Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL)
today reported financial results for the fiscal second quarter of
2024 ended December 31, 2023.
The results for the fiscal second quarter of 2024 ended December
31, 2023 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
Revenue
$
165.3
$
180.6
$
188.8
Gross Margin
26.6
%
28.2
%
28.1
%
Operating Income (Loss)
$
(1.1
)
$
9.4
$
8.8
Net Income (Loss)
$
(2.9
)
$
5.8
$
6.3
Net Income (Loss) Per Share - Diluted
$
(0.10
)
$
0.19
$
0.21
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
Revenue
$
165.3
$
180.6
$
188.8
Non-GAAP Gross Margin
28.0
%
28.8
%
29.5
%
Non-GAAP Operating Income
$
8.4
$
11.2
$
22.8
Non-GAAP Net Income
$
7.2
$
9.9
$
20.0
Non-GAAP Net Income Per Share -
Diluted
$
0.24
$
0.33
$
0.67
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q2 Ended December 31,
2023” below exclude the effect of share-based compensation
expenses, amortization of purchased intangible, legal costs related
to government investigation, equity method investment (income) loss
from equity investee, and income tax effect of non-GAAP adjustments
in each of the periods presented. 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,
2023
- Revenue was $165.3 million, a decrease of 8.5% from the prior
quarter and a decrease of 12.4% from the same quarter last
year.
- GAAP gross margin was 26.6%, down from 28.2% in the prior
quarter and down from 28.1% in the same quarter last year.
- Non-GAAP gross margin was 28.0%, down from 28.8% in the prior
quarter and down from 29.5% in the same quarter last year.
- GAAP operating expenses were $45.1 million, up from $41.5
million in the prior quarter and up from $44.3 million in the same
quarter last year.
- Non-GAAP operating expenses were $37.9 million, down from $40.8
million from last quarter and up from $32.8 million in the same
quarter last year.
- GAAP operating loss was $1.1 million, down from $9.4 million of
operating income in the prior quarter and down from $8.8 million of
operating income in the same quarter last year.
- Non-GAAP operating income was $8.4 million as compared to $11.2
million of operating income for the prior quarter and $22.8 million
of operating income for the same quarter last year.
- GAAP net loss per diluted share was $0.10, compared to $0.19
net income per share for the prior quarter, and $0.21 net income
per share for the same quarter a year ago.
- Non-GAAP net income per share was $0.24 compared to $0.33 net
income per share for the prior quarter and $0.67 net income per
share for the same quarter a year ago.
- Consolidated cash flow used in operating activities was $23.5
million, as compared to $13.8 million of cash flow provided by
operating activities in the prior quarter.
- The Company closed the quarter with $162.3 million of cash and
cash equivalents.
AOS Chief Executive Officer Stephen Chang commented, “Our fiscal
Q2 results were in-line with our guidance driven by continued
recovery across notebooks, desktop, smartphones, and power tools,
offset by ongoing inventory correction in gaming and weak demand
for quick chargers and solar.”
Mr. Chang continued, “Beyond normal seasonality, there are
promising signs suggesting the cycle has bottomed. AOS's diverse
product portfolio is mitigating short-term unpredictability while
preparing us to take advantage of a broader market resurgence in
the second half of calendar 2024 – especially as customers unveil
new products featuring integrated power solutions with higher BOM
content. More specifically, we are seeing encouraging near-term
strength in graphics cards, AI accelerators for data centers,
smartphones from Chinese OEMs, and e-mobility. We are confident
that our leading technology, extensive and diverse product range,
and Tier 1 customer base strategically positions AOS to navigate
through the current cycle and thrive in the forthcoming one.”
Business Outlook for Fiscal Q3 Ending March 31, 2024
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 fiscal third quarter of year 2024 are
as follows:
- Revenue to be approximately $150 million, plus or minus $10
million.
- GAAP gross margin to be 23.5%, plus or minus 1%. We anticipate
non-GAAP gross margin to be 25.0%, plus or minus 1%. The
quarter-over-quarter decrease in gross margin mainly reflects the
lower factory utilization due to the seasonality and the Lunar New
Year holiday.
- GAAP operating expenses to be in the range of $46.7 million,
plus or minus $1 million. Non-GAAP operating expenses are expected
to be in the range of $39.5 million, plus or minus $1 million.
- Interest expense to be approximately $1.0 million, and
- Income tax expense to be approximately $1.1 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, 2023 today, February 6, 2024 at 2:00 p.m. PT / 5:00
p.m. ET. To listen to the live conference call, please dial +1
(833) 470-1428 or +1 (404) 975-4839 if dialing from outside the
United States and Canada. The access code is 798862. 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, market
trends in the semiconductor industry, our ability to mitigate
economic downturns and current cycles, seasonality of our business,
our ability to penetrate new markets and achieve long-term growth,
our ability to improve our financial performance in 2024, our
projected amount of revenue, gross margin, operating income (loss),
income tax expenses, net income (loss), and share-based
compensation expenses, non-GAAP gross margin, non-GAAP operating
expenses, income tax expenses, our ability to continue to win and
acquire market share and other information under the section
entitled “Business Outlook for Fiscal Q3 Ending March 31, 2024”.
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 state of semiconductor industry and seasonality of
our markets; government policies on our business operations in
China; our lack of control over the joint venture in China;
difficulties and challenges in executing our diversification
strategy into different market segments; 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; 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, 2023 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 expenses,
operating income (loss), net income (loss), diluted earnings per
share ("EPS") and EBITDAS. These supplemental measures exclude,
among other items, share-based compensation expenses, legal and
profession fees related to government investigation, amortization
of purchased intangible, income tax effect of non-GAAP adjustments
and equity method investment loss (income) from equity investee. We
also disclose certain non-GAAP financial measures in our guidance
for the next quarter, including non-GAAP gross margin and operating
expenses. 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 the amount of income tax
effect of non-GAAP adjustments in the non-GAAP net income (loss) 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 technologies, 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, 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 condensed 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,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
Revenue
$
165,285
$
180,633
$
188,760
$
345,918
$
397,236
Cost of goods sold
121,284
129,708
135,719
250,992
273,067
Gross profit
44,001
50,925
53,041
94,926
124,169
Gross margin
26.6
%
28.2
%
28.1
%
27.4
%
31.3
%
Operating expenses:
Research and development
22,919
22,113
21,468
45,032
42,857
Selling, general and administrative
22,216
19,431
22,788
41,647
46,993
Total operating expenses
45,135
41,544
44,256
86,679
89,850
Operating income (loss)
(1,134
)
9,381
8,785
8,247
34,319
Other income (loss), net
(472
)
26
(903
)
(446
)
(919
)
Interest income (expense), net
274
229
(397
)
503
(1,005
)
Net income (loss) before income taxes
(1,332
)
9,636
7,485
8,304
32,395
Income tax expense
894
1,138
1,659
2,032
3,033
Net income (loss) before income (loss)
from equity method investment
(2,226
)
8,498
5,826
6,272
29,362
Equity method investment income (loss)
from equity investee
(697
)
(2,712
)
511
(3,409
)
3,013
Net income (loss)
$
(2,923
)
$
5,786
$
6,337
$
2,863
$
32,375
Net income (loss) per common share
Basic
$
(0.10
)
$
0.21
$
0.23
$
0.10
$
1.18
Diluted
$
(0.10
)
$
0.19
$
0.21
$
0.10
$
1.10
Weighted average number of common shares
used to compute net income (loss) per share
Basic
27,939
27,693
27,511
27,816
27,451
Diluted
27,939
29,786
29,576
29,830
29,499
Alpha and Omega Semiconductor
Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
December 31, 2023
June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
162,266
$
195,188
Restricted cash
212
415
Accounts receivable, net
31,923
22,420
Inventories
191,709
183,247
Other current assets
20,509
22,666
Total current assets
406,619
423,936
Property, plant and equipment, net
349,046
357,831
Operating lease right-of-use assets
25,416
24,349
Intangible assets, net
5,141
6,765
Equity method investment
356,144
366,617
Deferred income tax assets
518
536
Other long-term assets
33,462
19,703
Total assets
$
1,176,346
$
1,199,737
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
45,156
$
50,775
Accrued liabilities
77,683
79,533
Payable related to equity investee,
net
12,966
11,950
Income taxes payable
4,680
5,546
Short-term debt
11,533
11,434
Deferred revenue
3,715
8,073
Finance lease liabilities
900
867
Operating lease liabilities
4,963
4,383
Total current liabilities
161,596
172,561
Long-term debt
32,568
38,360
Income taxes payable - long-term
2,924
2,817
Deferred income tax liabilities
26,385
27,283
Finance lease liabilities - long-term
2,758
3,216
Operating lease liabilities -
long-term
21,214
20,544
Other long-term liabilities
34,343
51,037
Total liabilities
281,788
315,818
Shareholders' Equity:
Preferred shares, par value $0.002 per
share:
Authorized: 10,000 shares; issued and
outstanding: none at December 31, 2023 and June 30, 2023
—
—
Common shares, par value $0.002 per
share:
Authorized: 100,000 shares; issued and
outstanding: 35,205 shares and 28,051 shares, respectively at
December 31, 2023 and 34,811 shares and 27,654 shares, respectively
at June 30, 2023
70
70
Treasury shares at cost: 7,154 shares at
December 31, 2023 and 7,157 shares at June 30, 2023
(79,343
)
(79,365
)
Additional paid-in capital
342,636
329,034
Accumulated other comprehensive loss
(13,937
)
(8,111
)
Retained earnings
645,132
642,291
Total shareholders' equity
894,558
883,919
Total liabilities and shareholders'
equity
$
1,176,346
$
1,199,737
Alpha and Omega Semiconductor
Limited
Selected Cash Flow
Information
(in thousands,
unaudited)
Six Months Ended December
31,
2023
2022
Net cash provided by (used in) operating
activities
$
(9,628
)
$
37,015
Net cash used in investing activities
(21,431
)
(67,935
)
Net cash provided by (used in) financing
activities
(2,146
)
4,526
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
80
(164
)
Net decrease in cash, cash equivalents and
restricted cash
(33,125
)
(26,558
)
Cash, cash equivalents and restricted cash
at beginning of period
195,603
314,651
Cash, cash equivalents and restricted cash
at end of period
$
162,478
$
288,093
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,
2023
September 30,
2023
December 31,
2022
December 31,
2023
December 31,
2022
GAAP gross profit
$
44,001
$
50,925
$
53,041
94,926
$
124,169
Share-based compensation
1,504
212
1,748
1,716
3,536
Amortization of purchased intangible
812
812
811
1,624
1,623
Non-GAAP gross profit
$
46,317
$
51,949
$
55,600
$
98,266
$
129,328
Non-GAAP gross margin as a % of
revenue
28.0
%
28.8
%
29.5
%
28.4
%
32.6
%
GAAP operating expense
$
45,135
$
41,544
$
44,256
$
86,679
$
89,850
Share-based compensation
7,187
706
11,343
7,893
20,151
Legal costs related to government
investigation
16
52
110
68
252
Non-GAAP operating expense
$
37,932
$
40,786
$
32,803
$
78,718
$
69,447
GAAP operating income (loss)
$
(1,134
)
$
9,381
$
8,785
$
8,247
$
34,319
Share-based compensation
8,691
918
13,091
9,609
23,687
Amortization of purchased intangible
812
812
811
1,624
1,623
Legal costs related to government
investigation
16
52
110
68
252
Non-GAAP operating income
$
8,385
$
11,163
$
22,797
$
19,548
$
59,881
Non-GAAP operating margin as a % of
revenue
5.1
%
6.2
%
12.1
%
5.7
%
15.1
%
GAAP net income (loss)
$
(2,923
)
$
5,786
$
6,337
$
2,863
$
32,375
Share-based compensation
8,691
918
13,091
9,609
23,687
Amortization of purchased intangible
812
812
811
1,624
1,623
Equity method investment (income) loss
from equity investee
697
2,712
(511
)
3,409
(3,013
)
Legal costs related to government
investigation
16
52
110
68
252
Income tax effect of non-GAAP
adjustments
(96
)
(406
)
122
(502
)
241
Non-GAAP net income
$
7,197
$
9,874
$
19,960
$
17,071
$
55,165
Non-GAAP net margin as a % of revenue
4.4
%
5.5
%
10.6
%
4.9
%
13.9
%
GAAP net income (loss)
$
(2,923
)
$
5,786
$
6,337
$
2,863
$
32,375
Share-based compensation
8,691
918
13,091
9,609
23,687
Amortization and depreciation
13,573
12,951
10,804
26,524
20,156
Equity method investment (income) loss
from equity investee
697
2,712
(511
)
3,409
(3,013
)
Interest expense (income), net
(274
)
(229
)
397
(503
)
1,005
Income tax expense
894
1,138
1,659
2,032
3,033
EBITDAS
$
20,658
$
23,276
$
31,777
$
43,934
$
77,243
GAAP diluted net income (loss) per
share
$
(0.10
)
$
0.19
$
0.21
$
0.10
$
1.10
Share-based compensation
0.29
0.03
0.44
0.32
0.80
Amortization of purchased intangible
0.03
0.03
0.03
0.05
0.05
Equity method investment (income) loss
from equity investee
0.02
0.09
(0.02
)
0.11
(0.10
)
Legal costs related to government
investigation
0.00
0.00
0.00
0.00
0.01
Income tax effect of non-GAAP
adjustments
(0.00
)
(0.01
)
0.01
(0.01
)
0.01
Non-GAAP diluted net income per share
$
0.24
$
0.33
$
0.67
$
0.57
$
1.87
Weighted average number of common shares
used to compute GAAP diluted net income (loss) per share
27,939
29,786
29,576
29,830
29,499
Weighted average number of common shares
used to compute Non-GAAP diluted net income (loss) per share
29,874
29,786
29,576
29,830
29,499
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