Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q3 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants Gary Dvorchak – Managing Director-Blueshirt Group Asia Mike Chang – Chairman of the Board and Chief Executive Officer Stephen Chang – President Yifan Liang – Chief Financial Officer and Corporate Secretary Conference Call Participants Craig Ellis – B. Riley Securities Jeremy Kwan – Stifel, Nicolaus David Williams – Loop Capital Operator Good day and thank you for standing by. Welc ...

Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) Q2 2021 Earnings Conference Call February 4, 2021 5:00 PM ET Company Participants Gary Dvorchak - MD, Asia, The Blueshirt Group Mike Chang - Co-Founder, Chairman & CEO Stephen Chang - President Yifan Liang - CFO & Corporate Secretary Conference Call Participants Craig Ellis - B. Riley Securities David Williams - Loop Capital Markets Jeremy Kwan - Stifel, Nicolaus & Company Operator Ladies and gentlemen, thank you for standing by and welcome to the Alpha and Om ...

Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q1 2021 Earnings Conference Call November 5, 2020 5:00 PM ET Company Participants Gary Dvorchak - IR Mike Chang - Chairman and CEO Stephen Chang - EVP, Product Line Management Yifan Liang - CFO Conference Call Participants Craig Ellis - B. Riley FBR David Williams - Loop Capital Jeremy Kwan - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to Alpha and Omega Semiconductor Financial Results for the Fiscal First Quarter of 2021 C ...

Title of each class Trading Symbol(s) Name of each exchange on which registered Common Shares AOSL The NASDAQ Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10-Q _________________________________ (MARK ONE) ☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ...

Revenue and Financial Performance - Revenue from PC markets accounted for approximately 41.1%, 45.9%, and 41.6% of total revenue for the years ended June 30, 2020, 2019, and 2018 respectively[91]. - Revenue for the fiscal year ended June 30, 2020, was $464.9 million, an increase of 3.5% from $450.9 million in 2019[263]. - Gross profit for the fiscal year 2020 was $102.7 million, down from $115.4 million in 2019, representing a decrease of 11%[263]. - The company reported a net loss attributable to Alpha and Omega Semiconductor Limited of $6.6 million for the fiscal year 2020, compared to a net income of $1.9 million in 2019[263]. - As of June 30, 2020, cash and cash equivalents were $158.5 million, an increase from $121.9 million in 2019[265]. - The total assets of the company as of June 30, 2020, were $792.9 million, up from $739.4 million in 2019, indicating a growth of 7.2%[265]. Market Demand and Trends - The company has experienced increased demand for PC-related products due to the COVID-19 pandemic, but future demand remains uncertain[85]. - There has been a shift in market demand, with increased demand for notebooks, PCs, and gaming devices, while mobile phone product demand has decreased[275]. Operational Challenges - Supply chain challenges have been exacerbated by COVID-19, affecting manufacturing activities and ramp-up timelines for the Chongqing facility[85]. - The company expects difficulties and logistical challenges in operations due to COVID-19 measures, which may reduce workforce productivity and delay product shipping[276]. - The long-term economic impact of the COVID-19 pandemic remains uncertain, with ongoing monitoring and potential alterations to business operations[277]. Strategic Initiatives and Risks - The company is developing a new digital power business, expecting significant startup costs, with no guarantee of short-term revenue offset[88][89]. - Diversification efforts into new market segments may expose the company to new risks and require significant resource management[92][93]. - The company must enhance its management systems and operational capabilities to effectively manage diversification and mitigate risks[94]. - The establishment of the joint venture is expected to enhance growth and profitability, but there are no guarantees of success due to various operational risks[111][112]. Competition and Market Position - The semiconductor industry is highly competitive, with major competitors including Infineon Technologies, ON Semiconductor, and Texas Instruments, which could impact market share and revenue[130][131]. - The company's ability to compete effectively is challenged by competitors with greater resources, brand recognition, and established customer relationships[131][132]. Legal and Regulatory Issues - The U.S. Department of Justice is investigating the company's compliance with export control regulations related to transactions with Huawei, which may negatively impact revenue and financial performance[172]. - The company has not shipped any products to Huawei since December 31, 2019, due to compliance with export control regulations, and is currently cooperating with the U.S. Department of Justice in an ongoing investigation[247]. - The company is exposed to legal proceedings, including a putative class action lawsuit alleging material misstatements regarding its business and operations[248]. Financial Liabilities and Risks - The joint venture company in China has incurred a total debt of $140.7 million as of June 30, 2020, which requires interest payments to service[116]. - The company may face warranty and product liability claims that exceed revenue from affected products, potentially leading to significant costs[123]. - The company's debt agreements include financial covenants that may limit its ability to pursue business opportunities and could lead to default risks[190]. Research and Development - Research and development expenses increased to $51.3 million in 2020, up from $46.4 million in 2019, reflecting a growth of 6%[263]. - The company introduced over 160 new products in the fiscal year ended June 30, 2020, contributing to a total portfolio of approximately 2,300 products[268]. Supply Chain and Manufacturing - The company relies on third-party foundries for manufacturing, with HHGrace supplying 12.7%, 14.1%, and 15.4% of wafers used in products for the fiscal years ended June 30, 2020, 2019, and 2018, respectively[134]. - The company may experience significant production difficulties, including lower manufacturing yields and quality problems, which could adversely affect revenue opportunities[118]. - Manufacturing costs and capacity utilization significantly affect gross margins, with potential wafer capacity constraints impacting the ability to meet customer demand[282]. Intellectual Property - The company owns 823 issued U.S. patents expiring between 2022 and 2039 and has 76 pending patent applications, highlighting its focus on intellectual property protection[163]. Economic and Environmental Factors - The Chinese economy's slowdown could adversely affect business operations and financial results, with significant government involvement and control[202]. - The company’s operations are subject to environmental regulations that could lead to substantial fines or delays in production if compliance is not met[153].

Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q4 2020 Earnings Conference Call August 11, 2020 5:00 PM ET Company Participants Gary Dvorchak - Investor Relations Mike Chang - Chief Executive Officer Stephen Chang - Executive Vice President Yifan Liang - Chief Financial Officer Conference Call Participants Craig Ellis - B. Riley FBR David Williams - Loop Capital Jeremy Kwan - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to the Alpha and Omega Semiconductor Reports Financ ...

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for the period ended March 31, 2020, show a decrease in cash and cash equivalents to $110.2 million and an increase in total assets to $767.3 million, with a net loss attributable to AOS of $6.5 million for the third quarter and for the nine months ended March 31, 2020 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2020, the company's total assets increased to $767.3 million from $739.4 million, driven by property, plant, and equipment, while total liabilities rose to $337.6 million and total equity slightly decreased to $429.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2020 | June 30, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $110,223 | $121,893 | | Inventories | $127,395 | $111,643 | | Total current assets | $291,931 | $295,298 | | Property, plant and equipment, net | $412,318 | $409,737 | | **Total assets** | **$767,295** | **$739,394** | | **Liabilities & Equity** | | | | Total current liabilities | $190,834 | $177,964 | | Total liabilities | $337,566 | $296,105 | | Total equity | $429,729 | $443,289 | | **Total liabilities and equity** | **$767,295** | **$739,394** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2020, revenue decreased 2.0% year-over-year to $106.9 million, resulting in a gross profit of $22.5 million and an increased net loss attributable to AOS of $6.5 million, or ($0.26) per share, due to lower gross profit and higher operating expenses Key Operating Results (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2020 | Three Months Ended Mar 31, 2019 | Nine Months Ended Mar 31, 2020 | Nine Months Ended Mar 31, 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $106,852 | $109,067 | $342,514 | $339,064 | | Gross Profit | $22,459 | $25,629 | $73,797 | $87,742 | | Operating Loss | $(8,619) | $(3,735) | $(12,610) | $(6,062) | | Net Loss attributable to AOS | $(6,495) | $(1,555) | $(6,491) | $(684) | | Diluted EPS | $(0.26) | $(0.06) | $(0.26) | $(0.03) | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2020, net cash provided by operating activities slightly decreased to $22.0 million, while net cash used in investing activities significantly decreased to $47.7 million, and net cash provided by financing activities was $16.5 million Cash Flow Summary (Nine Months Ended Mar 31, in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $22,023 | $23,156 | | Net cash used in investing activities | $(47,655) | $(90,295) | | Net cash provided by financing activities | $16,494 | $77,477 | | **Net (decrease) increase in cash** | **$(9,774)** | **$9,765** | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on the financial statements, covering the impact of COVID-19, lease accounting, the Chongqing JV, debt, share-based compensation, CARES Act tax benefits, and contingencies like the DOJ investigation regarding Huawei - The company identified the COVID-19 pandemic as a significant risk, noting a decline in demand for some products (smartphones, industrial) offset by increases in others (notebooks, PCs, gaming)[22](index=22&type=chunk) - The company is under investigation by the U.S. Department of Justice ("DOJ") regarding compliance with export control regulations related to Huawei, leading to suspended shipments to Huawei after December 31, 2019[122](index=122&type=chunk) - A shareholder class-action lawsuit was filed against the company and its management in March 2020, alleging material misstatements regarding export control practices related to Huawei[123](index=123&type=chunk) - The company recognized a **$1.1 million discrete tax benefit** related to the U.S. CARES Act, which allows for the carryback of net operating losses[107](index=107&type=chunk)[108](index=108&type=chunk) - The Chongqing JV, **51% owned by the company**, commenced limited mass production at its 12-inch wafer fab in July 2019[29](index=29&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, significantly affected by the COVID-19 pandemic, Chongqing JV ramp-up costs, and a government investigation into export controls, resulting in a 2.0% YoY revenue decrease to $106.9 million and a gross margin decline to 21.0% for Q3 FY20, while maintaining sufficient liquidity [Results of Operations](index=44&type=section&id=Results%20of%20Operations) For Q3 FY20, revenue decreased 2.0% YoY to $106.9 million, primarily due to an 11.0% decline in Power IC sales, leading to a gross margin contraction to 21.0% and an operating loss of $8.6 million, partially offset by a $1.0 million tax benefit Revenue by Product Type (Q3 FY20 vs Q3 FY19, in thousands) | Product Type | Q3 2020 | Q3 2019 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Power discrete | $89,932 | $89,936 | $(4) | 0.0% | | Power IC | $15,699 | $17,631 | $(1,932) | (11.0)% | | Packaging and testing services | $1,221 | $1,500 | $(279) | (18.6)% | | **Total Revenue** | **$106,852** | **$109,067** | **$(2,215)** | **(2.0)%** | - Gross margin for Q3 FY20 decreased to **21.0%** from **23.5%** in Q3 FY19, primarily due to low capacity utilization from the commencement of limited mass production in the Chongqing joint venture[173](index=173&type=chunk) - Selling, general and administrative (SG&A) expenses for Q3 FY20 decreased by **$1.0 million** YoY, mainly due to lower pre-production costs at the JV, offset by a **$2.4 million increase** in legal expenses related to the government investigation[177](index=177&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company had $114.5 million in cash, cash equivalents, and restricted cash, believing its current liquidity and cash flows from operations are sufficient for the next twelve months, supported by various debt facilities for operations and capital expenditures - As of March 31, 2020, the company had cash, cash equivalents, and restricted cash of **$114.5 million**, of which **$99.5 million** was held outside the United States[204](index=204&type=chunk) - The company did not repurchase any shares during the nine months ended March 31, 2020, with approximately **$13.4 million** remaining available under the share repurchase program[201](index=201&type=chunk)[241](index=241&type=chunk) - Subsequent to the quarter end, in April 2020, the JV Company entered into new loan agreements totaling **RMB 350 million** (approximately **$50 million**)[185](index=185&type=chunk)[186](index=186&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=54&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes in its market risks since the disclosures in its Annual Report on Form 10-K for the fiscal year ended June 30, 2019 - There have been no material changes in market risks since the last annual report filed on August 23, 2019[217](index=217&type=chunk) [Controls and Procedures](index=54&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that disclosure controls and procedures were effective as of March 31, 2020[218](index=218&type=chunk) - No material changes to internal control over financial reporting were identified during the quarter[219](index=219&type=chunk) [Part II. OTHER INFORMATION](index=55&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=55&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in an ongoing U.S. Department of Justice investigation into export control compliance related to Huawei, leading to suspended shipments, and faces a shareholder class-action lawsuit alleging misstatements regarding these practices, which the company intends to vigorously defend - The U.S. Department of Justice (DOJ) is investigating the company's compliance with export control regulations related to business with Huawei[222](index=222&type=chunk) - As requested by the Department of Commerce (DOC), the company suspended all product shipments to Huawei after December 31, 2019[222](index=222&type=chunk) - A shareholder class-action lawsuit (Gray Action) was filed on March 19, 2020, alleging misstatements regarding the company's export control practices[223](index=223&type=chunk) [Risk Factors](index=55&type=section&id=Item%201A.%20Risk%20Factors) This section highlights material changes to risk factors, including the adverse effects of the COVID-19 pandemic, the ongoing government investigation into export controls, potential U.S.-China tariffs, and disruptions to information technology systems, all posing significant operational and financial challenges - **COVID-19 Pandemic:** The company is experiencing a significant decline in product demand, work stoppages, and logistical challenges due to the pandemic, with the long-term impact remaining highly uncertain[227](index=227&type=chunk)[228](index=228&type=chunk) - **Government Investigation & Export Controls:** The ongoing DOJ investigation and suspension of shipments to Huawei negatively impact revenue and incur significant legal costs, with evolving U.S. export regulations potentially further restricting business with customers in China[234](index=234&type=chunk)[235](index=235&type=chunk) - **Tariffs:** The potential for new or additional U.S. tariffs on goods from China could reduce demand for the company's products or lower gross margins[238](index=238&type=chunk) - **IT System Disruption:** The company's operations are dependent on its IT systems, which are vulnerable to cyber-attacks like ransomware, potentially causing business disruptions and increased costs[239](index=239&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase any shares under its $30.0 million share repurchase program during the three months ended March 31, 2020, leaving approximately $13.4 million available for future repurchases - The company did not repurchase any of its common shares during the three months ended March 31, 2020[241](index=241&type=chunk) - As of March 31, 2020, approximately **$13.4 million** remained available under the company's share repurchase program[241](index=241&type=chunk)