AXT Announces Plan to Discontinue Opto-Electronics Production
Tuesday June 24, 4:05 pm ET
Substrate Performance on Track for Second Quarter
FREMONT, Calif., June 24 /PRNewswire-FirstCall/ -- AXT, Inc. (Nasdaq: AXTI - News), a leading manufacturer of compound semiconductor substrates, today announced that it will discontinue the majority of its unprofitable opto-electronics production. Approximately 165 employees at the California facilities of its opto-electronics division will be given notice that they will be laid off in 60 days. In the near future, the company will keep a minimum work force to produce and ship current customer orders and to continue to sell products from its inventory.
AXT is reviewing its options for the discontinuation of the business, including spin-off of the division which may involve a joint venture, sale of the division or all or part of its assets, or liquidation. The gain or loss on disposal could vary materially depending on how the disposal is effected. Therefore, no estimates of the costs of discontinuation can be provided at this time.
"By taking this step, we will be able to focus our attention on growing our core substrate business and bringing it to profitability, while conserving the company's cash," said Morris Young, President and CEO of AXT.
Recently, AXT was sued by Cree Lighting for allegedly infringing a patent regarding light emitting diodes that Cree licenses from Boston University. AXT believes that the lawsuit is without merit and intends to defend itself vigorously.
For the second quarter ending June 30, 2003, revenue from the continuing substrate business is expected to be $8.2-$8.4 million and net loss from continuing operations is expected to be $2.9-3.1 million or $0.13-$0.14 per share. The company's net loss for the second quarter will also include charges related to the discontinued opto-electronics business.
The company will announce its second quarter results on July 23, 2003 and will host a conference call with company management at 1:30 PM PDT on July 23 to announce its results. The call can be accessed at 785-832-2041; the passcode is AXT. The call will also be simulcast on the Internet at www.axt.com. Replays will be available at 402-530-9311 until July 30. 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. A replay of the call and management's accompanying script will be available on the company's website immediately after the call through July 23, 2004. Additional investor information can be accessed at www.axt.com or by calling the Company's Investor Relations Department at 510-683-5900. |
