AXT sells opto business, reports flat revenue
Substrates manufacturer AXT reported revenue of $8.5 million from continuing operations for its third quarter, which ended September 30, 2003 - exactly the same figure reported in the previous quarter. The quarter also saw AXT sell its loss-making optoelectronics business to Lumei Optoelectronics for the equivalent of $9.6 million in Chinese currency.
AXT made a net loss of $2.6 million on the flat revenue, compared with a net loss of $17.7 million in the previous quarter. The latter figure included a $13.8 million charge associated with the discontinuation of its optoelectronics busniess.
Following the sale of the optoelectronics business, AXT said it repaid its outstanding equipment loans and leases.
“Revenue during the third quarter was flat, but we saw improvements in product quality and acceptance,” said Morris Young, president and CEO. “While price competition continues, the appreciation of the yen and euro in recent months makes us more competitive. Furthermore, our substrate business continues to generate cash from operations.”
“Our decision to discontinue the optoelectronics business was difficult, but it was the best decision for the company. Now we can focus all of our efforts on growing and improving the performance of our core substrate business. With the proceeds of the sale of the optoelectronics assets and the receipt of approximately $8.1 million in tax refunds, we paid down our equipment loans and leases and simultaneously improved our cash balances by $9.6 million compared with the second quarter of 2003.”
AXT is expecting revenue from continuing operations to remain flat in its next quarter, coming in somewhere between $8.3 and $8.7 million, with a net loss of between $2.8 and $3.0 million.