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AXT Goes Into Profit For Q1 2016

InP revenue strongest in recent years

AXT, a manufacturer of compound semiconductor substrates, has reported financial results for the first quarter 2016, ended March 31, 2016. Revenue was $18.7 million, compared with $18.1 million in t Q4 2015, slightly above expectations of $17.5 million to $18.5 million.

Net profit in the first quarter of 2016 was $42,000, or $0.00 per share, compared with a net loss of $1.2 million or a loss of $0.04 per diluted share in the fourth quarter of 2015.

Gross margin was 28.1 percent of revenue, compared with 17.1 percent of revenue in Q4 2015.

"Q1 was a strong quarter for AXT in which we exceeded our revenue and profitability guidance, and posted a strong increase in both our gross and operating margins from the prior quarter," said Morris Young, chief executive officer. "Our InP revenue was our strongest in recent years. In addition, our manufacturing team continues to work on efficiency and yield improvement, and these efforts along with our product mix helped improve our gross margin in the quarter."

Operating expenses were $4.8 million in the first quarter of 2016, compared with $4.8 million in the fourth quarter of 2015. Operating profit for the first quarter of 2016 was $0.5 million compared with an operating loss of $1.7 million in the fourth quarter of 2015.

Net interest and other income for the first quarter of 2016 was a loss of $0.2 million, compared with a gain of $0.1 million in the fourth quarter of 2015.

In the first quarter of 2016, revenue for North America was 13 percent, Asia Pacific was 64 percent and Europe was 23 percent of total revenue. In the first quarter, we had one customer that generated more than 10 percent of revenue and the top five customers generated approximately 41 percent of total revenue, reflecting again our diversification in both products and customers.

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