American Xtal Technology Reports Q4 and 1999 Financial Results

AXT Announces Restated Results for Q1-Q3 1999

FREMONT, CA. American Xtal Technology, Inc. (Nasdaq: AXTI) today reported financial results for the fourth quarter and fiscal year ended Dec. 31, 1999. In addition, the company announced the restated results for the first three quarters of 1999. Revenues for the fourth quarter of 1999 were $21.8 million. Net income for the fourth quarter of 1999 was $1.6 million, or $.08 per share on approximately 19.7 million shares outstanding. All per share amounts are computed on a diluted basis.

The company has restated results for the first three quarters of 1999. During the course of preparing the annual financial statements, AXT learned that certain expenses of Lyte Optronics for the period from Jan. 1, 1999 to May 28, 1999 were understated by approximately $4 million, net of income taxes. The company acquired Lyte Optronics on May 28, 1999, in a transaction accounted for as a pooling of interests. Certain shares issued by the company to acquire Lyte Optronics will be returned to the company by the selling shareholders as a result of the understatement of expenses. In addition, certain expenses of Lyte Optronics for the quarter ended Sept. 30, 1999 were understated by approximately $1.2 million, net of income taxes.

Restated net revenues for fiscal 1999 were $81.5 million. Restated net income for 1999 was $ 3.5 million, or $.19 per share on approximately 18.8 million shares outstanding, before taking into account acquisition costs of $2.8 million and the extraordinary loss of $500,000 associated with the acquisition of Lyte Optronics. All per share amounts are computed on a diluted basis.

The following tables reflect the effect of the restatement on reported revenues, net income and earnings per share.

Q199 Reported Q199 Restated

Net Revenue $19.0 M $18.9 M Net Income $ 1.3 M $(.98) M EPS $0.06 $(0.06)

Q299 Reported Q299 Restated

Net Revenue $21.0 M $20.7 M Net Income $2.8 M $(2.0) M EPS $0.14 $(0.11)

Q399 Reported Q399 Restated

Net Revenue $21.4 M $20.0 M Net Income $2.8 M $1.6 M EPS $0.14 $0.08

Cal-OSHA

The company also reported that it is cooperating with Cal-OSHA in an investigation regarding higher than permissible levels of potentially hazardous materials in certain areas of the AXT facility in Fremont, Calif. The company has put in place engineering, administrative and personal protective equipment programs to address this issue. The AXT facility is in full operation, and the company is pleased to report that no accidents or injuries resulted from this matter. Although civil and criminal charges can be imposed by Cal-OSHA, the current focus of the investigation is on civil enforcement.

New Product Initiative

The company further reported that it has begun shipping its blue light emitting diode (LED) product in pilot quantities. The new 470 nm aluminum indium gallium nitride (AlInGaN)-based high brightness blue LED has approximately 1.5 milliwatt power output at 20 milliamps. This product is used in applications such as full color video display signs, back lighting for LCD displays in cell phones and automobile instrument panels and white light LED illumination. The new blue LED product builds upon the company s current offering of aluminum indium gallium phosphide (AlInGaP)-based high brightness red, amber and yellow LED products.

Safe Harbor Statement

This press release contains forward-looking statements regarding, among other matters, the company s future financial performance, new product releases and the resolution of the monitoring situation with Cal-OSHA. Forward-looking statements address matters that are subject to a number of risks and uncertainties, which could cause actual results to differ materially. In addition to the general risks associated with the development of complex technology and the risks associated with the company s acquisition and the integration of Lyte Optronics, Inc., future results of the company will depend on a variety of factors, including, among others, the timing of significant orders, unexpected cancellations or returns by customers, the ability of the company to bring new products to market, the timing of new product releases and product announcements by the company s competitors and other competitive factors. Reference is made to the company s filings with the Securities and Exchange Commission, including the Company s Form 10-K for the year ended Dec. 31, 1998, and 10-Q for the quarter ended Sept. 30, 1999, for further discussion of risks and uncertainties regarding the company s business.

About American Xtal Technology

American Xtal Technology designs, develops, manufactures and markets high-performance substrates for the communications industry. Its Lyte Optronics subsidiary is a leading producer of diodes for laser pointers and light-emitting diodes (LEDs) for the display and lighting industries. The company s proprietary Vertical Gradient Freeze (VGF) crystal growth technology produces low-defect, semi-insulating and semi-conducting gallium arsenide, germanium and indium phosphide wafers. The company has also introduced silicon carbide and gallium nitride substrates for manufacturing blue LEDs. For more information, see American Xtal Technology s website at www.axt.com. The company can also be reached at 4281 Technology Drive, Fremont, California 94538 or call 510-683-5900. American Xtal Technology is traded on the Nasdaq National Market under the symbol AXTI.

Contact: Guy Atwood, CFO of AXT 510-683-5900