8-K

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 28, 2010

AXT, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-24085	94-3031310
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4281 Technology Drive

Fremont, California  94538

(Address of principal executive offices) (Zip Code)

Registrant’s 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))

Item 2.02 Results of Operations and Financial Condition

On October 28, 2010, AXT, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2010.  A copy of the Company’s 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 Company’s results of operations and financial condition for the quarter ended September 30, 2010, 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

99.1Press release dated October 28, 2010, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2010.

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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.

	AXT, INC.
Date: October 28, 2010	By:	/s/ Raymond A. Low
		Raymond A. Low
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated October 28, 2010, regarding the financial results of AXT, Inc. for the quarter ended September 30, 2010.

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:

Raymond A. Low

Chief Financial Officer

(510) 683-5900

Leslie Green

Green Communications Consulting, LLC

(650) 312-9060

AXT, Inc. Announces Third Quarter 2010 Financial Results

·Q3 FY 2010 Net Revenues: $26.8 million

·Q3 FY 2010 GAAP Gross Margin: 39.3 percent

·Q3 FY 2010 GAAP Net Income: $5.6 million; $0.17 per share (diluted)

FREMONT, Calif., Oct 28, 2010 — AXT, Inc. (NasdaqGM: AXTI), a leading manufacturer of compound semiconductor substrates, today reported financial results for the third quarter ended September 30, 2010.

Third Quarter 2010 Results

Revenue for the third quarter of 2010 was $26.8 million, compared with $23.2 million in the second quarter of 2010, and $16.8 million in the third quarter of 2009.

Total gallium arsenide (GaAs) substrate revenue was $19.2 million for the third quarter of 2010, compared with $16.2 million in the second quarter of 2010, and $13.3 million in the third quarter of 2009. Indium phosphide (InP) substrate revenue was $955,000 for the third quarter of 2010, compared with $1.1 million in the second quarter of 2010, and $688,000 in the third quarter of 2009. Germanium (Ge) substrate revenue was $2.3 million for the third quarter of 2010 compared with $1.6 million in the second quarter of 2010 and $1.8 million in the third quarter of 2009. Raw materials sales were $4.4 million for the third quarter of 2010, compared with $4.2 million in the second quarter of 2010 and $1.0 million in the third quarter of 2009.

Gross margin was 39.3 percent of revenue for the third quarter of 2010. By comparison, gross margin in the second quarter of 2010 was 36.8 percent of revenue. Gross margin was 32.9 percent of revenue for the third quarter of 2009.

Operating expenses were $3.8 million in the third quarter of 2010, compared with $3.6 million in the second quarter of 2010. Operating expenses in the third quarter of 2009 were $3.7 million.

AXT, Inc. 4281 Technology Drive Fremont, CA 94538 Tel: 510.683.5900 Fax: 510.353.0668 www.axt.com.

Income from operations for the third quarter of 2010 was $6.7 million compared with income from operations of $5.0 million in the second quarter of 2010, and income from operations of $1.9 million in the third quarter of 2009.

Net interest and other income for the third quarter of 2010 was $442,000, which included an unrealized foreign exchange gain of $210,000. This compares with net interest and other income of $1.6 million in the second quarter of 2010, which included $1.2 million, net, sales tax refund and an unrealized foreign exchange gain of $230,000, and net interest and other income of $677,000 in the third quarter of 2009, which included an unrealized foreign exchange gain of $302,000.

Net income in the third quarter of 2010 was $5.6 million or $0.17 per diluted share compared with net income of $5.5 million or $0.17 per diluted share in the second quarter of 2010, and with a net income of $2.1 million or $0.07 per diluted share in the third quarter of 2009. Excluding the $1.2 million, net, sales tax refund or $0.04 per diluted share, our net income in the second quarter of 2010 was $4.3 million or $0.13 per diluted share

Management Qualitative Comments

“Q3 was another strong quarter for AXT,” said Morris Young, chief executive officer.  “Solid demand in all of our key end markets coupled with great execution across our organization allowed us to deliver outstanding financial results and continued increases in our market share and customer penetration.  Not only did we exceed our revenue expectations, our gross margin performance was the highest it has been in many years. We continue to see growing momentum in the long-term secular trends that are fueling our growth, including the adoption of smartphones and other intelligent wireless devices, the proliferation of LED applications and the expansion of photovoltaic technology.  These trends are opening up exciting opportunities for our business that we believe will extend for years to come.”

Outlook for Fourth Quarter, Ending December 31, 2010

AXT estimates revenue for the fourth quarter will increase to between $28.0 million and $29.0 million. The company estimates that net income per share will be between $0.15 and $0.17, which takes into account our weighted average share count of approximately 32.4 million shares.

Conference Call

The company will also host a conference call to discuss these results on October 28, 2010 at 1:30 p.m. PDT. The conference call can be accessed at (719) 325-4760 (passcode 6968854). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (719) 457-0820 (passcode 6968854) until November 4, 2010. 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 company’s substrate products are used primarily in lighting display applications, wireless communications, fiber optic

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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 five joint ventures 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 statements regarding our outlook for the fourth quarter of 2010, the current and long-term growth and trends in the demand for our products, the outlook for sales of wireless devices and the adoption of and investment in LED technology, the change in the composition of our revenues by product, and the positioning of the company in terms of capacity, raw material access and cost-structure within the industry.  These forward-looking statements are based upon specific assumptions that are subject to uncertainties and factors relating to the company’s 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 company’s 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 company’s 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 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.

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FINANCIAL TABLES TO FOLLOW

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AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2010			2009			2010			2009
Revenue	$	26,809		$	16,819		$	68,627		$	37,528
Cost of revenue	16,278			11,281			42,829			29,711
Gross profit	10,531			5,538			25,798			7,817
Operating expenses:
Selling, general and administrative	3,347			3,323			9,805			10,815
Research and development	462			360			1,428			1,175
Restructuring charge	—			—			—			507
Total operating expenses	3,809			3,683			11,233			12,497
Income (loss) from operations	6,722			1,855			14,565			(4,680		)
Interest income (expense), net	26			39			16			117
Other income (expense), net	442			638			2,077			537
Income (loss) before provision for income taxes	7,190			2,532			16,658			(4,026		)
Provision for income taxes	871			201			1,677			513
Net income (loss)	6,319			2,331			14,981			(4,539		)
Less: Net income (loss) attributable to noncontrolling interest	(680		)	(210		)	(1,227		)	(136		)
Net income (loss) attributable to AXT, Inc.	$	5,639		$	2,121		$	13,754		$	(4,675	)
Net income (loss) attributable to AXT, Inc. per common share:
Basic	$	0.18		$	0.07		$	0.44		$	(0.16	)
Diluted	$	0.17		$	0.07		$	0.42		$	(0.16	)
Weighted average number of common shares outstanding:
Basic	30,944			30,475			30,853			30,449
Diluted	32,509			30,911			32,170			30,449

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AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

	September 30,			December 31,
	2010			2009
Assets:
Current assets
Cash and cash equivalents	$	23,393		$	16,934
Short-term investments	17,606			18,469
Accounts receivable, net	18,977			15,362
Inventories, net	33,153			27,718
Prepaid expenses and other current assets	3,451			2,411
Total current assets	96,580			80,894
Property, plant and equipment, net	22,709			20,853
Other assets	6,313			6,199
Total assets	$	125,602		$	107,946
Liabilities and stockholders’ equity:
Current liabilities
Accounts payable	$	5,979		$	5,571
Accrued liabilities	6,557			4,566
Current portion of long-term debt	—			76
Total current liabilities	12,536			10,213
Long-term debt, net of current portion	0			420
Other long-term liabilities	30			62
Total liabilities	12,566			10,695
Stockholders’ equity:
Preferred stock	3,532			3,532
Common stock	189,140			187,901
Accumulated deficit	(87,376		)	(101,130		)
Other comprehensive income	4,276			4,300
Total AXT, Inc. stockholders’ equity	109,572			94,603
Noncontrolling interest	3,464			2,648
Total stockholders’ equity	113,036			97,251
Total liabilities and stockholders’ equity	$	125,602		$	107,946