Alpha and Omega Semiconductor Limited (AOS) has reported financial results for the fiscal first quarter of 2020 ended September 30, 2019. Revenue was $117.8 million, an increase of 5.3% quarter-over-quarter and an increase of 2.4% from the same quarter last year. The quarter-over-quarter increase was primarily due to the increased sales in mobile applications.
GAAP gross margin was 22.9%. Non-GAAP gross margin was 28.3%, an increase of 90 basis points quarter-over-quarter and a decrease of 140 basis points year-over-year. The quarter-over-quarter increase on a non-GAAP basis was primarily due to the improvement of operation efficiency and product mix, partially offset by the price erosion.
GAAP operating expenses were $27.6 million. Non-GAAP operating expenses were $25.6 million, an increase of $3.0 million quarter-over-quarter and an increase of $1.1 million from the same quarter last year. The quarter-over-quarter increase on a non-GAAP basis was primarily due to the increased research and development engineering expenses and the merit increase of compensation started in the new fiscal year.
GAAP operating loss was $0.6 million. Non-GAAP operating income was $7.7 million as compared to $8.0 million for the prior quarter and $9.7 million for the same quarter last year.
GAAP earnings per share attributable to AOS was $0.04. Non-GAAP earnings per share attributable to AOS was $0.26 compared to $0.35 for the prior quarter and $0.36 for the same quarter a year ago.
Consolidated cash flow used in operating activities was $2.7 million, compared to cash flow provided by operating activities of $8.3 million last quarter. Operating cash flow used by AOS alone was $4.2 million, compared to $15.2 million cash flow generated in the prior quarter. The AOS operating cash flow was significantly impacted by a one-day delay of $9.2 million receivable payment from one of our major distributors due to the bank shut down on September 30, 2019 because of Typhoon Mitag in Taiwan, and $5.9 million intercompany receivable impact from the Chongqing Joint Venture (the JV Company).
The Company closed the quarter with $103.1 million of cash and cash equivalents, including $15.1 million cash balance at the JV Company.
"The strength of our September quarter, especially with record revenue that marked the fifteenth consecutive quarter of year-over-year increase, underscores the successful deployment of our growth strategy in the Mobile business. Our expertise in high performance MOSFET technology coupled with our advanced packaging capabilities have enabled us to grow our Battery Protection and Quick Charger businesses at multiple global brand smartphone OEM customers," remarked Dr. Mike Chang, Chairman and CEO of AOS.
"To support the growing demand for our products, we are progressively ramping up the production of the 12-inch fab at the joint venture," continued Dr. Chang, "We are confident that the 12-inch fab can reach the Phase 1 target run rate by the September quarter of next year as planned. Our diversified products are well-positioned with strategic players in many key market segments, and we are committed to better serving those customers through increasingly comprehensive total power solutions and a highly reliable supply chain."
Business Outlook for Fiscal Q2 Ending December 31, 2019
The following statements are based on management’s current expectations. These statements are forward-looking, and actual results may differ materially.
- Revenue is expected to be between $117 million and $121 million.
- GAAP gross margin is expected to be approximately 22.3% plus or minus 1%. Non-GAAP gross margin is expected to be approximately 27.3% plus or minus 1%. Note that non-GAAP gross margin excludes $0.4 million of estimated share-based compensation and $5.8 million of estimated production ramp-up costs relating to the JV Company.
- GAAP operating expenses is expected to be in the range of $27.4 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $25.4 million plus or minus $1 million. Both GAAP and non-GAAP operating expenses include $3.1 million to $3.3 million of estimated expenses relating to the development of our digital power controller business. Non-GAAP operating expenses exclude an estimated share-based compensation charge of approximately $2.0 million.
- Tax expense is expected to be approximately $0.5 million to $0.7 million.
- Loss attributable to noncontrolling interest is expected to be around $3.6 million. On a non-GAAP basis, excluding estimated production ramp-up costs relating to the JV Company, this item is expected to be approximately $0.9 million.