Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL)
today reported financial results for the fiscal second quarter of
2022 ended December 31, 2021.
The results for the fiscal second quarter of 2022 ended December
31, 2021 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2021
September 30, 2021
December 31, 2020
Revenue
$
193.3
$
187.0
$
158.8
Gross Margin
35.4
%
34.5
%
30.7
%
Operating Income
$
27.7
$
24.9
$
13.6
Net Income Attributable to AOS
$
383.0
$
23.4
$
12.9
Net Income Per Share Attributable to AOS -
Diluted
$
13.54
$
0.85
$
0.47
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2021
September 30, 2021
December 31, 2020
Revenue
$
193.3
$
187.0
$
158.8
Non-GAAP Gross Margin
36.7
%
35.3
%
31.4
%
Non-GAAP Operating Income
$
37.4
$
30.8
$
18.5
Non-GAAP Net Income Attributable to
AOS
$
34.0
$
29.3
$
17.8
Non-GAAP Net Income Per Share Attributable
to AOS - Diluted
$
1.20
$
1.06
$
0.65
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q2 Ended December 31,
2021” below exclude the effect of share-based compensation
expenses, amortization of purchased intangible, legal costs related
to government investigation, and income tax effect of non-GAAP
adjustments in each of the periods presented, as well as gain on
deconsolidation and changes of equity interest in the JV Company
for the three months ended December 31, 2021. 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,
2021
- Revenue was $193.3 million, an increase of 3.4% from the prior
quarter and an increase of 21.7% from the same quarter last
year.
- GAAP gross margin was 35.4%, up from 34.5% in the prior quarter
and up from 30.7% in the same quarter last year.
- Non-GAAP gross margin was 36.7%, up from 35.3% in the prior
quarter and up from 31.4% in the same quarter last year.
- GAAP operating expenses were $40.6 million, up from $39.6
million in the prior quarter and up from $35.2 million in the same
quarter last year.
- Non-GAAP operating expenses were $33.5 million, a decrease of
$1.6 million from last quarter and an increase of $2.0 million from
the same quarter last year.
- GAAP operating income was $27.7 million, up from $24.9 million
in the prior quarter and up from $13.6 million in the same quarter
last year.
- Non-GAAP operating income was $37.4 million as compared to
$30.8 million for the prior quarter and $18.5 million for the same
quarter last year.
- GAAP net income per diluted share attributable to AOS was
$13.54 primarily due to gain on deconsolidation and changes of
equity interest in the JV Company, compared to $0.85 net income per
share for the prior quarter and $0.47 net income per share for the
same quarter a year ago.
- Non-GAAP net income per share attributable to AOS was $1.20
compared to $1.06 for the prior quarter and $0.65 for the same
quarter a year ago.
- Consolidated cash flow provided by operating activities was
$50.8 million, compared to $80.6 million in the prior quarter.
- The Company closed the quarter with $269.3 million of cash and
cash equivalents.
AOS Chairman and Chief Executive Officer Dr. Mike Chang
commented, “Last quarter, we crossed an important milestone of $1
quarterly non-GAAP EPS. This quarter, we are happy to report $1.20
non-GAAP EPS, which further reinforces our Company’s strong
earnings power of $4.00 to $5.00 per share.”
Dr. Chang continued, “Looking back, calendar 2021 was an
exceptional year for AOS. A few years ago, we set out to achieve a
target annual revenue of $600 million in calendar year 2021. Today,
the business that we have built has the product portfolio, customer
relationships and production capacity to deliver well over our
original revenue target, and our confidence in our business model
and strategic positioning has never been greater. As we look to the
future, we now have our sights set on actively planning and
marching towards $1 billion annual revenues with much stronger and
more sophisticated R&D capabilities and supply chain
operations, and with most of our customers being the world’s
leading OEMs in the markets that we serve.”
Business Outlook for Fiscal Q3 Ending March 31, 2022
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 2022 are
as follows:
- Revenue is expected to be approximately $194 million, plus or
minus $3 million.
- GAAP gross margin is expected to be approximately 35.1% plus or
minus 1%. Non-GAAP gross margin is expected to be approximately
36.0% plus or minus 1%. Non-GAAP gross margin excludes $0.8 million
amortization of acquired IP and $1.0 million of estimated
share-based compensation charge.
- GAAP operating expenses are expected to be in the range of
$41.9 million plus or minus $1 million. Non-GAAP operating expenses
are expected to be in the range of $34.5 million plus or minus $1
million. Non-GAAP operating expenses exclude $7.0 million of
estimated share-based compensation charge and $0.4 million of
estimated professional fees related to the government
investigation.
- Interest expense is expected to be approximately $0.5
million.
- Income tax expense is expected to be in the range of $1.2
million to $1.4 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, 2021 today, February 7, 2022 at 2:00 p.m. PT / 5:00
p.m. ET. To listen to the live conference call, please dial +1
(844) 200-6205 or +1 (929) 526-1599 if dialing from outside the
United States and Canada. The access code is 522169. 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 anticipated earnings power and Non-GAAP EPS on an
annual basis, our growth opportunities and new markets, our annual
revenue target, projected amount of revenue, gross margin,
operating income, income tax expenses, net income, 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, strategic partnership with customers, and other
information under the section entitled “Business Outlook for Fiscal
Q3 Ending March 31, 2022”. 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 lack of control over the
joint venture in China; 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, 2021 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,
net loss attributable to noncontrolling interest, net income,
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, as well as gain on deconsolidation
and changes of equity interest in the JV Company. We also disclose
certain non-GAAP financial measures in our guidance for the next
quarter, including non-GAAP gross margin, operating expenses and
earnings/loss in equity method investment. 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.
Condensed Consolidated
Statements of Operations
(in thousands, except
percentages and per share amounts)
(unaudited)
Three Months Ended
Six Months Ended
December 31,
2021
September 30,
2021
December 31,
2020
December 31,
2021
December 31,
2020
Revenue
$
193,319
$
187,035
$
158,830
$
380,354
$
310,381
Cost of goods sold
124,954
122,468
110,081
247,422
219,109
Gross profit
68,365
64,567
48,749
132,932
91,272
Gross margin
35.4
%
34.5
%
30.7
%
34.9
%
29.4
%
Operating expenses:
Research and development
16,516
17,812
15,423
34,328
30,114
Selling, general and administrative
24,132
21,806
19,736
45,938
37,241
Total operating expenses
40,648
39,618
35,159
80,266
67,355
Operating income
27,717
24,949
13,590
52,666
23,917
Interest expense and other income (loss),
net
(68
)
(2,192
)
(381
)
(2,260
)
(930
)
Gain on deconsolidation of the JV
Company
399,093
—
—
399,093
—
Loss on changes of equity interest in the JV Company, net
(7,641
)
—
—
(7,641
)
—
Net income before income taxes
419,101
22,757
13,209
441,858
22,987
Income tax expense
34,096
1,320
669
35,416
1,680
Net income
385,005
21,437
12,540
406,442
21,307
Net gain (loss) attributable to
noncontrolling interest
2,007
(1,987
)
(363
)
20
(1,170
)
Net income attributable to Alpha and Omega
Semiconductor Limited
$
382,998
$
23,424
$
12,903
$
406,422
$
22,477
Net income per common share attributable
to Alpha and Omega Semiconductor Limited
Basic
$
14.40
$
0.89
$
0.50
$
15.35
$
0.88
Diluted
$
13.54
$
0.85
$
0.47
$
14.53
$
0.84
Weighted average number of common shares
attributable to Alpha and Omega Semiconductor Limited used to
compute net income per share
Basic
26,593
26,365
25,672
26,479
25,506
Diluted
28,287
27,638
27,353
27,963
26,834
Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
December 31, 2021
June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
269,306
$
202,412
Restricted cash
314
233
Accounts receivable, net
31,661
35,789
Other receivable, equity investee
25,030
—
Inventories
129,084
154,293
Other current assets
11,312
14,595
Total current assets
466,707
407,322
Property, plant and equipment, net
196,743
436,977
Operating lease right-of-use assets,
net
22,263
34,660
Intangible assets, net
11,730
13,410
Equity method investment
376,061
—
Deferred income tax assets
440
5,167
Restricted cash - long-term
—
2,168
Other long-term assets
37,931
18,869
Total assets
$
1,111,875
$
918,573
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
62,175
$
80,699
Accrued liabilities
95,212
69,494
Income taxes payable
7,337
2,604
Short-term debt
8,960
58,030
Finance lease liabilities
—
16,724
Operating lease liabilities
4,293
5,679
Total current liabilities
177,977
233,230
Long-term debt
13,707
77,990
Income taxes payable - long-term
1,345
1,319
Deferred income tax liabilities
27,742
2,448
Finance lease liabilities - long-term
—
12,698
Operating lease liabilities -
long-term
19,430
30,440
Other long-term liabilities
77,684
44,123
Total liabilities
317,885
402,248
Equity:
Preferred shares, par value $0.002 per
share:
Authorized: 10,000 shares; issued and
outstanding: none at December 31, 2021 and June 30, 2021
—
—
Common shares, par value $0.002 per
share:
Authorized: 100,000 shares; issued and
outstanding: 33,329 shares and 26,706 shares, respectively at
December 31, 2021 and 32,975 shares and 26,350 shares, respectively
at June 30, 2021
67
66
Treasury shares at cost: 6,623 shares at
December 31, 2021 and 6,625 shares at June 30, 2021
(66,046
)
(66,064
)
Additional paid-in capital
275,410
259,993
Accumulated other comprehensive income
1,260
2,315
Retained earnings
583,299
176,895
Total Alpha and Omega Semiconductor
Limited shareholder's equity
793,990
373,205
Noncontrolling interest
—
143,120
Total equity
793,990
516,325
Total liabilities and equity
$
1,111,875
$
918,573
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,
2021
September 30,
2021
December 31,
2020
December 31,
2021
December 31,
2020
GAAP gross profit
$
68,365
$
64,567
$
48,749
$
132,932
$
91,272
Share-based compensation
1,709
569
383
2,278
768
Amortization of purchased intangible
811
812
811
1,623
1,623
Production ramp up costs related to joint
venture
—
—
—
—
275
Non-GAAP gross profit
$
70,885
$
65,948
$
49,943
$
136,833
$
92,315
Non-GAAP gross margin as a % of
revenue
36.7
%
35.3
%
31.4
%
36.0
%
30.3
%
GAAP operating expense
$
40,648
$
39,618
$
35,159
$
80,266
$
67,355
Share-based compensation
6,838
4,066
2,841
10,904
5,332
Legal costs related to government
investigation
293
431
843
724
1,950
Non-GAAP operating expense
$
33,517
$
35,121
$
31,475
$
68,638
$
60,073
GAAP operating income
$
27,717
$
24,949
$
13,590
$
52,666
$
23,917
Share-based compensation
8,547
4,635
3,224
13,182
6,100
Amortization of purchased intangible
811
812
811
1,623
1,623
Production ramp up costs related to joint
venture
—
—
—
—
275
Legal costs related to government
investigation
293
431
843
724
1,950
Non-GAAP operating income
$
37,368
$
30,827
$
18,468
$
68,195
$
33,865
Non-GAAP operating margin as a % of
revenue
19.3
%
16.5
%
11.6
%
17.9
%
10.9
%
GAAP net income attributable to AOS
$
382,998
$
23,424
$
12,903
$
406,422
$
22,477
Share-based compensation
8,547
4,635
3,224
13,182
6,100
Amortization of purchased intangible
811
812
811
1,623
1,623
Gain on deconsolidation and changes of the
equity interest in the JV Company
(391,452
)
—
—
(391,452
)
—
Production ramp up costs related to joint
venture
—
—
—
—
135
Legal costs related to government
investigation
293
431
843
724
1,950
Income tax effect of non-GAAP
adjustments
32,800
1
(1
)
32,801
(9
)
Non-GAAP net income attributable to
AOS
$
33,997
$
29,303
$
17,780
$
63,300
$
32,276
Non-GAAP net margin attributable to AOS as
a % of revenue
17.6
%
15.7
%
11.2
%
16.6
%
10.4
%
GAAP net income attributable to AOS
$
382,998
$
23,424
$
12,903
$
406,422
$
22,477
Share-based compensation
8,547
4,635
3,224
13,182
6,100
Gain on deconsolidation and changes of the
equity interest in the JV Company
(391,452
)
—
—
(391,452
)
—
Amortization and depreciation
11,938
13,722
13,200
25,660
25,689
Interest expense (income), net
541
2,176
1,649
2,717
3,271
Income tax expense
34,096
1,320
669
35,416
1,680
EBITDAS
$
46,668
$
45,277
$
31,645
$
91,945
$
59,217
GAAP diluted net income per share
attributable to AOS
$
13.54
$
0.85
$
0.47
$
14.53
$
0.84
Share-based compensation
0.30
0.16
0.12
0.47
0.23
Gain on deconsolidation and changes of the
equity interest in the JV Company
(13.84
)
—
—
(14.00
)
—
Production ramp up costs related to joint
venture
—
—
—
—
0.01
Legal costs related to government
investigation
0.01
0.02
0.03
0.03
0.07
Amortization of purchased intangible
0.03
0.03
0.03
0.06
0.06
Income tax effect of non-GAAP
adjustments
1.16
0.00
(0.00
)
1.17
(0.00
)
Non-GAAP diluted net income per share
attributable to AOS
$
1.20
$
1.06
$
0.65
$
2.26
$
1.20
Shares used to compute GAAP diluted net
income (loss) per share
28,287
27,638
27,353
27,963
26,834
Shares used to compute Non-GAAP diluted
net income per share
28,287
27,638
27,353
27,963
26.834
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Investor and media inquiries:
The Blueshirt Group Gary Dvorchak, CFA In US +1 323 240 5796 In
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Yujia Zhai The Blueshirt Group Yujia@blueshirtgroup.com +1 (860)
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