Alpha and Omega Semiconductor Limited (“AOS”) (NASDAQ: AOSL)
today reported financial results for the fiscal second quarter of
2023 ended December 31, 2022.
The results for the fiscal second quarter of 2023 ended December
31, 2022 were as follows:
GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2022
September 30, 2022
December 31, 2021
Revenue
$
188.8
$
208.5
$
193.3
Gross Margin
28.1
%
34.1
%
35.4
%
Operating Income
$
8.8
$
25.5
$
27.7
Net Income Attributable to AOS
$
6.3
$
26.0
$
383.0
Net Income Per Share Attributable to AOS -
Diluted
$
0.21
$
0.88
$
13.54
Non-GAAP Financial
Comparison
Quarterly
(in millions, except percentage
and per share data)
(unaudited)
Three Months Ended
December 31, 2022
September 30, 2022
December 31, 2021
Revenue
$
188.8
$
208.5
$
193.3
Non-GAAP Gross Margin
29.5
%
35.4
%
36.7
%
Non-GAAP Operating Income
$
22.8
$
37.1
$
37.4
Non-GAAP Net Income Attributable to
AOS
$
20.0
$
35.2
$
34.0
Non-GAAP Net Income Per Share Attributable
to AOS - Diluted
$
0.67
$
1.20
$
1.20
The non-GAAP financial measures in the schedule above and under
the section “Financial Results for Fiscal Q2 Ended December 31,
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 income from equity investee for the three months ended
December 31, 2022 and September 30, 2022, and gain on
deconsolidation and changes of the 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,
2022
- Revenue was $188.8 million, a decrease of 9.5% from the prior
quarter and a decrease of 2.4% from the same quarter last
year.
- GAAP gross margin was 28.1%, down from 34.1% in the prior
quarter and down from 35.4% in the same quarter last year.
- Non-GAAP gross margin was 29.5%, down from 35.4% in the prior
quarter and down from 36.7% in the same quarter last year.
- GAAP operating expenses were $44.3 million, down from $45.6
million in the prior quarter and up from $40.6 million in the same
quarter last year.
- Non-GAAP operating expenses were $32.8 million, down from $36.6
million from last quarter and down from $33.5 million in the same
quarter last year.
- GAAP operating income was $8.8 million, down from $25.5 million
in the prior quarter and down from $27.7 million in the same
quarter last year.
- Non-GAAP operating income was $22.8 million as compared to
$37.1 million for the prior quarter and $37.4 million for the same
quarter last year.
- GAAP net income per diluted share attributable to AOS was
$0.21, compared to $0.88 net income per share for the prior
quarter, and $13.54 net income per share for the same quarter a
year ago.
- Non-GAAP net income per share attributable to AOS was $0.67
compared to $1.20 for the prior quarter and $1.20 for the same
quarter a year ago.
- Consolidated cash flow provided by operating activities was
$0.3 million, as compared to $36.7 million in the prior
quarter.
- The Company closed the quarter with $287.8 million of cash and
cash equivalents.
AOS Chairman and Chief Executive Officer Dr. Mike Chang
commented, “While our business was negatively impacted by the
industry-wide inventory correction and reduction of customer
demand, we are proactively implementing measures to ensure that we
emerge from this downturn stronger and more successful than ever.
Even as we project a decline in our March quarter revenue, we
expect to recover a good portion of the sequential decline in the
June quarter, with further recovery in the 2nd half of calendar
year 2023, especially with the re-opening of China.”
Dr. Chang continued, “While this temporary slowdown is
disappointing, the fundamentals of our business are the strongest
that they have ever been, which will enable us to meet this
challenge. In 2022, we set records across almost every metric. Our
annual revenue was a record $794 million and non-GAAP earnings per
share was a record $4.16. These successes were driven by many
critical achievements, including a significant increase in record
Tier 1 customers and market share across most of our product
segments.”
“AOS has been in business for over two decades and inventory
corrections and market cycles are a natural and healthy part of our
industry. Demand for more and better power management is being
driven by what we call the ‘electrification of everything’. We
believe this tailwind is here to stay despite this temporary
headwind, and we are in an excellent position to continue to win
and thrive in this market. We enter 2023 with many strengths:
growing product offerings, promising technology roadmaps, diverse
and expanding manufacturing capabilities, strong relationships with
strategic customers and a robust balance sheet, which will enable
us to navigate the current economic environment while keeping our
eyes on achieving our one-billion-dollar annual revenue target in
the next couple of years.”
Business Outlook for Fiscal Q3 Ending March 31, 2023
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 2023 are
as follows:
- Revenue to be approximately $130 million, plus or minus $5
million.
- GAAP gross margin to be 22.5%, plus or minus 1%. We anticipate
non-GAAP gross margin to be 24.5%, plus or minus 1%.
- GAAP operating expenses to be in the range of $45.5 million,
plus or minus $1 million. Non-GAAP operating expenses are expected
to be in the range of $35.5 million, plus or minus $1 million.
- Interest expense is expected to be approximately $1.2 million,
and
- Tax expense is expected to be in the range of $1.3 million to
$1.5 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, 2022 today, February 6, 2023 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 529922. 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 and expected recovery timeline; 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 continue
to win and acquire market share and other information under the
section entitled “Business Outlook for Fiscal Q3 Ending March 31,
2023”. 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 and
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; 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 expenses,
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, equity method investment income from equity investee,
and gain on deconsolidation and changes of the 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 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 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 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,
2022
September 30,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Revenue
$
188,760
$
208,476
$
193,319
$
397,236
$
380,354
Cost of goods sold
135,719
137,348
124,954
273,067
247,422
Gross profit
53,041
71,128
68,365
124,169
132,932
Gross margin
28.1
%
34.1
%
35.4
%
31.3
%
34.9
%
Operating expenses:
Research and development
21,468
21,389
16,516
42,857
34,328
Selling, general and administrative
22,788
24,205
24,132
46,993
45,938
Total operating expenses
44,256
45,594
40,648
89,850
80,266
Operating income
8,785
25,534
27,717
34,319
52,666
Other income (loss), net
(903
)
(16
)
473
(919
)
457
Interest expense, net
(397
)
(608
)
(541
)
(1,005
)
(2,717
)
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
7,485
24,910
419,101
32,395
441,858
Income tax expense
1,659
1,374
34,096
3,033
35,416
Net income before income from equity
method investment
5,826
23,536
385,005
29,362
406,442
Equity method investment income from
equity investee
511
2,502
—
3,013
—
Net income
6,337
26,038
385,005
32,375
406,442
Net loss attributable to noncontrolling
interest
—
—
2,007
—
20
Net income attributable to Alpha and Omega
Semiconductor Limited
$
6,337
$
26,038
$
382,998
$
32,375
$
406,422
Net income per common share attributable
to Alpha and Omega Semiconductor Limited
Basic
$
0.23
$
0.95
$
14.40
$
1.18
$
15.35
Diluted
$
0.21
$
0.88
$
13.54
$
1.10
$
14.53
Weighted average number of common shares
attributable to Alpha and Omega Semiconductor Limited used to
compute net income per share
Basic
27,511
27,391
26,593
27,451
26,479
Diluted
29,576
29,423
28,287
29,499
27,963
Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance
Sheets
(in thousands, except par
value per share)
(unaudited)
December 31, 2022
June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
287,805
$
314,352
Restricted cash
288
299
Accounts receivable, net
53,223
65,681
Inventories
163,823
158,040
Other current assets
12,004
11,220
Total current assets
517,143
549,592
Property, plant and equipment, net
350,950
318,666
Operating lease right-of-use assets
23,474
23,674
Intangible assets, net
8,389
10,050
Equity method investment
365,115
378,378
Deferred income tax assets
566
592
Other long-term assets
20,008
17,677
Total assets
$
1,285,645
$
1,298,629
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
65,799
$
87,377
Accrued liabilities
98,107
116,893
Payable related to equity investee,
net
21,570
28,989
Income taxes payable
5,620
4,248
Short-term debt
25,045
25,563
Finance lease liabilities
835
802
Operating lease liabilities
4,553
3,850
Total current liabilities
221,529
267,722
Long-term debt
44,101
42,486
Income taxes payable - long-term
2,227
2,158
Deferred income tax liabilities
27,136
28,757
Finance lease liabilities - long-term
3,658
3,932
Operating lease liabilities -
long-term
19,713
20,878
Other long-term liabilities
67,607
78,603
Total liabilities
385,971
444,536
Equity:
Preferred shares, par value $0.002 per
share:
Authorized: 10,000 shares; issued and
outstanding: none at December 31, 2022 and June 30, 2022
—
—
Common shares, par value $0.002 per
share:
Authorized: 100,000 shares; issued and
outstanding: 34,181 shares and 27,565 shares, respectively at
December 31, 2022 and 33,988 shares and 27,371 shares, respectively
at June 30, 2022
68
68
Treasury shares at cost: 6,616 shares at
December 31, 2022 and 6,617 shares at June 30, 2022
(65,990
)
(66,000
)
Additional paid-in capital
316,141
288,951
Accumulated other comprehensive income
(loss)
(12,904
)
1,080
Retained earnings
662,359
629,994
Total equity
899,674
854,093
Total liabilities and equity
$
1,285,645
$
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
Six Months Ended
December 31,
2022
September 30,
2022
December 31,
2021
December 31,
2022
December 31,
2021
GAAP gross profit
$
53,041
$
71,128
$
68,365
$
124,169
$
132,932
Share-based compensation
1,748
1,788
1,709
3,536
2,278
Amortization of purchased intangible
811
812
811
1,623
1,623
Non-GAAP gross profit
$
55,600
$
73,728
$
70,885
$
129,328
$
136,833
Non-GAAP gross margin as a % of
revenue
29.5
%
35.4
%
36.7
%
32.6
%
36.0
%
GAAP operating expense
$
44,256
$
45,594
$
40,648
$
89,850
$
80,266
Share-based compensation
11,343
8,808
6,838
20,151
10,904
Legal costs related to government
investigation
110
142
293
252
724
Non-GAAP operating expense
$
32,803
$
36,644
$
33,517
$
69,447
$
68,638
GAAP operating income
$
8,785
$
25,534
$
27,717
$
34,319
$
52,666
Share-based compensation
13,091
10,596
8,547
23,687
13,182
Amortization of purchased intangible
811
812
811
1,623
1,623
Legal costs related to government
investigation
110
142
293
252
724
Non-GAAP operating income
$
22,797
$
37,084
$
37,368
$
59,881
$
68,195
Non-GAAP operating margin as a % of
revenue
12.1
%
17.8
%
19.3
%
15.1
%
17.9
%
GAAP net income attributable to AOS
$
6,337
$
26,038
$
382,998
$
32,375
$
406,422
Share-based compensation
13,091
10,596
8,547
23,687
13,182
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
)
Equity method investment income from
equity investee
(511
)
(2,502
)
—
(3,013
)
—
Legal costs related to government
investigation
110
142
293
252
724
Income tax effect of non-GAAP
adjustments
122
119
32,800
241
32,801
Non-GAAP net income attributable to
AOS
$
19,960
$
35,205
$
33,997
$
55,165
$
63,300
Non-GAAP net margin attributable to AOS as
a % of revenue
10.6
%
16.9
%
17.6
%
13.9
%
16.6
%
GAAP net income attributable to AOS
$
6,337
$
26,038
$
382,998
$
32,375
$
406,422
Share-based compensation
13,091
10,596
8,547
23,687
13,182
Amortization and depreciation
10,804
9,352
11,938
20,156
25,660
Gain on deconsolidation and changes of the
equity interest in the JV Company
—
—
(391,452
)
—
(391,452
)
Equity method investment income from
equity investee
(511
)
(2,502
)
—
(3,013
)
—
Interest expense, net
397
608
541
1,005
2,717
Income tax expense
1,659
1,374
34,096
3,033
35,416
EBITDAS
$
31,777
$
45,466
$
46,668
$
77,243
$
91,945
GAAP diluted net income per share
attributable to AOS
$
0.21
$
0.88
$
13.54
$
1.10
$
14.53
Share-based compensation
0.44
0.36
0.30
0.80
0.47
Amortization of purchased intangible
0.03
0.03
0.03
0.05
0.06
Gain on deconsolidation and changes of the
equity interest in the JV Company
—
—
(13.84
)
—
(14.00
)
Equity method investment income from
equity investee
(0.02
)
(0.09
)
—
(0.10
)
—
Legal costs related to government
investigation
0.00
0.01
0.01
0.01
0.03
Income tax effect of non-GAAP
adjustments
0.01
0.01
1.16
0.01
1.17
Non-GAAP diluted net income per share
attributable to AOS
$
0.67
$
1.20
$
1.20
$
1.87
$
2.26
Shares used to compute GAAP diluted net
income per share
29,576
29,423
28,287
29,499
27,963
Shares used to compute Non-GAAP diluted
net income per share
29,576
29,423
28,287
29,499
27,963
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230205005026/en/
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
Alpha and Omega Semicond... (NASDAQ:AOSL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Alpha and Omega Semicond... (NASDAQ:AOSL)
Historical Stock Chart
From Apr 2023 to Apr 2024