Alpha and omega semiconductor reports financial results for the fiscal second quarter of 2022 ended december 31, 2021
Sunnyvale, calif.--(business wire)--alpha and omega semiconductor limited (“aos”) (nasdaq: aosl) today reported financial results for the fiscal second quarter of 2022 ended december 31, 2021. the results for the fiscal second quarter of 2022 ended december 31, 2021 were as follows: gaap financial comparison quarterly (in millions, except percentage and per share data) (unaudited) three months ended december 31, 2021 september 30, 2021 december 31, 2020 revenue $ 193.3 $ 187.0 $ 158.8 gross margin 35.4 % 34.5 % 30.7 % operating income $ 27.7 $ 24.9 $ 13.6 net income attributable to aos $ 383.0 $ 23.4 $ 12.9 net income per share attributable to aos - diluted $ 13.54 $ 0.85 $ 0.47 non-gaap financial comparison quarterly (in millions, except percentage and per share data) (unaudited) three months ended december 31, 2021 september 30, 2021 december 31, 2020 revenue $ 193.3 $ 187.0 $ 158.8 non-gaap gross margin 36.7 % 35.3 % 31.4 % non-gaap operating income $ 37.4 $ 30.8 $ 18.5 non-gaap net income attributable to aos $ 34.0 $ 29.3 $ 17.8 non-gaap net income per share attributable to aos - diluted $ 1.20 $ 1.06 $ 0.65 the non-gaap financial measures in the schedule above and under the section “financial results for fiscal q2 ended december 31, 2021” below exclude the effect of share-based compensation expenses, amortization of purchased intangible, legal costs related to government investigation, and income tax effect of non-gaap adjustments in each of the periods presented, as well as gain on deconsolidation and changes of equity interest in the jv company for the three months ended december 31, 2021. a detailed reconciliation of gaap and non-gaap financial measures is included at the end of this press release. financial results for fiscal q2 ended december 31, 2021 revenue was $193.3 million, an increase of 3.4% from the prior quarter and an increase of 21.7% from the same quarter last year. gaap gross margin was 35.4%, up from 34.5% in the prior quarter and up from 30.7% in the same quarter last year. non-gaap gross margin was 36.7%, up from 35.3% in the prior quarter and up from 31.4% in the same quarter last year. gaap operating expenses were $40.6 million, up from $39.6 million in the prior quarter and up from $35.2 million in the same quarter last year. non-gaap operating expenses were $33.5 million, a decrease of $1.6 million from last quarter and an increase of $2.0 million from the same quarter last year. gaap operating income was $27.7 million, up from $24.9 million in the prior quarter and up from $13.6 million in the same quarter last year. non-gaap operating income was $37.4 million as compared to $30.8 million for the prior quarter and $18.5 million for the same quarter last year. gaap net income per diluted share attributable to aos was $13.54 primarily due to gain on deconsolidation and changes of equity interest in the jv company, compared to $0.85 net income per share for the prior quarter and $0.47 net income per share for the same quarter a year ago. non-gaap net income per share attributable to aos was $1.20 compared to $1.06 for the prior quarter and $0.65 for the same quarter a year ago. consolidated cash flow provided by operating activities was $50.8 million, compared to $80.6 million in the prior quarter. the company closed the quarter with $269.3 million of cash and cash equivalents. aos chairman and chief executive officer dr. mike chang commented, “last quarter, we crossed an important milestone of $1 quarterly non-gaap eps. this quarter, we are happy to report $1.20 non-gaap eps, which further reinforces our company’s strong earnings power of $4.00 to $5.00 per share.” dr. chang continued, “looking back, calendar 2021 was an exceptional year for aos. a few years ago, we set out to achieve a target annual revenue of $600 million in calendar year 2021. today, the business that we have built has the product portfolio, customer relationships and production capacity to deliver well over our original revenue target, and our confidence in our business model and strategic positioning has never been greater. as we look to the future, we now have our sights set on actively planning and marching towards $1 billion annual revenues with much stronger and more sophisticated r&d capabilities and supply chain operations, and with most of our customers being the world’s leading oems in the markets that we serve.” business outlook for fiscal q3 ending march 31, 2022 the following statements are based on management's current expectations. these statements are forward-looking, and actual results may differ materially. aos undertakes no obligation to update these statements. our expectations for the third quarter of fiscal year 2022 are as follows: revenue is expected to be approximately $194 million, plus or minus $3 million. gaap gross margin is expected to be approximately 35.1% plus or minus 1%. non-gaap gross margin is expected to be approximately 36.0% plus or minus 1%. non-gaap gross margin excludes $0.8 million amortization of acquired ip and $1.0 million of estimated share-based compensation charge. gaap operating expenses are expected to be in the range of $41.9 million plus or minus $1 million. non-gaap operating expenses are expected to be in the range of $34.5 million plus or minus $1 million. non-gaap operating expenses exclude $7.0 million of estimated share-based compensation charge and $0.4 million of estimated professional fees related to the government investigation. interest expense is expected to be approximately $0.5 million. income tax expense is expected to be in the range of $1.2 million to $1.4 million. conference call and webcast aos plans to hold an investor teleconference and live webcast to discuss the financial results for the fiscal second quarter ended december 31, 2021 today, february 7, 2022 at 2:00 p.m. pt / 5:00 p.m. et. to listen to the live conference call, please dial +1 (844) 200-6205 or +1 (929) 526-1599 if dialing from outside the united states and canada. the access code is 522169. a live webcast of the call will also be available in the "events & presentations" section of the company's investor relations website, http://investor.aosmd.com. the webcast replay will be available for seven days after the live call on the same website. in addition, a copy of the script of management's prepared remarks and a live webcast of the call will also be available in the "events & presentations" section of the company's investor relations website, http://investor.aosmd.com. forward-looking statements this press release contains forward-looking statements that are based on current expectations, estimates, forecasts and projections of future performance based on management's judgment, beliefs, current trends, and anticipated product performance. these forward-looking statements include, without limitation, statements relating to anticipated earnings power and non-gaap eps on an annual basis, our growth opportunities and new markets, our annual revenue target, projected amount of revenue, gross margin, operating income, income tax expenses, net income, noncontrolling interest, and share-based compensation expenses, non-gaap gross margin, non-gaap operating expenses, tax expenses, and non-gaap loss attributable to noncontrolling interest, our objectives to achieve long-term success, our ability to gain new customers and design wins, strategic partnership with customers, and other information under the section entitled “business outlook for fiscal q3 ending march 31, 2022”. forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. these factors include, but are not limited to, the impact of covid-19 pandemic on our business; our lack of control over the joint venture in china; difficulties and challenges in executing our diversification strategy into different market segments; new tariffs on goods from china; ordering pattern from distributors and seasonality; changes in regulatory environment and government investigation; our ability to introduce or develop new and enhanced products that achieve market acceptance; decline of pc markets; the actual product performance in volume production; the quality and reliability of our product, our ability to achieve design wins; the general business and economic conditions; the state of semiconductor industry and seasonality of our markets; our ability to maintain factory utilization at a desirable level; and other risks as described in our sec filings, including our annual report on form 10-k for the fiscal year ended june 30, 2021 filed by aos with the sec and other periodic reports we filed with the sec. other unknown or unpredictable factors or underlying assumptions subsequently proving to be incorrect could cause actual results to differ materially from those in the forward-looking statements. although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, or achievements. you should not place undue reliance on these forward-looking statements. all information provided in this press release is as of today's date, unless otherwise stated, and aos undertakes no duty to update such information, except as required under applicable law. use of non-gaap financial measures to supplement our unaudited consolidated financial statements presented on a basis consistent with u.s. gaap, we disclose certain non-gaap financial measures for our historical performance, including non-gaap gross profit, gross margin, operating income, net loss attributable to noncontrolling interest, net income, diluted earnings per share ("eps") and ebitdas. these supplemental measures exclude, among other items, share-based compensation expenses, legal and profession fees related to government investigation, amortization of purchased intangible, income tax effect of non-gaap adjustments, as well as gain on deconsolidation and changes of equity interest in the jv company. we also disclose certain non-gaap financial measures in our guidance for the next quarter, including non-gaap gross margin, operating expenses and earnings/loss in equity method investment. we believe that these historical and forecast non-gaap financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. in addition, our management uses non-gaap measures to compare our performance relative to forecasts and to benchmark our performance externally against competitors. our use of non-gaap financial measures has certain limitations in that such non-gaap financial measures may not be directly comparable to those reported by other companies. for example, the terms used in this press release, such as non-gaap net income (loss) or non-gaap operating expenses, do not have a standardized meaning. other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. in addition, we included amount of income tax effect of non-gaap adjustments in the non-gaap net income of reconciliation table for all periods presented as the management believes that such non-gaap presentation provides useful information to investors, even though the amounts are not significant. we seek to compensate for the limitation of our non-gaap presentation by providing a detailed reconciliation of the non-gaap financial measures to the most directly comparable u.s. gaap measures both in the text in this press release and in the tables attached hereto. investors are encouraged to review the related u.s. gaap financial measures and the reconciliation of these non-gaap financial measures to their most directly comparable u.s. gaap financial measures. about alpha and omega semiconductor alpha and omega semiconductor limited, or aos, is a designer, developer and global supplier of a broad range of power semiconductors, including a wide portfolio of power mosfet, igbt, ipm, tvs, hvic, gan/sic, power ic and digital power products. aos has developed extensive intellectual property and technical knowledge that encompasses the latest advancements in the power semiconductor industry, which enables us to introduce innovative products to address the increasingly complex power requirements of advanced electronics. aos differentiates itself by integrating its discrete and ic semiconductor process technology, product design, and advanced packaging know-how to develop high performance power management solutions. aos’ portfolio of products targets high-volume applications, including personal and portable computers, graphic cards, flat panel tvs, home appliances, smart phones, battery packs, quick chargers, home appliances, consumer and industrial motor controls and power supplies for tvs, computers, servers and telecommunications equipment. for more information, please visit www.aosmd.com. the following unaudited consolidated financial statements are prepared in accordance with u.s. gaap. condensed consolidated statements of operations (in thousands, except percentages and per share amounts) (unaudited) three months ended six months ended december 31, 2021 september 30, 2021 december 31, 2020 december 31, 2021 december 31, 2020 revenue $ 193,319 $ 187,035 $ 158,830 $ 380,354 $ 310,381 cost of goods sold 124,954 122,468 110,081 247,422 219,109 gross profit 68,365 64,567 48,749 132,932 91,272 gross margin 35.4 % 34.5 % 30.7 % 34.9 % 29.4 % operating expenses: research and development 16,516 17,812 15,423 34,328 30,114 selling, general and administrative 24,132 21,806 19,736 45,938 37,241 total operating expenses 40,648 39,618 35,159 80,266 67,355 operating income 27,717 24,949 13,590 52,666 23,917 interest expense and other income (loss), net (68 ) (2,192 ) (381 ) (2,260 ) (930 ) gain on deconsolidation of the jv company 399,093 — — 399,093 — (7,641 ) — — (7,641 — net income before income taxes 419,101 22,757 13,209 441,858 22,987 income tax expense 34,096 1,320 669 35,416 1,680 net income 385,005 21,437 12,540 406,442 21,307 net gain (loss) attributable to noncontrolling interest 2,007 (1,987 ) (363 ) 20 (1,170 ) net income attributable to alpha and omega semiconductor limited $ 382,998 $ 23,424 $ 12,903 $ 406,422 $ 22,477 net income per common share attributable to alpha and omega semiconductor limited basic $ 14.40 $ 0.89 $ 0.50 $ 15.35 $ 0.88 diluted $ 13.54 $ 0.85 $ 0.47 $ 14.53 $ 0.84 weighted average number of common shares attributable to alpha and omega semiconductor limited used to compute net income per share basic 26,593 26,365 25,672 26,479 25,506 diluted 28,287 27,638 27,353 27,963 26,834 condensed consolidated balance sheets (in thousands, except par value per share) (unaudited) december 31, 2021 june 30, 2021 assets current assets: cash and cash equivalents $ 269,306 $ 202,412 restricted cash 314 233 accounts receivable, net 31,661 35,789 other receivable, equity investee 25,030 — inventories 129,084 154,293 other current assets 11,312 14,595 total current assets 466,707 407,322 property, plant and equipment, net 196,743 436,977 operating lease right-of-use assets, net 22,263 34,660 intangible assets, net 11,730 13,410 equity method investment 376,061 — deferred income tax assets 440 5,167 restricted cash - long-term — 2,168 other long-term assets 37,931 18,869 total assets $ 1,111,875 $ 918,573 liabilities and equity current liabilities: accounts payable $ 62,175 $ 80,699 accrued liabilities 95,212 69,494 income taxes payable 7,337 2,604 short-term debt 8,960 58,030 finance lease liabilities — 16,724 operating lease liabilities 4,293 5,679 total current liabilities 177,977 233,230 long-term debt 13,707 77,990 income taxes payable - long-term 1,345 1,319 deferred income tax liabilities 27,742 2,448 finance lease liabilities - long-term — 12,698 operating lease liabilities - long-term 19,430 30,440 other long-term liabilities 77,684 44,123 total liabilities 317,885 402,248 equity: preferred shares, par value $0.002 per share: authorized: 10,000 shares; issued and outstanding: none at december 31, 2021 and june 30, 2021 — — common shares, par value $0.002 per share: authorized: 100,000 shares; issued and outstanding: 33,329 shares and 26,706 shares, respectively at december 31, 2021 and 32,975 shares and 26,350 shares, respectively at june 30, 2021 67 66 treasury shares at cost: 6,623 shares at december 31, 2021 and 6,625 shares at june 30, 2021 (66,046 ) (66,064 ) additional paid-in capital 275,410 259,993 accumulated other comprehensive income 1,260 2,315 retained earnings 583,299 176,895 total alpha and omega semiconductor limited shareholder's equity 793,990 373,205 noncontrolling interest — 143,120 total equity 793,990 516,325 total liabilities and equity $ 1,111,875 $ 918,573 reconciliation of condensed consolidated gaap financial measures to non-gaap financial measures (in thousands, except percentages and per share data) (unaudited) three months ended six months ended december 31, 2021 september 30, 2021 december 31, 2020 december 31, 2021 december 31, 2020 gaap gross profit $ 68,365 $ 64,567 $ 48,749 $ 132,932 $ 91,272 share-based compensation 1,709 569 383 2,278 768 amortization of purchased intangible 811 812 811 1,623 1,623 production ramp up costs related to joint venture — — — — 275 non-gaap gross profit $ 70,885 $ 65,948 $ 49,943 $ 136,833 $ 92,315 non-gaap gross margin as a % of revenue 36.7 % 35.3 % 31.4 % 36.0 % 30.3 % gaap operating expense $ 40,648 $ 39,618 $ 35,159 $ 80,266 $ 67,355 share-based compensation 6,838 4,066 2,841 10,904 5,332 legal costs related to government investigation 293 431 843 724 1,950 non-gaap operating expense $ 33,517 $ 35,121 $ 31,475 $ 68,638 $ 60,073 gaap operating income $ 27,717 $ 24,949 $ 13,590 $ 52,666 $ 23,917 share-based compensation 8,547 4,635 3,224 13,182 6,100 amortization of purchased intangible 811 812 811 1,623 1,623 production ramp up costs related to joint venture — — — — 275 legal costs related to government investigation 293 431 843 724 1,950 non-gaap operating income $ 37,368 $ 30,827 $ 18,468 $ 68,195 $ 33,865 non-gaap operating margin as a % of revenue 19.3 % 16.5 % 11.6 % 17.9 % 10.9 % gaap net income attributable to aos $ 382,998 $ 23,424 $ 12,903 $ 406,422 $ 22,477 share-based compensation 8,547 4,635 3,224 13,182 6,100 amortization of purchased intangible 811 812 811 1,623 1,623 gain on deconsolidation and changes of the equity interest in the jv company (391,452 ) — — (391,452 ) — production ramp up costs related to joint venture — — — — 135 legal costs related to government investigation 293 431 843 724 1,950 income tax effect of non-gaap adjustments 32,800 1 (1 ) 32,801 (9 ) non-gaap net income attributable to aos $ 33,997 $ 29,303 $ 17,780 $ 63,300 $ 32,276 non-gaap net margin attributable to aos as a % of revenue 17.6 % 15.7 % 11.2 % 16.6 % 10.4 % gaap net income attributable to aos $ 382,998 $ 23,424 $ 12,903 $ 406,422 $ 22,477 share-based compensation 8,547 4,635 3,224 13,182 6,100 gain on deconsolidation and changes of the equity interest in the jv company (391,452 ) — — (391,452 ) — amortization and depreciation 11,938 13,722 13,200 25,660 25,689 interest expense (income), net 541 2,176 1,649 2,717 3,271 income tax expense 34,096 1,320 669 35,416 1,680 ebitdas $ 46,668 $ 45,277 $ 31,645 $ 91,945 $ 59,217 gaap diluted net income per share attributable to aos $ 13.54 $ 0.85 $ 0.47 $ 14.53 $ 0.84 share-based compensation 0.30 0.16 0.12 0.47 0.23 gain on deconsolidation and changes of the equity interest in the jv company (13.84 ) — — (14.00 ) — production ramp up costs related to joint venture — — — — 0.01 legal costs related to government investigation 0.01 0.02 0.03 0.03 0.07 amortization of purchased intangible 0.03 0.03 0.03 0.06 0.06 income tax effect of non-gaap adjustments 1.16 0.00 (0.00 ) 1.17 (0.00 ) non-gaap diluted net income per share attributable to aos $ 1.20 $ 1.06 $ 0.65 $ 2.26 $ 1.20 shares used to compute gaap diluted net income (loss) per share 28,287 27,638 27,353 27,963 26,834 shares used to compute non-gaap diluted net income per share 28,287 27,638 27,353 27,963 26.834
