April 25, 2012

Alpha and Omega Semiconductor Reports Financial Results for the Third Quarter of Fiscal 2012

SUNNYVALE, Calif., April 25, 2012 (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 for the third quarter of fiscal 2012 ended March 31, 2012.

  • Revenue was $83.9 million, an increase of 3.9% from $80.7 million for the prior quarter.
     
  • GAAP gross margin was 23.0%, compared to 22.6% for the prior quarter. Non-GAAP gross margin was 23.2%, compared to 22.8% for the prior quarter.
     
  • GAAP operating income was $3.8 million, compared to $2.3 million for the prior quarter. Non-GAAP operating income was $5.2 million, compared to $3.8 million for the prior quarter.
     
  • GAAP net income was $2.6 million, compared to $1.5 million for the prior quarter. Non-GAAP net income was $4.1 million, compared to $2.9 million for the prior quarter. 
     
  • GAAP diluted EPS was $0.10 as compared to $0.06 for the prior quarter. Non-GAAP diluted EPS was $0.16 as compared to $0.12 for the prior quarter.

Non-GAAP gross margin excludes share-based compensation expenses. Non-GAAP operating income, net income and EPS exclude share-based compensation expenses for both quarters and, acquisition related costs for the quarter ended March 31, 2012. Reconciliations of non-GAAP financial measures to the U.S. GAAP amounts are set forth in the attached schedules.

"Our strong performance this quarter was the combined results of improved market conditions and more importantly, the precise execution of our business strategies.  Our new products are gaining traction in the markets we serve and the favorable product mix has increased our gross margins," said Dr. Mike Chang, Chief Executive Officer and Chairman of AOS.

"We are starting off 2012 with renewed energy and a healthy backlog with a solid book-to-bill ratio at the end of the March quarter," Dr. Chang continued.  "We have an unwavering focus on the diversification of our product portfolio which will expand our served available markets.  We are ramping our new fab in Oregon as planned, which I strongly believe will improve our revenue and gross margin as it helps us enhance the efficiency of R&D efforts and accelerate the time-to-market of new products.  We are well positioned to grow our company with increased and sustained profitability."

Recent News Highlights

Apr 3, 2012 -  Alpha and Omega Semiconductor Offers New Solutions for the Ultra-Portable Market

Mar 29, 2012 - Alpha and Omega Semiconductor Expands its DFN2x2 Portfolio with New 40V and 60V MOSFETs

Feb 7, 2012 - Alpha and Omega Semiconductor's New 75V and 80V MOSFETs Deliver Industry-Leading Performance for Power Supply Designs

Jan 31, 2012 - Alpha and Omega Semiconductor Completes the Acquisition of the Fab in Oregon

Jan 16, 2012 - Alpha and Omega Semiconductor Demonstrates Breakthrough 1200V UniSiC(TM) Stack-Cascode MOSFETs

Jan 9, 2012 - Alpha and Omega Semiconductor Continues to Expand Its Portable Power Portfolio Using AlphaMOS Technology

Fiscal Q4, 2012 Business Outlook

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.

  • Revenue is expected to be between $88.0 million and $92.0 million.
     
  • GAAP gross margin is expected to be in the range of 24.0% to 25.0%, including the negative impact arising from the initial ramp at the Oregon fab facility. 
     
  • GAAP operating expense is expected to be in the range of $16.0 million to $17.0 million.
     
  • GAAP operating income is expected to be in the range of 5.0% to 6.0% of revenue. Non-GAAP operating income is expected to be in the range of 6.5% to 7.5% of revenue. 
     
  • GAAP net income is expected to be in the range of 3.5% to 4.5% of revenue, including the income tax provision which is expected to be in the range of $1.3 million to $1.5 million. Non-GAAP net income is expected to be in the range of 5.0% to 6.0% of revenue. 

Projected Non-GAAP operating income and net income both exclude estimated share-based compensation expense of $1.4 million.

Conference Call and Webcast

AOS plans to conduct an investor teleconference and live webcast to discuss the financial results for the third quarter of fiscal 2012 today, April 25, 2012 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, operating expenses, operating income, net income, share-based compensation expenses, expectation with respect to the macroeconomic conditions, expectation with respect to the production ramp at the Oregon fab, the anticipated improvement in our financial performance due to the Oregon fab, our ability to achieve profitability, and other information under the section entitled "Fiscal Q4, 2012 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, including our Annual Report on Form 10-K.  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 gross margin, operating expenses, operating income, net income and earnings per share ("EPS"). These supplemental measures exclude share-based compensation expenses that are non-cash charges, acquisition related costs 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 Statements of Income
(in thousands, except per share amounts)
(unaudited)
           
 Three Months EndedNine Months Ended
 March 31, 2012December 31, 2011March 31, 2011March 31, 2012March 31, 2011
           
Revenue  $ 83,858  $ 80,713  $ 91,074  $ 248,019  $ 264,473
Cost of goods sold  64,564  62,440  62,633  189,875  188,691
Gross profit  19,294  18,273  28,441  58,144  75,782
Gross margin 23.0 % 22.6 % 31.2 % 23.4 % 28.7 %
           
Operating expenses:          
Research and development  6,510  8,108  7,580  23,012  20,448
Selling, general and administrative  9,028  7,833  9,523  26,144  27,761
Total operating expenses  15,538  15,941  17,103  49,156  48,209
Operating income  3,756  2,332  11,338  8,988  27,573
           
Interest income  21  25  60  85  141
Interest expense  (135)  (44)  (78)  (206)  (187)
Income on equity investment in APM  --   --   --   --   1,768
Gain on equity interest in APM  --   --   --   --   836
Income before income taxes  3,642  2,313  11,320  8,867  30,131
           
Income tax expense  1,038  839  666  2,650  1,986
Net income  $ 2,604  $ 1,474  $ 10,654  $ 6,217  $ 28,145
           
Net income per share          
 Basic  $ 0.11   $ 0.06   $ 0.44   $ 0.25   $ 1.22 
 Diluted  $ 0.10   $ 0.06   $ 0.41   $ 0.24   $ 1.14 
           
Weighted-average number of shares used in computing net income per share          
           
 Basic  24,675  24,538  24,372  24,578  23,155
 Diluted  25,647  25,423  25,905  25,565  24,668
           
Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
 March 31, 2012June 30, 2011
ASSETS    
Current assets:    
Cash and cash equivalents  $ 79,344  $ 86,708
Restricted cash  79  54
Accounts receivable, net  39,008  42,503
Inventories  53,190  65,251
Deferred tax assets  1,815  1,773
Other current assets  3,229  5,056
Total current assets  176,665  201,345
Property and equipment, net  157,774  127,839
Intangible assets, net  1,440  1,599
Deferred tax assets  8,651  9,048
Other long-term assets  821  7,607
Total assets  $ 345,351  $ 347,438
LIABILITIES AND SHAREHOLDERS' EQUITY    
Current liabilities:    
Bank borrowings  $ 12,100  $ -- 
Accounts payable  38,801  64,678
Accrued liabilities  18,528  15,123
Income taxes payable  724  2,377
Deferred margin  346  495
Capital leases - current portion  15  306
Total current liabilities  70,514  82,979
Income taxes payable - long term  3,247  3,081
Deferred income tax liabilities  25  25
Capital leases - long term portion  115  130
Deferred rent  1,178  973
Total liabilities  75,079  87,188
Shareholders' equity:    
Preferred shares, par value $0.002 per share:    
Authorized: 10,000 shares; Issued and outstanding: none at March 31, 2012 and June 30, 2011  --   -- 
Common shares, par value $0.002 per share:    
Authorized: 50,000 shares; Issued and outstanding: 24,957 shares and 24,716 shares at March 31, 2012 and 24,612 shares and 24,562 shares at June 30, 2011  49  49
Treasury shares at cost; 241 shares at March 31, 2012 and 50 shares at June 30, 2011  (2,267)  (693)
Additional paid-in capital  158,289  153,004
Accumulated other comprehensive income  1,028  934
Retained earnings  113,173  106,956
Total shareholders' equity  270,272  260,250
Total liabilities and shareholders' equity  $ 345,351  $ 347,438
     
Alpha and Omega Semiconductor Limited
Reconciliation of Gross Profit to Non-GAAP Gross Profit
(in thousands)
(unaudited)
           
 Three Months EndedNine Months Ended
 March 31, 2012December 31, 2011March 31, 2011March 31, 2012March 31, 2011
           
U.S. GAAP gross profit $ 19,294  $ 18,273  $ 28,441  $ 58,144  $ 75,782
           
Share-based compensation:          
Cost of goods sold  171  133  190  385  486
           
Non-GAAP gross profit $ 19,465  $ 18,406  $ 28,631  $ 58,529  $ 76,268
Non-GAAP gross margin23.2 %22.8 %31.4 %23.6 %28.8 %
           
Alpha and Omega Semiconductor Limited
Reconciliation of Operating Income to Non-GAAP Operating Income
(in thousands)
(unaudited)
           
 Three Months EndedNine Months Ended
 March 31, 2012December 31, 2011March 31, 2011March 31, 2012March 31, 2011
           
U.S. GAAP operating income $ 3,756  $ 2,332  $ 11,338  $ 8,988  $ 27,573
           
Share-based compensation:          
Cost of goods sold  171  133  190  385  486
Research and development  285  372  391  916  1,109
Selling, general and administrative  840  948  863  2,670  2,621
Total share-based compensation  1,296  1,453  1,444  3,971  4,216
           
Acquisition cost  153  --   --   153  -- 
U.S. GAAP conversion costs included in          
Selling, general and administrative  --   --   360  435  360
           
Non-GAAP operating income $ 5,205  $ 3,785  $ 13,142  $ 13,547  $ 32,149
           
Alpha and Omega Semiconductor Limited
Reconciliation of Net Income to Non-GAAP Net Income
(in thousands, except per share amounts)
(unaudited)
           
 Three Months EndedNine Months Ended
 March 31, 2012December 31, 2011March 31, 2011March 31, 2012March 31, 2011
           
U.S. GAAP net income $ 2,604  $ 1,474  $ 10,654  $ 6,217  $ 28,145
           
Share-based compensation:          
Cost of goods sold  171  133  190  385  486
Research and development  285  372  391  916  1,109
Selling, general and administrative  840  948  863  2,670  2,621
Total share-based compensation  1,296  1,453  1,444  3,971  4,216
           
Acquisition cost  153  --   --   153  -- 
U.S. GAAP conversion costs included in          
Selling, general and administrative  --   --   360  435  360
           
Non-GAAP net income $ 4,053  $ 2,927  $ 12,458  $ 10,776  $ 32,721
           
Non-GAAP diluted EPS $ 0.16  $ 0.12  $ 0.48  $ 0.42  $ 1.33 
           
Weighted-average number of shares used in computing non-GAAP earnings per share          
Diluted shares 25,647  25,423  25,905  25,565  24,668
           
CONTACT: So-Yeon Jeong

         investors@aosmd.com


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