AOSL
$34.42
Alpha and Omega Semi
($.88)
(2.49%)
Earnings Details
1st Quarter September 2022
Thursday, November 3, 2022 4:01:00 PM
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Summary

Alpha and Omega Semi Misses

Alpha and Omega Semi (AOSL) reported 1st Quarter September 2022 earnings of $1.08 per share on revenue of $208.5 million. The consensus earnings estimate was $1.20 per share on revenue of $210.0 million. The Earnings Whisper number was $1.21 per share. Revenue grew 11.5% on a year-over-year basis.

The company said it expects second quarter revenue of $192.0 million to $198.0 million. The current consensus revenue estimate is $202.55 million for the quarter ending December 31, 2022.

Alpha & Omega Semiconductor Ltd designs, develops and supplies a broad range of power semiconductors for computing, consumer electronics, communication and industrial applications.

Results
Reported Earnings
$1.08
Earnings Whisper
$1.21
Consensus Estimate
$1.20
Reported Revenue
$208.5 Mil
Revenue Estimate
$210.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal First Quarter of 2023 Ended September 30, 2022

SUNNYVALE, Calif.--(BUSINESS WIRE)--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

 

 

 

 

 

 

 

 

 

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

Source: Alpha and Omega Semiconductor Limited