15,811 |
|
|
$ |
14,575 |
|
Stock-based compensation
expense |
|
745 |
|
|
|
1,088 |
|
|
|
4,006 |
|
|
|
4,519 |
|
Non-GAAP net income |
$ |
2,086 |
|
|
$ |
4,053 |
|
|
$ |
19,817 |
|
|
$ |
19,094 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income per diluted
share |
$ |
0.03 |
|
|
$ |
0.07 |
|
|
$ |
0.37 |
|
|
$ |
0.34 |
|
Stock-based compensation
expense per diluted share |
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
0.09 |
|
|
$ |
0.11 |
|
Non-GAAP net income per
diluted share |
$ |
0.05 |
|
|
$ |
0.09 |
|
|
$ |
0.46 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute diluted
net income per share |
|
42,705 |
|
|
|
42,750 |
|
|
|
42,715 |
|
|
|
42,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contacts: |
Gary FischerChief Financial Officer(510) 438-4700Leslie GreenGreen
Communications Consulting, LLC(650) 312-9060 |
|
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