Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL),
today reported financial results for the fiscal first quarter of
2020 ended September 30, 2019.
The results for the fiscal first quarter of 2020 ended September
30, 2019 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
September 30, 2019
June 30, 2019
September 30, 2018
Revenue
$
117.8
$
111.9
$
115.1
Gross Margin
22.9
%
24.7
%
28.3
%
Operating Income (Loss)
$
(0.6
)
$
(1.0
)
$
0.9
Net Income Attributable to AOS
$
1.0
$
2.5
$
2.4
Net Income Per Share Attributable to AOS -
Diluted
$
0.04
$
0.10
$
0.10
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
September 30, 2019
June 30, 2019
September 30, 2018
Revenue
$
117.8
$
111.9
$
115.1
Non-GAAP Gross Margin
28.3
%
27.4
%
29.7
%
Non-GAAP Operating Income
$
7.7
$
8.0
$
9.7
Non-GAAP Net Income Attributable to
AOS
$
6.5
$
8.8
$
8.8
Non-GAAP Net Income Per Share Attributable
to AOS - Diluted
$
0.26
$
0.35
$
0.36
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q1 Ended September 30,
2019” below exclude the effect of share-based compensation expenses
and production ramp up costs in each of the periods presented, as
well as pre-production costs relating to the Chongqing Joint
Venture for the three months ended June 30, 2019 and September 30,
2018. A detailed reconciliation of GAAP and non-GAAP financial
measures is included at the end of this press release.
Financial Results for Fiscal Q1 Ended September 30,
2019
- Revenue was $117.8 million, an increase of 5.3%
quarter-over-quarter and an increase of 2.4% from the same quarter
last year. The quarter-over-quarter increase was primarily due to
the increased sales in mobile applications.
- GAAP gross margin was 22.9%. Non-GAAP gross margin was 28.3%,
an increase of 90 basis points quarter-over-quarter and a decrease
of 140 basis points year-over-year. The quarter-over-quarter
increase on a non-GAAP basis was primarily due to the improvement
of operation efficiency and product mix, partially offset by the
price erosion.
- GAAP operating expenses were $27.6 million. Non-GAAP operating
expenses were $25.6 million, an increase of $3.0 million
quarter-over-quarter and an increase of $1.1 million from the same
quarter last year. The quarter-over-quarter increase on a non-GAAP
basis was primarily due to the increased research and development
engineering expenses and the merit increase of compensation started
in the new fiscal year.
- GAAP operating loss was $0.6 million. Non-GAAP operating income
was $7.7 million as compared to $8.0 million for the prior quarter
and $9.7 million for the same quarter last year.
- GAAP earnings per share attributable to AOS was $0.04. Non-GAAP
earnings per share attributable to AOS was $0.26 compared to $0.35
for the prior quarter and $0.36 for the same quarter a year
ago.
- Consolidated cash flow used in operating activities was $2.7
million, compared to cash flow provided by operating activities of
$8.3 million last quarter. Operating cash flow used by AOS alone
was $4.2 million, compared to $15.2 million cash flow generated in
the prior quarter. The AOS operating cash flow was significantly
impacted by a one-day delay of $9.2 million receivable payment from
one of our major distributors due to the bank shut down on
September 30, 2019 because of Typhoon Mitag in Taiwan, and $5.9
million intercompany receivable impact from the Chongqing Joint
Venture (the "JV Company").
- The Company closed the quarter with $103.1 million of cash and
cash equivalents, including $15.1 million cash balance at the JV
Company.
“The strength of our September quarter, especially with record
revenue that marked the fifteenth consecutive quarter of
year-over-year increase, underscores the successful deployment of
our growth strategy in the Mobile business. Our expertise in high
performance MOSFET technology coupled with our advanced packaging
capabilities have enabled us to grow our Battery Protection and
Quick Charger businesses at multiple global brand smartphone OEM
customers,” remarked Dr. Mike Chang, Chairman and CEO of AOS.
“To support the growing demand for our products, we are
progressively ramping up the production of the 12-inch fab at the
joint venture,” continued Dr. Chang, “We are confident that the
12-inch fab can reach the Phase 1 target run rate by the September
quarter of next year as planned. Our diversified products are
well-positioned with strategic players in many key market segments,
and we are committed to better serving those customers through
increasingly comprehensive total power solutions and a highly
reliable supply chain.”
Business Outlook for Fiscal Q2 Ending December 31,
2019
The following statements are based on management's current
expectations. These statements are forward-looking, and actual
results may differ materially. AOS undertakes no obligation to
update these statements.
- Revenue is expected to be between $117 million and $121
million.
- GAAP gross margin is expected to be approximately 22.3% plus or
minus 1%. Non-GAAP gross margin is expected to be approximately
27.3% plus or minus 1%. Note that non-GAAP gross margin excludes
$0.4 million of estimated share-based compensation and $5.8 million
of estimated production ramp-up costs relating to the JV
Company.
- GAAP operating expenses is expected to be in the range of $27.4
million plus or minus $1 million. Non-GAAP operating expenses are
expected to be in the range of $25.4 million plus or minus $1
million. Both GAAP and non-GAAP operating expenses include $3.1
million to $3.3 million of estimated expenses relating to the
development of our digital power controller business. Non-GAAP
operating expenses exclude an estimated share-based compensation
charge of approximately $2.0 million.
- Tax expense is expected to be approximately $0.5 million to
$0.7 million.
- Loss attributable to noncontrolling interest is expected to be
around $3.6 million. On a non-GAAP basis, excluding estimated
production ramp-up costs relating to the JV Company, this item is
expected to be approximately $0.9 million.
Conference Call and Webcast
AOS plans to hold an investor teleconference and live webcast to
discuss the financial results for the fiscal first quarter of 2020
ended September 30, 2019 today, November 4, 2019 at 2:00 p.m. PT /
5:00 p.m. ET. To participate in the live call, analysts and
investors should dial 866-393-4306 (or 734-385-2616 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 management's prepared remarks 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 expected growth rate, our product portfolios, projected
amount of revenue, gross margin, operating income (loss), income
tax expenses, net income (loss), noncontrolling interest, and
share-based compensation expenses, non-GAAP gross margin, non-GAAP
operating expenses, tax expenses, and non-GAAP loss attributable to
noncontrolling interest, anticipated annual revenue target, our
ability and strategy to develop new products including digital
power controller products, the ability to expand our sales and
market share, increase our capacity and achieve sustained growth
and profitability, the expected ramp-up schedule of the 12 inch fab
at the JV Company, the development of digital power business,
partnership with global brands, the relationship with key
customers, business pipeline from design wins, the grown in mobile
business, our ability to provide power solutions and reliable
supply chains, and other information under the section entitled
“Business Outlook for Fiscal Q2 Ending December 31, 2019”.
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, our ability to successfully operate our joint venture
in China; our ability to develop and succeed in the digital power
business; difficulties and challenges in executing our
diversification strategy into different market segments; new
tariffs on goods from China; ordering pattern from distributors and
seasonality; our ability to introduce or develop new and enhanced
products that achieve market acceptance; decline of PC markets; 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; and other
risks as described in our SEC filings, including our Annual Report
on Form 10-K for the fiscal year ended June 30, 2019 filed on
August 23, 2019. 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 for our historical performance,
including non-GAAP gross profit, gross margin, operating income
(loss), net loss attributable to noncontrolling interest, net
income (loss) and diluted earnings per share ("EPS"). These
supplemental measures exclude share-based compensation expenses and
production ramp up costs for all periods presented, as well
pre-production expenses related to the JV Company for the quarter
ended June 30, 2019 and September 30, 2018. We also disclose
certain non-GAAP financial measures in our guidance for the next
quarter, including non-GAAP gross margin, operating expenses and
loss attributable to noncontrolling interest. These forecast
supplemental measures exclude estimated pre-production expenses and
production ramp-up costs relating to our JV Company and estimated
share-based compensation expenses. We believe that these historical
and forecast non-GAAP financial measures can provide useful
information to both management and investors by excluding certain
items and expenses that are not indicative of our core operating
results or do not reflect our normal business operations, such as
the joint venture pre-production expenses. 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 terms used in this press release, such
as non-GAAP net income (loss) or non-GAAP operating expenses, do
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. We seek to compensate for the
limitation of our non-GAAP presentation by providing a detailed
reconciliation of the non-GAAP financial measures to the most
directly comparable U.S. GAAP measures both in the text in this
press release and in the tables attached hereto. 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,
IPM, TVS, HVIC, GaN/SiC, Power IC and Digital Power products. AOS
has developed extensive intellectual property and technical
knowledge that encompasses the latest advancements in the power
semiconductor industry, which enables us 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’ 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 www.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
September 30, 2019
June 30, 2019
September 30, 2018
Revenue
$
117,802
$
111,856
$
115,072
Cost of goods sold
90,870
84,220
82,461
Gross profit
26,932
27,636
32,611
Gross margin
22.9
%
24.7
%
28.3
%
Operating expenses:
Research and development
12,368
11,030
11,384
Selling, general and administrative
15,185
17,564
20,352
Total operating expenses
27,553
28,594
31,736
Operating income (loss)
(621
)
(958
)
875
Other income (loss), net
(998
)
83
262
Interest income (expenses)
171
(1,990
)
(1,490
)
Loss before income taxes
(1,448
)
(2,865
)
(353
)
Income tax expense (benefit)
410
(630
)
560
Net loss including noncontrolling
interest
(1,858
)
(2,235
)
(913
)
Net loss attributable to noncontrolling
interest
(2,867
)
(4,780
)
(3,329
)
Net income attributable to Alpha and Omega
Semiconductor Limited
$
1,009
$
2,545
$
2,416
Net income per common share attributable
to Alpha and Omega Semiconductor Limited
Basic
$
0.04
$
0.10
$
0.10
Diluted
$
0.04
$
0.10
$
0.10
Weighted average number of common shares
attributable to Alpha and Omega Semiconductor Limited used to
compute net income per share
Basic
24,538
24,438
23,844
Diluted
25,130
24,996
24,594
Alpha and Omega Semiconductor
Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
September 30, 2019
June 30, 2019
ASSETS
Current assets:
Cash and cash equivalents
$
103,136
$
121,893
Restricted cash
281
364
Accounts receivable, net
39,329
24,296
Inventories
118,558
111,643
Other current assets
33,092
37,102
Total current assets
294,396
295,298
Property, plant and equipment, net
400,278
409,737
Operating lease right-of-use assets,
net
19,362
—
Intangible assets, net
16,854
16,882
Deferred income tax assets
4,813
4,822
Restricted cash - long-term
1,966
2,038
Other long-term assets
10,149
10,617
Total assets
$
747,818
$
739,394
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
90,811
$
94,384
Accrued liabilities
49,397
44,075
Income taxes payable
1,574
1,541
Short-term debt
28,751
26,609
Finance lease liabilities
13,057
11,355
Operating lease liabilities
3,767
—
Total current liabilities
187,357
177,964
Long-term debt
56,357
59,380
Income taxes payable - long-term
1,006
993
Deferred income tax liabilities
425
466
Finance lease liabilities - long-term
38,047
43,381
Operating lease liabilities -
long-term
15,815
—
Other long-term liabilities
11,258
13,921
Total liabilities
310,265
296,105
Equity:
Preferred shares, par value $0.002 per
share:
Authorized: 10,000 shares; Issued and
outstanding: none at September 30, 2019 and June 30, 2019
—
—
Common shares, par value $0.002 per
share:
Authorized: 100,000 shares; Issued and
outstanding: 31,194 shares and 24,550 shares, respectively at
September 30, 2019 and 31,163 shares and 24,517 shares,
respectively at June 30, 2019
62
62
Treasury shares at cost, 6,644 shares at
September 30, 2019 and 6,646 shares at June 30, 2019
(66,227
)
(66,240
)
Additional paid-in capital
236,683
234,410
Accumulated other comprehensive loss
(5,876
)
(2,693
)
Retained earnings
126,481
125,485
Total Alpha and Omega Semiconductor
Limited shareholder's equity
291,123
291,024
Noncontrolling interest
146,430
152,265
Total equity
437,553
443,289
Total liabilities and equity
$
747,818
$
739,394
Supplemental disclosures of financial
information:
(in thousands)
As of September 30, 2019
As of June 30, 2019
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
Cash and cash equivalents
$
88,086
$
15,050
$
103,136
$
100,733
$
21,160
$
121,893
Bank borrowings liabilities
$
40,963
$
95,416
*
$
136,379
$
41,048
$
99,865
*
$
140,913
Inventory
$
92,469
$
26,089
$
118,558
$
93,852
$
17,791
$
111,643
Property, plant and equipment, net
$
149,915
$
250,363
$
400,278
$
148,497
$
261,240
$
409,737
Total assets
$
374,862
$
372,956
$
747,818
$
375,004
$
364,390
$
739,394
Total equity
$
331,176
$
106,377
$
437,553
$
325,240
$
118,049
$
443,289
* AOS is not a guarantor of CQJV's
(Chongqing Joint Venture) debts.
Three Months Ended September 30,
2019
Three Months Ended June 30,
2019
Three Months Ended September 30,
2018
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
Net cash provided by (used in) operating
activities
$
(4,225
)
$
1,569
$
(2,656
)
$
15,195
$
(6,930
)
$
8,265
$
18,403
$
(416
)
$
17,987
Purchase of property and equipment
$
8,292
$
6,077
$
14,369
$
4,600
$
17,540
$
22,140
$
15,216
$
34,272
$
49,488
EBITDAS
$
13,813
$
(2,421
)
**
$
14,259
$
15,076
$
(5,625
)
**
$
14,231
$
16,740
$
(4,670
)
**
$
15,399
** CQJV EBITDAS includes amounts
attributable to noncontrolling interest.
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
September 30, 2019
June 30, 2019
September 30, 2018
GAAP gross profit
$
26,932
$
27,636
$
32,611
Share-based compensation
436
431
497
Production ramp up costs related to joint
venture
5,991
2,587
1,117
Non-GAAP gross profit
$
33,359
$
30,654
$
34,225
Non-GAAP gross margin as a % of
revenue
28.3
%
27.4
%
29.7
%
GAAP operating income (loss)
$
(621
)
$
(958
)
$
875
Share-based compensation
2,369
2,518
3,129
Pre-production expenses related to joint
venture
—
3,902
4,627
Production ramp up costs related to joint
venture
5,991
2,587
1,117
Non-GAAP operating income
$
7,739
$
8,049
$
9,748
Non-GAAP operating margin as a % of
revenue
6.6
%
7.2
%
8.5
%
GAAP net income attributable to AOS
$
1,009
$
2,545
$
2,416
Share-based compensation
2,369
2,518
3,129
Pre-production expenses related to joint
venture
49
2,413
2,662
Production ramp up costs related to joint
venture
3,049
1,317
582
Non-GAAP net income attributable to
AOS
$
6,476
$
8,793
$
8,789
Non-GAAP net margin attributable to AOS as
a % of revenue
5.5
%
7.9
%
7.6
%
GAAP net income attributable to AOS
$
1,009
$
2,545
$
2,416
Share-based compensation
2,369
2,518
3,129
Amortization and depreciation
10,691
7,879
7,870
Interest expense (income), net
(220
)
1,919
1,424
Income tax expense (benefit)
410
(630
)
560
EBITDAS
$
14,259
$
14,231
$
15,399
GAAP diluted net income per share
attributable to AOS
$
0.04
$
0.10
$
0.10
Share-based compensation
0.10
0.10
0.13
Pre-production expenses related to joint
venture
—
0.10
0.11
Production ramp up costs related to joint
venture
0.12
0.05
0.02
Non-GAAP diluted net income per share
attributable to AOS
$
0.26
$
0.35
$
0.36
Shares used to compute GAAP diluted net
income per share
25,130
24,996
24,594
Shares used to compute Non-GAAP diluted
net income per share
25,130
24,996
24,594
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191104005860/en/
Alpha and Omega Semiconductor Limited Investor Relations So-Yeon
Jeong 408-789-3172 investors@aosmd.com
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