Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q3 2020 Earnings Conference Call May 5, 2020 5:00 PM ET Company Participants So-Yeon Jeong - Investor Relations Mike Chang - Chief Executive Officer Stephen Chang - Executive Vice President Yifan Liang - Chief Financial Officer Conference Call Participants David Williams - Loop Capital Tore Svanberg - Stifel Craig Ellis - B. Riley FBR Operator Ladies and gentlemen, thank you for standing by, and welcome to the Alpha and Omega Semiconductor Reports Financia ...

Product Development - The company introduced approximately 2,100 power semiconductor products, with 200 new products launched in both fiscal years 2019 and 2018, and an additional 45 new products in the six months ended December 31, 2019[108]. - The company has an extensive patent portfolio consisting of 804 patents and 87 patent applications in the United States, along with 833 foreign patents as of December 31, 2019[108]. Revenue and Sales Performance - Revenue from the personal computing (PC) market accounted for approximately 41.3% and 48.5% of total revenue for the three months ended December 31, 2019 and 2018, respectively[119]. - Total revenue for Q3 2019 was $117.9 million, an increase of $2.9 million, or 2.6%, compared to $114.9 million in Q3 2018[139]. - Total revenue for the six months ended December 31, 2019, was $235.7 million, an increase of $5.7 million, or 2.5%, compared to $230.0 million in the same period last year[140]. - Power discrete sales increased by $8.2 million, while power IC sales decreased by $4.7 million, leading to a net increase in sales[139]. - Sales of power discrete increased by $16.5 million, while power IC sales decreased by $8.4 million during the six-month period[140]. - Average selling price increased by 7.6% compared to the same quarter last year, despite a 4.1% decrease in unit shipments[139]. - Average selling price for power discrete and power IC products increased by 14.1% compared to the same period last year, despite a 9.1% decrease in unit shipments[140]. Financial Performance - Cost of goods sold for Q3 2019 was $93.5 million, representing 79.3% of revenue, compared to 74.3% in Q3 2018[135]. - Gross profit for Q3 2019 was $24.4 million, or 20.7% of revenue, down from 25.7% in Q3 2018[135]. - Operating expenses for Q3 2019 totaled $27.8 million, or 23.6% of revenue, compared to 28.5% in Q3 2018[135]. - Research and development expenses for Q3 2019 were $12.1 million, representing 10.3% of revenue, slightly down from 11.0% in Q3 2018[135]. - Gross profit for the three months ended December 31, 2019, was $24.4 million, a decrease of $5.1 million, or 17.3%, compared to $29.5 million for the same quarter last year[141]. - Gross margin for the six months ended December 31, 2019, decreased by 5.2 percentage points to 21.8% compared to 27.0% for the same period last year[142]. - Research and development expenses for the six months ended December 31, 2019, were $24.5 million, an increase of $0.5 million, or 2.2%, compared to $24.0 million for the same period last year[144]. - Selling, general and administrative expenses for the six months ended December 31, 2019, were $30.8 million, a decrease of $9.6 million, or 23.8%, compared to $40.5 million for the same period last year[146]. Joint Venture and Market Position - The joint venture company recorded a net loss of $3.6 million and $6.4 million attributable to noncontrolling interest during the three and six months ended December 31, 2019[110]. - The company anticipates that the joint venture will enhance market positions in China and drive improvements in capital expenditures[110]. - The company is incurring increased operating expenses due to costs associated with ramping up production at the joint venture and developing a new digital power business[114]. Future Outlook - The company expects a decrease in production during the quarter ending March 31, 2020, due to the coronavirus outbreak and extended Chinese New Year holiday[110]. - The company expects average selling prices of existing products to decline in the future, consistent with historical trends in the industry[117]. Compliance and Investigations - The company is currently under investigation by the U.S. Department of Justice regarding compliance with export control regulations, which may negatively impact financial performance[122]. Cash Flow and Financing - As of December 31, 2019, the company had $111.5 million in cash and cash equivalents, down from $124.3 million as of June 30, 2019[168]. - Net cash used in operating activities for the six months ended December 31, 2019 was $7.7 million, primarily due to a net loss of $6.4 million and net changes in assets and liabilities of $12.4 million[169]. - Net cash used in investing activities for the six months ended December 31, 2019 was $31.2 million, mainly for purchases of property and equipment totaling $32.4 million[173]. - Net cash provided by financing activities for the six months ended December 31, 2019 was $11.0 million, primarily from $33.7 million in borrowings[175]. - The outstanding balance of the lease financing as of December 31, 2019 was approximately $50.3 million[160]. - The company had an unused credit of approximately $30.0 million under a factoring agreement with HSBC as of December 31, 2019[159]. - As of December 31, 2019, the outstanding balance of a loan agreement with China Development Bank was $24.0 million[161]. - The company had $13.4 million remaining available under the share repurchase program as of December 31, 2019[166]. - The company drew down 190 million RMB (approximately $28.2 million) from a loan agreement with The Export-Import Bank of China as of December 31, 2019[162]. - The company was in compliance with all financial covenants as of December 31, 2019[163].

Financial Data and Key Metrics Changes - Revenue for the December quarter was $117.9 million, flat compared to the prior quarter and up 2.6% year-over-year [7] - Non-GAAP gross margin for the December quarter was 28.3%, unchanged from the prior quarter but down from 29.2% year-over-year [8] - Non-GAAP EPS attributable to AOS for the quarter was $0.23, compared to $0.26 for the prior quarter and $0.30 for the same quarter last year [9] - Cash and cash equivalents at the end of the December quarter were $107.2 million, up from $103.1 million at the end of the prior quarter [10] Business Line Data and Key Metrics Changes - MOSFET revenue was $101.5 million, up 0.9% sequentially and up 8.8% year-over-year [7] - Power IC revenue was $14.7 million, down 6.8% from the prior quarter and down 24.4% year-over-year [7] - Computing segment represented 41.3% of total revenue, with a 5.4% sequential increase but a 12.8% year-over-year decrease [21] - Consumer segment represented 18% of total revenue, with a 1.3% sequential decrease but a 13.8% year-over-year increase [22] - Power Supply and Industrial segment accounted for 21.3% of total revenue, down 7.6% sequentially but up 13.5% year-over-year [23] - Communications segment was 17.9% of revenue, down 1.1% sequentially but up 32.5% year-over-year [24] Market Data and Key Metrics Changes - The company anticipates a mid single-digit sequential decrease in the Computing segment due to CPU shortages and the impact of the coronavirus [21] - The Consumer segment is expected to see a moderate seasonal decline in the March quarter [22] - The Power Supply and Industrial segment is expected to experience a double-digit revenue decline in the March quarter due to seasonal low points [23] - The Communications segment is expected to see modest growth in the March quarter driven by recovery in 5G telecom [24] Company Strategy and Development Direction - The company is focused on creating demand with differentiated products across key market segments and accelerating penetration into multiple global brand customers [16] - The company aims to ramp up the Phase 1 of the 12-inch fab to approach the target run rate by the September quarter, subject to market conditions [12][19] - The company is committed to diversifying its customer base and applications to mitigate risks associated with specific customers [33] Management's Comments on Operating Environment and Future Outlook - Management expressed concern over the impact of the coronavirus outbreak on production and supply chains, emphasizing employee safety as a priority [14][15] - The company expects weaker than normal seasonality in the March quarter due to the ongoing challenges [14] - Management remains confident in the long-term growth strategy, despite short-term headwinds [67] Other Important Information - The company is cooperating with federal authorities regarding an investigation into export control practices with Huawei, which is expected to reduce revenue by approximately $4 million to $5 million in the March quarter [26][28] - The company expects to incur $1 million to $2 million in professional fees related to the ongoing investigation [27] Q&A Session Summary Question: Impact of Huawei on Revenue - Management confirmed that the impact of the Huawei situation is a short-term headwind, with an estimated revenue impact of $4 million to $5 million for the March quarter [32][33] Question: OpEx Trends - Management indicated that the OpEx guidance for the March quarter is flattish compared to the December quarter, maintaining investment in strategic initiatives [37][38] Question: Demand and Supply Dynamics - Management noted that while there are production delays due to the coronavirus, demand remains healthy, and they are confident in their ability to meet customer needs [62][63] Question: Joint Venture and Future Revenue - Management reiterated the goal to ramp up the 12-inch fab to meet the target run rate by the September quarter, with a focus on supporting growth in PC and smartphone applications [46][47] Question: Inventory Dynamics - Management stated that channel inventory is at the low end of the target range, and they are closely monitoring the impact of the coronavirus on supply chains [54][56]

Product Development - The company introduced 55 new products during the three months ended September 30, 2019, contributing to a total portfolio of approximately 2,100 products[100]. - The company continues to invest in research and development to develop new technologies and products critical to long-term success[118]. Financial Performance - Total revenue for the three months ended September 30, 2019, was $117.8 million, an increase of $2.7 million, or 2.4%, compared to $115.1 million for the same quarter last year[128]. - Cost of goods sold was $90.9 million for the three months ended September 30, 2019, an increase of $8.4 million, or 10.2%, compared to $82.5 million for the same quarter last year[129]. - Gross profit decreased to $26.9 million, representing a gross margin of 22.9%, down from 28.3% in the same quarter last year[129]. - Research and development expenses were $12.4 million, an increase of $1.0 million, or 8.6%, compared to $11.4 million for the same quarter last year[130]. - Selling, general and administrative expenses decreased to $15.2 million, a reduction of $5.2 million, or 25.4%, compared to $20.4 million for the same quarter last year[132]. - Interest income and other income (loss), net was $(998,000), a decrease of $1.3 million, or 480.9%, compared to $262,000 for the same period last year[133]. - Income tax expense for the three months ended September 30, 2019, was approximately $410,000, compared to $560,000 for the same period in 2018, a decrease of 26.8%[135]. - The effective tax rate for the three months ended September 30, 2019, was estimated at (27.3)%, compared to (159.8)% for the same period in 2018[135]. Operating Expenses - The company is incurring increased operating expenses due to costs associated with ramping up production activities and developing its new digital power business[106]. - The company expects selling, general and administrative expenses to fluctuate in the near future due to cost control measures and reduced pre-production costs[119]. Joint Ventures and Market Position - The company recorded a net loss of $2.9 million attributable to noncontrolling interest in the joint venture company during the September 2019 quarter[102]. - The company anticipates that the joint venture will deliver significant cost savings and enhance market positions in China in the long term[102]. Production and Manufacturing - The company expects to ramp up production at the 12-inch wafer fabrication facility gradually, which commenced limited mass production in July 2019[102]. - The company expects average selling prices of existing products to decline in the future, consistent with historical trends in the industry[109]. Cash Flow and Financing - The net cash used in operating activities for the three months ended September 30, 2019 was $1.2 million, resulting from a net loss of $1.9 million[153]. - The net cash used in investing activities for the three months ended September 30, 2019 was $15.8 million, primarily for purchases of property and equipment[155]. - The net cash used in financing activities for the three months ended September 30, 2019 was $1.1 million, primarily due to repayments of borrowings[157]. - As of September 30, 2019, the company had $105.4 million in cash, cash equivalents, and restricted cash[151]. - The company continues to finance operations and capital expenditures primarily through funds generated from operations and borrowing under various debt agreements[136]. Debt and Obligations - As of September 30, 2019, the outstanding balance of the short-term loan from China Everbright Bank was $0.8 million[137]. - The outstanding balance of the one-year loan from China Everbright Bank was 20 million RMB, equivalent to $2.8 million as of September 30, 2019[138]. - The total outstanding balance of loans from China Merchant Bank was 80 million RMB and 20 million RMB, totaling approximately $14 million as of September 30, 2019[139]. - The outstanding balance of the lease financing agreement was approximately $51.1 million as of September 30, 2019[142]. - The outstanding balance of the loan from The Export-Import Bank of China was 190 million RMB, equivalent to $26.7 million as of September 30, 2019[144]. - The outstanding balance of the term loan from Jireh was $16.6 million as of September 30, 2019[145]. Market Risks and Changes - There have been no material changes in market risks previously disclosed in the Annual Report for the year ended June 30, 2019[164]. - There were no material changes in contractual obligations from those disclosed in the Annual Report for the fiscal year ended June 30, 2019[161]. - Recent accounting pronouncements and their expected effects on operations and financial condition are detailed in the Quarterly Report[162].

Alpha and Omega Semiconductor Ltd (NASDAQ:AOSL) Q1 2020 Results Conference Call November 4, 2019 5:00 PM ET Company Participants So-Yeon Jeong - IR Mike Chang - CEO Yifan Liang - CFO Stephen Chang - EVP Conference Call Participants David Williams - Loop Capital Craig Ellis - B. Riley Jeremy Kwan - Stifel Operator Ladies and gentlemen, thank you for standing by, and welcome to Alpha and Omega Semiconductor Fiscal Q1 2020 Earnings Conference Call. [Operator Instructions] Please be advised that today's confere ...

Growth and Strategy - AOS is an emerging total solution provider in a market exceeding $40 billion[5] - The company projects a revenue CAGR of 13-15% from CY2018 to CY2024[15] - Major growth drivers are expected to contribute for multiple years[28] - The Chongqing JV 12-inch Phase 1 is targeted to reach its run rate by Q1FY2021, supporting approximately $150 million in additional revenue[43, 59] Financial Performance - Q1FY2020 saw a record revenue quarter, marking the 15th consecutive quarter of year-over-year revenue growth, driven by the mobile business[42] - The company targets revenue of $600 million to $1 billion, with a gross margin exceeding 30% and operating expenses around 20%[65] - Non-GAAP gross profit for the quarter ended September 30, 2019, was $33359 million, with a gross margin of 28.3%[68] - Non-GAAP net income attributable to AOS for the quarter ended September 30, 2019, was $6476 million, representing a net margin of 5.5%[68] Balance Sheet - As of September 2019, the company's consolidated cash position was $103.1 million, and total debt was $136.4 million[61] - Inventory was valued at $118.6 million, and fixed assets totaled $400.3 million[61]

Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) AOS designs and supplies a broad portfolio of power semiconductors for high-volume applications globally - AOS is a global supplier of power semiconductors with a portfolio of approximately 2,100 products, targeting high-volume applications like PCs, TVs, LED lighting, and smartphones[6](index=6&type=chunk) - The company holds a significant intellectual property portfolio, with **781 U.S. patents and 816 foreign patents** as of June 30, 2019[6](index=6&type=chunk) - AOS is expanding its manufacturing capabilities through a joint venture in Chongqing, China, which includes a 12-inch wafer fabrication facility that commenced limited mass production in July 2019[9](index=9&type=chunk)[10](index=10&type=chunk) Revenue Concentration from Major Distributors (FY2017-2019) | Distributor | FY2019 Revenue % | FY2018 Revenue % | FY2017 Revenue % | | :--- | :--- | :--- | :--- | | WPG Holdings Limited | 36.4% | 35.2% | 35.8% | | Promate Electronic Co. Ltd. | 28.8% | 28.3% | 26.9% | Research and Development Expenditures (FY2017-2019) | Fiscal Year | R&D Expense (USD millions) | | :--- | :--- | | 2019 | $46.4 | | 2018 | $37.3 | | 2017 | $29.8 | [Item 1A. Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from its Chongqing JV, US-China trade tariffs, PC market cyclicality, and competition - The joint venture with the Chongqing government faces risks such as **high initial costs negatively impacting short-term results**, potential under-utilization of the new facility, and difficulties in integrating operations[79](index=79&type=chunk)[81](index=81&type=chunk) - A significant portion of revenue is derived from the PC market (**45.9% in FY2019**), making the company vulnerable to its continued decline[87](index=87&type=chunk) - Proposed U.S. tariffs on goods from China could reduce demand for the company's products or lead to pricing adjustments that **lower gross margins**[84](index=84&type=chunk) - The company faces intense competition from larger, more established competitors with greater financial and technical resources, such as Infineon, ON Semiconductor, and Texas Instruments[45](index=45&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - Reliance on two major distributors, WPG and Promate, accounted for **65.2% of revenue in FY2019**, posing a concentration risk[132](index=132&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[226](index=226&type=chunk) [Item 2. Properties](index=36&type=section&id=Item%202.%20Properties) The company operates key owned and leased facilities in the US and Asia for R&D, manufacturing, and sales - The company's main U.S. office is a **57,000 sq. ft. facility** in Sunnyvale, CA, used for R&D, marketing, sales, and administration[227](index=227&type=chunk) - AOS owns a **245,000 sq. ft. wafer fabrication facility** in Hillsboro, Oregon[227](index=227&type=chunk) - The company operates two significant packaging and testing facilities in Shanghai, China, with a combined floor space of **over 455,000 sq. ft.**[227](index=227&type=chunk) - The new joint venture facility in Chongqing, China, is a large-scale property for wafer fabrication and assembly/testing, with a land size of approximately **2.46 million sq. ft.**[227](index=227&type=chunk) [Item 3. Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - As of the report date, the company is not a party to any material legal proceedings[230](index=230&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[231](index=231&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on NASDAQ; it retains earnings and has an active share repurchase program - The company's common shares are traded on the NASDAQ Global Select Market under the symbol **AOSL**[233](index=233&type=chunk) - No cash dividends have ever been declared or paid, and the company intends to **retain future earnings** for business operations[234](index=234&type=chunk) - During fiscal year 2019, the company repurchased 111,509 shares for approximately **$1.5 million** at an average price of $13.43 per share[239](index=239&type=chunk) - As of June 30, 2019, **$13.4 million** was still available for future repurchases under the approved program[239](index=239&type=chunk) [Item 6. Selected Financial Data](index=42&type=section&id=Item%206.%20Selected%20Financial%20Data) The company presents five-year financial data showing revenue growth but a decline in net income for FY2019 Selected Consolidated Statements of Operations Data (in thousands, except per share data) | Fiscal Year Ended June 30, | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $450,920 | $421,553 | $383,337 | $335,661 | $327,935 | | **Gross Profit** | $115,378 | $111,928 | $91,821 | $65,822 | $60,482 | | **Operating Income (Loss)** | $(7,020) | $8,420 | $13,144 | $1,510 | $(4,218) | | **Net Income (Loss) attributable to AOS** | $1,861 | $14,263 | $13,829 | $(2,928) | $(7,763) | | **Diluted EPS** | $0.08 | $0.57 | $0.56 | $(0.13) | $(0.29) | Selected Consolidated Balance Sheet Data (in thousands) | As of June 30, | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Cash and cash equivalents** | $121,893 | $131,535 | $115,708 | $87,774 | $106,085 | | **Working capital** | $117,334 | $130,532 | $130,566 | $118,450 | $147,351 | | **Total assets** | $739,394 | $667,049 | $398,408 | $318,505 | $347,904 | | **Total AOS shareholders' equity** | $291,024 | $278,594 | $270,770 | $242,142 | $276,639 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=44&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue grew in FY2019, but gross margin and operating income declined due to JV ramp-up costs [Results of Operations](index=48&type=section&id=Results%20of%20Operations) FY2019 revenue grew 7.0%, but higher operating expenses led to an operating loss of $7.0 million Revenue by Product Type (FY2019 vs FY2018) | Product Type | FY2019 Revenue (M) | FY2018 Revenue (M) | Change (%) | | :--- | :--- | :--- | :--- | | Power discrete | $371.8 | $342.1 | +8.7% | | Power IC | $70.2 | $67.1 | +4.7% | | Packaging and testing services | $8.9 | $12.3 | -28.0% | | **Total** | **$450.9** | **$421.6** | **+7.0%** | - Gross margin decreased from **26.6% in FY2018 to 25.6% in FY2019**, primarily due to production ramp-up costs related to the Chongqing joint venture[285](index=285&type=chunk) - Research and development expenses **increased by 24.3% to $46.4 million** in FY2019, mainly due to increased headcount to ramp up the digital power business and higher product prototyping expenses[287](index=287&type=chunk)[288](index=288&type=chunk) - Selling, general and administrative expenses **increased by 14.8% to $76.0 million** in FY2019, largely due to costs for the new 12-inch fab facility in the JV Company and increased headcount[290](index=290&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains adequate liquidity despite significant capital expenditures for its JV Company Cash Flow Summary (in thousands) | Fiscal Year Ended June 30, | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Net cash provided by operating activities** | $31,421 | $3,480 | $42,648 | | **Net cash used in investing activities** | $(112,435) | $(194,127) | $(55,585) | | **Net cash provided by financing activities** | $75,099 | $206,953 | $40,809 | - Cash and cash equivalents decreased to **$121.9 million** at the end of FY2019 from $131.5 million at the end of FY2018[315](index=315&type=chunk) - Capital expenditures for property and equipment in FY2019 totaled **$112.1 million**, with a significant portion ($76.0 million) allocated to the JV Company in Chongqing[321](index=321&type=chunk) - As of June 30, 2019, net assets of China subsidiaries restricted from transfer amounted to approximately **$209.5 million**, or 64.4% of total consolidated net assets[313](index=313&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Key accounting policies involve revenue recognition, inventory reserves, and income tax valuation - The company adopted ASC 606 on July 1, 2018, which **changed the timing of revenue recognition** for two U.S.-based distributors from point-of-sale by the distributor to point-of-shipment to the distributor[333](index=333&type=chunk)[335](index=335&type=chunk) - Inventory reserves are established based on periodic reviews of inventory levels against sales forecasts, historical usage, and aging, which involves **significant estimation**[337](index=337&type=chunk) - The company maintains a **valuation allowance against certain deferred tax assets**, particularly for state R&D credits and net operating losses of the JV Company, if it is more likely than not they will not be realized[341](index=341&type=chunk)[563](index=563&type=chunk) - Share-based compensation expense is calculated using models like Black-Scholes and Monte Carlo, which require **subjective assumptions** about stock price volatility and expected term[345](index=345&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to foreign currency, interest rate, and commodity price risks - The company's primary market risks are foreign currency exchange rates (especially USD vs. RMB), interest rate fluctuations on its debt, and commodity price changes (e.g., gold)[350](index=350&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) - A hypothetical **10% increase in interest rates** could result in an additional **$0.6 million** in annual interest expense[351](index=351&type=chunk) - A hypothetical **10% change in the cost of raw materials** like gold would impact net earnings by approximately **$0.4 million**[352](index=352&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements and supplementary data for FY2019 - This section includes the full audited consolidated financial statements and supplementary data, including reports from independent registered public accounting firms BDO USA, LLP and Grant Thornton LLP[354](index=354&type=chunk)[365](index=365&type=chunk)[388](index=388&type=chunk) Selected Quarterly Data for Fiscal Year 2019 (in thousands, except per share data) | Quarter Ended | Sep 30, 2018 | Dec 31, 2018 | Mar 31, 2019 | Jun 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $115,072 | $114,925 | $109,067 | $111,856 | | **Gross Profit** | $32,611 | $29,502 | $25,629 | $27,636 | | **Net Income (Loss) attributable to AOS** | $2,416 | $(1,545) | $(1,555) | $2,545 | | **Diluted EPS** | $0.10 | $(0.06) | $(0.06) | $0.10 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants - None reported[357](index=357&type=chunk) [Item 9A. Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2019[358](index=358&type=chunk) - Management's assessment concluded that **internal control over financial reporting was effective** as of June 30, 2019, based on the COSO framework[360](index=360&type=chunk) - The independent auditor, BDO USA, LLP, provided an **unqualified opinion** on the effectiveness of the company's internal control over financial reporting[361](index=361&type=chunk)[365](index=365&type=chunk) [Item 9B. Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[371](index=371&type=chunk) Part III [Items 10-14](index=66&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Details on governance and compensation are incorporated by reference from the 2019 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is **incorporated by reference** from the forthcoming 2019 Proxy Statement[371](index=371&type=chunk)[372](index=372&type=chunk)[373](index=373&type=chunk) Part IV [Item 15. Exhibits and Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits filed with the annual report - This part includes the consolidated financial statements, financial statement schedules, and a list of exhibits filed with the Form 10-K[378](index=378&type=chunk)[379](index=379&type=chunk) - Key exhibits include the company's bye-laws, equity incentive plans, material contracts with foundries and distributors, and certifications from the CEO and CFO[609](index=609&type=chunk)[610](index=610&type=chunk)[611](index=611&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q4 2019 was $111.9 million, up 2.6% sequentially and up 1.8% year-over-year [7] - Non-GAAP gross margin for Q4 was 27.4%, compared to 27.0% in the prior quarter and the same quarter last year [9] - Non-GAAP EPS for Q4 was $0.35, compared to $0.22 in the prior quarter and $0.31 year-over-year [12] - For the fiscal year 2019, revenue was $450.9 million, up 7% year-over-year [8] Business Line Data and Key Metrics Changes - MOSFET revenue was $96.4 million, up 7.1% sequentially and up 7.8% year-over-year, while Power IC revenue was $13.8 million, down 21.8% sequentially and down 21.4% year-over-year [7] - Computing segment represented 44.0% of total revenue, down 5.1% sequentially but up 2.3% year-over-year [22] - Consumer segment accounted for 18.7% of total revenue, increasing 1.3% sequentially but flat year-over-year [24] - Power Supply and Industrial segment represented 20.5% of total revenue, up 8.1% sequentially and up 3.7% year-over-year [25] - Communications segment accounted for 15.3% of revenue, up 25.4% sequentially and up 10.4% year-over-year [26] Market Data and Key Metrics Changes - The company noted a robust design-in pipeline and strong design wins, particularly in mobile and home appliance applications [19] - The demand for battery protection products in the Communications segment is rising, driven by increasing smartphone battery capacities [26] Company Strategy and Development Direction - The company aims to achieve a target of $600 million in annual revenue by calendar 2021, with a focus on diversifying its product portfolio and customer base [19][20] - The production ramp of the Chongqing Joint Venture is expected to align with the company's growth strategy, with small mass production starting in July 2019 [17][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market challenges, including trade tensions and economic uncertainty [19] - The company anticipates continued growth in the Consumer segment, particularly in home appliances, and expects a modest growth in the overall Consumer segment [24] Other Important Information - The company generated $15.2 million in operating cash flow for Q4, compared to $9.5 million in the prior quarter [13] - Cash and cash equivalents at the end of Q4 were $121.9 million, down from $139.1 million in the prior quarter [15] Q&A Session Summary Question: Can you provide more color on the $600 million target? - Management clarified that the target run rate of $600 million is expected to be approached by the June 2020 quarter, focusing on capacity readiness and technology [30][33] Question: What is the status of channel inventory health? - Management indicated that channel inventory is healthy, within the target of 2 to 3 months, and adjustments are being made to manage production according to customer demand [41] Question: How is the demand environment in China? - Management noted that demand is dynamic, with some pull-ins and push-outs due to trade tensions, but overall, the situation is being managed diligently [42][43] Question: What is the expected revenue contribution from digital power initiatives next year? - The expected revenue contribution from digital power initiatives is projected to be between $5 million to $10 million [46] Question: How will gross margins track towards the 30% target? - Management expects gross margins to gradually increase to the 28% to 29% range as new products are introduced, with a target of 30% margin when reaching $600 million in revenue [55][57]

Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q3 2019 Results Earnings Conference Call May 2, 2019 5:00 PM ET Company Participants So Yeon Jeong - Investor Relations Yifan Liang - Chief Financial Officer and Corporate Secretary Mike Chang - Co Founder, Chairman, Chief Executive Officer and President Stephen Chang - Senior Vice President of Marketing Conference Call Participants Jeremy Kwan - Stifel, Nicolaus Operator Good afternoon. My name is Jason, and I will be your conference operator today. At th ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10-Q _________________________________ (MARK ONE) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission file number 001-34717 __________________________ Alpha and Omega Semiconduct ...