Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ:AOSL), today
reported financial results for the fiscal fourth quarter and the
fiscal year ended June 30, 2017.
The results for the fiscal fourth quarter of 2017
ended June 30, 2017 were as follows:
GAAP Financial Comparison |
Quarterly |
(in millions except percentage and per share
data) |
(unaudited) |
|
|
Three Months Ended |
|
|
June 30, 2017 |
|
March 31, 2017 |
|
June 30, 2016 |
Revenue |
|
$ |
98.0 |
|
|
$ |
93.3 |
|
|
$ |
91.4 |
|
Gross Margin |
|
25.6 |
% |
|
24.3 |
% |
|
21.3 |
% |
Operating Income |
|
$ |
3.6 |
|
|
$ |
3.0 |
|
|
$ |
2.6 |
|
Net Income attributable
to AOS |
|
$ |
4.1 |
|
|
$ |
3.6 |
|
|
$ |
1.9 |
|
Income Per Share
attributable to AOS - Diluted |
|
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Our non-GAAP measures exclude the effect of
share-based compensation expenses in each of the periods presented,
the results were as set forth below (see detailed reconciliation
included at the end of this press release).
Non-GAAP Financial Comparison |
Quarterly |
(in millions except percentage and per share
data) |
(unaudited) |
|
|
Three Months Ended |
|
|
June 30, 2017 |
|
March 31, 2017 |
|
June 30, 2016 |
Revenue |
|
$ |
98.0 |
|
|
$ |
93.3 |
|
|
$ |
91.4 |
|
Gross Margin |
|
26.0 |
% |
|
24.6 |
% |
|
21.5 |
% |
Operating Income |
|
$ |
5.6 |
|
|
$ |
4.7 |
|
|
$ |
3.8 |
|
Net Income attributable
to AOS |
|
$ |
6.2 |
|
|
$ |
5.3 |
|
|
$ |
3.2 |
|
Income Per Share
attributable to AOS - Diluted |
|
$ |
0.25 |
|
|
$ |
0.21 |
|
|
$ |
0.13 |
|
GAAP and Non-GAAP Annual Financial Results
The results for the fiscal year ended June 30, 2017 were as
follows:
- Revenue was $383.3 million, an increase of 14.2% from $335.7
million for the prior year.
- GAAP gross margin was 24.0%, compared to 19.6% for the prior
year. Non-GAAP gross margin was 24.2%, compared to 19.8% for
the prior year.
- GAAP operating income was $13.1 million, compared to operating
income of $1.5 million for the prior year. Non-GAAP operating
income was $19.8 million, compared to $6.3 million for the prior
year.
- GAAP net income attributable to AOS was $13.8 million, compared
to net loss attributable to AOS of $2.9 million for the prior
year. Non-GAAP net income attributable to AOS was $20.5
million, compared to non-GAAP net income attributable to AOS of
$1.8 million for the prior year.
- GAAP diluted income per share attributable to AOS was $0.56,
compared to diluted loss per share attributable to AOS of $0.13 for
the prior year. Non-GAAP diluted income per share
attributable to AOS was $0.83, compared to non-GAAP diluted income
attributable to AOS of $0.08 for the prior year.On a non-GAAP basis
excluding the effect of share-based compensation expenses in each
of the periods presented, and impairment of long-lived assets in
the quarter ended December 31, 2015, the results were as set forth
in the attached schedules (see detailed reconciliation included at
the end of this press release).
“AOS delivered another strong quarter with record quarterly
revenue of $98 million and the ninth consecutive quarter of gross
margin expansion, driven by healthy demand for our diversified new
products. We closed fiscal year 2017 with record annual revenue of
$383 million and a significant increase in earnings per share from
a year ago,” said Dr. Mike Chang, the chairman and CEO of the
company. “In response to current environment of tight supply, we
are taking active measures to meet customer demand, including
expanding our manufacturing capacity starting from the September
quarter. Looking ahead, we are confident that we can continue to
expand our business and improve profitability as we are seeing more
sustainable growth opportunities.”
Business Outlook for Fiscal Q1 Ending September 30,
2017
The following forward-looking statements are based on
management's current expectations and actual results may differ
materially. AOS undertakes no obligation to update these
statements.
- Revenue is expected to be between $101 million and $105
million.
- GAAP gross margin is expected to be in the range of 25.5% plus
or minus 1%.
- GAAP operating expenses are expected to be in the range of $22
million plus or minus $1 million.
- Tax expense is expected to be approximately $1.1 million to
$1.3 million.
- Loss attributable to non-controlling interest is expected to be
approximately $1.6 million.
The above projections on GAAP gross margin and GAAP operating
expenses include estimated share-based compensation expense of $2.0
million to $2.3 million.
Conference Call and Webcast
AOS plans to conduct an investor teleconference and live webcast
to discuss the financial results for the fiscal fourth quarter and
the fiscal year ended June 30, 2017 today, August 9, 2017 at 2:00
p.m. PT / 5:00 p.m. ET. To participate in the live call,
analysts and investors should dial 877-312-8797 (or 253-237-1194 if
outside the U.S.). To access the live webcast and the subsequent
replay of the conference call, which will be available for seven
days after the live call, go to the "Events & Presentations"
section of the company's investor relations website,
http://investor.aosmd.com. In addition, a copy of the script
of prepared remarks by CEO and CFO at the investor teleconference
and webcast is available prior to the call at the Company’s
investor relations website.
Forward Looking Statements
This press release contains forward-looking statements that are
based on current expectations, estimates, forecasts and projections
of future performance based on management's judgment, beliefs,
current trends, and anticipated product performance. These
forward-looking statements include, without limitation, statements
relating to projected amount of revenue, gross margin, operating
income (loss), income tax expenses, net income (loss),
noncontrolling interest, and share-based compensation expenses, our
ability and strategy to develop new products, increase
manufacturing capacity, expand our sales, maintain optimal
capacity and achieve sustained growth and profitability, and
other information under the section entitled “Business Outlook for
Fiscal Q1 Ending September 30, 2017”. Forward-looking
statements involve risks and uncertainties that may cause actual
results to differ materially from those contained in the
forward-looking statements. These factors include, but are
not limited to, the decline of the PC industry and our ability to
respond to such decline, our ability to introduce or develop new
and enhanced products that achieve market acceptance, the actual
product performance in volume production, the quality and
reliability of our product, our ability to achieve design wins, the
general business and economic conditions, the state of
semiconductor industry and seasonality of our markets, our ability
to maintain factory utilization at a desirable level, our ability
to successfully operate our joint venture in China, and other risks
as described in our SEC filings, including our Annual Report on
Form 10-K for the fiscal year ended June 30, 2017 to be filed
by AOS. Other unknown or unpredictable factors or underlying
assumptions subsequently proving to be incorrect could cause actual
results to differ materially from those in the forward-looking
statements. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we
cannot guarantee future results, level of activity, performance, or
achievements. You should not place undue reliance on these
forward-looking statements. All information provided in this
press release is as of today's date, unless otherwise stated, and
AOS undertakes no duty to update such information, except as
required under applicable law.
Use of Non-GAAP Financial Measures
To supplement our unaudited consolidated financial statements
presented on a basis consistent with U.S. GAAP, we disclose certain
non-GAAP financial measures, including non-GAAP gross profit, gross
margin, operating income (loss), net income (loss) and diluted
earnings per share ("EPS"). These supplemental measures
exclude share-based compensation expenses and impairment of
long-lived assets. We believe that non-GAAP financial
measures can provide useful information to both management and
investors by excluding certain expenses that are not indicative of
our core operating results. In addition, our management uses
non-GAAP measures to compare our performance relative to forecasts
and to benchmark our performance externally against
competitors. Our use of non-GAAP financial measures has
certain limitations in that the non-GAAP financial measures we use
may not be directly comparable to those reported by other
companies. For example, the term used in this press release,
non-GAAP net income (loss), does not have a standardized
meaning. Other companies may use the same or similarly named
measures, but exclude different items, which may not provide
investors with a comparable view of our performance in relation to
other companies. In addition, different items may be excluded
in non-GAAP measures presented in different periods. For
example, we have previously presented non-GAAP measures that
excluded joint venture related costs for the quarter ended and the
fiscal year ended June 30, 2016, while exclusion of such costs for
the period is not presented in this press release as the management
no longer believes that such non-GAAP presentation provides useful
information to investors. We believe that the change in such
presentation is not significant as the excluded joint venture
related costs were $137,000 and $241,000 in non-GAAP net income and
non-GAAP operating income for the quarterly period ended June 30,
2016, respectively, and $317,000 and $421,000 in non-GAAP net
income and non-GAAP operating income for the fiscal year ended June
30, 2016, respectively. We seek to compensate for this
limitation by providing a detailed reconciliation of the non-GAAP
financial measures to the most directly comparable U.S. GAAP
measures in the tables attached to this press release.
Investors are encouraged to review the related U.S. GAAP financial
measures and the reconciliation of these non-GAAP financial
measures to their most directly comparable U.S. GAAP financial
measures.
About Alpha and Omega Semiconductor
Alpha and Omega Semiconductor Limited, or AOS, is a designer,
developer and global supplier of a broad range of power
semiconductors, including a wide portfolio of Power MOSFET, IGBT
and Power IC products. AOS has developed extensive
intellectual property and technical knowledge that encompasses the
latest advancements in the power semiconductor industry, which
enables it to introduce innovative products to address the
increasingly complex power requirements of advanced
electronics. AOS differentiates itself by integrating its
Discrete and IC semiconductor process technology, product design,
and advanced packaging know-how to develop high performance power
management solutions. AOS's portfolio of products targets
high-volume applications, including portable computers, flat panel
TVs, LED lighting, smart phones, battery packs, consumer and
industrial motor controls and power supplies for TVs, computers,
servers and telecommunications equipment. For more
information, please visit http://www.aosmd.com. For investor
relations, please contact So-Yeon Jeong at investors@aosmd.com.
The following unaudited consolidated financial statements are
prepared in accordance with U.S. GAAP.
Alpha and Omega Semiconductor
Limited |
Condensed Consolidated Statements of
Operations |
(in thousands, except percentages and per
share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
June 30, 2017 |
|
March 31, 2017 |
|
June 30, 2016 |
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
98,007 |
|
|
$ |
93,281 |
|
|
$ |
91,410 |
|
|
$ |
383,337 |
|
|
$ |
335,661 |
|
Cost of goods sold |
72,921 |
|
|
70,584 |
|
|
71,940 |
|
|
291,516 |
|
|
269,839 |
|
Gross profit |
25,086 |
|
|
22,697 |
|
|
19,470 |
|
|
91,821 |
|
|
65,822 |
|
Gross
margin |
25.6 |
% |
|
24.3 |
% |
|
21.3 |
% |
|
24.0 |
% |
|
19.6 |
% |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and
development |
7,907 |
|
|
7,625 |
|
|
6,977 |
|
|
29,835 |
|
|
26,006 |
|
Selling, general and
administrative |
13,618 |
|
|
12,067 |
|
|
9,939 |
|
|
48,842 |
|
|
37,874 |
|
Impairment of
long-lived assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
432 |
|
Total
operating expenses |
21,525 |
|
|
19,692 |
|
|
16,916 |
|
|
78,677 |
|
|
64,312 |
|
Operating income |
3,561 |
|
|
3,005 |
|
|
2,554 |
|
|
13,144 |
|
|
1,510 |
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other income (loss), net |
52 |
|
|
(74 |
) |
|
(163 |
) |
|
(141 |
) |
|
(498 |
) |
Interest expense |
(19 |
) |
|
(22 |
) |
|
(1 |
) |
|
(91 |
) |
|
(23 |
) |
Income before income
taxes |
3,594 |
|
|
2,909 |
|
|
2,390 |
|
|
12,912 |
|
|
989 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
807 |
|
|
523 |
|
|
573 |
|
|
3,652 |
|
|
4,021 |
|
Net income (loss)
including noncontrolling interest |
2,787 |
|
|
2,386 |
|
|
1,817 |
|
|
9,260 |
|
|
(3,032 |
) |
Net loss attributable
to noncontrolling interest |
(1,332 |
) |
|
(1,170 |
) |
|
(104 |
) |
|
(4,569 |
) |
|
(104 |
) |
Net income (loss)
attributable to Alpha and Omega Semiconductor Limited |
$ |
4,119 |
|
|
$ |
3,556 |
|
|
$ |
1,921 |
|
|
$ |
13,829 |
|
|
$ |
(2,928 |
) |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share attributable to Alpha and Omega Semiconductor
Limited |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.17 |
|
|
$ |
0.15 |
|
|
$ |
0.08 |
|
|
$ |
0.59 |
|
|
$ |
(0.13 |
) |
Diluted |
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.08 |
|
|
$ |
0.56 |
|
|
$ |
(0.13 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common share attributable to Alpha and Omega Semiconductor
Limited used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
23,917 |
|
|
23,675 |
|
|
22,608 |
|
|
23,526 |
|
|
22,452 |
|
Diluted |
24,960 |
|
|
24,951 |
|
|
23,630 |
|
|
24,826 |
|
|
22,452 |
|
Alpha and Omega Semiconductor
Limited |
Condensed Consolidated Balance
Sheets |
(in thousands, except par value per
share) |
(unaudited) |
|
June 30, 2017 |
|
June 30, 2016 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
115,708 |
|
|
$ |
87,774 |
|
Restricted cash |
221 |
|
|
188 |
|
Accounts
receivable, net |
28,410 |
|
|
26,594 |
|
Inventories |
76,254 |
|
|
68,848 |
|
Other
current assets |
4,883 |
|
|
4,526 |
|
Total
current assets |
225,476 |
|
|
187,930 |
|
Property, plant and
equipment, net |
139,387 |
|
|
116,084 |
|
Land use rights,
net |
8,804 |
|
|
— |
|
Deferred income tax
assets - long term |
4,594 |
|
|
12,132 |
|
Other long-term
assets |
20,147 |
|
|
2,359 |
|
Total
assets |
$ |
398,408 |
|
|
$ |
318,505 |
|
LIABILITIES AND EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable |
$ |
63,134 |
|
|
$ |
42,718 |
|
Accrued
liabilities |
28,386 |
|
|
22,590 |
|
Income
taxes payable |
1,748 |
|
|
2,356 |
|
Deferred
margin |
814 |
|
|
997 |
|
Capital
leases |
828 |
|
|
819 |
|
Total
current liabilities |
94,910 |
|
|
69,480 |
|
Income taxes payable -
long term |
922 |
|
|
1,577 |
|
Deferred income tax
liabilities |
2,659 |
|
|
2,973 |
|
Capital leases - long
term |
866 |
|
|
1,695 |
|
Other long term
liabilities |
502 |
|
|
741 |
|
Total
liabilities |
99,859 |
|
|
76,466 |
|
Equity: |
|
|
|
Preferred
shares, par value $0.002 per share: |
|
|
|
Authorized: 10,000 shares; Issued and outstanding: none at
June 30, 2017 and 2016 |
— |
|
|
— |
|
Common
shares, par value $0.002 per share: |
|
|
|
Authorized: 50,000 shares; Issued and outstanding: 29,600 shares
and 23,992 shares at June 30, 2017 and 28,405 shares and 22,754
shares at June 30, 2016 |
59 |
|
|
57 |
|
Treasury
shares at cost; 5,608 shares at June 30, 2017 and 5,651 shares at
June 30, 2016 |
(49,836 |
) |
|
(50,199 |
) |
Additional paid-in capital |
206,332 |
|
|
191,444 |
|
Accumulated other comprehensive income |
306 |
|
|
769 |
|
Retained
earnings |
113,909 |
|
|
100,071 |
|
Total
Alpha and Omega Semiconductor Limited shareholders’ equity |
270,770 |
|
|
242,142 |
|
Noncontrolling
interest |
27,779 |
|
|
(103 |
) |
Total
equity |
298,549 |
|
|
242,039 |
|
Total
liabilities and equity |
$ |
398,408 |
|
|
$ |
318,505 |
|
Alpha and Omega Semiconductor
Limited |
Reconciliation of Condensed Consolidated GAAP
Financial Measures to Non-GAAP Financial Measures |
(in thousands, except percentages and per
share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Fiscal Year Ended |
|
June 30, 2017 |
|
March 31, 2017 |
|
June 30, 2016 |
|
June 30, 2017 |
|
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
GAAP gross profit |
$ |
25,086 |
|
|
$ |
22,697 |
|
|
$ |
19,470 |
|
|
$ |
91,821 |
|
|
$ |
65,822 |
|
Share-based compensation |
420 |
|
|
222 |
|
|
161 |
|
|
1,041 |
|
|
636 |
|
Non-GAAP gross
profit |
$ |
25,506 |
|
|
$ |
22,919 |
|
|
$ |
19,631 |
|
|
$ |
92,862 |
|
|
$ |
66,458 |
|
Non-GAAP gross margin
as a % of revenue |
26.0 |
% |
|
24.6 |
% |
|
21.5 |
% |
|
24.2 |
% |
|
19.8 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP operating
income |
$ |
3,561 |
|
|
$ |
3,005 |
|
|
$ |
2,554 |
|
|
$ |
13,144 |
|
|
$ |
1,510 |
|
Share-based compensation |
2,049 |
|
|
1,715 |
|
|
1,266 |
|
|
6,634 |
|
|
4,313 |
|
Impairment of long-lived assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
432 |
|
Non-GAAP operating
income |
$ |
5,610 |
|
|
$ |
4,720 |
|
|
$ |
3,820 |
|
|
$ |
19,778 |
|
|
$ |
6,255 |
|
Non-GAAP operating
income as a % of revenue |
5.7 |
% |
|
5.1 |
% |
|
4.2 |
% |
|
5.2 |
% |
|
1.9 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
attributable to AOS |
$ |
4,119 |
|
|
$ |
3,556 |
|
|
$ |
1,921 |
|
|
$ |
13,829 |
|
|
$ |
(2,928 |
) |
Share-based compensation |
2,049 |
|
|
1,715 |
|
|
1,266 |
|
|
6,634 |
|
|
4,313 |
|
Impairment of long-lived assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
432 |
|
Non-GAAP net income
attributable to AOS |
$ |
6,168 |
|
|
$ |
5,271 |
|
|
$ |
3,187 |
|
|
$ |
20,463 |
|
|
$ |
1,817 |
|
Non-GAAP net income
attributable to AOS as a % of revenue |
6.3 |
% |
|
5.7 |
% |
|
3.5 |
% |
|
5.3 |
% |
|
0.5 |
% |
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss)
attributable to AOS |
$ |
4,119 |
|
|
$ |
3,556 |
|
|
$ |
1,921 |
|
|
$ |
13,829 |
|
|
$ |
(2,928 |
) |
Share-based compensation |
2,049 |
|
|
1,715 |
|
|
1,266 |
|
|
6,634 |
|
|
4,313 |
|
Impairment of long-lived assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
432 |
|
Amortization and depreciation |
7,040 |
|
|
6,885 |
|
|
6,599 |
|
|
27,188 |
|
|
27,303 |
|
Interest
expense (income), net |
(18 |
) |
|
(54 |
) |
|
(13 |
) |
|
(140 |
) |
|
(21 |
) |
Income
tax expense |
807 |
|
|
523 |
|
|
573 |
|
|
3,652 |
|
|
4,021 |
|
EBITDA |
$ |
13,997 |
|
|
$ |
12,625 |
|
|
$ |
10,346 |
|
|
$ |
51,163 |
|
|
$ |
33,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net
income(loss) per share attributable to AOS |
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.08 |
|
|
$ |
0.56 |
|
|
$ |
(0.13 |
) |
Share-based compensation |
0.08 |
|
|
0.07 |
|
|
0.05 |
|
|
0.27 |
|
|
0.19 |
|
Impairment of long-lived assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
0.02 |
|
Non-GAAP diluted net
income per share attributable to AOS |
$ |
0.25 |
|
|
$ |
0.21 |
|
|
$ |
0.13 |
|
|
$ |
0.83 |
|
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
Shares used to compute
basic per share |
23,917 |
|
|
23,675 |
|
|
22,608 |
|
|
23,526 |
|
|
22,452 |
|
Shares used to compute
dilute per share |
24,960 |
|
|
24,951 |
|
|
23,630 |
|
|
24,826 |
|
|
23,114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONTACT: Alpha and Omega Semiconductor Limited
Investor Relations
So-Yeon Jeong
408-789-3172
investors@aosmd.com
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