May 4, 2016

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Third Quarter of 2016 Ended March 31, 2016

SUNNYVALE, Calif., May 04, 2016 (GLOBE NEWSWIRE) -- Alpha and Omega Semiconductor Limited ("AOS") (NASDAQ:AOSL), today reported financial results for the fiscal third quarter of 2016 ended March 31, 2016.

The results for the fiscal third quarter of 2016 ended March 31, 2016 were as follows:

GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
  Three Months Ended
  March 31, 2016 December 31, 2015 March 31, 2015
Revenue $83.0  $79.8  $76.9 
Gross Margin 19.7% 18.8% 16.6%
Operating Loss $  $(0.6) $(3.4)
Net Loss $(1.3) $(1.6) $(4.1)
Loss Per Share - Diluted $(0.06) $(0.07) $(0.16)


On a non-GAAP basis excluding the effect of share-based compensation expenses in each of the periods presented, impairment of long-lived assets in the quarter ended December 31, 2015, and joint venture related costs in the quarter ended March 31, 2016, the results were as set forth below (see detailed reconciliation included at the end of this press release).


Non-GAAP Financial Comparison
Quarterly
(in millions, except percentage and per share data)
(unaudited)
       
  Three Months Ended
  March 31, 2016 December 31, 2015 March 31, 2015
Revenue $83.0  $79.8  $76.9 
Gross Margin 19.9% 19.0% 16.8%
Operating Income (Loss) $1.3  $0.9  $(2.4)
Net Income (Loss) $0.1  $(0.1) $(3.2)
Income (Loss) Per Share - Diluted $  $  $(0.12)


"AOS delivered strong execution in the March quarter that typically marks the lowest season for us," said Dr. Mike Chang, chairman and CEO of AOS.  "The revenue came in at the high end of our guidance range, and the gross margin and the bottom line exceeded the stated expectations. Our diversified product portfolio enabled us to deliver a sound performance amid challenges in the PC market, resulting in counter-seasonal growth.  We believe that the improved operating performance is evidence that our turnaround strategies are beginning to bear fruit.  We remain keenly focused on driving a more solid turnaround with full strength to achieve revenue growth and profitability."

Business Outlook for Fiscal Q4 Ending June 30, 2016

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 $87 million and $91 million.

  • GAAP gross margin is expected to be 20.0% plus or minus 1%. 

  • GAAP operating expenses are expected to be in the range of $15.8 million to $17.8 million. 

  • Tax expense is expected to be approximately $1.0 million to $1.2 million. 

The above projections on GAAP gross margin and GAAP operating expenses include estimated share-based compensation expense of $1.1 million to $1.3 million.

Conference Call and Webcast
AOS plans to conduct an investor teleconference and live webcast to discuss the financial results for the fiscal third quarter of 2016 ended March 31, 2016 today, May 4, 2016 at 2:00 p.m. PT / 5:00 p.m. ET.  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.  In addition, a copy of the script of prepared remarks by CEO and CFO at the investor teleconference and webcast is available prior to the call at the Company's investor relations website.

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 the expected new product cycle, projected amount of revenues, gross margin, operating income/(expenses), tax expenses, net income/(loss), and share-based compensation expenses, expectation with respect to improvement in profit, our recovery progress and competitive position, our ability and strategy to develop new products, expand our sales, design wins, revenue and profitability, growth in revenue and market share, seasonality fluctuation in customer demand, the execution of our business plan, and other information under the section entitled "Business Outlook for Fiscal Q4 Ending June 30, 2016".  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 decline of the PC industry and our ability to respond to such decline, 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, the state of semiconductor industry and seasonality of our markets, our ability to maintain factory utilization at a desirable level, our ability to successfully operate joint venture, and other risks as described in our SEC filings, including our Annual Report on Form 10-K for the fiscal year ended June 30, 2015 filed on August 27, 2015.  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, including non-GAAP gross profit, gross margin, operating income/(loss), net income/(loss) and diluted earnings (loss) per share ("EPS").  These supplemental measures exclude share-based compensation expenses, impairment of long-lived assets and joint venture related costs.  We believe that non-GAAP financial measures can provide useful information to both management and investors by excluding certain non-cash 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/(loss), 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, IGBT and Power IC products.  AOS has developed extensive intellectual property and technical knowledge that encompasses the latest advancements in the power semiconductor industry, which enables it 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's portfolio of products targets high-volume applications, including portable computers, flat panel TVs, LED lighting, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.  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 Operations
(in thousands, except percentages and per share amounts)
(unaudited)
          
 Three Months Ended Nine Months Ended
 March 31,
 2016
 December 31,
 2015
 March 31,
 2015
 March 31,
 2016
 March 31,
 2015
          
Revenue$82,987  $79,825  $76,918  $244,251  $246,463 
Cost of goods sold66,668  64,853  64,154  197,899  200,297 
Gross profit16,319  14,972  12,764  46,352  46,166 
Gross margin19.7% 18.8% 16.6% 19.0% 18.7%
          
Operating expenses         
Research and development6,924  5,941  6,929  19,029  20,155 
Selling, general and administrative9,444  9,197  9,219  28,300  27,958 
Impairment of long-lived assets  432    432   
Total operating expenses16,368  15,570  16,148  47,761  48,113 
Operating loss(49) (598) (3,384) (1,409) (1,947)
          
Interest income and other, net10  9  18  30  92 
Interest expense(5) (7) (41) (22) (157)
Loss before income taxes(44) (596) (3,407) (1,401) (2,012)
          
Income tax expense1,219  1,015  698  3,448
  2,826 
Net loss$(1,263) $(1,611) $(4,105) $(4,849) $(4,838)
          
Net loss per share:         
Basic$(0.06) $(0.07) $(0.16) $(0.22) $(0.18)
Diluted$(0.06) $(0.07) $(0.16) $(0.22) $(0.18)
          
Weighted average number of common shares used to compute net loss per share:         
Basic22,232  22,269  26,447  22,400  26,469 
Diluted22,232  22,269  26,447  22,400  26,469 


Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
 March 31, 2016 June 30, 2015
ASSETS   
Current assets:   
Cash and cash equivalents$78,923  $106,085 
Restricted cash347  368 
Accounts receivable, net32,036  38,781 
Inventories67,911  64,175 
Deferred income tax assets2,959  2,205 
Other current assets5,772  4,279 
Total current assets187,948  215,893 
Property, plant and equipment, net112,497  119,579 
Intangible assets, net16  17 
Goodwill269  269 
Deferred income tax assets - long term10,193  10,848 
Other long-term assets2,971  2,011 
Total assets$313,894  $348,617 
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current liabilities:   
Accounts payable$47,041  $44,083 
Accrued liabilities22,011  19,225 
Income taxes payable1,724  1,372 
Deferred margin807  716 
Capital leases255  941 
Total current liabilities71,838  66,337 
Income taxes payable - long term1,576  1,601 
Deferred income tax liabilities3,913  3,023 
Capital leases - long term45  64 
Other long term liabilities797  953 
Total liabilities78,169
  71,978 
Shareholders' equity:   
Preferred shares, par value $0.002 per share:   
Authorized: 10,000 shares, issued and outstanding: none at March 31, 2016 and June 30, 2015   
Common shares, par value $0.002 per share:   
Authorized: 50,000 shares, issued and outstanding: 28,039 shares and 22,360 shares, respectively at March 31, 2016 and 27,314 shares and 26,316 shares, respectively at June 30, 201556  55 
Treasury shares at cost, 5,679 shares at March 31, 2016 and 998 shares at June 30, 2015(50,470) (8,593)
Additional paid-in capital187,148  181,040 
Accumulated other comprehensive income772  905 
Retained earnings98,219  103,232 
Total shareholders' equity235,725  276,639 
Total liabilities and shareholders' equity$313,894  $348,617 


Alpha and Omega Semiconductor Limited
Reconciliation of Gross Profit to Non-GAAP Gross Profit
(in thousands)
(unaudited)
          
 Three Months Ended Nine Months Ended
 March 31,
 2016
 December 31,
 2015
 March 31,
 2015
 March 31,
 2016
 March 31,
 2015
          
U.S. GAAP gross profit$16,319  $14,972  $12,764  $46,352  $46,166 
          
Share-based compensation:         
Cost of goods sold187  157  167  475  495 
Non-GAAP gross profit$16,506  $15,129  $12,931  $46,827  $46,661 
Non-GAAP gross margin19.9% 19.0% 16.8% 19.2% 18.9%


Alpha and Omega Semiconductor Limited
Reconciliation of Operating Loss to Non-GAAP Operating Income (Loss)
(in thousands)
(unaudited)
          
 Three Months Ended Nine Months Ended
 March 31,
 2016
 December 31,
 2015
 March 31,
 2015
 March 31,
 2016
 March 31,
 2015
          
U.S. GAAP operating loss$(49) $(598) $(3,384) $(1,409) $(1,947)
          
Share-based compensation:         
Cost of goods sold187  157  167  475  495 
Research and development309  264  43  766  542 
Selling, general and administrative677  664  730  1,806  2,282 
Total share-based compensation1,173  1,085  940  3,047  3,319 
Joint venture related costs180      180   
Impairment of long-lived assets  432    432   
          
Non-GAAP operating income (loss)$1,304  $919  $(2,444) $2,250  $1,372 


Alpha and Omega Semiconductor Limited
Reconciliation of Net  Loss to Non-GAAP Net Income (Loss)
(in thousands, except per share amounts)
(unaudited)
          
 Three Months Ended Nine Months Ended
 March 31,
 2016
 December 31,
 2015
 March 31,
 2015
 March 31,
 2016
 March 31,
 2015
          
U.S. GAAP net loss$(1,263) $(1,611) $(4,105) $(4,849) $(4,838)
          
Share-based compensation:         
Cost of goods sold187  157  167  475  495 
Research and development309  264  43  766  542 
Selling, general and administrative677  664  730  1,806  2,282 
Total share-based compensation1,173  1,085  940  3,047  3,319 
Joint venture related costs180      180   
Impairment of long-lived assets  432    432   
          
Non-GAAP net income (loss)$90  $(94) $(3,165) $(1,190) $(1,519)
          
Non-GAAP diluted net income (loss) per share$  $  $(0.12) $(0.05) $(0.06)
          
Weighted-average number of common shares used in computing non-GAAP net income (loss) per share:         
Diluted shares22,944  22,269  26,447  22,400  26,469 

 

CONTACT: 
Alpha and Omega Semiconductor Limited
Investor Relations
So-Yeon Jeong
408-789-3172
investors@aosmd.com


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