AXT Inc. (NASDAQ:AXTI) Q3 2019 Earnings Conference Call - Final Transcript

Oct 30, 2019 • 04:30 pm ET

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AXT Inc. (NASDAQ:AXTI) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, everyone and welcome to AXT's Third Quarter 2019 Financial Conference Call. Leading the call today is Dr. Morris Young, Chief Executive Officer and Gary Fischer, Chief Financial Officer. [Operator Instructions] I would now like to turn the call over to Leslie Green, Investor Relations for AXT.

Executive
Leslie Green

Thank you, Ann, and good afternoon everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the Company, market conditions and trends including expected growths in the markets we serve, emerging applications, using chips or devices fabricated on our substrates, our product mix, our ability to increase orders and succeeding quarters to control costs and expenses, to improve manufacturing yields and efficiencies, to utilize our manufacturing capacity, the schedule and timeliness regarding our relocation, the growing environmental health and safety and chemical industry regulations in China, as well as global economic and political conditions, including trade tariffs and restrictions.

We wish to caution you that such statements deal with future events, are based on management's current expectations and are subject to risks and uncertainties that could cause actual events or results to differ materially. These uncertainties and risks include, but are not limited to, overall conditions in the markets in which the Company competes, global financial conditions and uncertainties, potential tariffs and trade restrictions, increased environmental regulations in China, market acceptance and demand for the Company's products, the financial performance of our partially-owned supply chain companies and the impact of delays by our customers on the timing of sales of their products.

In addition to the factors that maybe discussed in this call, we refer you to the Company's periodic reports filed with the Securities and Exchange Commission. These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com through October 30, 2020. Also before we begin, I want to note that shortly following the close of market today, we issued a press release reporting financial results for the third quarter. This information is available on the Investor Relations portion of our website at axt.com. I would now like to turn the call over to Gary Fischer for a review of our third quarter results. Gary?

Executive
Gary Fischer

Thank you, Leslie and good afternoon everyone. Total revenue for the third quarter of 2019 was $19.8 million. By comparison, revenue in the second quarter of 2019 was $24.8 million and revenue in the third quarter of 2018 was $28.6 million. Of our total revenue, substrate sales were $16.0 million compared with $20.6 million in the prior quarter. Revenue from our raw material joint ventures was $3.9 million in Q3, compared with $4.2 million in Q2 and $5.8 million in Q3 of 2018.

Morris can