Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL)
today reported financial results for the fiscal first quarter of
2023 ended September 30, 2022.
The results for the fiscal first quarter of 2023 ended September
30, 2022 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
Revenue
$
208.5
$
194.0
$
187.0
Gross Margin
34.1
%
32.6
%
34.5
%
Operating Income
$
25.5
$
18.1
$
24.9
Net Income Attributable to AOS
$
26.0
$
15.1
$
23.4
Net Income Per Share Attributable to AOS -
Diluted
$
0.88
$
0.53
$
0.85
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
September 30, 2022
June 30, 2022
September 30, 2021
Revenue
$
208.5
$
194.0
$
187.0
Non-GAAP Gross Margin
35.4
%
33.8
%
35.3
%
Non-GAAP Operating Income
$
37.1
$
28.9
$
30.8
Non-GAAP Net Income Attributable to
AOS
$
35.2
$
27.1
$
29.3
Non-GAAP Net Income Per Share Attributable
to AOS - Diluted
$
1.20
$
0.95
$
1.06
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q1 Ended September 30,
2022” below exclude the effect of share-based compensation
expenses, amortization of purchased intangible, legal costs related
to government investigation, income tax effect of non-GAAP
adjustments in each of the periods presented, and equity method
investment loss (income) from equity investee for the three months
ended September 30, 2022 and June 30, 2022. 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,
2022
- Revenue was $208.5 million, an increase of 7.5% from the prior
quarter and an increase of 11.5% from the same quarter last
year.
- GAAP gross margin was 34.1%, up from 32.6% in the prior quarter
and down from 34.5% in the same quarter last year.
- Non-GAAP gross margin was 35.4%, up from 33.8% in the prior
quarter and up from 35.3% in the same quarter last year.
- GAAP operating expenses were $45.6 million, up from $45.1
million in the prior quarter and up from $39.6 million in the same
quarter last year.
- Non-GAAP operating expenses were $36.6 million, a decrease of
$0.1 million from last quarter and an increase of $1.5 million from
the same quarter last year.
- GAAP operating income was $25.5 million, up from $18.1 million
in the prior quarter and up from $24.9 million in the same quarter
last year.
- Non-GAAP operating income was $37.1 million as compared to
$28.9 million for the prior quarter and $30.8 million for the same
quarter last year.
- GAAP net income per diluted share attributable to AOS was
$0.88, compared to $0.53 net income per share for the prior
quarter, and $0.85 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 $0.95 for the prior quarter and $1.06 for the same
quarter a year ago.
- Consolidated cash flow provided by operating activities was
$36.7 million, as compared to $25.7 million in the prior
quarter.
- The Company closed the quarter with $316.1 million of cash and
cash equivalents.
AOS Chairman and Chief Executive Officer Dr. Mike Chang
commented, “Our fiscal Q1 results were in-line with our
expectations. Revenue grew 11.5% year-over-year to a record high of
$208.5 million and non-GAAP EPS was $1.20. Looking forward, we
expect to be impacted by an industry inventory correction in PCs
and smartphones. While our near-term results will be affected, our
PC and smartphone revenue for calendar year 2022, including our
December quarter outlook, will actually grow year-over-year
notwithstanding a decline of approximately 20% and 6% in global PC
and smartphone shipment, respectively, in 2022. We believe this is
primarily due to our success with Tier 1 customers, market share
gains, higher BOM content, and better premium tier product
mix.”
Dr. Chang continued, “The current market environment is not
coming to us as a surprise. Over our 22-year history, we have
navigated many boom-and-bust cycles. Today, we are better prepared
to weather these challenges with our leading technology and a much
more diversified product portfolio. For example, our Gaming and
Quick Chargers segments have been a great success recently as we
secured the leading player in each respective market, and we expect
strong demand to continue over the coming quarters.”
Dr. Chang concluded, “While we are not immune to slowdowns in
the broader economy, we are resilient and confident that we will be
able to navigate the current market cycle with our proven business
strategies and strong financial condition. When the market
recovers, our goal is to be well on our way towards achieving our
one-billion-dollar annual revenue target.”
Business Outlook for Fiscal Q2 Ending December 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 second quarter of fiscal year 2023 are
as follows:
- Revenue to be approximately $195 million, plus or minus $3
million.
- GAAP gross margin to be 30.0%, plus or minus 1%. We anticipate
non-GAAP gross margin to be 31.0%, plus or minus 1%.
- GAAP operating expenses to be in the range of $43.5 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.
- Interest expense is expected to be approximately $1.0 million,
and
- 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 first quarter ended
September 30, 2022 today, November 3, 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 590723. 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 navigate
economic downturns; 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, and share-based
compensation expenses, non-GAAP gross margin, non-GAAP operating
expenses, tax expenses, our objectives to achieve revenue target,
our ability to mitigate economic downturns, and other information
under the section entitled “Business Outlook for Fiscal Q2 Ending
December 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 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; 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, 2022 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 AOS, 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,
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 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 condensed 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
September 30,
2022
June 30, 2022
September 30,
2021
Revenue
$
208,476
$
193,959
$
187,035
Cost of goods sold
137,348
130,737
122,468
Gross profit
71,128
63,222
64,567
Gross margin
34.1
%
32.6
%
34.5
%
Operating expenses:
Research and development
21,389
20,386
17,812
Selling, general and administrative
24,205
24,696
21,806
Total operating expenses
45,594
45,082
39,618
Operating income
25,534
18,140
24,949
Other income (loss), net
(16
)
279
(16
)
Interest expense, net
(608
)
(895
)
(2,176
)
Net income before income taxes
24,910
17,524
22,757
Income tax expense
1,374
940
1,320
Net income before income (loss) from
equity method investment
23,536
16,584
21,437
Equity method investment income (loss)
from equity investee
2,502
(1,493
)
—
Net income
26,038
15,091
21,437
Net loss attributable to noncontrolling
interest
—
—
(1,987
)
Net income attributable to
Alpha and Omega Semiconductor Limited
$
26,038
$
15,091
$
23,424
Net income per common share attributable
to Alpha and Omega Semiconductor Limited
Basic
$
0.95
$
0.55
$
0.89
Diluted
$
0.88
$
0.53
$
0.85
Weighted average number of common shares
attributable to Alpha and Omega Semiconductor Limited used to
compute net income per share
Basic
27,391
27,269
26,365
Diluted
29,423
28,466
27,638
Alpha and Omega Semiconductor
Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
September 30, 2022
June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
316,119
$
314,352
Restricted cash
278
299
Accounts receivable, net
55,769
65,681
Inventories
164,946
158,040
Other current assets
11,030
11,220
Total current assets
548,142
549,592
Property, plant and equipment, net
339,470
318,666
Operating lease right-of-use assets
24,251
23,674
Intangible assets, net
9,211
10,050
Equity method investment
375,914
378,378
Deferred income tax assets
553
592
Other long-term assets
13,897
17,677
Total assets
$
1,311,438
$
1,298,629
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
80,101
$
87,377
Accrued liabilities
108,350
116,893
Payable related to equity
investee, net
19,516
28,989
Income taxes payable
4,687
4,248
Short-term debt
26,738
25,563
Finance lease liabilities
820
802
Operating lease liabilities
4,119
3,850
Total current liabilities
244,331
267,722
Long-term debt
46,953
42,486
Income taxes payable - long-term
2,191
2,158
Deferred income tax liabilities
28,572
28,757
Finance lease liabilities - long-term
3,873
3,932
Operating lease liabilities -
long-term
20,748
20,878
Other long-term liabilities
79,301
78,603
Total liabilities
425,969
444,536
Equity:
Preferred shares, par value
$0.002 per share:
Authorized: 10,000 shares;
issued and outstanding: none at September 30, 2022 and June 30,
2022
—
—
Common shares, par value $0.002
per share:
Authorized: 100,000 shares;
issued and outstanding: 34,018 shares and 27,401 shares,
respectively at September 30, 2022 and 33,988 shares and 27,371
shares, respectively at June 30, 2022
68
68
Treasury shares at cost: 6,617
shares at September 30, 2022 and 6,617 shares at June 30, 2022
(65,996
)
(66,000
)
Additional paid-in capital
299,196
288,951
Accumulated other comprehensive
income
(3,827
)
1,080
Retained earnings
656,028
629,994
Total equity
885,469
854,093
Total liabilities and
equity
$
1,311,438
$
1,298,629
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,
2022
June 30, 2022
September 30,
2021
GAAP gross profit
$
71,128
$
63,222
$
64,567
Share-based compensation
1,788
1,565
569
Amortization of purchased
intangible
812
811
812
Non-GAAP gross profit
$
73,728
$
65,598
$
65,948
Non-GAAP gross margin as a % of
revenue
35.4
%
33.8
%
35.3
%
GAAP operating expense
$
45,594
$
45,082
$
39,618
Share-based compensation
8,808
8,305
4,066
Legal costs related to
government investigation
142
84
431
Non-GAAP operating expense
$
36,644
$
36,693
$
35,121
GAAP operating income
$
25,534
$
18,140
$
24,949
Share-based compensation
10,596
9,870
4,635
Amortization of purchased
intangible
812
811
812
Legal costs related to
government investigation
142
84
431
Non-GAAP operating income
$
37,084
$
28,905
$
30,827
Non-GAAP operating margin as a % of
revenue
17.8
%
14.9
%
16.5
%
GAAP net income attributable to AOS
$
26,038
$
15,091
$
23,424
Share-based compensation
10,596
9,870
4,635
Amortization of purchased
intangible
812
811
812
Equity method investment loss
(income) from equity investee
(2,502
)
1,493
—
Legal costs related to
government investigation
142
84
431
Income tax effect of non-GAAP
adjustments
119
(234
)
1
Non-GAAP net income attributable to
AOS
$
35,205
$
27,115
$
29,303
Non-GAAP net margin attributable to AOS as
a % of revenue
16.9
%
14.0
%
15.7
%
GAAP net income attributable to AOS
$
26,038
$
15,091
$
23,424
Share-based compensation
10,596
9,870
4,635
Amortization and
depreciation
9,352
8,588
13,722
Equity method investment loss
(income) from equity investee
(2,502
)
1,493
—
Interest expense, net
608
895
2,176
Income tax expense
1,374
940
1,320
EBITDAS
$
45,466
$
36,877
$
45,277
GAAP diluted net income per share
attributable to AOS
$
0.88
$
0.53
$
0.85
Share-based compensation
0.36
0.35
0.16
Amortization of purchased
intangible
0.03
0.03
0.03
Equity method investment loss
(income) from equity investee
(0.09
)
0.05
—
Legal costs related to
government investigation
0.01
0.00
0.02
Income tax effect of non-GAAP
adjustments
0.01
(0.01
)
0.00
Non-GAAP diluted net income per share
attributable to AOS
$
1.20
$
0.95
$
1.06
Shares used to compute GAAP diluted net
income per share
29,423
28,466
27,638
Shares used to compute Non-GAAP diluted
net income per share
29,423
28,466
27,638
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Investor and media inquiries:
The Blueshirt Group Gary Dvorchak, CFA In US +1 323 240 5796 In
China +86 (138) 1079-1480 gary@blueshirtgroup.com
Yujia Zhai The Blueshirt Group Yujia@blueshirtgroup.com +1 (860)
214-0809
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