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Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Third Quarter of 2024 Ended March 31, 2024
The results for the fiscal third quarter of 2024 ended March 31, 2024 were as follows:
GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
Three Months Ended
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
March 31, December 31, March 31,
2024 2023 2023
--------------------------------------------- --------------------------------------------- ---------------------------------------------
Revenue $ 150.1 $ 165.3 $ 132.6
Gross Margin 23.7 % 26.6 % 23.2 %
Operating Loss $ (10.5 ) $ (1.1 ) $ (14.4 )
Net Loss $ (11.2 ) $ (2.9 ) $ (18.9 )
Non-GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
Three Months Ended
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
March 31, 2024 December 31, 2023 March 31, 2023
---------------------------------------------- ---------------------------------------------- ----------------------------------------------
Revenue $ 150.1 $ 165.3 $ 132.6
Non-GAAP Gross Margin 25.2 % 28.0 % 25.1 %
Non-GAAP Operating Income (Loss) $ (1.1 ) $ 8.4 $ (2.9 )
Non-GAAP Net Income (Loss) $ (1.2 ) $ 7.2 $ (5.9 )
The non-GAAP financial measures in the schedule above and under the section "Financial Results for Fiscal Q3 Ended March 31, 2024" below exclude the effect of share-based compensation expenses, amortization of purchased intangible, legal costs related to government investigation, equity method investment 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 Q3 Ended March 31, 2024
Revenue was $150.1 million, a decrease of 9.2% from the prior quarter and an increase of 13.2% from the same quarter last year. GAAP gross margin was 23.7%, down from 26.6% in the prior quarter and up from 23.2% in the same quarter last year. Non-GAAP gross margin was 25.2%, down from 28.0% in the prior quarter and up from 25.1% in the same quarter last year. GAAP operating expenses were $46.1 million, up from $45.1 million in the prior quarter and up from $45.2 million in the same quarter last year. Non-GAAP operating expenses were $38.9 million, up from $37.9 million from last quarter and up from $36.2 million in the same quarter last year. GAAP operating loss was $10.5 million, up from $1.1 million of operating loss in the prior quarter and down from $14.4 million of operating loss in the same quarter last year. Non-GAAP operating loss was $1.1 million as compared to $8.4 million of operating income for the prior quarter and $2.9 million of operating loss for the same quarter last year. GAAP net loss per diluted share was $0.39, compared to $0.10 net loss per share for the prior quarter, and $0.68 net loss per share for the same quarter a year ago. Non-GAAP net loss per share was $0.04 compared to $0.24 net income per share for the prior quarter and 0.21 net loss per share for the same quarter a year ago. Consolidated cash flow provided by operating activities was $28.2 million, as compared to $23.5 million of cash flow used in operating activities in the prior quarter. The Company closed the quarter with $174.4 million of cash and cash equivalents.
AOS Chief Executive Officer Stephen Chang commented, "Our fiscal Q3 results were in-line with our guidance driven by seasonal declines in computing, smartphones, and quick chargers. We saw initial indications that inventory corrections across certain markets are nearing completion, setting the stage for a gradual recovery. Seasonality is starting to return as we prepare for PC and smartphone launches in the Fall."
Mr. Chang continued, "Looking beyond calendar 2024, AOS is transitioning from a component supplier to become a comprehensive solution provider, enabling us to 'go deeper' with increasing BOM content while penetrating new products and verticals. We are confident that our leading technology, extensive product portfolio, and Tier 1 customer base strategically position us well to outperform the broader markets we serve. We are optimistic about the future and look forward to executing on the opportunities ahead of us."
Business Outlook for Fiscal Q4 Ending June 30, 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 fourth quarter of year 2024 are as follows:
Revenue to be approximately $160 million, plus or minus $10 million. GAAP gross margin to be 24.7%, plus or minus 1%. We anticipate non-GAAP gross margin to be 26.3%, plus or minus 1%. GAAP operating expenses to be in the range of $47.9 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. Net interest expense to be approximately $0.5 million, and Income tax expense 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 third quarter ended March 31, 2024 today, May 7, 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 819299. 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 ability to increase BOM content, 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 Q4 Ending June 30, 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; 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 (income) loss 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 discrete power devices, wide band gap power devices, power management ICs, and modules, including a wide portfolio of Power MOSFET, SiC, IGBT, IPM, TVS, HV Gate Drivers, 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, smartphones, battery packs, consumer and industrial motor controls, automotive electronics, 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 Nine Months Ended
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------
March 31, December 31, March 31, March 31, March 31,
2024 2023 2023 2024 2023
----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- -----------------------------------------------
Revenue $ 150,060 $ 165,285 $ 132,560 $ 495,978 $ 529,796
Cost of goods sold 114,505 121,284 101,774 365,497 374,841
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Gross profit 35,555 44,001 30,786 130,481 154,955
23.7 % 26.6 % 23.2 % 26.3 % 29.2 %
Gross margin
Operating expenses:
Research and development 23,095 22,919 22,578 68,127 65,435
Selling, general and administrative 22,964 22,216 22,610 64,611 69,603
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
46,059 45,135 45,188 132,738 135,038
Total operating expenses
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Operating income (loss) (10,504 ) (1,134 ) (14,402 ) (2,257 ) 19,917
Other income (loss), net 308 (472 ) (513 ) (138 ) (1,432 )
Interest income (expense), net 271 274 5 774 (1,000 )
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Net income (loss) before income taxes (9,925 ) (1,332 ) (14,910 ) (1,621 ) 17,485
Income tax expense 611 894 2,517 2,643 5,550
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Net income (loss) before income (loss) from equity method investment (10,536 ) (2,226 ) (17,427 ) (4,264 ) 11,935
Equity method investment income (loss) from equity investee (676 ) (697 ) (1,480 ) (4,085 ) 1,533
-------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
$ (11,212 ) $ (2,923 ) $ (18,907 ) $ (8,349 ) $ 13,468
Net income (loss)
==================== ======= ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Net income (loss) per common share
$ (0.39 ) $ (0.10 ) $ (0.68 ) $ (0.30 ) $ 0.49
Basic
$ (0.39 ) $ (0.10 ) $ (0.68 ) $ (0.30 ) $ 0.46
Diluted
Weighted average number of common shares used to compute net income (loss) per share
28,433 27,939 27,710 28,022 27,537
Basic
28,433 27,939 27,710 28,022 29,576
Diluted
Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
March 31, 2024 June 30, 2023
------------------------------------------------------ ------------------------------------------------------
ASSETS
Current assets:
$ 174,387 $ 195,188
Cash and cash equivalents
208 415
Restricted cash
13,254 22,420
Accounts receivable, net
198,098 183,247
Inventories
8,604 22,666
Other current assets
-------------------- -------------- -------------------- -------------------- -------------- --------------------
394,551 423,936
Total current assets
Property, plant and equipment, net 339,515 357,831
Operating lease right-of-use assets 24,421 24,349
Intangible assets, net 4,328 6,765
Equity method investment 359,244 366,617
Deferred income tax assets 499 536
Other long-term assets 31,491 19,703
-------------------- -------------- -------------------- -------------------- -------------- --------------------
$ 1,154,049 $ 1,199,737
Total assets
==================== ============== ==================== ==================== ============== ====================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
$ 42,513 $ 50,775
Accounts payable
73,587 79,533
Accrued liabilities
14,275 11,950
Payable related to equity investee, net
4,490 5,546
Income taxes payable
11,584 11,434
Short-term debt
7,664 8,073
Deferred revenue
917 867
Finance lease liabilities
4,909 4,383
Operating lease liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
159,939 172,561
Total current liabilities
Long-term debt 29,653 38,360
Income taxes payable - long-term 2,978 2,817
Deferred income tax liabilities 26,337 27,283
Finance lease liabilities - long-term 2,522 3,216
Operating lease liabilities - long-term 20,099 20,544
Other long-term liabilities 23,584 51,037
-------------------- -------------- -------------------- -------------------- -------------- --------------------
265,112 315,818
Total liabilities
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Shareholders' Equity:
Preferred shares, par value $0.002 per share:
-- --
Authorized: 10,000 shares; issued and outstanding: none at March 31, 2024 and June 30, 2023
Common shares, par value $0.002 per share:
72 70
Authorized: 100,000 shares; issued and outstanding: 35,836 shares and 28,697 shares, respectively at March 31, 2024 and 34,811 shares and 27,654 shares, respectively at June 30, 2023
(79,220 ) (79,365 )
Treasury shares at cost: 7,139 shares at March 31, 2024 and 7,157 shares at June 30, 2023
345,413 329,034
Additional paid-in capital
(11,125 ) (8,111 )
Accumulated other comprehensive loss
633,797 642,291
Retained earnings
-------------------- -------------- -------------------- -------------------- -------------- --------------------
888,937 883,919
Total shareholders' equity
-------------------- -------------- -------------------- -------------------- -------------- --------------------
Alpha and Omega Semiconductor Limited
Selected Cash Flow Information
( in thousands, unaudited)
Nine Months Ended March 31,
------------------------------------------------------------------------------------------------------------------
2024 2023
-------------------- ------- -------------------- -------------------- -------------------- ------- --------------------
Net cash provided by operating activities $ 18,591 $ 48,654
Net cash used in investing activities (28,593 ) (90,603 )
Net cash used in financing activities (10,923 ) (6,417 )
Effect of exchange rate changes on cash, cash equivalents and restricted cash (83 ) (121 )
-------------------- ------- -------------------- -------------------- ------- --------------------
Net decrease in cash, cash equivalents and restricted cash (21,008 ) (48,487 )
Cash, cash equivalents and restricted cash at beginning of period 195,603 314,651
-------------------- ------- -------------------- -------------------- ------- --------------------
Cash, cash equivalents and restricted cash at end of period $ 174,595 $ 266,164
==================== ======= ==================== ==================== ======= ====================
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 Nine Months Ended
-------------------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------
March 31, December 31, March 31, March 31, March 31,
2024 2023 2023 2024 2023
-------------------- ----------------------------------------------- ---------------------------------------------- ----------------------------------------------- ----------------------------------------------- -----------------------------------------------
GAAP gross profit $ 35,555 $ 44,001 $ 30,786 130,481 $ 154,955
1,424 1,504 1,723 3,140 5,259
Share-based compensation
812 812 812 2,435 2,435
Amortization of purchased intangible
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Non-GAAP gross profit $ 37,791 $ 46,317 $ 33,321 $ 136,056 $ 162,649
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Non-GAAP gross margin as a % of revenue 25.2 % 28.0 % 25.1 % 27.4 % 30.7 %
GAAP operating expense $ 46,059 $ 45,135 $ 45,188 $ 132,738 $ 135,038
7,041 7,187 8,709 14,934 28,860
Share-based compensation
103 16 304 172 556
Legal costs related to government investigation
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Non-GAAP operating expense $ 38,915 $ 37,932 $ 36,175 $ 117,632 $ 105,622
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
GAAP operating income (loss) $ (10,504 ) $ (1,134 ) $ (14,402 ) $ (2,257 ) $ 19,917
8,465 8,691 10,432 18,074 34,119
Share-based compensation
812 812 812 2,435 2,435
Amortization of purchased intangible
103 16 304 172 556
Legal costs related to government investigation
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Non-GAAP operating income (loss) $ (1,124 ) $ 8,385 $ (2,854 ) $ 18,424 $ 57,027
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Non-GAAP operating margin as a % of revenue (0.7 )% 5.1 % (2.2 )% 3.7 % 10.8 %
GAAP net income (loss) $ (11,212 ) $ (2,923 ) $ (18,907 ) $ (8,349 ) $ 13,468
8,465 8,691 10,432 18,074 34,119
Share-based compensation
812 812 812 2,435 2,435
Amortization of purchased intangible
676 697 1,480 4,085 (1,533 )
Equity method investment (income) loss from equity investee
103 16 304 172 556
Legal costs related to government investigation
(47 ) (96 ) 3 (549 ) 244
Income tax effect of non-GAAP adjustments
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Non-GAAP net income (loss) $ (1,203 ) $ 7,197 $ (5,876 ) $ 15,868 $ 49,289
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Non-GAAP net margin as a % of revenue (0.8 )% 4.4 % (4.4 )% 3.2 % 9.3 %
GAAP net income (loss) $ (11,212 ) $ (2,923 ) $ (18,907 ) $ (8,349 ) $ 13,468
8,465 8,691 10,432 18,074 34,119
Share-based compensation
13,325 13,573 11,006 39,849 31,162
Amortization and depreciation
676 697 1,480 4,085 (1,533 )
Equity method investment (income) loss from equity investee
(271 ) (274 ) (5 ) (774 ) 1,000
Interest expense (income), net
611 894 2,517 2,643 5,550
Income tax expense
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
EBITDAS $ 11,594 $ 20,658 $ 6,523 $ 55,528 $ 83,766
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
GAAP diluted net income (loss) per share $ (0.39 ) $ (0.10 ) $ (0.68 ) $ (0.28 ) $ 0.46
0.30 0.29 0.38 0.60 1.15
Share-based compensation
0.03 0.03 0.03 0.08 0.08
Amortization of purchased intangible
0.02 0.02 0.05 0.14 (0.05 )
Equity method investment (income) loss from equity investee
0.00 0.00 0.01 0.01 0.02
Legal costs related to government investigation
(0.00 ) (0.00 ) 0.00 (0.02 ) 0.01
Income tax effect of non-GAAP adjustments
-------------------- ------- -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Non-GAAP diluted net income (loss) per share $ (0.04 ) $ 0.24 $ (0.21 ) $ 0.53 $ 1.67
==================== ======= ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ==================== ==================== ======= ====================
Weighted average number of common shares used to compute GAAP diluted net income (loss) per share 28,433 27,939 27,710 28,022 29,576
Weighted average number of common shares used to compute Non-GAAP diluted net income (loss) per share 28,433 29,874 27,710 29,915 29,576
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SOURCE: Alpha and Omega Semiconductor Limited
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