November 2, 2011

Alpha and Omega Semiconductor Reports Financial Results for the First Quarter of Fiscal 2012 Ended September 30, 2011

SUNNYVALE, Calif., Nov. 2, 2011 (GLOBE NEWSWIRE) -- Alpha and Omega Semiconductor Limited ("AOS") (Nasdaq:AOSL), a designer, developer and global supplier of a broad range of power semiconductors, today reported financial results that are prepared in accordance with U.S. General Accepted Accounting Principles ("U.S. GAAP") for the first quarter of fiscal 2012 ended September 30, 2011.

The results for the first quarter of fiscal 2012 ended September 30, 2011 are as follows:

  • Revenue was $83.4 million, a sequential decrease of 13.8% from $96.8 million for the prior quarter, and a decrease of 6.7% from $89.4 million for the same quarter in the prior fiscal year.
     
  • Gross margin was 24.7%, compared to 30.4% for the prior quarter and 27.0% for the same quarter in the prior fiscal year.
     
  • Operating expenses were $17.7 million, compared to $19.2 million for the prior quarter and $15.5 million for the same quarter in the prior fiscal year.
  • Non-GAAP operating expenses were $16.1 million, compared to $16.8 million for the prior quarter and $14.0 million for the same quarter in the prior fiscal year. Non-GAAP operating expenses excluded share-based compensation expense of $1.1 million, $1.8 million and $1.4 million for this quarter, the prior quarter and the same quarter in the prior fiscal year, respectively. In addition, non-GAAP operating expenses excluded U.S. GAAP conversion costs of $0.4 million and $0.6 million for this quarter and the prior quarter, respectively.
  • Operating income was $2.9 million, compared to $10.2 million for the prior quarter and $8.7 million for the same quarter in the prior fiscal year.
  • Non-GAAP operating income was $4.6 million, compared to $12.8 million for the prior quarter and $10.2 million for the same quarter in the prior fiscal year. Non-GAAP operating income excluded share-based compensation expense of $1.2 million, $2.0 million and $1.5 million for this quarter, the prior quarter and the same quarter in the prior fiscal year, respectively. In addition, non-GAAP operating income excluded U.S. GAAP conversion costs of $0.4 million and $0.6 million for this quarter and the prior quarter, respectively.
  • Net income was $2.1 million, or $0.08 per diluted share, compared to $9.7 million, or $0.37 per diluted share, for the prior quarter and $8.8 million, or $0.37 per diluted share, for the same quarter in the prior fiscal year.
  • Non-GAAP net income, excluding share-based compensation expense and U.S. GAAP conversion costs, was $3.8 million, or $0.15 per diluted share, compared to $12.3 million, or $0.47 per diluted share, for the prior quarter and $10.3 million, or $0.44 per diluted share, for the same quarter in the prior fiscal year.

 Reconciliation of non-GAAP financial measures to the U.S. GAAP amounts are set forth in the attached schedules.

"In response to the macroeconomic environment, we responded decisively during the September quarter to reduce our operating expenses and to lower our inventory level at a faster rate than our original guidance. In addition, our new Generation 5 products are gaining design wins, and we are currently ramping up production gradually at IDT's Oregon facility for these and other products," said Dr. Mike Chang, Chief Executive Officer and Chairman of AOS. "In recent weeks, our bookings pattern has stabilized and shown gradual improvement. Despite the economic uncertainty, we continue to focus on long-term growth by investing in new products and technology development to further diversify and expand our serviceable available markets (SAM)."

Fiscal Q2, 2012 Business Outlook

The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. AOS undertakes no obligation to update these statements.

  • Revenue is expected to be between $75 million and $79 million.
  • Gross margin is expected to be approximately at 24% +/- 50 basis points.
  • Operating expenses are expected to be approximately flat to slightly down from prior quarter.
  • Operating income is expected to be in the range of 1.0% to 2.0%.
  • Non-GAAP operating income is expected to be in the range of 3.0% to 4.0%, excluding estimated $1.5 million share-based compensation expense.

Conference Call and Webcast

AOS plans to conduct an investor teleconference and live webcast to discuss the financial results for the first quarter of fiscal 2012 today, November 2, 2011 at 2:00 p.m. PDT / 5:00 p.m. EDT. To participate in the live call, analysts and investors should dial 877-312-8797 (or 253-237-1194 if outside the U.S.). To access the live webcast and the subsequent replay of the conference call, which will be available for seven days after the live call, go to 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, projected amount of revenues, gross margin, and operating income, expectation with respect to the macroeconomic conditions, product design wins and our long-term strategy and revenue growth, and other information under the section entitled "Business Outlook". 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, our ability to introduce or develop new and enhanced products that achieve market acceptance; 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 identify and consummate strategic transactions; the state of semiconductor industry and seasonality of our markets, and other risks as described in our SEC filings. 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 the U.S. GAAP, we disclose certain non-GAAP financial measures, including non-GAAP operating expenses, operating income, projected operating income, net income and earnings per share. These supplemental measures exclude share-based compensation expenses that are non-cash charges and costs incurred for our U.S. GAAP conversion. We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash and non-recurring expenses that are not indicative of our core operating results. 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 the non-GAAP financial measures we use may not be directly comparable to those reported by other companies. For example, the term used in this press release, non-GAAP net income, does 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. We seek to compensate for this limitation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures in the tables attached to this press release.  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 and Power IC products. AOS seeks to differentiate itself by integrating its expertise in device physics, process technology, design and advanced packaging to optimize product performance and cost, and its product portfolio is designed to meet the ever increasing power efficiency requirements in high volume applications, including portable computers, smart phones, flat panel TVs, battery packs, portable media players, UPS, motor control and power supplies. For more information, please visit http://www.aosmd.com. For investor relations, please contact So-Yeon Jeong at investors@aosmd.com.

The following consolidated financial statements are prepared in accordance with U.S. GAAP.

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
U.S. GAAP
(in thousands, except par value per share)  
(unaudited)  
     
 September 30,
2011
June 30,
2011
ASSETS    
Current assets:    
Cash and cash equivalents  $ 88,400   $ 86,708 
Restricted cash  38   54 
Accounts receivable, net  25,434   42,503 
Inventories  53,309   65,251 
Deferred tax assets  1,831   1,773 
Other current assets  3,668   5,056 
Total current assets  172,680   201,345 
Property and equipment, net  131,730   127,839 
Intangible assets, net  1,456   1,599 
Deferred tax assets  8,960   9,048 
Other long-term assets  6,620   7,607 
Total assets  $ 321,446   $ 347,438 
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:    
Bank borrowings  $ 4,000   $ -- 
Accounts payable  37,773   64,678 
Accrued liabilities  11,425   15,123 
Income taxes payable  1,218   2,377 
Deferred margin  382   495 
Capital leases - current portion  161   306 
Total current liabilities  54,959   82,979 
Income taxes payable - long term  3,139   3,081 
Deferred income tax liabilities  24   25 
Capital leases - long term portion  130   130 
Deferred rent  1,041   973 
Total liabilities  59,293   87,188 
     
Shareholders' equity:    
Preferred shares, par value $0.002 per share:    
Authorized: 10,000 shares; Issued and outstanding: none at September 30, 2011 and June 30, 2011  --   -- 
Common shares, par value $0.002 per share:    
Authorized: 50,000 shares; Issued and outstanding: 24,650 shares and 24,409 shares at September 30, 2011 and 24,612 shares and 24,562 shares at June 30, 2011  49   49 
Treasury shares at cost; 241 shares at September 30, 2011 and 50 shares at June 30, 2011  (2,267)  (693)
Additional paid-in capital  154,353   153,004 
Accumulated other comprehensive income  923   934 
Retained earnings  109,095   106,956 
Total shareholders' equity  262,153   260,250 
Total liabilities and shareholders' equity  $ 321,446   $ 347,438 
       
Alpha and Omega Semiconductor Limited      
Condensed Consolidated Statements of Income      
U.S. GAAP      
(in thousands, except per share amounts)      
(unaudited)   
    
 Three Months Ended
 September 30, 2011June 30, 2011September 30, 2010
       
Revenue  $ 83,448   $ 96,835   $ 89,417 
Cost of goods sold  62,871   67,396   65,272 
Gross profit  20,577   29,439   24,145 
Gross margin 24.7 % 30.4 % 27.0 %
       
Operating expenses:      
Research and development  8,394   9,021   6,259 
Selling, general and administrative  9,283   10,177   9,198 
Total operating expenses  17,677   19,198   15,457 
Operating income  2,900   10,241   8,688 
       
Interest income  39   139   28 
Interest expense  (27)  (75)  (46)
Income on equity investment in APM  --   --   886 
Income before income taxes  2,912   10,305   9,556 
       
Income tax expense  773   623   756 
Net income  $ 2,139   $ 9,682   $ 8,800 
       
       
Net income per share      
Basic per share  $ 0.09   $ 0.39   $ 0.40 
Diluted per share  $ 0.08   $ 0.37   $ 0.37 
       
Weighted-average number of shares used in computing net income per share      
 Basic shares  24,472   24,514   22,115 
 Diluted shares  25,495   25,984   23,662 
       
Alpha and Omega Semiconductor Limited      
Reconciliation of Operating Expenses to non-GAAP Operating Expenses      
(in thousands)      
(unaudited)      
 Three Months Ended
 September 30, 2011June 30, 2011September 30, 2010
       
U.S. GAAP operating expenses $ 17,677  $ 19,198  $ 15,457 
       
Share-based compensation included in      
Operating expenses:      
Research and development  259   606   387 
Selling, general and administrative  882   1,209   1,024 
   1,141   1,815   1,411 
       
U.S. GAAP conversion costs included in      
Selling, general and administrative  435   621   -- 
       
Non-GAAP operating expenses $ 16,101  $ 16,762  $ 14,046 
       
Alpha and Omega Semiconductor Limited      
Reconciliation of Operating Income to non-GAAP Operating Income      
(in thousands)      
(unaudited)      
 Three Months Ended
 September 30, 2011June 30, 2011September 30, 2010
       
U.S. GAAP operating income $ 2,900  $ 10,241  $ 8,688 
       
Share-based compensation:      
Cost of goods sold  81   143   137 
Research and development  259   606   387 
Selling, general and administrative  882   1,209   1,024 
Total share-based compensation  1,222   1,958   1,548 
       
U.S. GAAP conversion costs included in      
Selling, general and administrative  435   621   -- 
       
Non-GAAP operating income $ 4,557  $ 12,820  $ 10,236 
       
Alpha and Omega Semiconductor Limited      
Reconciliation of Net Income to non-GAAP Net Income      
(in thousands, except per share amounts)      
(unaudited)      
 Three Months Ended
 September 30, 2011June 30, 2011September 30, 2010
       
U.S. GAAP net income $ 2,139  $ 9,682  $ 8,800 
       
Share-based compensation:      
Cost of goods sold  81   143   137 
Research and development  259   606   387 
Selling, general and administrative  882   1,209   1,024 
Total share-based compensation  1,222   1,958   1,548 
       
U.S. GAAP conversion costs included in      
Selling, general and administrative  435   621   -- 
       
Non-GAAP net income $ 3,796  $ 12,261  $ 10,348 
       
Non-GAAP diluted EPS  $ 0.15   $ 0.47   $ 0.44 
       
Weighted-average number of shares used in computing non-GAAP earnings per share      
Diluted shares  25,495   25,984   23,662 
CONTACT: Alpha and Omega Semiconductor Limited

         Investor Relations

         So-Yeon Jeong

         investors@aosmd.com


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