Form 8-K AXT INC For: Oct 30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2014
AXT, INC.
(Exact name of registrant as specified in its charter)
____________________
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Delaware
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000-24085
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94-3031310
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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____________________
4281 Technology Drive
Fremont, California 94538
(Address of principal executive offices) (Zip Code)
____________________
Registrants telephone number, including area code: (510) 683-5900
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 2.02 Results of Operations and Financial Condition
On October 30, 2014, AXT, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2014. A copy of the Companys press release, announcing the results, is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information in Exhibit 99.1 hereto discussing the Companys results of operations and financial condition for the quarter ended September 30, 2014, is being furnished in accordance with General Instruction B.2 of Form 8-K and shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act ), or otherwise subject to the liabilities of that section, or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any filing of the Registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing.
Item 9.01 Financial Statements and Exhibits
| (d) | Exhibits |
| 99.1 | Press release dated October 30, 2014, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2014. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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AXT, INC.
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Date: October 30, 2014
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By:
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/s/ Gary L. Fischer
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����� Gary L. Fischer
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Chief Financial Officer and Corporate Secretary
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EXHIBIT INDEX
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Exhibit
Number
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Description
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| � | � | � |
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Press release dated October 30, 2014, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2014.
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Exhibit 99.1
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FOR IMMEDIATE RELEASE
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Contacts:
Gary Fischer
Chief Financial Officer
(510) 683-5900
Leslie Green
Green Communications Consulting, LLC
(650) 312-9060
AXT, Inc. Announces Third Quarter 2014 Financial Results
FREMONT, Calif., Oct. 30, 2014 AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter ended Sept. 30, 2014.
Third Quarter 2014 Results
Revenue for the third quarter of 2014 was $23.1 million compared with $21.4 million in the second quarter of 2014.
Gross margin was 23.0 percent of revenue for the third quarter of 2014, compared with 19.4 percent of revenue in the second quarter of 2014.
Operating expenses were $4.7 million in the third quarter of 2014, unchanged from $4.7 million in the second quarter of 2014.
Profit from operations for the third quarter of 2014 was $653,000 compared with a loss from operations of $515,000 in the second quarter of 2014.
Net interest and other income for the third quarter of 2014 was $260,000. This was primarily attributable to $390,000 from equity earnings of the companys unconsolidated joint ventures, $302,000 from the sale of IntelliEpi stock, $556,000 from a loss on foreign exchange and $106,000 from interest income. By comparison, net interest and other income for the second quarter of 2014 was $1.2 million. This was primarily attributable to $625,000 from equity earnings of the companys unconsolidated joint ventures, $324,000 from the sale of IntelliEpi stock, $158,000 from a gain on foreign exchange and $127,000 from interest income.
Net income in the third quarter of 2014 was $644,000 or $0.02 per diluted share compared with a net income of $319,000 or $0.01 per diluted share in the second quarter of 2014.
Management Qualitative Comments
The third quarter was a positive quarter for AXT, said Morris Young, chief executive officer. Revenue came in ahead of our expectations, and we achieved another quarter of profitability through improved gross margins and tight expense control. Further, we are diversifying our customer base throughout our product portfolio and are pleased to be gaining traction in several areas that have been a strong focus of our sales efforts. The changes in the gallium arsenide landscape over the past two years have had an adverse impact on our business. However, these changes are finally beginning to settle and new applications for our products are emerging across our substrate portfolio. I am very pleased to have a strong team in place with the expertise to maximize our potential as we evolve our business to meet new opportunities.
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AXT, Inc.
4281 Technology Drive
Fremont, CA 94538
Tel: 510.683.5900
Fax: 510.353.0668
www.axt.com.
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AXT, Inc. Announces Third Quarter 2014 Results
Oct. 30, 2014
Page 2 of 4
Conference Call
The company will host a conference call to discuss these results on Oct. 30, 2014 at 1:30 p.m. PT. The conference call can be accessed at (719) 457-2645 (passcode 2872393). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 2872393) until Nov. 6, 2014. 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) 683-5900.
About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising gallium arsenide (GaAs), indium phosphide (InP) 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 companys substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell. 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 AXTs 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 statements regarding the market demand for our products, our market opportunity, our business planning and management approach and our expectations with respect to our business prospects. These forward-looking statements are based upon specific assumptions that are subject to uncertainties and factors relating to the companys operations and business environment, which could cause actual results of the company 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; market acceptance and demand for the companys products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; and other factors as set forth in the companys annual report on Form 10-K and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the companys control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.
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FINANCIAL TABLES TO FOLLOW
AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
| � | � |
Three Months Ended
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� | � |
Nine Months Ended
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| � | � |
September 30,
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� | � |
September 30,
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| � | � |
2014
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� | � |
2013
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� | � |
2014
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� | � |
2013
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� | ||||
| � | � | � | � | � | � | � | � | � | ||||||||
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Revenue
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$
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23,138
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� | � |
$
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20,521
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� | � |
$
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63,932
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� | � |
$
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66,732
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� |
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Cost of revenue
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� | � |
17,820
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� | � | � |
18,075
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� | � | � |
51,736
|
� | � | � |
57,717
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� |
|
Gross profit
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� | � |
5,318
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� | � | � |
2,446
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� | � | � |
12,196
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� | � | � |
9,015
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� |
| � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Operating expenses:
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� | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Selling, general and administrative
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� | � |
3,505
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� | � | � |
4,303
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� | � | � |
10,629
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� | � | � |
12,435
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� |
|
Research and development
|
� | � |
1,160
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� | � | � |
766
|
� | � | � |
2,922
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� | � | � |
2,627
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� |
|
Restructuring charge
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� | � | � | � | � | � | � | � | � | � |
907
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� | � | � | � | � |
|
Total operating expenses
|
� | � |
4,665
|
� | � | � |
5,069
|
� | � | � |
14,458
|
� | � | � |
15,062
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� |
|
Income (loss) from operations
|
� | � |
653
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� | � | � |
(2,623
|
)
|
� | � |
(2,262
|
)
|
� | � |
(6,047
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)
|
|
Interest income, net
|
� | � |
106
|
� | � | � |
55
|
� | � | � |
360
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� | � | � |
136
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� |
|
Equity in earnings of unconsolidated joint ventures
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� | � |
390
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� | � | � |
346
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� | � | � |
1,502
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� | � | � |
1,099
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� |
|
Other income (expense), net
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� | � |
(236
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)
|
� | � |
(47
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)
|
� | � |
250
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� | � | � |
(491
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)
|
| � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Income (loss) before provision for income taxes
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� | � |
913
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� | � | � |
(2,269
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)
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� | � |
(150
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)
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� | � |
(5,303
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)
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|
Provision for (benefit from) income taxes
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� | � |
43
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� | � | � |
(204
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)
|
� | � |
254
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� | � | � |
322
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� |
|
Net income (loss)
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� | � |
870
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� | � | � |
(2,065
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)
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� | � |
(404
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)
|
� | � |
(5,625
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)
|
| � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Less: Net income (loss) attributable to noncontrolling interest
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� | � |
(226
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)
|
� | � |
(230
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)
|
� | � |
(673
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)
|
� | � |
(1,105
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)
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|
Net income (loss) attributable to AXT, Inc.
|
� |
$
|
644
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� | � |
$
|
(2,295
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)
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� |
$
|
(1,077
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)
|
� |
$
|
(6,730
|
)
|
| � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
|
Net income (loss) attributable to AXT, Inc. per common share:
|
� | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Basic
|
� |
$
|
0.02
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� | � |
$
|
(0.07
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)
|
� |
$
|
(0.04
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)
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$
|
(0.21
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)
|
|
Diluted
|
� |
$
|
0.02
|
� | � |
$
|
(0.07
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)
|
� |
$
|
(0.04
|
)
|
� |
$
|
(0.21
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)
|
| � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
|
Weighted average number of common shares outstanding:
|
� | � | � | � | � | � | � | � | � | � | � | � | � | � | � | � |
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Basic
|
� | � |
32,504
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� | � | � |
32,366
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� | � | � |
32,416
|
� | � | � |
32,407
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� |
|
Diluted
|
� | � |
32,738
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� | � | � |
32,366
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� | � | � |
32,416
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� | � | � |
32,407
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- more -
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)
| � | � |
September 30,
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December 31,
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| � | � |
2014
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2013
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Assets:
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� | � | � | � | ||||
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Current assets
|
� | � | � | � | ||||
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Cash and cash equivalents
|
� |
$
|
25,793
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� | � |
$
|
24,961
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� |
|
Short-term investments
|
� | � |
15,366
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� | � | � |
12,499
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� |
|
Accounts receivable, net
|
� | � |
21,079
|
� | � | � |
14,943
|
� |
|
Inventories
|
� | � |
36,648
|
� | � | � |
39,127
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� |
|
Related party notes receivable - current
|
� | � |
0
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� | � | � |
0
|
� |
|
Prepaid expenses and other current assets
|
� | � |
5,914
|
� | � | � |
8,010
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� |
|
Total current assets
|
� | � |
104,800
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� | � | � |
99,540
|
� |
| � | � | � | � | � | � | � | � | � |
|
Long-term investments
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� | � |
7,332
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� | � | � |
10,145
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� |
|
Property, plant and equipment, net
|
� | � |
34,663
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� | � | � |
37,621
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� |
|
Related party notes receivable - long-term
|
� | � |
1,874
|
� | � | � |
1,715
|
� |
|
Other assets
|
� | � |
15,216
|
� | � | � |
14,801
|
� |
| � | � | � | � | � | � | � | � | � |
|
Total assets
|
� |
$
|
163,885
|
� | � |
$
|
163,822
|
� |
| � | � | � | � | � | � | � | � | � |
|
Liabilities and stockholders' equity:
|
� | � | � | � | � | � | � | � |
|
Current liabilities
|
� | � | � | � | � | � | � | � |
|
Accounts payable
|
� |
$
|
9,480
|
� | � |
$
|
8,140
|
� |
|
Accrued liabilities
|
� | � |
6,790
|
� | � | � |
7,286
|
� |
|
Total current liabilities
|
� | � |
16,270
|
� | � | � |
15,426
|
� |
| � | � | � | � | � | � | � | � | � |
|
Long-term portion of royalty payments
|
� | � |
1,925
|
� | � | � |
2,525
|
� |
|
Other long-term liabilities
|
� | � |
323
|
� | � | � |
325
|
� |
|
Total liabilities
|
� | � |
18,518
|
� | � | � |
18,276
|
� |
| � | � | � | � | � | � | � | � | � |
|
Stockholders' equity:
|
� | � | � | � | � | � | � | � |
|
Preferred stock
|
� | � |
3,532
|
� | � | � |
3,532
|
� |
|
Common stock
|
� | � |
32
|
� | � | � |
32
|
� |
|
Additional paid-in capital
|
� | � |
195,151
|
� | � | � |
194,156
|
� |
|
Accumulated deficit
|
� | � |
(68,082
|
)
|
� | � |
(67,005
|
)
|
|
Accumulated other comprehensive income
|
� | � |
8,333
|
� | � | � |
8,953
|
� |
|
Total AXT, Inc. stockholders' equity
|
� | � |
138,966
|
� | � | � |
139,668
|
� |
| � | � | � | � | � | � | � | � | � |
|
Noncontrolling interest
|
� | � |
6,401
|
� | � | � |
5,878
|
� |
|
Total stockholders' equity
|
� | � |
145,367
|
� | � | � |
145,546
|
� |
| � | � | � | � | � | � | � | � | � |
|
Total liabilities and stockholders' equity
|
� |
$
|
163,885
|
� | � |
$
|
163,822
|
� |
�