Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL)
today reported financial results for the fiscal second quarter of
2021 ended December 31, 2020.
The results for the fiscal second quarter of 2021 ended December
31, 2020 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2020
September 30, 2020
December 31, 2019
Revenue
$
158.8
$
151.6
$
117.9
Gross Margin
30.7
%
28.1
%
20.7
%
Operating Income (Loss)
$
13.6
$
10.3
$
(3.4)
Net Income (Loss) Attributable to AOS
$
12.9
$
9.6
$
(1.0)
Net Income (Loss) Per Share Attributable
to AOS - Diluted
$
0.47
$
0.36
$
(0.04)
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2020
September 30, 2020
December 31, 2019
Revenue
$
158.8
$
151.6
$
117.9
Non-GAAP Gross Margin
31.4
%
29.0
%
28.3
%
Non-GAAP Operating Income
$
18.5
$
15.4
$
7.6
Non-GAAP Net Income Attributable to
AOS
$
17.8
$
14.5
$
5.8
Non-GAAP Net Income Per Share Attributable
to AOS - Diluted
$
0.65
$
0.55
$
0.23
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q2 Ended December 31,
2020” below exclude the effect of share-based compensation expenses
in each of the periods presented, legal costs related to government
investigation for the three months ended December 31, 2020 and
September 30, 2020, production ramp up costs for the three months
ended September 30, 2020 and December 31, 2019, as well as
amortization of purchased intangible for the three months ended
December 31, 2020 and September 30, 2020. A detailed reconciliation
of GAAP and non-GAAP financial measures is included at the end of
this press release.
Financial Results for Fiscal Q2 Ended December 31,
2020
- Revenue was $158.8 million, an increase of 4.8% from the prior
quarter and an increase of 34.8% from the same quarter last
year.
- GAAP gross margin was 30.7%, up from 28.1% in the prior quarter
and up from 20.7% in the same quarter last year.
- Non-GAAP gross margin was 31.4%, up from 29.0% in the prior
quarter and up from 28.3% in the same quarter last year.
- GAAP operating expenses were $35.2 million, up from $32.2
million in the prior quarter and up from $27.8 million in the same
quarter last year.
- Non-GAAP operating expenses were $31.5 million, an increase of
$2.9 million from last quarter and an increase of $5.8 million from
the same quarter last year.
- GAAP operating income was $13.6 million, up from $10.3 million
in the prior quarter and up from $3.4 million loss in the same
quarter last year.
- Non-GAAP operating income was $18.5 million as compared to
$15.4 million for the prior quarter and $7.6 million for the same
quarter last year.
- GAAP net income per share attributable to AOS was $0.47,
compared to $0.36 for the prior quarter and $0.04 net loss per
share for the same quarter a year ago.
- Non-GAAP net income per share attributable to AOS was $0.65
compared to $0.55 for the prior quarter and $0.23 for the same
quarter a year ago.
- Consolidated cash flow provided by operating activities was
$36.1 million, compared to $9.8 million in the prior quarter.
Operating cash flow provided by AOS alone (excluding the JV
Company) was $35.7 million, compared to $12.7 million in the prior
quarter.
- The Company closed the quarter with $181.0 million of cash and
cash equivalents, including $38.6 million cash balance at the JV
Company.
AOS Chairman and Chief Executive Officer Dr. Mike Chang
commented, “Our fiscal second quarter marked an impressive finish
to calendar year 2020, as solid shipments across most of our
product categories drove strong financial performance in the
quarter. We grew revenue by 35% year-over-year, achieved higher
utilization and operational efficiency at our manufacturing
facilities, and continued to be disciplined with our spending. All
of this led to records in non-GAAP gross margin of 31.4% and
non-GAAP EPS of $0.65.”
Dr. Chang continued, “Our mission is to become a leading
designer, developer, and global supplier of a broad portfolio of
power semiconductors, and I am proud of what our team has
accomplished and the groundwork we are laying for long-term and
sustainable success. Obviously, we faced tremendous challenges in
calendar year 2020, including the COVID-19 pandemic, trade
conflicts, and political and social unrest in different parts of
the world. Despite these challenges, we made significant progress
toward our calendar year 2021 target of $600 million in annual
revenue. We did this by focusing on disciplined execution and
developing a healthy pipeline of new products, new design wins, and
new customers.”
Business Outlook for Fiscal Q3 Ending March 31, 2021
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.
Our expectations for the third quarter of fiscal year 2021 are
as follows:
- Revenue is expected to be approximately $157 million, plus or
minus $3 million.
- GAAP gross margin is expected to be approximately 28.7% plus or
minus 1%. Non-GAAP gross margin is expected to be approximately
29.5% plus or minus 1%. Non-GAAP gross margin excludes $0.8 million
amortization of acquired IP and $0.5 million of estimated
share-based compensation charge.
- GAAP operating expenses are expected to be in the range of
$33.8 million plus or minus $1 million. Non-GAAP operating expenses
are expected to be in the range of $29.5 million plus or minus $1
million. Non-GAAP operating expenses exclude $3.3 million of
estimated share-based compensation charge and $1.0 million of
estimated professional fees related to the government
investigation.
- Income tax expense is expected to be approximately $0.7 million
to $1.0 million.
- Loss attributable to noncontrolling interest is expected to be
approximately $0.2 million.
Conference Call and Webcast
AOS plans to hold an investor teleconference and live webcast to
discuss the financial results for the fiscal second quarter ended
December 31, 2020 today, February 4, 2021 at 2:00 p.m. PT / 5:00
p.m. ET. To listen to the live conference call, please dial
877-683-1095 (or 647-689-5445 if dialing from outside the United
States and Canada). The conference ID number is 5785406. A live
webcast of the call will also be available in the "Events &
Presentations" section of the company's investor relations website,
http://investor.aosmd.com/. The webcast replay will be available
for seven days after the live call on the same website. In
addition, a copy of the script of management's prepared remarks and
a live webcast of the call will also be available in the "Events
& Presentations" section of the company's investor relations
website, http://investor.aosmd.com.
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, our objectives to achieve long-term
success, our ability to gain new customers and design wins, and
other information under the section entitled “Business Outlook for
Fiscal Q3 Ending March 31, 2021”. 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
impact of COVID-19 pandemic on our business; 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; changes in regulatory
environment and government investigation; 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, 2020 filed by AOS with the SEC and other
periodic reports we filed with the SEC. 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), diluted earnings per share ("EPS") and EBITDAS.
These supplemental measures exclude, among other items, share-based
compensation expenses, production ramp up costs related to the JV
Company, legal and profession fees related to government
investigation, as well as amortization of purchased intangible. 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. We
believe that these historical and forecast non-GAAP financial
measures 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. 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 such non-GAAP financial measures 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. In addition, we included amount of income tax
effect of non-GAAP adjustments in the non-GAAP net income of
reconciliation table for all periods presented as the management
believes that such non-GAAP presentation provides useful
information to investors, even though the amounts are not
significant. 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 personal and portable
computers, graphic cards, flat panel TVs, home appliances, smart
phones, battery packs, quick chargers, home appliances, 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
Six Months Ended
December 31,
2020
September 30,
2020
December 31,
2019
December 31,
2020
December 31,
2019
Revenue
$
158,830
$
151,551
$
117,860
$
310,381
$
235,662
Cost of goods sold
110,081
109,028
93,454
219,109
184,324
Gross profit
48,749
42,523
24,406
91,272
51,338
Gross margin
30.7
%
28.1
%
20.7
%
29.4
%
21.8
%
Operating expenses:
Research and development
15,423
14,691
12,147
30,114
24,515
Selling, general and administrative
19,736
17,505
15,629
37,241
30,814
Total operating expenses
35,159
32,196
27,776
67,355
55,329
Operating income (loss)
13,590
10,327
(3,370
)
23,917
(3,991
)
Interest expense and other income (loss),
net
(381
)
(549
)
(635
)
(930
)
(1,462
)
Income (loss) before income taxes
13,209
9,778
(4,005
)
22,987
(5,453
)
Income tax expense
669
1,011
568
1,680
978
Net income (loss) including noncontrolling
interest
12,540
8,767
(4,573
)
21,307
(6,431
)
Net loss attributable to noncontrolling
interest
(363
)
(807
)
(3,568
)
(1,170
)
(6,435
)
Net income (loss) attributable to Alpha
and Omega Semiconductor Limited
$
12,903
$
9,574
$
(1,005
)
$
22,477
$
4
Net income (loss) per common share
attributable to Alpha and Omega Semiconductor Limited
Basic
$
0.50
$
0.38
$
(0.04
)
$
0.88
$
0.00
Diluted
$
0.47
$
0.36
$
(0.04
)
$
0.84
$
0.00
Weighted average number of common shares
attributable to Alpha and Omega Semiconductor Limited used to
compute net income (loss) per share
Basic
25,672
25,340
24,701
25,506
24,620
Diluted
27,353
26,314
24,701
26,834
25,362
Alpha and Omega Semiconductor
Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
December 31, 2020
June 30, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
180,966
$
158,536
Restricted cash
230
2,190
Accounts receivable, net
24,934
13,272
Inventories
144,307
135,528
Other current assets
10,833
8,807
Total current assets
361,270
318,333
Property, plant and equipment, net
430,808
412,340
Operating lease right-of-use assets,
net
34,395
32,948
Intangible assets, net
15,090
16,770
Deferred income tax assets
4,852
4,766
Restricted cash - long-term
2,143
1,978
Other long-term assets
4,607
5,804
Total assets
$
853,165
$
792,939
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
83,859
$
86,181
Accrued liabilities
60,483
54,986
Income taxes payable
2,166
1,360
Short-term debt
43,574
30,114
Finance lease liabilities
16,535
15,258
Operating lease liabilities
4,896
4,159
Total current liabilities
211,513
192,058
Long-term debt
93,096
99,775
Income taxes payable - long-term
921
903
Deferred income tax liabilities
860
496
Finance lease liabilities - long-term
20,821
26,842
Operating lease liabilities -
long-term
31,102
30,254
Other long-term liabilities
20,196
10,723
Total liabilities
378,509
361,051
Equity:
Preferred shares, par value $0.002 per
share:
Authorized: 10,000 shares; issued and
outstanding: none at December 31, 2020 and June 30, 2020
—
—
Common shares, par value $0.002 per
share:
Authorized: 100,000 shares; issued and
outstanding: 32,394 shares and 25,765 shares, respectively at
December 31, 2020 and 31,944 shares and 25,305 shares, respectively
at June 30, 2020
65
64
Treasury shares at cost: 6,629 shares at
December 31, 2020 and 6,639 shares at June 30, 2020
(66,097
)
(66,184
)
Additional paid-in capital
254,980
246,103
Accumulated other comprehensive income
(loss)
1,481
(5,127
)
Retained earnings
141,289
118,833
Total Alpha and Omega Semiconductor
Limited shareholder's equity
331,718
293,689
Noncontrolling interest
142,938
138,199
Total equity
474,656
431,888
Total liabilities and equity
$
853,165
$
792,939
Supplemental disclosures of financial information:
(in thousands)
As of December 31, 2020
As of June 30, 2020
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
Cash and cash equivalents
$
142,326
$
38,640
$
180,966
$
110,346
$
48,190
$
158,536
Bank borrowings liabilities
$
28,538
$
146,676
*
$
175,214
$
32,708
$
140,652
*
$
173,360
Inventory
$
97,795
$
46,512
$
144,307
$
97,593
$
37,935
$
135,528
Property, plant and equipment, net
$
168,120
$
262,688
$
430,808
$
162,833
$
249,507
$
412,340
* AOS is not a guarantor of CQJV's (Chongqing Joint Venture)
debts.
Three Months Ended December 31,
2020
Three Months Ended September 30,
2020
Three Months Ended December 31,
2019
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
AOS
CQJV
Consolidated
Net cash provided by (used in) operating
activities
$
35,678
$
407
$
36,085
$
12,701
$
(2,853
)
$
9,848
$
12,470
$
(3,532
)
$
8,938
Purchase of property and equipment, net of
government grant
$
6,779
$
6,533
$
13,312
$
7,944
$
3,393
$
11,337
$
12,062
$
3,307
$
15,369
EBITDAS
$
25,332
$
5,950
**
$
31,645
$
22,156
$
4,609
**
$
27,572
$
12,538
$
(2,214
)
**
$
13,892
** 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
Six Months Ended
December 31,
2020
September 30,
2020
December 31,
2019
December 31,
2020
December 31,
2019
GAAP gross profit
$
48,749
$
42,523
$
24,406
$
91,272
$
51,338
Share-based compensation
383
385
404
768
840
Amortization of purchased intangible
811
812
—
1,623
—
Production ramp up costs related to joint
venture
—
275
8,486
275
14,477
Non-GAAP gross profit
$
49,943
$
43,995
$
33,296
$
93,938
$
66,655
Non-GAAP gross margin as a % of
revenue
31.4
%
29.0
%
28.3
%
30.3
%
28.3
%
GAAP operating expense
$
35,159
$
32,196
$
27,776
$
67,355
$
55,329
Share-based compensation
2,841
2,491
2,083
5,332
4,016
Legal costs related to government
investigation
843
1,107
—
1,950
—
Non-GAAP operating expense
$
31,475
$
28,598
$
25,693
$
60,073
$
51,313
GAAP operating income (loss)
$
13,590
$
10,327
$
(3,370
)
$
23,917
$
(3,991
)
Share-based compensation
3,224
2,876
2,487
6,100
4,856
Amortization of purchased intangible
811
812
—
1,623
—
Production ramp up costs related to joint
venture
—
275
8,486
275
14,477
Legal costs related to government
investigation
843
1,107
—
1,950
—
Non-GAAP operating income
$
18,468
$
15,397
$
7,603
$
33,865
$
15,342
Non-GAAP operating margin as a % of
revenue
11.6
%
10.2
%
6.5
%
10.9
%
6.5
%
GAAP net income (loss) attributable to
AOS
$
12,903
$
9,574
$
(1,005
)
$
22,477
$
4
Share-based compensation
3,224
2,876
2,487
6,100
4,856
Amortization of purchased intangible
811
812
—
1,623
—
Pre-production expenses related to joint
venture
—
—
(25
)
—
24
Production ramp up costs related to joint
venture
—
135
4,319
135
7,368
Legal costs related to government
investigation
843
1,107
—
1,950
—
Income tax effect of non-GAAP
adjustments
(1
)
(8
)
(2
)
(9
)
(7
)
Non-GAAP net income attributable to
AOS
$
17,780
$
14,496
$
5,774
$
32,276
$
12,245
Non-GAAP net margin attributable to AOS as
a % of revenue
11.2
%
9.6
%
4.9
%
10.4
%
5.2
%
GAAP net income (loss) attributable to
AOS
$
12,903
$
9,574
$
(1,005
)
$
22,477
$
4
Share-based compensation
3,224
2,876
2,487
6,100
4,856
Amortization and depreciation
13,200
12,489
10,850
25,689
21,754
Interest expense (income), net
1,649
1,622
992
3,271
772
Income tax expense
669
1,011
568
1,680
978
EBITDAS
$
31,645
$
27,572
$
13,892
$
59,217
$
28,364
GAAP diluted net income (loss) per share
attributable to AOS
$
0.47
$
0.36
$
(0.04
)
$
0.84
$
0.00
Share-based compensation
0.12
0.11
0.10
0.23
0.19
Pre-production expenses related to joint
venture
—
—
(0.00
)
—
0.00
Production ramp up costs related to joint
venture
—
0.01
0.17
0.01
0.29
Legal costs related to government
investigation
0.03
0.04
—
0.07
—
Amortization of purchased intangible
0.03
0.03
—
0.06
—
Income tax effect of non-GAAP
adjustments
(0.00
)
(0.00
)
(0.00
)
(0.00
)
(0.00
)
Non-GAAP diluted net income per share
attributable to AOS
$
0.65
$
0.55
$
0.23
$
1.20
$
0.48
Shares used to compute GAAP diluted net
income (loss) per share
27,353
26.314
24,701
26,834
25,362
Shares used to compute Non-GAAP diluted
net income per share
27,353
26.314
25,594
26,834
25,362
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version on businesswire.com: https://www.businesswire.com/news/home/20210204005451/en/
Investor and media inquiries: In the United States: The
Blueshirt Group Ralph Fong +1 (415) 489-2195
ralph@blueshirtgroup.com
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