Alpha and Omega Semiconductor Reports Record Revenues in FY2019

Alpha and Omega Semiconductor Limited (AOS) reported financial results for the fiscal fourth quarter and the fiscal year ended June 30, 2019 including annual revenue of $450.9 million compared with revenue of $421.6 million in 2018. Gross margin in 2019 was 25.6% compared with 26.6% in 2018.

Operating income in 2019 was a loss of $7 million in 2019 compared with a profit of $8.4 million in 2018. The income attributable to AOS was $1.9 million 2019 compared with $14.3 million in 2018. Net income per share attributable to AOS was $0.08 in the current year compared with $0.57 in the previous year.

Financial Results for fiscal Q4 Ended June 30, 2019

• Revenue was $111.9 million, an increase of 2.6% quarter-over-quarter and an increase of 1.8% from the same quarter last year. The quarter-over-quarter increase was mainly due to increased sales in smart phone related applications.
• GAAP gross margin was 24.7%. Non-GAAP gross margin was 27.4%, an increase of 40 basis points quarter-over-quarter and from the same quarter last year. The quarter-over-quarter increase was primarily due to the improved product mix.
• GAAP operating expenses were $28.6 million. Non-GAAP operating expenses were $22.6 million, a decrease of $0.6 million quarter-over-quarter and an increase of $0.8 million from the same quarter last year. The quarter-over-quarter decrease was primarily due to the fluctuation of research and development engineering expenses.
• GAAP operating loss was $1.0 million. Non-GAAP operating income was $8.0 million as compared to $6.3 million for the prior quarter and $7.8 million for the same quarter last year.
• GAAP earnings per share attributable to AOS was $0.10. Non-GAAP earnings per share attributable to AOS was $0.35 compared to $0.22 for the prior quarter and $0.31 for the same quarter a year ago.
• Consolidated cash flow provided by operating activities was $8.3 million, compared to consolidated cash flow used in operating activities of $10.8 million in the same quarter a year ago. Operating cash flow generated by AOS alone was $15.2 million, compared to $9.5 million for the prior quarter and $8.7 million for the same quarter a year ago.
• The Company closed the quarter with $121.9 million of cash and cash equivalents, including $100.7 million at AOS alone and $21.2 million at the Chongqing Joint Venture.

"Our solid fourth quarter results marked a strong finish to fiscal year 2019, another record year on top of a very strong 2018. This clearly demonstrates the strength of our business strategy, operating excellence, as well as our diversified product portfolio and growing customer base," stated Dr. Mike Chang, chairman and CEO of the company.

"Looking ahead, despite the ongoing challenges of current market conditions and the geopolitical environment, we are consistently making progress toward our calendar 2021 annual revenue target of $600 million. The demand for our products, especially for mobile and home appliance applications, remains strong. The ramp up of Chongqing Joint Venture is well timed, as we are in the process of increasing volume production for multiple global brand OEM customers. We believe the success of our new product initiatives, diversification in product portfolio and customer base, as well as disciplined and timely investment in capacity expansion over the past several years will further propel our long-term growth."

Business Outlook for Fiscal Q1 Ending September 30, 2019

The following statements are based on management's current expectations.

• Revenue is expected to be in the range of $115 million to $119 million.
• Gross margin is expected to be approximately 20.0% plus or minus 1%. Non-GAAP gross margin is expected to be approximately 27.3% plus or minus 1%. Non-GAAP gross margin excludes $0.5 million of estimated share-based compensation charge and $8.1 million of estimated production ramp-up costs relating to the Chongqing Joint Venture as the 12" fab initiates production in the September quarter.
• Operating expenses are expected to be in the range of $27.0 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $24.6 million plus or minus $1 million. Both GAAP and non-GAAP operating expenses include $2.9 million to $3.1 million of estimated expenses relating to the development of our digital power controller business. Non-GAAP operating expenses exclude $2.4 million of estimated share-based compensation charge.
• Tax expenses are expected to be in the range of $0.5 million to $0.7 million.
• Chongqing Joint Venture's loss attributable to noncontrolling interest is expected to be approximately $5.4 million. On a non-GAAP basis, excluding estimated production ramp-up costs, this item is expected to be approximately $0.9 million.