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): July 27, 2021

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) 438-4700

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):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, $0.001 par value	AXTI	The NASDAQ Stock Market LLC

Item 2.02 Results of Operations and Financial Condition

On July 27, 2021, AXT, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2021.  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 June 30, 2021, 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 July 27, 2021, regarding the financial results of AXT, Inc. for the quarter ended June 30, 2021.

EXHIBIT INDEX

Eptem
Exhibit Number	Description
99.1	Press release dated July 27, 2021, regarding the financial results of AXT, Inc. for the quarter ended June 30, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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: July 27, 2021	By:	/s/ Gary L. Fischer
		Gary L. Fischer
		Chief Financial Officer and Corporate Secretary

EX-99.1

Y
	Exhibit 99.1
	AXT, Inc. Second Quarter 2021 Results
	July 27, 2021
	Page 1 of 5

AXT, Inc. Announces Second Quarter 2021 Financial Results

Revenue Reaches $33.7 Million, 52% Over Prior Year

FREMONT, Calif., July 27, 2021 – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor wafer substrates, today reported financial results for the second quarter, ended June 30, 2021.

Management Qualitative Comments

“Our Q2 results demonstrate that the momentum in our business continues to build with major customer wins that are increasingly contributing to our revenue,” said Morris Young, chief executive officer. “The investments we’ve made over the past years in our facilities, our team, and our business processes have come at exactly the right time and are producing new opportunities. With these investments, we are able to participate in several major technology trends and are now in the supply chains of some of the most prestigious companies in the world. Our growth and record results underscore our strong competitive positioning and the expanding number of major applications for compound semiconductors.”

Second Quarter 2021 Results

● Revenue for the second quarter of 2021 was $33.7 million, compared with $31.4 million in the first quarter of 2021 and $22.1 million for the second quarter of 2020.  This is more than 52 percent growth over the second quarter of 2020.

● Gross margin was 36.3 percent of revenue for the second quarter of 2021, compared with 36.8 percent of revenue in the first quarter of 2021 and 30.6 percent for the second quarter of 2020.

● Operating expenses were $8.3 million in the second quarter of 2021, compared with $8.0 million in the first quarter of 2021 and $6.3 million for the second quarter of 2020.  

● Operating profit for the second quarter of 2021 was $3.9 million, compared with an operating profit of $3.6 million in the first quarter of 2021 and operating profit of $0.5 million for the second quarter of 2020.

● Other income, net for the second quarter of 2021 was a gain of $1.6 million, compared with a gain of $1.0 million in the first quarter of 2021 and a gain of $1.4 million for the second quarter of 2020.

AXT, Inc. Second Quarter 2021 Results
	July 27, 2021
	Page 2 of 5

● Net income in the second quarter of 2021 was $4.4 million, or $0.10 per share, compared with net income of $3.4 million or $0.08 per share in the first quarter of 2021 and net income of $0.4 million or $0.01 per share for the second quarter of 2020.

STAR Market Listing Update

AXT previously announced on November 16, 2020 a strategic plan to access China’s capital markets and progress to an initial public offering by Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), its wafer manufacturing company in China, on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd (the “STAR Market”).  The company is currently preparing required documents for submission to the STAR Market authorities.  

The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Tongmei expects to accomplish this goal in mid-2022. AXT has posted a brief summary of the plan and the process on its website at 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 (844) 892-6598 (passcode 4868076). The call will also be simulcast at www.axt.com. Replays will be available at (855) 859-2056 (passcode 4868076) until August 2, 2021. 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) 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 and includes 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.

Forward-Looking Statements

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding completing other preliminary steps

AXT, Inc. Second Quarter 2021 Results
	July 27, 2021
	Page 3 of 5

in connection with the proposed listing of shares of Tongmei on the STAR Market, being accepted to list shares of Tongmei on the STAR Market and the timing and completion of such 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 growth prospects and opportunities for continued business expansion, including technology trends and new applications, our market opportunity, our ability to lead our industry, our relocation and our expectations with respect to our business prospects and financial results. 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 withdrawal, cancellations or 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 investments in Tongmei and 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; 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.

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FINANCIAL TABLES TO FOLLOW

AXT, Inc. Second Quarter 2021 Results
	July 27, 2021
	Page 4 of 5

AXT, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, in thousands, except per share data)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Revenue	$	33,735	$	22,134	$	65,085	$	42,857
Cost of revenue		21,497		15,366		41,311		30,567
Gross profit		12,238		6,768		23,774		12,290
Operating expenses:
Selling, general and administrative		5,795		4,747		11,365		9,496
Research and development		2,537		1,543		4,942		2,950
Total operating expenses		8,332		6,290		16,307		12,446
Income (loss) from operations		3,906		478		7,467		(156)
Interest income (expense), net		39		(39)		(11)		(68)
Equity in income (loss) of unconsolidated joint ventures		1,502		(168)		2,613		(288)
Other income (expense), net		61		1,608		(50)		2,974
Income before provision for income taxes		5,508		1,879		10,019		2,462
Provision for income taxes		893		920		1,639		1,286
Net income		4,615		959		8,380		1,176
Less: Net income attributable to noncontrolling interests		(230)		(598)		(570)		(993)
Net income attributable to AXT, Inc.	$	4,385	$	361	$	7,810	$	183
Net income attributable to AXT, Inc. per common share:
Basic	$	0.11	$	0.01	$	0.19	$	0.00
Diluted	$	0.10	$	0.01	$	0.18	$	0.00
Weighted-average number of common shares outstanding:
Basic		41,248		39,973		41,124		39,891
Diluted		42,727		40,750		42,725		40,543

AXT, Inc. Second Quarter 2021 Results
	July 27, 2021
	Page 5 of 5

AXT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands)

	June 30,		December 31,
	2021		2020
ASSETS
Current assets:
Cash and cash equivalents	$	52,783	$	72,602
Short-term investments		2,751		240
Accounts receivable, net		33,473		24,558
Inventories		58,926		51,515
Prepaid expenses and other current assets		16,509		15,603
Total current assets		164,442		164,518
Long-term investments		2,944		5,726
Property, plant and equipment, net		127,241		115,825
Operating lease right-of-use assets		2,504		2,683
Other assets		12,273		10,110
Total assets	$	309,404	$	298,862
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	16,130	$	12,669
Accrued liabilities		11,547		15,995
Bank loan		10,533		10,411
Total current liabilities		38,210		39,075
Noncurrent operating lease liabilities		2,156		2,374
Other long-term liabilities		1,693		1,881
Total liabilities		42,059		43,330
Redeemable noncontrolling interests		50,083		47,563
Stockholders’ equity:
Preferred stock		3,532		3,532
Common stock		42		42
Additional paid-in capital		228,411		230,381
Accumulated deficit		(36,735)		(44,545)
Accumulated other comprehensive income		4,533		3,209
Total AXT, Inc. stockholders’ equity		199,783		192,619
Noncontrolling interests		17,479		15,350
Total stockholders’ equity		217,262		207,969
Total liabilities, redeemable noncontrolling interests and stockholders’ equity	$	309,404	$	298,862

XML

Document and Entity Information	Jul. 27, 2021
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Jul. 27, 2021
Entity File Number	000-24085
Entity Registrant Name	AXT, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3031310
Entity Address, Address Line One	4281 Technology Drive
Entity Address, City or Town	Fremont
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94538
City Area Code	510
Local Phone Number	438-4700
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	AXTI
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false
Entity Central Index Key	0001051627
Amendment Flag	false