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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC.WASHINGTON, D.C. 20549
----------------------------
FORM 10-Q10-Q/A
(Mark One)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended JuneSeptember 30, 20001999
or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the transition period from ______________ to ______________
Commission File Number 0-24085
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AXT, INC.
(Exact name of registrant as specified in its charter)(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-3031310
(State or other jurisdiction of(STATE OR OTHER JURISDICTION OF (I.R.S. Employer
Incorporation or organization) Identification No.EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4281 Technology Drive, Fremont, CaliforniaTECHNOLOGY DRIVE, FREMONT, CALIFORNIA 94538
(Address of principal executive offices) (Zip code)(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(510) 683-5900
(Registrant's telephone number, including area code)(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at June 30, 2000
------- ----------------------------
Common Stock, $.001 par value 18,947,781
Class Outstanding at September 30, 1999
----------------------------- ---------------------------------
Common Stock, $.001 par value 18,612,434
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AXT, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.Statements
Condensed Consolidated Balance Sheets at JuneSeptember 30, 20001999
and December 31, 19991998
Condensed Consolidated Income Statements for the three and
sixnine months ended JuneSeptember 30, 20001999 and 19991998
Condensed Consolidated Statements of Cash Flows for the sixnine
months ended JuneSeptember 30, 20001999 and 19991998
Notes To Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II. OTHER INFORMATION
Item 4. Submission2. Changes in Securities and Use of Matters to a Vote of Security HoldersProceeds
Item 6. Exhibits and Reports on Form 8-K
Signatures
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AXT, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JuneSeptember 30, December 31,
2000 1999 -----------1998
------------- ------------
(Unaudited)
Assets:
Current assets
Cash and cash equivalents $ 5,1494,883 $ 6,06216,438
Accounts receivable, net of allowance for doubtful
accounts of $1,702$1,864 and $778 20,889 17,561$1,648 17,344 13,128
Inventories 43,630 35,47033,447 25,300
Prepaid expenses and other current assets 6,071 8,9458,328 3,271
Deferred income taxes 4,585 3,2102,856 2,452
--------- ---------
Total current assets 80,324 71,24866,858 60,589
Property, plant and equipment 52,476 40,86540,304 37,624
Other assets 2,427 1,4052,087 1,927
Goodwill 1,945 2,2442,394 2,843
--------- ---------
Total assets $ 137,172111,643 $ 115,762102,983
========= =========
Liabilities and Stockholders' Equity:
Current liabilities
Short-term bank borrowing $ 12,9804,345 $ 11,298
Note payable 4,000 --1,928
Accounts payable 12,575 8,2949,951 7,850
Accrued liabilities 10,801 7,46410,967 5,242
Current portion of long-term debt 1,862 1,5683,190 2,733
Current portion of capital lease obligation 3,437 2,1621,092 1,192
--------- ---------
Total current liabilities 45,655 30,78629,545 18,945
Long-term debt, net of current portion 14,034 15,25415,079 18,416
Long-term capital lease, net of current portion 8,137 6,8535,904 3,854
Other long-term liabilities 100 410501 604
--------- ---------
Total liabilities 67,926 53,30351,029 41,819
--------- ---------
Stockholders' equity:
Preferred stock
$.001 par value per share; 1,000,0002,000 shares authorized;
980,655981 shares issued and outstanding 1 1
Additional paid-in capital 3,989 3,9893,999 3,999
Common stock
$.001 par value per share; 100,000,000100,000 shares authorized;
18,947,78118,612 and 18,658,91918,393 shares issued and outstanding, respectively 19 1918
Additional paid-in capital 48,606 46,32145,992 45,248
Deferred compensation (162) (217)(244) (327)
Retained earnings 16,695 12,37010,807 12,198
Cumulative translation adjustments 98 (24)40 27
--------- ---------
Total stockholders' equity 69,246 62,45960,614 61,164
--------- ---------
Total liabilities and stockholders' equity $ 137,172111,643 $ 115,762102,983
========= =========
See accompanying notes to these unaudited condensed consolidated financial
statements.
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AXT, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
(In thousands, except per share data)
Three Months Ended SixNine Months Ended
JuneSeptember 30, JuneSeptember 30,
--------------------- ---------------------
2000------------------------- -------------------------
1999 20001998 1999 1998
-------- -------- -------- --------
Revenue $ 28,94420,017 $ 20,78313,942 $ 52,87859,697 $ 39,68040,660
Cost of revenue 17,859 13,971 32,198 30,21113,077 8,911 43,288 26,244
-------- -------- -------- --------
Gross profit 11,085 6,812 20,680 9,4696,940 5,031 16,409 14,416
Operating expenses:
Selling, general and administrative 4,564 3,196 8,417 6,8433,113 2,540 9,956 7,238
Research and development 1,863 858 3,851 1,520670 819 2,190 2,173
Acquisition costs -- -- 2,810 -- 2,810
-------- -------- -------- --------
Total operating expenses 6,427 6,864 12,268 11,1733,783 3,359 14,956 9,411
-------- -------- -------- --------
Income (loss) from operations 4,658 (52) 8,412 (1,704)3,157 1,672 1,453 5,005
Interest expense (1,149) (730) (1,918) (1,360)(752) (325) (1,535) (837)
Other income and expense 303 29 499 722235 248 380 219
-------- -------- -------- --------
Income (loss) before provision for income taxes 3,812 (753) 6,993 (2,342)2,640 1,595 298 4,387
Provision for income taxes 1,459 782 2,668 1781,003 559 1,181 1,704
-------- -------- -------- --------
Net Income (loss) before extraordinary item 2,353 (1,535) 4,325 (2,520)1,637 1,036 (883) 2,683
Extraordinary item -- -- 508 508--
-------- -------- -------- --------
Net Income (loss) $ 2,3531,637 $ (2,043)1,036 $ 4,325(1,391) $ (3,028)2,683
======== ======== ======== ========
Basic income (loss) per share:
Income before extraordinary item $ 0.130.09 $ (0.08)0.06 $ 0.23(0.05) $ (0.14)0.17
Extraordinary item (0.03)
(0.03)
Net income 0.13 (0.11) 0.23 (0.16)0.09 0.06 (0.07) 0.17
Diluted income (loss) per share:
Income before extraordinary item $ 0.120.08 $ (0.08)0.06 $ 0.23(0.05) $ (0.14)0.17
Extraordinary item (0.03)
(0.03)
Net income 0.12 (0.11) 0.21 (0.16)0.08 0.06 (0.07) 0.17
Shares used in per share calculations:
Basic 18,654 18,443 18,687 18,45118,482 16,915 18,610 15,388
Diluted 20,149 18,443 20,178 18,45119,946 17,705 18,610 16,178
See accompanying notes to these unaudited condensed consolidated financial
statements.
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AXT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
SixNine Months Ended
JuneSeptember 30,
---------------------
2000-------------------------
1999 1998
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss): $ 4,325(1,391) $ (3,028)2,683
Adjustments to reconcile net income (loss) to cash used in operations:
Depreciation 2,917 1,1624,097 1,961
Deferred income taxes (1,375) (404) (1,152)
Amortization of goodwill 299 300449 --
Stock compensation 55 5583 (134)
Changes in assets and liabilities:
Accounts receivable (3,328) (929)(4,216) (1,174)
Inventories (8,160) (4,491)(8,147) (5,057)
Prepaid expenses and other current assets 2,874 (4,407)(5,057) (1,796)
Other assets (1,022) 790(160) (81)
Accounts payable 4,281 1892,101 2,102
Accrued liabilities 3,337 3,7645,725 (85)
Other long-term liabilities (310) (103) --
-------- --------
Net cash provided by (used in) operating activities 3,893 (7,102)(7,023) (2,733)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (11,101) (3,853)(4,123) (15,029)
-------- --------
Net cash used in investing activities (11,101) (3,853)(4,123) (15,029)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments of):
Issuance of common stock 2,285 359745 34,577
Issuance of preferred stock -- (7,829)
Capital leases (868) (268)(704) (99)
Short-term bank borrowings 5,682 4,5262,417 2,556
Long-term debt borrowings (926) 157(2,880) 601
-------- --------
Net cash provided by financing activities 6,173 4,774(422) 29,806
-------- --------
Effect of exchange rate changes 122 (53)13 (33)
-------- --------
Net increase (decrease) in cash and cash equivalents (913) (6,234)(11,555) 12,011
Cash and cash equivalents at the beginning of the period 6,062 16,438 3,199
-------- --------
Cash and cash equivalents at the end of the period $ 5,1494,883 $ 10,20415,210
======== ========
Non cash activity:
PurchasesPurchase of PP&E through capital leases $ 3,4272,654 $ 39--
======== ========
See accompanying notes to these unaudited condensed consolidated financial
statements.
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AXT, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Presentation
As previously disclosed in the Company's Annual Report on Form 10-K for
the year ended December 31, 1999, the results of operations for the quarters
ended ended March 31, June 30 and September 30, 1999 were restated for certain
corrections to the account balances of Lyte Optronics, Inc. This report on Form
10-Q/A amends the previously filed report on Form 10-Q to reflect these
corrections.
The accompanying condensed consolidated financial statements for the
three-month and six-monthnine-month periods ended JuneSeptember 30, 20001999 and 19991998 are
unaudited. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, the
unaudited condensed consolidated financial statements reflect all adjustments,
consisting only of normal recurring adjustments, considered necessary to present
fairly the financial position, results of operations and cash flows of AXT, Inc.
(the "Company") and its subsidiaries for all periods presented. Certain prior
period reclassifications have been made to conform to the current period
presentation.
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities to prepare these condensed consolidated
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
The results of operations are not necessarily indicative of the results
to be expected in the future or for the full fiscal year. It is recommended that
these condensed consolidated financial statements be read in conjunction with
the Company's consolidated financial statements and the notes thereto included
in its 19991998 Annual Report on Form 10-K and the separate financial statements of
Lyte Optronics, Inc. included in the Form 8-K/A filed with the Securities and
Exchange Commission.
Note 2. Acquisition
On May 28, 1999, the Company completed a merger with Lyte Optronics,
Inc., a Nevada corporation and all of its subsidiaries, including Alpha
Photonics, Inc., Lyte Optronics Ltd. (a United Kingdom company) and Advanced
Semiconductor (a Xiamen, Peoples Republic of China company). Lyte Optronics,
Inc. and its subsidiaries manufacture and distribute visible semiconductor laser
diode chips, high brightness visible light emitting diodes and laser pointers.
Under the terms of the merger agreement, the Company issued
approximately 2.3 million shares of common stock in exchange for all the
outstanding shares of Lyte's common stock as well as the outstanding shares of
Lyte's Series A preferred stock. The Company also issued approximately 981,000
shares of Series A preferred stock in exchange for all the outstanding shares of
Lyte's Series B preferred stock. In addition, the Company assumed and converted
Lyte's options and warrants representing approximately 115,000 shares of the
Company's common stock.
The merger has been accounted for as a pooling of interests;
accordingly, all prior period consolidated financial statements have been
restated to include the combined results of operations, financial position, and
cash flows of Lyte Optronics, Inc.
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The Company incurred costs of approximately $2.8 million associated with
the merger, which was charged to operations during the quarter ended June 30,
1999, the period in which the merger was consummated.
Note 3. Net Income Per Share
Basic earnings per common share is calculated by dividing net earnings
by the weighted average number of common shares outstanding during the period.
Diluted earnings per common and common equivalent share includeincludes the dilutive effect of common stock
equivalents outstanding during the period calculated using the treasury stock
method. Common stock equivalents consist of the shares issuable upon the
exercise of stock options.
Common equivalent shares of
approximately 1.0 million are excluded from the computation for the three month
and six month periods ended June 30, 1999, as their effect is antidilutive.
A reconciliation of the numerators and denominators of the basic and
diluted net income per share calculations is as follows (in thousands except per
share data):
Three Months Ended June 30, SixNine Months Ended
JuneSeptember 30, ------------------------------------------------- --------------------------------------------------
2000September 30,
---------------------- ------------------------
1999 20001998 1999 ----------------------- ----------------------- ----------------------- -------------------------
Per Per Per Per
Net Share Net Share Net Share Net Share
Income Shares Amount Income Shares Amount Income Shares Amount Income Shares Amount
------ ------ ------1998
------- ------ ------ ------ ------ ------ ------- ------ -------------- -------
Basic EPS calculation $2,353 18,654 $0.13 $(2,043) 18,443 $(0.11) $4,325 18,687 $0.23 $(3,028) 18,451 $(0.16)Numerator:
Net income (loss) $ 1,637 $ 1,036 $ (1,391) $ 2,683
======= ======= ======== =======
Denominator:
Denominator for basic earnings per share -
weighted average common shares 18,482 16,915 18,610 15,388
Effect of dilutive securitiessecurities:
Common stock options 1,495 1,4911,464 790 -- 790
------- ------- -------- -------
Denominator for dilutive earnings per share 19,946 17,705 18,610 16,178
======= ======= ======== =======
Basic earnings per share $ 0.09 $ 0.06 $ (0.07) $ 0.17
Diluted EPS calculation $2,353 20,149 $0.12 $(2,043) 18,443 $(0.11) $4,325 20,178 $0.21 $(3,028) 18,451 $(0.16)
====== ====== ===== ======= ====== ====== ====== ====== ===== ======= ====== ======earnings per share $ 0.08 $ 0.06 $ (0.07) $ 0.17
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Note 3.4. Inventories
The components of inventory are summarized below (in thousands):
JuneSeptember 30, December 31,
2000 1999 --------1998
------------- ------------
Inventories:
Raw materials $13,904 $ 16,693 $ 13,5039,928
Work in process 20,987 16,15113,012 13,171
Finished goods 5,950 5,816
-------- --------
$ 43,630 $ 35,470
======== ========6,531 2,201
------- -------
$33,447 $25,300
======= =======
Note 4.5. Comprehensive Income
The components of comprehensive income are summarized below (in
thousands):
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Three months ended Six months ended
JuneMonths Ended Nine Months Ended
September 30, JuneSeptember 30,
-------------------- --------------------
2000--------------------- -----------------------
1999 20001998 1999 1998
------ -------- ------ --------------- ------- -------
Net Income (loss) $2,353$1,637 $ (2,043) $4,3251,036 $(1,391) $ (3,028)2,683
Foreign currency translation gain (loss) 89 25 122 (53)66 (63) 13 (26)
------ -------- ------ --------------- ------- -------
Comprehensive income $2,442$1,703 $ (2,018) $4,447973 $(1,378) $ (3,081)2,657
====== ======== ====== =============== ======= =======
Note 5.6. Segment Information
Selected industry segment information is summarized below (in
thousands):
Three months ended Six months ended
JuneMonths Ended Nine Months Ended
September 30, JuneSeptember 30,
-------------------- -------------------
2000------------------------ -------------------------
1999 20001998 1999 1998
-------- -------- -------- --------
Substrates
Net revenues from external customers $ 26,21215,030 $ 14,40511,395 $ 45,33741,167 $ 26,13731,915
Gross profit 12,466 5,549 21,148 10,3816,225 4,554 16,606 12,992
Operating income 8,782 1,164 14,418 4,0234,371 2,708 8,394 7,752
Identifiable assets 105,151 82,068 105,151 82,06883,500 66,380 83,500 66,380
Visible emitters
Net revenues from external customers 1,728 4,792 4,868 9,3913,889 - 13,280 -
Gross profit (loss) (1,409) 1,622 (1,120) (110)920 - 810 -
Operating income (loss) (3,811) 111 (5,592) (2,884)97 - (2,787) -
Identifiable assets 26,920 20,675 26,920 20,67522,547 - 22,547 -
Consumer products
Net revenues from external customers 1,004 1,586 2,673 4,1521,098 2,547 5,250 8,745
Gross profit (loss) 28 (359) 652 (802)(205) 477 (1,007) 1,424
Operating loss (313) (1,327) (414) (2,843)(1,311) (1,036) (4,154) (2,747)
Identifiable assets 5,100 5,095 5,100 5,0955,596 4,973 5,596 4,973
Total
Net revenues from external customers 28,944 20,783 52,878 39,68020,017 13,942 59,697 40,660
Gross profit 11,085 6,812 20,680 9,4696,940 5,031 16,409 14,416
Operating income (loss) 4,658 (52) 8,412 (1,704)3,157 1,672 1,453 5,005
Identifiable assets 137,171 107,838 137,171 107,838111,643 71,353 111,643 71,353
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The Company sells its products in the United States and in other parts of the
world. Also, the Company has operations in China and Japan. Revenues by
geographic location based on the country of the customer are summarized below
(in thousands):
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2000 1999 2000 1999
------- ------- ------- -------
Net revenues:
United States $15,462 $10,807 $27,869 $19,991
Europe 3,265 1,889 5,956 3,694
Canada 1,203 48 1,211 124
Japan 2,311 1,627 4,436 3,081
Asia Pacific and other 6,703 6,412 13,406 12,790
------- ------- ------- -------
Consolidated $28,944 $20,783 $52,878 $39,680
======= ======= ======= =======
Note 6. Short-Term Bank Borrowing
The Company has a $15 million bank line of credit that expires on August
31, 2000. The Company has received a commitment from its bank for a new two-year
$20 million line of credit and additional long-term debt of $6 million.
Management expects that the new credit facility will be completed by August 31,
2000.
Note 7. Notes Payable
On June 15, 2000, the Company entered into a short-term note with its bank
in the amount of $4 million. The note bears interest at 1% above the lender's
variable prime rate that was 9.5% at June 30, 2000. The principal and unpaid
interest of the note is due August 31, 2000. The proceeds of the note were
primarily used to fund the current operating and capital expenditure needs of
the Company.
Note 8. Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS No. 133 established accounting and
reporting standards for derivative instruments including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. In June 2000, SFAS No. 133 was amended
by SFAS No. 138. The Company has not determined what the effect of SFAS No. 133
will be on the operations and financial position of the Company. The Company
will be required to implement SFAS No. 133 as amended by SFAS No. 137, beginning
in 2001. Adopting the provisions of SFAS 133 is not expected to have a material
effect on the Company's financial position or results of operations.
In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition," which
provides guidance on the recognition, presentation, and disclosure of revenue in
financial statements filed with the SEC. SAB 101 outlines the basic criteria
that must be met to recognize revenue and provides guidance for disclosures
related to revenue recognition policies. Management believes that the impact of
SAB 101 would have no material effect on the financial position or results of
operations of the Company.
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In March 2000, the FASB issued FASB Interpretation No. 44 ("FIN 44")
Accounting for Certain Transactions involving Stock Compensation, an
interpretation of APB Opinion No. 25. FIN 44 clarifies the application of
Opinion 25 for (a) the definition of employee for purposes of applying Opinion
25, (b) the criteria for determining whether a plan qualifies as a
noncompensatory plan, (c) the accounting consequence for various modifications
to the terms of a previously fixed stock option or award, and (d) the accounting
for an exchange of stock compensation awards in a business combination. FIN 44
is effective July 1, 2000, but certain conclusions cover specific events that
occur after either December 15, 1998, or January 12, 2000. The Company does not
expect that the adoption of FIN 44 will have a material impact on its financial
position or results of operations.
Note 9. Subsequent Events
On July 25, 2000 the Company completed a private securities offering, raising
approximately $8.5 million in exchange for 234,115 shares of common stock. The
shares issued have not been registered under the Securities Act of 1933 and are
"restricted securities" as defined by rule 144 promulgated under the act. The
securities may not be sold or offered for sale or otherwise distributed except
in conjunction with an effective registration statement for the shares under the
Act, in compliance with rule 144, or pursuant to an opinion of counsel
satisfactory to the Company, that such registration or compliance is not
required as to said sale, offer or distribution. The Company is obligated to
register the shares no later than ten days after the completion of its next
public securities offering.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Management's Discussion and Analysis of Financial Condition and
Results of Operations includes a number of forward-looking statements that
reflect current views with respect to future events and financial performance.
These forward-looking statements are subject to certain risks and uncertainties
that could cause actual results to differ materially from historical results or
those anticipated. In this report, the words "anticipates," "believes,"
"expects," "future," "intends," and similar expressions identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. This
discussion should be read in conjunction with Management's Discussion and
Analysis of Financial Condition and Results of Operations included in the
Company's Annual Report on Form 10-K for the year ended December 31, 19991998 as
filed with the Securities and Exchange Commission and the condensed consolidated
financial statements included elsewhere in this report.
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Results of Operations
The following table sets forth certain information relating to the
operations of the Company expressed as a percentage of total revenues for the
periods indicated:
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Three Months Ended SixNine Months Ended
JuneSeptember 30, JuneSeptember 30,
-------------------- --------------------
2000 1999 20001998 1999 ------ ------ ------ ------1998
----- ----- ----- -----
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of revenues 61.7 67.2 60.9 76.1
------ ------ ------ ------65.3 63.9 72.5 64.5
----- ----- ----- -----
Gross profit 38.3 32.8 39.1 23.934.7 36.1 27.5 35.5
Operating expenses:
Selling, general and administrative 15.8 15.4 15.9 17.215.6 18.2 16.7 17.8
Research and development 6.4 4.1 7.3 3.83.3 5.9 3.7 5.3
Acquisition costs -- 13.5 -- 7.1
------ ------ ------ ------4.7 --
----- ----- ----- -----
Total operating expenses 22.2 33.0 23.2 28.1
------ ------ ------ ------18.9 24.1 25.1 23.1
----- ----- ----- -----
Income (loss) from operations 16.1 (0.2) 15.9 (4.3)15.8 12.0 2.4 12.3
Interest expense (4.0) (3.5) (3.6) (3.4)(3.8) (2.3) (2.6) (2.1)
Other income and expense 1.0 0.1 0.91.2 1.8 ------ ------ ------ ------0.6 0.5
----- ----- ----- -----
Income (loss) before provision for income taxes 13.1 (3.6) 13.2 (5.9)11.4 0.5 10.8
Provision for income taxes 5.0 3.8 5.0 0.4
------ ------ ------ ------4.0 2.0 4.2
----- ----- ----- -----
Net income (loss) before extra ordinary item 8.1 (7.4) 8.2 (6.3)
Extra ordinary7.4 (1.5) 6.6
Extraordinary item -- 2.4 -- 1.3
------ ------ ------ ------0.9 --
----- ----- ----- -----
Net Income (loss) after extra ordinary item 8.1% (9.8)% 8.2% (7.6)%
====== ====== ====== ======7.4% 2.3% 6.6%
===== ===== ===== =====
Three months ended June 30, 2000 compared to three months ended June 30, 1999
Revenues. RevenuesTotal revenues increased $8.1 million, or 39.3%, to $28.943.6% from $13.9 million for the
three months ended JuneSeptember 30, 2000 compared1998 to $20.8$20.0 million for the three months ended
JuneSeptember 30, 1999. The increase in product revenues was primarily due tofor the three month and
nine month periods ended September 30, 1999, reflected an
$11.8 million, or 82.0%, increase in substrate sales comprisedthe volume
of a $12.5
million, or 98.8%, increase in sales of GaAs and InP substrates to existing domestic and international
customers and the addition of new customers, which offset by a $718,000 decreasedecline in Ge salesLyte
Optronics' sales. In addition, the 1999 results include the sale of laser diodes
and contract revenues atLED's in the substrate division.
The increaseamount of $3.9 million and $13.2 million for the three months
and nine months, respectively, which were not included in GaAs and InPthe 1998 results. We
introduced LED's in the second quarter of 1999. Ge substrate sales was primarily duewere $315,000
lower in the third quarter of 1999 when compared to increasedthe third quarter of 1998,
and were $527,000 lower in sales volumefor the nine months ended September 30, 1999
when compared to existing and new domestic and foreign customersthe nine months ended September 30, 1998. These decreases were
due in part to strong growth in the fiber optic and wireless handset markets. The decrease in
Ge sales is the result of a cancellation of a contractrequest by a major Ge customer for a two-month suspension in
shipments due to weakness in the satellite market. Additionally, sales at our visible emitter
division decreased $3.1 million, or 63.9% of visible emitter sales and sales at
our consumer products division decreased $582,000, or 36.7% of consumer product
sales, due to declining sales prices and lower demand for laser pointer
products.their excess inventory.
International revenues, decreased to 46.6%excluding Canada, increased from 17.2% of total
revenues for the three months ended JuneSeptember 30, 2000 compared1998 to 48.0%44.7% of total
revenues for the three months ended JuneSeptember 30, 1999, and increased from 22.3%
of total revenues for the nine months ended September 30, 1998 to 43.5% for the
nine months ended September 30, 1999. The decreaseThese increases primarily reflect
increased sales in Europe and Asia for GaAs substrates used for the percentageLED market,
and the inclusion of international
revenueAlpha division's sales in 1999 results, which are sold
primarily to total revenue was primarily the result of increased substrate sales
to domestic customers.Asian markets.
Gross margin. GrossTotal gross margin increaseddecreased from 36.1% to 38.3%34.7% of total
revenues for the three months ended JuneSeptember 30, 2000 compared1998, and September 30, 1999,
respectively. This decrease is due to 32.8%a mix of total revenuesdifferent factors.
9
10
The inclusion of the Alpha laser-diode and LED divisions in the 1999 amounts
resulted in an increase in gross margin. Alpha's laser-diode and LED division
benefited from the transition of manufacturing operations to China in the first
quarter of 1999, and Lyte's consumer products division benefited from the 1998
closing of their Arizona manufacturing facility, which lowered our labor costs
and improved our gross margins in 1999. In 1999, gross margins from Ge
substrates were lower, which offset, in part, the higher yields achieved in GaAs
and InP production. The lower gross margins from Ge substrates in 1999 were
primarily the result of pricing declines in the Ge industry generally. The
decrease in gross margin for the threenine months ended JuneSeptember 30, 1999. The gross margin at the substrate division
increased to 47.6% of substrate revenues for the three months ended June 30,
2000 compared to 38.5% of substrate revenues for the period ended June 30, 1999.
The increase was1999 is
primarily due to higher volumecharges for returned merchandise and the realization of lower
labor and manufacturing overhead costs as a result of expanding our wafer
production capacity in China. The gross margin at the visible emitter division
decreased to negative 81.5% of visible emitter revenuesincreased warranty amounts
for the three months
ended June 30, 2000 compared to 33.8% of visible emitter revenues for the period
ended June 30, 1999. The decrease was primarily due to increased costs
associated with the start-up of blue LED and other product production. The gross
margin at the consumer products division increased to 2.8% of consumer product
revenues for the three months ended June 30, 2000 compared to a negative 22.6%
of consumer product
10
11
revenues for the three months ended June 30, 1999. The increase was primarily
due to manufacturing process improvements and cost reductions.division.
Selling, general and administrativeadministration expenses. Selling, general and
administrative expenses increased $1.4 million, or 42.8%, to $4.6from $2.5 million for the three months ended
JuneSeptember 30, 2000 compared1998 to $3.2$3.1 million for the three months ended JuneSeptember 30,
1999, and increased 38.9% from $7.2 million for the nine months ended September
30, 1998 to $10.0 million for the nine months ended September 30, 1999. As a percentageThese
increases resulted primarily from the inclusion of total revenues,the Alpha division in the
1999 results. The Alpha division added $652,000 and $2.6 million to the selling,
general and administrative expenses were 16.1% forin the three months ended June 30, 2000
compared to 15.4% for the threeand nine months ended
JuneSeptember 30, 1999. Selling, general and
administrative expenses increased 42.8% compared to increased total revenues of
39.3% for the three months ended June 30, 2000. The1999, respectively. This increase was partially offset by a
decrease in selling, general and administrative expenses wasby the Lyte division,
as a result of the closing of a manufacturing facility located in Arizona in
1998 as mentioned above. Selling, general and administrative expenses as a
percentage of total revenues decreased from 18.2% for the three months ended
September 30, 1998 to 15.6% for the three months ended September 30, 1999, and
decreased as a percentage of total revenues from 17.8% for the nine months ended
September 30, 1998 to 16.7% for the nine months ended September 30, 1999. These
decreases primarily due to increasesreflect the closing of the facility in personnelArizona by Lyte and
relatedthe control of our expenses required to support current and future increasescombined with an increase in sales
volume.our total revenues.
Research and development expenses. Research and development expenses
increased $1.0 million, or 117.1%, to $1.9 milliondecreased 18.2% from $819,000 for the three months ended JuneSeptember 30, 2000 compared1998 to
$858,000$670,000 for the three months ended JuneSeptember 30, 1999. As
a percentage of total revenues1999, and were flat at $2.2
million for these three-month periods, researchthe nine months ended September 30, 1998 and
development expenses were 6.4% in 2000 and 4.1% in 1999. The increasedecrease for
the three months ended September 30, 1999 was primarily due to a reduction of
consulting fees and materials purchased at the resultsubstrate division.
Acquisition cost. As part of increasesthe acquisition of Lyte Optronics in personnelMay
1999, we incurred a number of one-time expenses associated with the transaction
in the approximate amount of $2.8 million. Such expenses include the fees paid
to our investment bankers, accountants, attorneys, and other outside consultants
and related expenses and
materials to support LED and other product research and development at the
visible emitter division.transaction expenses.
Interest expense. Interest expense increased $419,000, or 57.4%, to $1.1
millionfrom $325,000 for the three
months ended JuneSeptember 30, 2000 compared1998 to $730,000$752,000 for the three months ended JuneSeptember
30, 1999. The increase was primarily due to utilizing
short-term debt to finance the short-term liquidity needs resulting1999, and increased from our
increased sales volume and the addition of certain capital leases to finance
equipment purchases.
Other income and expense. Other income and expense increased $274,000 to
$303,000$837,000 for the threenine months ended JuneSeptember 30,
2000 compared to $29,000 for the
three months ended June 30, 1999. The increase was primarily due to increases in
foreign exchange gains and rental and interest income.
Provision for income taxes. Income tax expense remained at our effective
tax rate of 38.0% for the three months ended June 30, 2000 and 1999. For the
three months ended June 30, 1999, income tax expense was adjusted for
non-deductible acquisition costs of $2.8 million.
Six months ended June 30, 2000 compared to six months ended June 30, 1999
Revenues. Revenues increased $13.2 million, or 33.3%, to $52.9 million for
the six months ended June 30, 2000 compared to $39.7 million for the six months
ended June 30, 1999. The increase in revenues was primarily due to a $19.2
million, or 73.5% increase in substrate sales comprised of a $22.8 million, or
106.9% increase in sales of GaAs and InP substrates offset by a $3.6 million
decrease in Ge sales and contract revenues at the substrate division. The
increase in GaAs and InP substrate sales was due to increased sales volume to
existing and new domestic and foreign customers due in part to strong growth in
the fiber optic wireless handset markets. The decrease in Ge sales is the result
of a cancellation of a contract by a major customer due to weakness in the
satellite market. Additionally, sales at our visible emitter division decreased
$4.5 million, or 48.2% of visible emitter sales, and sales at our consumer
products division decreased $1.5 million, or 35.6% of consumer product sales,
due to declining sales prices and lower demand for laser pointer products.
International revenues decreased to 47.3% of total revenues for the six
months ended June 30, 2000 compared to 49.6% of total revenues for the six
months ended June 30, 1999. The decrease in the percentage of international
revenue to total revenue was primarily the result of increased substrate sales
to domestic customers.
Gross margin. Gross margin increased to 39.1% of revenues for the six
months ended June 30, 2000 compared to 23.9% of revenues for the six months
ended June 30, 1999. The gross margin at the substrate division increased to
46.6% of substrate revenues for the six months ended June 30, 2000 compared to
39.7% of substrate revenues for the period ended June 30, 1999. The increase was
primarily due to higher volume and the realization of lower labor and
manufacturing overhead costs as a result of expanding our wafer production
capacity in China. The gross margin at the visible emitter division decreased to
negative 23.0% of visible emitter revenues for the six
11
12
months ended June 30, 2000 compared to negative 1.2% of visible emitter revenues
for the period ended June 30, 1999. The decrease was primarily due to increased
costs associated with the start-up of blue LED and other product production. The
gross margin at the consumer products division increased to 24.4% of consumer
product revenues for the six months ended June 30, 2000 compared to negative
19.3% of consumer product revenues for the six months ended June 30, 1999. The
increase was primarily due to manufacturing process improvements and cost
reductions.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.6 million, or 23.0%, to $8.4 million for
the six months ended June 30, 2000 compared to $6.8 million for the six months
ended June 30, 1999. As a percentage of total revenues, selling, general and
administrative expenses were 15.9% for the six months ended June 30, 2000 and
17.2% for the six months ended June 30,1999. Selling, general and administrative
expenses increased 23.0% compared to increased total revenues of 33.3% for the
six months ended June 30, 2000. The increase in selling, general and
administrative expenses were primarily due to increases in personnel and related
expenses required to support current and future increases in sales volume.
Research and development expenses. Research and development expenses
increased $2.3 million, or 153.4%, to $3.9 million for the six months ended June
30, 2000 compared1998 to $1.5 million for the sixnine months ended JuneSeptember 30, 1999. These
increases primarily reflect the inclusion of the laser-diode and LED business in
the 1999 results. As a
percentagepart of total revenues for these six-month periods, research and
development expenses were 7.3%the acquisition, we added about $11.0 million in
2000 and 3.8%debt, of which we repaid approximately $6.0 million in June 1999. The increaseadditional
interest from the inclusion of the laser-diode and LED business was primarily the result of increases in personnel$213,000 and
related expenses and
materials to support LED and other product research and development at the
visible emitter division.
Interest expense. Interest expense increased $558,000, or 41.0%, to $1.9
million$599,000 for the sixthree months and nine months ended JuneSeptember 30, 2000 compared to $1.4 million for the
six months ended June 30, 1999. The increase was primarily due to utilizing
short-term debt to finance the short-term liquidity needs resulting from our
increased sales volume and the addition of certain capital leases to finance
equipment purchases.1999,
respectively.
Other income and expense. Other income and expense decreased $223,000 to
$499,0005.2% from
$248,000 for the sixthree months ended JuneSeptember 30, 2000 compared1998 to $722,000$235,000 for the sixthree
months ended JuneSeptember 30, 1999. Other income and expense increased from
$219,000 for the nine months ended September 30, 1998 to $380,000 for the nine
months ended September 30, 1999. The decrease for the three months ended
September 30, 1999 was primarily due to smaller foreignlower interest income on short-term
investments offset by exchange rate gains. The increase for the nine months
ended September 30, 1999 was primarily due to exchange rate gains.
Provision for income taxes. Income tax expense, remained at our effective
tax rate of 38.0% for the six months ended June 30, 2000 and 1999. For the six
months ended June 30, 1999, income tax expense wasas adjusted for non-deductible
acquisition costs of $2.8 million.
Financial Condition,million in 1999, declined from 38.8% of income before
provision of income taxes for the nine months ended September 30, 1998 to 38.0%
for the nine months ended September 30, 1999.
10
11
Extraordinary Item, net of tax benefits. In connection with the
acquisition of Lyte, we incurred prepayment penalties associated with a loan
that we repaid as part of the transaction. This one-time charge is shown, net of
tax benefits, as an extraordinary item in the second quarter of 1999, which is
reflected in the nine months ended September 30, 1999.
Liquidity and Capital Resources
WorkingDuring the past five years, we have funded our operations primarily from
cash provided by operations, short-term and long-term borrowings and a private
financing of $5.9 million for Preferred Stock completed in March 1997. We
completed our initial public offering in May 1998, and raised approximately
$25.8 million, net of offering expenses. In December 1998 we completed our
taxable bond offering and raised approximately $11.6 million. As of September
30, 1999, we had working capital decreased $5.8of $37.3 million, or 14% to $34.7including cash and cash
equivalents of $4.9 million, at June 30,
2000 compared to $40.5 millionworking capital at December 31, 1999. The decrease1998 of
$41.6 million, including cash and cash equivalents of $16.4 million.
During the nine months ended September 30, 1999, net cash used in
operations of $7.0 million was primarily due to increases in short-term obligations necessaryinventories of $8.1
million, accounts receivable of $4.2 million, prepaid and other assets of $5.1
million and a loss of $1.3 million, offset in part by depreciation of $4.1
million and increases in accounts payable and accrued liabilities of $7.8
million. The increases in accounts receivable, inventory and accounts payable
and accrued liabilities were primarily the result of the 46.8% increase in total
revenues from the prior nine months ended September 30. In addition, raw
materials inventories increased in anticipation of large orders for the upcoming
quarters. The increase in prepaid and other assets was primarily due to sustain additional
revenue growthdeposits
for Ge raw material, prepaid research and development expenses.
Net cash used in investing activities was $4.1 million for the usenine
months ended September 30, 1999, and was due primarily to the purchase of operating cash flows to procure capital equipment.
Total long-term debt including capital leases increased $7.3 million while
property, plant and equipment purchases were $14.5 million.
Operating activities generated $3.9 million for the six months ended June
30, 2000 compared to negative $7.1 million for the six months ended June 30,
1999. The increase was primarily due to increased profitability at the substrate
division.
We invested $14.5 million in capital expenditures during the six months
ended June 30, 2000 compared to $3.9 million during the six months ended June
30, 1999. The increase in spending was primarily due to facility expansion and
equipment additions to increase crystal growth and wafer processing capacity at
the substrate divisionour Fremont facilities as well as our new
facility expansion and equipment additions at
the visible emitter division to begin volume epitaxy, wafer processing and chip
production for LED's.
We are currently engaged in constructing an additional 31,000 square foot
building in Beijing, China to expand substrate wafer processing facilities, a
27,000 square foot buildingChina.
Net cash used in El Monte, California to expand epitaxy
12
13
production, as well as constructing leasehold improvements in a 20,000 square
foot building and a 9,000 square foot building to expand administration offices
and material storage areas in Fremont, California. We are also constructing
improvements to the existing production facilities in Fremont, California to
increase crystal growth and wafer processing capacity. We expect to invest
approximately $47 million in additional facilities and equipment over the next
12 months.
Cash provided by financing activities was $422,000 for the sixnine months
ended JuneSeptember 30, 2000 included a $4.0 million note1999, and was generated primarily from our bank and $2.3 million in proceeds
from the exerciseissuance of
stock options from the employee stock option plan.
Total debt was $44.5 million (39% of total capital) at June 30, 2000
compared to $37.1 million (37% of total capital) at December 31, 1999.
We currently have a $15.0 million line of credit with a commercial bank at
an interest rate equal to the bank's prime rate plus one-half percent. The
bank's prime rate was 9.5% at June 30, 2000. This line of credit is secured by
all business assets, less equipment, and expires on August 31, 2000. This line
of credit is subject to certain financial covenants regarding current financial
ratios and cash flow requirements, which were met as of June 30, 2000. We must
obtain the lender's approval to obtain additional borrowings or to further
pledge our assets, except for borrowings obtained in the normal course of
business or the pledging of equipment. At June 30, 2000, $13.0 million was
outstanding under the $15 million line of credit. We have received a commitment
from our bank for a new two-year $20 million line of credit and additional
long-term debt of $6 million. Management expects that the new credit facility
will be completed by August 31, 2000.
On June 15, 2000, we entered into a short-term note with our bankCommon Stock in the amount of $4$956,000 and short-term borrowings of $2.4
million, offset by repayments of long-term borrowings and capital leases of $3.6
million. The note bears interest at 1% above the lender's variable
prime rate thatCommon Stock was 9.5% at June 30, 2000. The principal and unpaid interest of
the note is due August 31, 2000.issued primarily to employees exercising their
stock options or purchasing stock through our employee stock purchase plan.
We expect to repay this note with the proceeds
of the new line of credit. The proceeds of the note were primarily used to fundhave generally financed our current operating and capital expenditure needs.
We generally finance equipment purchases through secured
equipment loans
and capital leases over five-year terms at interest rates ranging from 6.0% to 10.0%9.0%
per annum. Our manufacturing facilities have been financed by long-term
borrowings, which were repaid by the taxable variable rate revenue bonds in
1998. These bonds have a term of twenty-five years and mature in 2023 with an
interest rate at 200 basis points below the prime rate and are traded in the
public market. Repayment of principal and interest under the bonds is secured by
a letter of credit from our bank and is paid on a quarterly basis. We have the
option to redeem in whole or in part the bonds during their term. At JuneSeptember
30, 2000,1999, $10.7 million was outstanding under the taxable variable rate revenue
bonds.
We currently have a $15.0 million line of credit with a commercial bank
at an interest rate equal to the prime rate plus one-half percent. This line of
credit is secured by all business assets, less equipment, and expires in
November 1999. We are currently negotiating an extension to this line of credit.
This line of credit is subject to certain financial covenants regarding current
financial ratios and cash flow requirements, which were met as of September 30,
1999. We must obtain the lender's approval to obtain additional borrowings or to
further pledge our assets, except for borrowings obtained in the normal course
of business or the pledging of equipment. At September 30, 1999, $4.3 million
was outstanding under the $15 million line of credit.
We anticipate that the combination of existing working capital and the
borrowings available under the current and committed credit agreements will be sufficient to fund
working capital and capital expenditure requirements for the next 12 months. Our
future capital requirements will be dependent on many factors including the rate
of revenue growth, our profitability, the timing and extent of spending to
support research and development programs, the expansion of
manufacturing facilities, the expansion of11
12
selling and marketing and administrative activities, and market acceptance of
our products. We expect that we may need to raise additional equity andor debt
financing in the future.future, although we are not currently negotiating for
additional financing nor have any plans to obtain additional financing. We
cannot assure you that additional equity or debt financing, if required, will be
available on the acceptable terms or at all. If we are unable to obtain such
additional capital, if needed, we may be required to reduce the scope of our
planned product development the expansion of our manufacturing facilities, and selling and marketing activities, which would
have a material adverse effect on our business, financial condition and results
of operations. In the event that we do raise additional equity financing,
further dilution to our investors will result.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Since many of the Company's Japanese and Taiwanese invoices are
denominated in yen, the Company has purchased foreign exchange contracts to
hedge against certain trade accounts receivable in Japanese yen. As of JuneSeptember
30, 2000,1999, the Company's outstanding commitments with respect to the foreign
exchange contracts had a total value of approximately $1.7$3.8 million. Many of the
contracts were entered into six months prior to the due date and
13
14 the dates
coincide with the receivable terms on customer invoices. By matching the
receivable collection date and contract due date, the Company attempts to
minimize the impact of foreign exchange fluctuations.
PART II. OTHER INFORMATION
Item 4. Submission2. Changes in securities and use of Mattersproceeds
(a) In connection with the acquisition of Lyte Optronics, our Board of
Directors adopted resolutions designating 2,000,000 shares of Preferred Stock of
the Company as Series A Preferred Stock (the "Series A Preferred Stock"), of
which 980,655 shares were subsequently issued to the stockholders of Lyte
Optronics in exchange for the shares of Series B Preferred Stock of Lyte
Optronics, in connection with the Company's acquisition of Lyte Optronics. The
holders of the Series A Preferred Stock shall be entitled to receive, out of any
funds legally available therefor, dividends in cash in an amount equal to $0.20
per annum for each share of Series A Preferred Stock held by them, in each case
as adjusted for stock splits, recapitalizations and the like. Unless we have
paid all dividends that have accrued on the Series A Preferred Stock, so long as
any shares of Series A Preferred Stock are outstanding we shall not pay or
declare any dividend or distribution of any nature on shares of Common Stock. In
the event of a Voteliquidation, dissolution, or winding up of Security Holders
Thethe Company, held its 2000 Annual Meetingwhether
voluntary or involuntary, after our debts have been paid, the holders of Stockholders on June 7, 2000. OfSeries
A Preferred Stock shall be entitled to receive out of our assets an amount per
share equal to $4.00 before any payment shall be made or any assets distributed
to the 18,906,558holders of Common Stock. If the assets remaining after our debts have
been paid or amounts set aside for such payment are insufficient to pay to the
holders of Series A Preferred Stock the full amount to which they are entitled,
then all of our assets available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock. After payment in full of this
liquidation preference plus accrued but unpaid dividends of the shares eligibleof the
Series A Preferred Stock, no further participation in any distribution of our
assets shall be allowed in respect of such shares, and the holders of the Common
Stock shall be entitled to receive all of our remaining assets to be
distributed. Except as otherwise required by law, shares of Series A Preferred
Stock shall not be entitled to vote aton any matter to be voted on by our
stockholders.
(b) In connection with the meeting, 14,473,242 were present
either in person or by proxy. The following proposals were submitted to
stockholders at the 2000 Annual Meetingacquisition of Stockholders.
Proposal 1: ElectionLyte Optronics, we issued an
aggregate of two class II directors to hold office for a
three-year term2,247,465 Common Stock and until their successors are elected and qualified. The
two candidates were Jesse Chen and Donald L. Tatzin.
Election results for this proposal were as follows:
For Withhold Abstain Not Voted
---------- -------- -------- ---------
Jesse Chen 14,392,983 80,259 0 0
Donald L. Tatzin 14,393,191 80,051 0 0
Proposal 2: To approve an amendment to American Xtal Technology's Certificate of
Incorporation changing its name from "American Xtal Technology, Inc." to "AXT,
Inc."
Election results for this proposal were as follows:
For Withhold Abstain Not Voted
---------- -------- -------- ---------
14,294,328 96,921 81,993 0
Proposal 3: To approve amendments to American Xtal Technology's 1997 Stock
Option Plan to increase the number of shares reserved for issuance under the
plan from 3,800,000 to 5,800,000980,655 shares of common stock.
Election resultsSeries A Preferred
Stock to the existing stockholders of Lyte Optronics in exchange for this proposal were as follows:
For Withhold Abstain Not Voted
---------- -------- -------- ---------
5,365,878 2,885,827 242,551 5,978,986
Proposal 4: To approve amendments to American Xtal Technology's 1998 Employee
Stock Purchase Plan to increaseall of the
number of shares reserved for issuance under
the plan from 400,000 to 900,000outstanding shares of common stock.
Election resultscapital stock of Lyte Optronics, and we assumed options to
acquire 101,501 shares of our Common Stock and warrants convertible into 13,557
shares of our Common Stock (collectively the "Merger Shares"). The Merger Shares
were issued pursuant to an exemption from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), afforded by Section
4(2). Lyte Optronics retained a purchaser representative on behalf of their
stockholders who had knowledge and experience in financial and business matters
such that the purchaser representative was capable of evaluating the merits and
risks of the investment. The stockholders of Lyte Optronics had access to all
relevant information regarding us necessary to evaluate the investment and
represented that the shares were being acquired for this proposalinvestment intent.
Additionally, the
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13
stockholders of Lyte Optronics were as follows:
For Withhold Abstain Not Voted
---------- -------- -------- ---------
7,979,590 506,357 8,309 5,978,986
Proposal 5: To ratifyprovided with an information statement
setting forth information about the appointmentCompany and the Merger. There was no general
solicitation or advertising involved in the acquisition. Prudential Securities,
Inc., to whom we paid a fee of PricewaterhouseCoopers LLP as$800,000, advised us on the Company's independent auditors for the fiscal year ending December 31, 2000.
Election results for this proposal were as follows:
For Withhold Abstain Not Voted
---------- -------- -------- ---------
14,445,688 21,098 6,456 0
14
15acquisition.
Item 6. Exhibits and reports on Form 8-K
a. Exhibits
3.1 Amended Certificate of Incorporation
27.1 Financial Data Schedule
b. Reports on Form 8-K
None
15(1) On June 14, 1999, we filed a report on Form 8-K reporting
the acquisition of Lyte Optronics, Inc.
(2) On August 28, 2000, we filed a report on Form 8-K/A to
amended the report on Form 8-K that was originally filed on June
14, 1999.
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1614
SIGNATURES
Pursuant to the requirements of SectionPURSUANT TO THE REQUIREMENTS OF SECTION 13 orOR 15(d) of the Securities
Exchange Act ofOF THE SECURITIES
EXCHANGE ACT OF 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
AMERICAN XTAL TECHNOLOGY, INC.
Dated: August 11,28, 2000 By: /s/ Donald L. Tatzin
-------------------------------------------------------------------
Donald L. Tatzin
Chief Financial Officer
16
17
EXHIBIT INDEX
Exhibits
--------
3.1 Amended Certificate of Incorporation
27.1 Financial Data Schedule
14