AXT to discontinue optoelectronics production
The company produces VCSELs, edge-emitting lasers and nitride-based LEDs at its facilities in California and China. On May 14, AXT announced that a temporary shutdown of its optoelectronics production facilities in the US (see AXT closes opto facility in US for two weeks). This followed a significant slowdown in sales of optoelectronic products at the start of May, which AXT blamed on the SARS virus.
However, the company says that revenues from its core substrate business remain on track for the second quarter of 2003.
Approximately 165 employees at the California facilities of AXT s optoelectronics division will be given notice that they will be laid off in 60 days. In the near future, the company will keep a minimum work force to produce and ship current customer orders and to continue to sell products from its inventory.
As previously reported, AXT is reviewing its options for the discontinuation of its optoelectronics business. These options may include spinning off the division, possibly through a joint venture; sale of the division or all or part of its assets; or liquidation.
"By taking this step, we will be able to focus our attention on growing our core substrate business and bringing it to profitability, while conserving the company s cash," said Morris Young, president and CEO of AXT.
Recently, AXT was sued by Cree Lighting for allegedly infringing a patent regarding LEDs that is licensed by Cree from Boston University (see Cree files patent infringement lawsuit against AXT). AXT believes that the lawsuit is without merit and intends to defend itself vigorously.
For the second quarter ending June 30, 2003, revenue from the continuing substrate business is expected to be $8.2-$8.4 million and net loss from continuing operations is expected to be $2.9-3.1 million or $0.13-$0.14 per share.
AXT s net loss for the second quarter will also include charges related to the discontinued optoelectronics business. The company will announce its second quarter results on July 23, 2003.
