AXT Inc (AXTI)

[Greencake]

Form 8-K for AXT INC


--------------------------------------------------------------------------------

8-Jul-2008

Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement



Item 1.01 Entry into a Material Definitive Agreement
On July 2, 2008, AXT, Inc., ("AXT" or the "Company") entered into a new lease agreement (the "New Lease") with T. Drive Partners, L.P., a California partnership (the "Lessor") of the facility located at 4281 Technology Drive, Fremont, California (the "Facility") with approximately 27,760 square feet. The New Lease shall commence on December 1, 2008 for a term of seven years, with an option by the Company to cancel the New Lease after five years, upon forfeiture of the security deposit and payment of one-half of the fifth year's rent. The base rent for the New Lease shall be $0.72 per square foot per month triple net, with annual rental increases of 4.5% per annum, payment of $50,000 security deposit, and tenant improvements of $575,000 to be amortized over seven years at 4% per annum.

The New Lease will replace the Company's existing lease at this facility in its entirety. The New Lease is filed as Exhibit 10.28to this Form 8-K and is incorporated herein in its entirety.





Item 1.02 Termination of a Material Definitive Agreement
The Company financed the original purchase of its Fremont, California manufacturing facility at 4311 Solar Way, Fremont, California (the "Solar Way Property"), by long-term borrowings, which were refinanced by taxable variable rate revenue bonds in 1998 pursuant to the Variable Rate Taxable Demand Revenue Bonds Series 1998 (the "Bonds") under that certain Indenture by and between the Company and Harris Trust Company of California, dated December 1, 1998 (the "Indenture"). The Bonds, which trade in the public market, mature in 2023. Repayment of principal and interest under the bonds is supported by a letter of credit from Wells Fargo Bank, National Association dated March 14, 2003 (the "Reimbursement Agreement") and has been paid on a quarterly basis. We have also pledged and placed certain investment securities with an affiliate of the bank as additional collateral for this facility. We have the option to redeem the bonds in whole or in part during their term.

The Company completed the sale of the Solar Way Property on March 28, 2008.

On July 1, 2008, the Company exercised its right to redeem the Bonds and to terminate the Agreement and related obligations (the "Redemption"). In connection with the Redemption, the Company repaid all outstanding indebtedness and accrued interest under the Bonds, of approximately $6.45 million. Accordingly, all remaining obligations of the Company under the Bonds, the Indenture and the Reimbursement Agreement have terminated and the $6.6 million recorded as restricted deposits on the consolidated balance sheets as of March 31, 2008 as a result of the outstanding principal amount on the Bonds has been released.





Item 9.01 Financial Statements and Exhibits

(d) Exhibits

10.28 Lease Agreement dated July 2, 2008 by and between AXT, Inc. and T. Drive
Partners, L.P., a California partnership.

[tomgrossman86]

Dr.Phil Yin did a great interview at marketheadquarters.net

[bowonwing]

Yes. Great post JT, thanks.

[Greencake]

Revenues Increase 31 Percent From Fiscal 2006

AXT, Inc. Announces Fourth Quarter and Fiscal 2007 Results
Tuesday February 26, 4:16 pm ET


Revenues Increase 31 Percent From Fiscal 2006


FREMONT, CA--(MARKET WIRE)--Feb 26, 2008 -- AXT, Inc. (NasdaqGM:AXTI - News), a leading manufacturer of compound semiconductor substrates, today reported financial results for the fourth quarter and fiscal year ended December 31, 2007.

Fourth Quarter 2007 Results

Revenue for the fourth quarter of 2007 was $17.6 million, compared with $14.5 million in the third quarter of 2007, and $13.1 million in the fourth quarter of 2006. Total gallium arsenide (GaAs) substrate revenue was $12.2 million for the fourth quarter of 2007, compared with $9.9 million in the third quarter of 2007, and $11.1 million in the fourth quarter of 2006.

Indium phosphide (InP) substrate revenue was $330,000 for the fourth quarter of 2007, compared with $408,000 in the third quarter of 2007, and compared with $456,000 in the fourth quarter of 2006. Germanium (Ge) substrate revenue was $747,000, compared with $536,000 in the third quarter of 2007, and $318,000 in the fourth quarter of 2006. Raw materials sales were $4.3 million for the fourth quarter of 2007, compared with $3.6 million in the third quarter of 2007, and $1.2 million in the fourth quarter of 2006.

Gross margin was 30.1 percent of revenue for the fourth quarter of 2007. This included a benefit from the sale of approximately $466,000 in fully reserved wafers, which positively affected the quarterly gross margin by 2.7 percentage points. By comparison, gross margin in the third quarter of 2007 was 31.3 percent. This included a benefit from the sales of approximately $556,000 in fully reserved wafers, which positively affected third quarter gross margin by 3.8 percentage points. Gross margin in the fourth quarter of 2006 was 38.2 percent, including a benefit from the sale of approximately $730,000 in fully reserved wafers, which positively affected the quarterly gross margins by 5.6 percentage points.

Operating expenses were $3.7 million in the fourth quarter of 2007, compared with $3.5 million in the third quarter of 2007, and $3.8 million in the fourth quarter of 2006.

Income from operations for the fourth quarter of 2007 was $1.6 million compared with income from operations of $1.1 million in the third quarter of 2007, and income from operations of $1.2 million in the fourth quarter of 2006.

Net interest and other income for the fourth quarter of 2007 was $608,000, which included a gain on sale of investment of $1.1 million, compared with net interest and other expense of $54,000 for the third quarter of 2007, and net interest and other income of $1.1 million in the fourth quarter of 2006, which included a gain on sale of Finisar stock of $1.3 million.

Net income in the fourth quarter of 2007 was $1.9 million or $0.06 per diluted share, compared with a net income of $858,000 or $0.03 per diluted share in the third quarter of 2007, and a net income of $3.4 million, or $0.13 per diluted share in the fourth quarter of 2006, which included approximately $0.05 per diluted share from the gain on sale of Finisar stock, and $0.04 per diluted share from our net income tax benefit.

Fiscal Year 2007 Results

Revenue for fiscal year 2007 was $58.2 million, compared with $44.4 million in fiscal year 2006. Gross margin for fiscal year 2007 was 34.8 percent of revenue compared with 28.7 percent of revenue for fiscal year 2006.

Net income for fiscal year 2007 was $5.3 million or $0.16 per diluted share compared with net income of $944,000 or $0.03 per diluted share for fiscal year 2006.

Management Qualitative Comments

"Our strong fourth quarter results concluded what was another solid year for AXT," said Phil Yin, chairman and CEO. "In addition to posting very meaningful gains in revenue, gross profit, operating income, net income and positive cash flow from operations, we have continued to grow our customer base, significantly increase our market share and make strategic investments into the technologies and products that will expand our addressable market. We are excited by the long-term trends in all of the markets that we serve, including the growth of the handset market, the increasing prevalence of LED's in a wide variety of lighting applications and the worldwide adoption of solar energy. We believe that our unique business model is allowing us to convert these exciting opportunities into tangible results."

Outlook for First Quarter, Ending March 31, 2008

AXT estimates revenue for the first quarter will increase to between $17.6 million and $18.0 million. The company estimates that net income per diluted share will be between $0.03 and $0.05, which takes into account our diluted weighted average share count of approximately 31.6 million shares.

Conference Call

The company will also host a conference call today to discuss these results at 1:30 p.m. PT. The conference call can be accessed at [phone] (conference ID 3248721). The call will also be simulcast on the Internet at www.axt.com. Replays will be available at [phone] until March 4, 2008. 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 [phone].

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, and fiber optic communications. 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, particularly in optoelectronics applications. 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 first quarter of 2008, growth in our customer base and expansion of our addressable markets, increasing market share, industry trends that are driving increasing demand for our products, the growth in the handset market, increasing prevalence of LED's in a wide variety of lighting applications, the worldwide adoption of solar energy, and opportunities for growth in the coming years. 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; market acceptance and demand for the company's 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 publicly any forward-looking statement, as a result of new information, future events or otherwise.





AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)



Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- ------------------
2007 2006 2007 2006
--------- -------- -------- --------

Revenue $ 17,564 $ 13,072 $ 58,203 $ 44,445
Cost of revenue 12,270 8,084 37,942 31,709
--------- -------- -------- --------
Gross profit 5,294 4,988 20,261 12,736
--------- -------- -------- --------

Operating expenses:
Selling, general and
administrative 3,217 2,926 13,746 12,650
Research and development 509 854 1,699 2,351
Impairment (recovery) on assets
held for sale - - (481) 1,417
Restructuring benefit - - - (2)
--------- -------- -------- --------
Total operating expenses 3,726 3,780 14,964 16,416
--------- -------- -------- --------
Income (loss) from continuing
operations 1,568 1,208 5,297 (3,680)
Interest income, net 153 101 704 443
Other income, net 455 1,016 16 2,709
--------- -------- -------- --------
Income (loss) from continuing
operations before provision
for income taxes 2,176 2,325 6,017 (528)
Provision (benefit) for income
taxes 302 (1,048) 728 (1,454)
--------- -------- -------- --------
Income from continuing operations 1,874 3,373 5,289 926
Discontinued operations:
Gain from discontinued
operations, net of tax - 11 - 18
--------- -------- -------- --------
Net income $ 1,874 $ 3,384 $ 5,289 $ 944
========= ======== ======== ========

Basic income per share:
Income from continuing operations $ 0.06 $ 0.14 $ 0.17 $ 0.03
Gain from discontinued
operations, net of tax - - - -
--------- -------- -------- --------
Net income per share - basic $ 0.06 $ 0.14 $ 0.17 $ 0.03
========= ======== ======== ========
Shares used in computing basic
income per share 30,337 24,009 30,035 23,303
========= ======== ======== ========

Diluted income per share:
Income from continuing operations $ 0.06 $ 0.13 $ 0.16 $ 0.03
Gain from discontinued
operations, net of tax - - - -
--------- -------- -------- --------
Net income per share - diluted $ 0.06 $ 0.13 $ 0.16 $ 0.03
========= ======== ======== ========
Shares used in computing diluted
income per share 31,550 25,543 31,348 24,600
========= ======== ======== ========







AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)



December 31, December 31,
2007 2006
------------ ------------
Assets:
Current assets
Cash and cash equivalents $ 18,380 $ 16,116
Short-term investments 20,825 19,428
Accounts receivable, net 12,149 9,658
Inventories, net 24,781 20,263
Prepaid expenses and other current assets 3,569 3,985
Assets held for sale 5,140 4,659
------------ ------------
Total current assets 84,844 74,109

Property, plant and equipment, net 15,986 12,775
Other assets 5,242 4,298
Restricted deposits 6,700 7,150

------------ ------------
Total assets $ 112,772 $ 98,332
============ ============

Liabilities and stockholders' equity:
Current liabilities
Accounts payable $ 4,328 $ 3,764
Accrued liabilities 4,716 3,536
Current portion of long-term debt 450 450
------------ ------------
Total current liabilities 9,494 7,750

Long-term debt, net of current portion 6,273 6,839
Other long-term liabilities 3,755 2,543
------------ ------------
Total liabilities 19,522 17,132
------------ ------------

Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 185,979 180,965
Accumulated deficit (98,543) (103,832)
Other comprehensive income 2,282 535
------------ ------------
Total stockholders' equity 93,250 81,200

------------ ------------
Total liabilities and stockholders'
equity $ 112,772 $ 98,332
============ ============



Contact:
Contacts:
Wilson W. Cheung
Chief Financial Officer
[phone]

Leslie Green
Green Communications Consulting, LLC
[phone]



--------------------------------------------------------------------------------
Source: AXT, Inc.

[johncee]

Can anyone explain the class action law suite for $2,575,000 for shareholders that owned the between Feb 6 2001 and April 27th 2004. I don't even remember owning this at that time but they want me to fill out paperwork to get my share of the settlement. Was this under another ticker symbol then? Any info would be appreciated.

[bowonwing]

AXT third quarter 2007 results. Rev: $14.5M; EPS: $0.03. Estimate was $0.05, -0.02.

Short-term, interesting bump in the road.

Long-term, the 64 thousand dollar question is can AXTI execute it's business plan?

From what I know about this company all of the pieces are in place for good, sustainable growth, but it did not happen in Q3-2007 and Q4-2007 EPS estimates are down to between $0.03 and $0.05, when previous estimate was $0.06. Wish I knew what the answer was here.

Stock price got hammered this week and closed today (10/30/07) at $4.64.

[Greencake]

talk about an effective "Golden Cross" wow... nice investment Bow!

Cheers,

JT

[bkasno123]

Check out the interview with Dr.Yin at Wall Street Reporter
www.wallstreetreporter.com

[americano]

AXTI Golden cross bound

[bowonwing]

Yes! Thanks JT!!

[Greencake]

**AXTI Charts**

about to "golden cross"?!!!



and look at the volume on this 2nd chart, investors know what is about to happen

[bowonwing]

AXT Semiconductor Today article- 8/2/07

2 August 2007

AXT's second-quarter growth fuelled by strong demand for GaAs substrates and raw gallium
For second-quarter 2007, substrate and raw materials supplier AXT Inc of Fremont, CA, USA has reported revenue of $13.6m, up by around 9% on the $12.5m in Q1/2007 and around 20% on the $10.4m a year ago.

Revenue from gallium arsenide (GaAs) substrate sales increased to $9.3m, from Q1’s $8.8m. But 6-inch diameter wafer sales were down at $2.8m, from $3.3m in Q1 and $3.0m a year ago. AXT said that the decrease was mainly due to a delay in BiFET qualifications, of which 70-80% had now been completed. The company added that in late June it received some large orders for 6-inch wafers for delivery in Q3/2007.

Second-quarter indium phosphide (InP) revenue was $660,000, up on the $518,000 in Q1/2007 and the $613,000 in Q2/2006.

Germanium (Ge) substrate revenue was $402,000, down on the $541,000 recorded in Q1/2007 due to slightly lower demand from a major Chinese customer, but a substantial increase on the $169,000 achieved in Q2/2006.

Q2/2007 sales of raw materials, primarily 99.99% pure gallium, were $3.3m, compared with $2.6m in Q1/2007, and more than double the $1.4m for the same period in 2006. According to AXT, this increase in revenue was the result of sales in the quarter to two new European customers. AXT added that at least one of the new European customers for raw materials was also a competitor to its substrates business, but declined to disclose further details. As well as the new customers, an increase in raw materials pricing (particularly the average sales price for raw gallium) contributed to the results.

The Asia/Pacific region generated 61% of revenue, followed by 20% from North America and 19% from Europe. AXT said that the percentages represent an upward trend in the Asia/Pacific region in the last few quarters, but adds that it expects to see the percentage for North America to increase relative to other regions due to increasing revenue from photovoltaics manufacturers.

Gross margin for Q2/2007 was 36.9%, compared with a Q1/2007 gross margin of 43.2%, and a Q2/2006 gross margin of 26.6%.

Operating expenses were $3.6m in Q2/2007, compared with operating expenses of $4.2m in Q1/2007, and $4.4m in Q2/2006. The latest figures included a bad debt expense of $574,000, due to slow paying customers, mainly in Asia. Also, during Q2, AXT entered into an agreement to sell its manufacturing facility in Fremont, USA for $5.35m, and accordingly the company recognized a recovery of an impairment on assets held for sale of $481,000.

Q2/2007 income from operations was $1.4m, compared with $1.2m in Q1/2007, and a loss of $1.7m in Q2/2006. Net income in Q2/2007 was $1.2m ($0.04 per diluted share), compared with $1.3m in Q1/2007. Net loss in the Q2/2006 was $(876,000).

Commenting on the results, AXT’s CEO Phil Yin said: "Shortages in gallium raw material and increasing interest in emerging applications such as photovoltaics are illuminating the unique competitive positioning that AXT is likely to benefit from over the next several years. After an industry wide pause to complete BiFET qualifications and digest some excess inventory, we are poised for renewed growth in our 6-inch products. Demand is returning across all areas of our core GaAs business and we are completing several strategically important qualifications that will begin to generate revenue in the second half of the fiscal year. Further, we are very pleased to report that our strategy to vertically integrate our raw material needs has not only proven to be very effective in regards to raw materials pricing and volume, it has clearly become a major differentiator in our industry . . .”.

Moving forward, AXT says it is looking to increase its ownership in joint ventures with suppliers of raw materials, particularly those that produce arsenic and germanium. AXT adds that it is also investigating silicon carbide (SiC), gallium nitride (GaN), and diamond materials, for possible future production.

AXT estimates an increase in Q3/2007 revenue to between $14.0m and $14.6m.

See related items:

AXT’s sales dip due to 6” GaAs, but rebound expected in Q2

AXT’s fourth quarter drove return to profitability in 2006

See company profile

Visit: http://www.axt.com

[bowonwing]

We will have to wait to Q3- 2007 results, or beyond, to see if AXT is really going to breakout in earnings.

Still, all in all a good Q2- 2007 report, which CEO Yin called "... a very interesting and gratifying quarter for AXT."

"... we are completing several strategically important qualifications that will begin to generate revenue in the second half of the fiscal year."

[bowonwing]

AXT, Inc. Announces Second Quarter 2007 Results
Wednesday August 1, 4:02 pm ET

FREMONT, Calif., Aug. 1 /PRNewswire-FirstCall/ -- AXT, Inc. (Nasdaq: AXTI - News), a leading manufacturer of compound semiconductor substrates today reported financial results for the second quarter ended June 30, 2007. The company's financial statements have been presented to reflect the opto-electronics division as a discontinued operation for all periods presented.
Second Quarter 2007 Results

Revenue for the second quarter of 2007 was $13.6 million, compared with $12.5 million in the first quarter of 2007, and $10.4 million in the second quarter of 2006. Total gallium arsenide (GaAs) substrate revenue was $9.3 million for the second quarter of 2007, compared with $8.8 million in the first quarter of 2007, and $8.1 million in the first quarter of 2006. Specifically, 6-inch diameter wafer sales were $2.8 million for the second quarter of 2007 compared with $3.3 million in the first quarter of 2007, and $3.0 million in the second quarter of 2006. The continued decrease in 6-inch diameter wafer sales from the prior quarter was primarily due to the delay in BIFET qualifications of certain customers. However, the majority of the BIFET qualifications was completed by the end of the second quarter.

Indium phosphide (InP) revenue was $660,000 for the second quarter of 2007, compared with $518,000 in the first quarter of 2007, and $613,000 in the second quarter of 2006. Germanium (Ge) substrate revenue was $402,000, compared with $541,000 in the first quarter of 2007, and $169,000 in the second quarter of 2006. Sales of raw materials, primarily 99.99 percent pure gallium, were $3.3 million in the second quarter of 2007, compared with $2.6 million in the first quarter of 2007, and with $1.4 million in the second quarter of 2006. The increase in raw material sales is the result of our selling to new European customers, as well as the increase in raw materials pricing, particularly average sales price for raw gallium.

Gross margin was 36.9 percent of revenue for the second quarter of 2007. This included a benefit from the sale of approximately $387,000 in fully reserved wafers, which positively affected the quarterly gross margin by 2.8 percentage points. By comparison, gross margin in the first quarter of 2007 was 43.2 percent, including a benefit from the sales of approximately $785,000 in fully reserved wafers, which positively affected first quarter gross margin by 6.3 percentage points. Gross margin in the second quarter of 2006 was 26.6 percent, including a benefit from the sale of approximately $802,000 in fully reserved wafers, which positively affected the quarterly gross margins by 7.7 percentage points.

Operating expenses were $3.6 million in the second quarter of 2007, which included a bad debt expense of $574,000 partially offset by a recovery of an impairment on assets held for sale of $481,000, compared with operating expenses of $4.2 million in the first quarter of 2007, and operating expenses were $4.4 million in the second quarter of 2006.

Income from operations for the second quarter of 2007 was $1.4 million, compared with income from operations of $1.2 million for the first quarter of 2007, and a loss from operations of $1.7 million for the second quarter of 2006.

Net interest and other income (expense) for the second quarter of 2007 was an expense of $47,000 compared with income of $213,000 for the first quarter primarily due to foreign exchange losses and; net interest and other income (expense) for the second quarter of 2006 was income of $925,000, primarily due to a gain on sale of Finisar stock of $1.0 million.

Net income in the second quarter of 2007 was $1.2 million or $0.04 per diluted share. By comparison, in the first quarter of 2007 we reported net income of $1.3 million or $0.04 per diluted share. Net loss in the second quarter of 2006 was $(876,000), or $(0.04) per diluted share.

Management Qualitative Comments

"This has been a very interesting and gratifying quarter for AXT," said Phil Yin, chief executive officer. "Shortages in gallium raw material and increasing interest in emerging applications such as photovoltaics are illuminating the unique competitive positioning that AXT is likely to benefit from over the next several years. After an industry wide pause to complete BIFET qualifications and digest some excess inventory, we are poised for renewed growth in our 6 inch products. Demand is returning across all areas of our core GaAs business and we are completing several strategically important qualifications that will begin to generate revenue in the second half of the fiscal year. Further, we are very pleased to report that our strategy to vertically integrate our raw material needs has not only proven to be very effective in regards to raw materials pricing and volume, it has clearly become a major differentiator in our industry; and, coupled with our diverse and unique product portfolio, extensive manufacturing capabilities and strong execution, has resulted in significant advantages for our customers and our shareholders."

Outlook for Third Quarter, Ending September 30, 2007

AXT estimates revenue for the third quarter will increase to between $14.0 million and $14.6 million. The company estimates that net income per diluted share will be between $0.04 and $0.06, which takes into account stock compensation expense of approximately $100,000 and our diluted weighted average share count of approximately 31.2 million shares.

Conference Call

The company will also host a conference call today to discuss these results at 1:30 p.m. PT. The conference call can be accessed at [phone] (PIN 8890680). The call will also be simulcast on the Internet at http://www.axt.com. Replays will be available at [phone] until August 8, 2007. 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 [phone].

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, and fiber optic communications. 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, particularly in optoelectronics applications. 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 related to the future financial performance of the company and our ability to continue growth, maintain profitability, control costs and improve efficiency, as well as relating to improvements in our manufacturing costs, improvements in our competitive position and our technology development. 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 the impact of customer qualification of our products, new opportunities for our China joint ventures, improvements in our production processes, product quality and yields, cost and supply of raw materials, the impact of technology developments providing new markets for GaAs and Ge substrates, overall conditions in the markets in which the company competes as well as market conditions and trends; market acceptance and demand for the company's 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 publicly any forward-looking statement, as a result of new information, future events or otherwise.

FINANCIAL TABLES TO FOLLOW


AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
2007 2006 2007 2006

Revenue $13,639 $10,355 $26,165 $18,826
Cost of revenue 8,607 7,596 15,728 14,557
Gross profit 5,032 2,759 10,437 4,269

Operating expenses:
Selling, general and administrative 3,743 3,853 7,446 7,083
Research and development 348 571 808 1,105
Recovery of impairment on assets
held for sale (481) - (481) -
Restructuring benefit - - - (2)
Total operating expenses 3,610 4,424 7,773 8,186
Income (loss) from continuing
operations 1,422 (1,665) 2,664 (3,917)
Interest income, net 225 111 449 239
Other income (expense), net (272) 814 (283) 1,052
Income (loss) from continuing
operations before
provision for income taxes 1,375 (740) 2,830 (2,626)
Provision for income taxes 162 138 273 456
Income (loss) from continuing
operations 1,213 (878) 2,557 (3,082)
Discontinued operations:
Gain from discontinued operations,
net of tax - 2 - 3
Net income (loss) $1,213 $(876) $2,557 $(3,079)

Basic income (loss) per share:
Income (loss) from continuing
operations $0.04 $(0.04) $0.08 $(0.14)
Gain (loss) from discontinued
operations, net of tax - - - -
Net income (loss) per share - basic $0.04 $(0.04) $0.08 $(0.14)
Shares used in computing basic
income (loss) per share 29,943 23,052 29,871 23,019

Diluted income (loss) per share:
Income (loss) from continuing
operations $0.04 $(0.04) $0.08 $(0.14)
Gain (loss) from discontinued
operations, net of tax - - - -
Net income (loss) per share - diluted $0.04 $(0.04) $0.08 $(0.14)
Shares used in computing diluted
income (loss) per share 31,142 23,052 31,233 23,019



AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, in thousands)

June 30, December 31,
2007 2006
Assets:
Current assets
Cash and cash equivalents $15,416 $16,116
Short-term investments 18,262 19,428
Accounts receivable, net 9,882 9,658
Inventories, net 24,953 20,263
Prepaid expenses and other current assets 4,121 3,985
Assets held for sale 5,140 4,659
Total current assets 77,774 74,109

Property, plant and equipment, net 14,814 12,775
Other assets 4,843 4,298
Restricted deposits 6,850 7,150

Total assets $104,281 $98,332

Liabilities and stockholders' equity:
Current liabilities
Accounts payable $2,141 $3,764
Accrued liabilities 3,761 3,536
Current portion of long-term debt 450 450
Total current liabilities 6,352 7,750

Long-term debt, net of current portion 6,456 6,839
Other long-term liabilities 2,592 2,543
Total liabilities 15,400 17,132

Stockholders' equity:
Preferred stock 3,532 3,532
Common stock 185,018 180,965
Accumulated deficit (101,275) (103,832)
Other comprehensive income 1,606 535
Total stockholders' equity 88,881 81,200

Total liabilities and
stockholders' equity $104,281 $98,332


Source: AXT, Inc.

[bowonwing]

"Tommorrow never knows."

Todays action is sure strange.

[Greencake]

Yes, looking nice

[bowonwing]

$4.92, nice move. Almost there!

We have built a strong base and hopefully with strong earnings on Aug 1 we will be on are way to a new 52 week high.

If and when that happens, on to $6, then $8 a share.

GOAXT!

[bowonwing]

Alright! cool JT. Thanks!

P.S. How do you do that?

[bowonwing]

OK JT, I found you. You are on board!

Welcome.

GOAXTI!

[bowonwing]

JT what is your handle so I can add you.

[bowonwing]

Hey JT! You found it!

I did not include AXTI because of it's recent run-up to $4.72. I was really lucky and got in @$3.70 on May 30, 2007. There was a major bullish hammer that day and AXTI has never looked back.

I still believe there is a lot value @$4.72 long term.

Next stop would be $5.49, the current 52 week high. But it is going to take a good earnings report on 8/2/07 (est. $0.03/shr) to really break-out.

I know this is looking forward and wishful thinking but here it goes:

If AXTI can get over $5.49, and stay over it, $5.49 would become support. Next resistance would be $6, on to $8.

If >$6, and stays over, on to $8, and so on, if >$8, resistance would be $10.

If >$10, resistance would be $12. If >$12, resistance would be $15.

I am not making these price targets up, I studied AXTI previous price action and came up with these target prices.

On Yahoo, growth estimate for 2007 is +206%, +35% for 2008.

Problem is no long term (5 yr) growth estimate. But if, IF, AXTI can grow somewhere between +25% to +35% for 2009 to 2013, I think those price projections are a strong possibility.

Cheers.

[Greencake]

Looks like a winner!

[bowonwing]

AXT- StockScouter rating 9 (10 is best). "AXT, Inc., a micro-cap growth company in the technology sector, is expected to significantly outperform the market over the next six months with less than average risk." source: www.moneycentral.com. July 8, 2007.

[bowonwing]

$4.77 close 7/6/07. $4.58 support (type single, strength 2). $5.11 resistance (type triple, strength 8).

Target #1: $5.49, 52 week high.

Target #2: $8.00, range $6.00-$8.00, support would be $5.49.

[bowonwing]

JDS Capital Management, Inc. bought 1.2m shares of AXT on June 5, 2007, for total ownership of 2M shares. source www.Quote.com.

[bowonwing]

AXT shares are being quietly accumulated, 7/3/07 closed @$4.43, up almost 10% in last week.

Hopefully on 8/2 earnings will beat estimate of $0.04.

I believe AXT is strong turn around company. I am long and holding for the long term.

AXT's all time high was $43.63 in about May, 1999.

At that time they had about 70% of VGF market. Yin (CEO) and Cheung's intent is to regain world market share to 30%, currently it is at about 17%. If AXT can gain world market share to 30%, my rough calculations based on old previous high, (70% market share- $43.63 stock price), works out to about $20 target price, in about two or three years (2009), a 450% increase from current price. Of course this does not factor inflation.

AXT's wild cards: solar play (germanium revenues) and joint ventures in China.

Perhaps, with luck we will see a new 52 week high (>$5.49) in short order, onward to >$6.00, $7.98 trending towards $10. Wishful thinking, I admit, but I like AXT's new management and projected reveune and earnings estimates.

If AXT can get painted on investors radar screens, long holders could be greatly rewarded.

We'll see.

[bowonwing]

AXT has five joint venture operations in China for the raw materials required by AXT's compound semiconductor substrates.
The five joint ventures are:

Beijing Ji Ya Semiconductor Co. Ltd.
Producer of 4N Ga. AXT ownership- 46%

Nanjin Jin Mei Gallium Co. Ltd.
Producer of 6N & 7N Ga, B2O3. -83%

Xilingol Tongli Germanium Co. Ltd.
Producer of Ge. -25%

Emeishan Jia Mei High Purity Materials Co. Ltd.
Produce of 4N, 6N and 7N Arsenic- 25%

Beijing Bo Yu Seniconductor Vessel Craftwork Technology
Producer of pBN crucibles, parts for MBE use. -70%.

Through these joint ventures, AXT manufactures and sells critical materials and parts, while reducing dependency on other suppliers of raw materials in the open market. This affords AXT the price and volume stability unavailable on the open market. In addition, AXT is a majority owner in three of the key ventures, which affords AXT board-level control and vertical intergation. AXT has critical manufacturing processes in China. See company web site for further information.

I am an individual investor. I bought AXTI in May, 2007. I believe AXT is a turn around story with very good days ahead.

Est. growth for 2007- 206%, for 2008- 29%. Est. revenue sales growth for 2008 is 24% (source Yahoo finance). Reuters Outperform rating, 4 of 4, as of June 28, 2007.

I came across AXT because Essex Investment Management Company (AMG Essex Small/Micro Cap Growth Fund) took an initial position in AXT between 1/1/07 and 3/31/07 of 1 million shares ($4.82M) at a price somewhere between $4.18 and $4.78. At 7/3/07 close of $4.43, much upside price potential.
During the same time peroid Institutional ownership in AXT increased by 2.63M shares, out of 29.89M shares outstanding, about +9%. (Sources www.Managersinvest.com and www.MoneyCentral.com).

Next earnings report for AXT is 08/02/2007.

The only question I have is long-term growth for 2009 to 2013. So far, neither Yahoo or Reuters have a long-term growth estimate for AXT. Does anyone have this information? Thank you.

Good luck to AXT and good investing to all.