Alpha and Omega Semiconductor Reports Financial Results for

Alpha and Omega Semiconductor Reports Financial Results for Fiscal Fourth Quarter and Fiscal Year Ended June 30, 2022

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 for our historical performance, including non-GAAP gross profit, gross margin, operating income, net income attributable to AOS, net income, diluted earnings per share ("EPS") and EBITDAS. These supplemental measures exclude, among other items, share-based compensation expenses, legal costs related to government investigation, amortization of purchased intangible, production ramp up costs related to the JV Company, income tax effect of non-GAAP adjustments, equity method investment loss from equity investee, and gain on deconsolidation and changes of equity interest in the JV Company. We also disclose certain non-GAAP financial measures in our guidance for the next quarter, including non-GAAP gross margin, operating expenses and earnings/loss in equity method investment. We believe that these historical and forecast non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. 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 such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP net income (loss) or non-GAAP operating expenses, do 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. In addition, we included the income tax effect of non-GAAP adjustments in the non-GAAP net income of reconciliation table for all periods presented as the management believes that such non-GAAP presentation provides useful information to investors, even though the amounts are not significant. We seek to compensate for the limitation of our non-GAAP presentation by having provided a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures both in the text in this press release and in the tables attached hereto. 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, IPM, TVS, HVIC, GaN/SiC, Power IC and Digital Power products. AOS has developed extensive intellectual property and technical knowledge that encompasses the latest advancements in the power semiconductor industry, which enables us 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’ portfolio of products targets high-volume applications, including personal and portable computers, graphic cards, flat panel TVs, home appliances, power tools, smart phones, battery packs, quick chargers, home appliances, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment. For more information, please visit www.aosmd.com.

The following unaudited 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									Fiscal Year Ended
	June 30, 2022			March 31, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Revenue	$	193,959		$	203,239		$	177,309		$	777,552		$	656,902
Cost of goods sold		130,737			130,837			116,729			508,996			452,359
Gross profit		63,222			72,402			60,580			268,556			204,543
Gross margin		32.6	%		35.6	%		34.2	%		34.5	%		31.1	%

Operating expenses:
Research and development		20,386			16,545			17,282			71,259			62,953
Selling, general and administrative		24,696			24,625			20,935			95,259			77,514
Total operating expenses		45,082			41,170			38,217			166,518			140,467
Operating income		18,140			31,232			22,363			102,038			64,076

Other income, net		279			263			369			999			2,456
Interest expense, net		(895	)		(308	)		(1,476	)		(3,920	)		(6,308	)
Gain on deconsolidation of the JV Company		—			—			—			399,093			—
Gain (loss) on changes of equity interest in the JV Company, net		—			4,501			—			(3,140	)		—
Net income before income taxes		17,524			35,688			21,256			495,070			60,224

Income tax expense		940			2,902			1,241			39,258			3,935
Net income before loss from equity method investment		16,584			32,786			20,015			455,812			56,289
Equity method investment loss from equity investee		1,493			1,136			—			2,629			—
Net income		15,091			31,650			20,015			453,183			56,289
Net income (loss) attributable to noncontrolling interest		—			—			476			20			(1,827	)
Net income attributable to Alpha and Omega Semiconductor Limited	$	15,091		$	31,650		$	19,539		$	453,163		$	58,116

Net income per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	0.55		$	1.18		$	0.74		$	16.93		$	2.25
Diluted	$	0.53		$	1.11		$	0.71		$	16.07		$	2.13

Weighted average number of common share attributable to Alpha and Omega Semiconductor Limited used to compute net income per share:
Basic		27,269			26,829			26,251			26,764			25,786
Diluted		28,466			28,423			27,705			28,203			27,272


Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	June 30, 2022			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	314,352		$	202,412
Restricted cash		299			233
Accounts receivable, net		65,681			35,789
Inventories		158,040			154,293
Other current assets		11,220			14,595
Total current assets		549,592			407,322
Property, plant and equipment, net		318,666			436,977
Operating lease right-of-use assets, net		23,674			34,660
Intangible assets, net		10,050			13,410
Equity method investment		378,378			—
Deferred income tax assets		592			5,167
Restricted cash - long-term		—			2,168
Other long-term assets		17,677			18,869
Total assets	$	1,298,629		$	918,573
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	87,377		$	80,699
Accrued liabilities		115,632			69,494
Payable related to equity investee, net		28,989			—
Income taxes payable		4,248			2,604
Short-term debt		24,878			58,030
Finance lease liabilities		1,376			16,724
Operating lease liabilities		3,850			5,679
Total current liabilities		266,350			233,230
Long-term debt		38,156			77,990
Income taxes payable - long-term		2,158			1,319
Deferred income tax liabilities		28,757			2,448
Finance lease liabilities - long-term		9,634			12,698
Operating lease liabilities - long-term		20,878			30,440
Other long-term liabilities		78,603			44,123
Total liabilities		444,536			402,248
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at June 30, 2022 and 2021		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 33,988 shares and 27,371 shares, respectively at June 30, 2022 and 32,975 shares and 26,350 shares, respectively at June 30, 2021		68			66
Treasury shares at cost; 6,617 shares at June 30, 2022 and 6,625 shares at June 30, 2021		(66,000	)		(66,064	)
Additional paid-in capital		288,951			259,993
Accumulated other comprehensive income		1,080			2,315
Retained earnings		629,994			176,895
Total Alpha and Omega Semiconductor Limited shareholders’ equity		854,093			373,205
Noncontrolling interest		—			143,120
Total equity		854,093			516,325
Total liabilities and equity	$	1,298,629		$	918,573


Alpha and Omega Semiconductor Limited
Reconciliation of Condensed Consolidated GAAP Financial Measures to Non-GAAP Financial Measures
(in thousands, except percentages and per share data)
(unaudited)

	Three Months Ended									Fiscal Year Ended
	June 30, 2022			March 31, 2022			June 30, 2021			June 30, 2022			June 30, 2021

GAAP gross profit	$	63,222		$	72,402		$	60,580		$	268,556		$	204,543
Share-based compensation		1,565			1,282			561			5,125			1,756
Amortization of purchased intangible		811			812			812			3,247			3,247
Production ramp up costs related to the JV Company		—			—			—			—			275
Non-GAAP gross profit	$	65,598		$	74,496		$	61,953		$	276,928		$	209,821
Non-GAAP gross margin as a % of revenue		33.8	%		36.7	%		34.9	%		35.6	%		31.9	%

GAAP operating expense	$	45,082		$	41,170		$	38,217		$	166,518		$	140,467
Share-based compensation		8,305			6,990			4,838			26,199			13,568
Legal costs related to government investigation		84			221			553			1,030			3,066
Non-GAAP operating expense	$	36,693		$	33,959		$	32,826		$	139,289		$	123,833

GAAP operating income	$	18,140		$	31,232		$	22,363		$	102,038		$	64,076
Share-based compensation		9,870			8,272			5,399			31,324			15,324
Amortization of purchased intangible		811			812			812			3,247			3,247
Production ramp up costs related to the JV Company		—			—			—			—			275
Legal costs related to government investigation		84			221			553			1,030			3,066
Non-GAAP operating income	$	28,905		$	40,537		$	29,127		$	137,639		$	85,988
Non-GAAP operating margin as a % of revenue		14.9	%		19.9	%		16.4	%		17.7	%		13.1	%

GAAP net income attributable to AOS	$	15,091		$	31,650		$	19,539		$	453,163		$	58,116
Share-based compensation		9,870			8,272			5,399			31,324			15,324
Amortization of purchased intangible		811			812			812			3,247			3,247
Gain on deconsolidation and changes of the equity interest in the JV Company		—			(4,501	)		—			(395,953	)		—
Equity method investment loss from equity investee		1,493			1,136			—			2,629			—
Production ramp up costs related to the JV Company		—			—			—			—			135
Legal costs related to government investigation		84			221			553			1,030			3,066
Income tax effect of non-GAAP adjustments		(234	)		630			(2	)		33,197			53
Non-GAAP net income attributable to AOS	$	27,115		$	38,220		$	26,301		$	128,637		$	79,941
Non-GAAP net margin attributable to AOS as a % of revenue		14.0	%		18.8	%		14.8	%		16.5	%		12.2	%

GAAP net income attributable to AOS	$	15,091		$	31,650		$	19,539		$	453,163		$	58,116
Share-based compensation		9,870			8,272			5,399			31,324			15,324
Amortization and depreciation		8,588			8,603			13,251			42,851			52,685
Gain on deconsolidation and changes of the equity interest in the JV Company		—			(4,501	)		—			(395,953	)		—
Equity method investment loss from equity investee		1,493			1,136			—			2,629			—
Interest expense, net		895			308			1,476			3,920			6,308
Income tax expense		940			2,902			1,241			39,258			3,935
EBITDAS	$	36,877		$	48,370		$	40,906		$	177,192		$	136,368

GAAP diluted net income per share attributable to AOS	$	0.53		$	1.11		$	0.71		$	16.07		$	2.13
Share-based compensation		0.35			0.29			0.19			1.11			0.56
Amortization of purchased intangible		0.03			0.03			0.03			0.11			0.12
Gain on deconsolidation and changes of the equity interest in the JV Company		—			(0.16	)		—			(14.04	)		—
Equity method investment loss from equity investee		0.05			0.04			—			0.09			—
Production ramp up costs related to the JV Company		—			—			—			—			0.01
Legal costs related to government investigation		0.00			0.01			0.02			0.04			0.11
Income tax effect of non-GAAP adjustments		(0.01	)		0.02			0.00			1.18			0.00
Non-GAAP diluted net income per share attributable to AOS	$	0.95		$	1.34		$	0.95		$	4.56		$	2.93



Shares used to compute GAAP diluted net income per share		28,466			28,423			27,705			28,203			27,272
Shares used to compute Non-GAAP diluted net income per share		28,466			28,423			27,705			28,203			27.272

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