LED Revenue Increases 27 Percent, Substrate Revenue increases 10 Percent Over Prior Quarter; LED Operations Approach Break Even
FREMONT, Calif., Jul 24, 2002 /PRNewswire-FirstCall via COMTEX/ -- AXT, Inc. (AXTI), a leading manufacturer of compound semiconductor substrates and opto-electronic devices, today reported financial results for the second quarter ended June 30, 2002.
Revenue for the second quarter of 2002 increased 14 percent to $19.2 million, compared with $16.8 million in the first quarter of 2002. Revenue in the second quarter of 2001 was $41.3 million.
Revenue for the substrate division, which represented 67 percent of total revenue for the second quarter of 2002, increased 10 percent to $12.9 million, compared with $11.7 million in the first quarter of 2002. Revenue in the second quarter of 2001 was $38.1 million. Revenue from the opto-electronics division, which represented 33 percent of total revenue for the second quarter of 2002, increased 25 percent to $6.3 million, compared with $5.0 million in the first quarter of 2002. Revenue in the second quarter of 2001 was $3.2 million.
The company experienced a net loss for the second quarter of 2002 of $31.4 million, or $1.40 per diluted share, compared with a loss of $3.6 million, or $0.16 per diluted share, for the first quarter of 2002, and with a net income of $5.2 million, or $0.23 per diluted share, for the second quarter of 2001.
During the second quarter of 2002, the company recorded asset impairment charges of $33.2 million. These charges include $24.0 million of machinery and equipment write-downs relating to idle manufacturing assets and a $9.2 million investment write-down recognized for the permanent decline in Finisar Corporation common stock. Excluding the asset impairment charges, the company experienced a pro-forma net loss for the second quarter of 2002 of $1.9 million, or $0.09 per diluted share.
"We are very pleased with the results of the second quarter considering the difficult economic climate," said Morris Young, president and chief executive officer. "We are particularly pleased with the growth of our LED division, which has recorded double digit revenue growth for the past three quarters, efficiently increased manufacturing capacity to sustain this growth, improved gross margins, and approached overall profitability."
"We are happy to announce that our substrate division recorded a 10 percent revenue increase over the prior quarter and has posted sequential revenue growth for the past two quarters. We believe that we saw the bottom of the current economic cycle for our gallium arsenide substrate products in the fourth quarter of last year. The growth in the substrate division is coming primarily from the wireless and LED device segments. We continue to believe that these customers are working though their excess inventory and expect orders to increase at a moderate but steady pace into the future. As the world market leader in GaAs and InP substrates, we believe that we are well positioned to grow as our markets recover."
Outlook for Third Quarter Ending September 30, 2002
The company anticipates that total revenue in the third quarter will increase 4 to 7 percent compared with the second quarter of 2002. This includes an increase in LED product revenue of 3 to 7 percent and an increase in substrate revenue of 5 to 8 percent compared with the second quarter 2002.
Gross margin for the third quarter is expected to improve to 13 to 15 percent.
The third quarter loss per share is expected to improve to $0.06 to $0.07.
Conference Call
A conference call will be held today at 1:30 p.m. PDT to discuss these announcements and to provide further discussion of the quarter and outlook for the next quarter. To participate in the call, please dial (706) 634-2108. The passcode is AXT. A live webcast of the conference call will be offered on AXT's website at www.axt.com and on www.prnewswire.com. A replay of the webcast will be available through August 23, 2002.
About AXT, Inc.
AXT designs, develops, manufactures and markets high-performance compound semiconductor substrates for the fiber optics and communications industries. AXT also is a leading producer of light-emitting diodes (LEDs), such as green, cyan and blue LEDs, for the display and lighting industries, and vertical-cavity surface-emitting lasers (VCSELs) for the fiber optics industry. The Company's proprietary Vertical Gradient Freeze (VGF) crystal growth technology produces low-defect, semi-insulating and semi-conducting gallium arsenide, indium phosphide and germanium substrates. For more information, see AXT's website at axt.com. The Company can also be reached at 4281 Technology Drive, Fremont, California 94538 or by calling 510-683-5900. AXT is traded on the Nasdaq National Market under the symbol AXTI.
Safe Harbor
This press release contains forward-looking information regarding, among other matters, the Company's future prospects and near-term outlook. Forward-looking statements address matters that are subject to a number of risks and uncertainties that might cause actual results to differ materially from those set forth in the forward-looking statements. Factors that could cause such results to differ include: unpredictable fluctuations in our operating results; a continued difficult economic climate and downturn in the markets for our products; the expansion of our China operations which may be costlier or take more time than expected; our dependence on a limited number of suppliers for critical raw materials; a decrease in the value of some of our raw materials inventory caused by fluctuation in market value; an impairment of our asset value; failure to achieve anticipated sales of our HBLED and VCSEL products; reduction or delays in the orders of our products; war or terrorist activity that may disrupt our manufacturing capabilities or interrupt the sale of our products; or reduction or delays in customer orders. These and other risks are discussed in our filings with the Securities and Exchange Commission, including AXT's Form 10-K for the year ended December 31, 2001. The Company assumes no obligation to update the information in this press release. |
