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Allegro MicroSystems(ALGM) - 2024 Q1 - Quarterly Report
ALGMAllegro MicroSystems(ALGM)2023-08-03 16:00
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Financial Performance - Net sales increased to 278.3millioninQ22023,upfrom278.3 million in Q2 2023, up from 217.8 million in Q2 2022, representing a 27.8% year-over-year growth[12] - Gross profit rose to 157.9millioninQ22023,comparedto157.9 million in Q2 2023, compared to 118.4 million in Q2 2022, reflecting a 33.4% increase[12] - Operating income surged to 70.7millioninQ22023,asignificantjumpfrom70.7 million in Q2 2023, a significant jump from 14.7 million in Q2 2022, marking a 380% increase[12] - Net income attributable to Allegro MicroSystems, Inc. reached 60.9millioninQ22023,upfrom60.9 million in Q2 2023, up from 10.2 million in Q2 2022, a 494% increase[12] - Net income for the three months ended June 30, 2023, was 60.889million,comparedto60.889 million, compared to 10.283 million for the same period in 2022[21] - Comprehensive income attributable to Allegro MicroSystems, Inc. reached 60.4millioninQ22023,comparedto60.4 million in Q2 2023, compared to 3.5 million in Q2 2022[15] - Net income attributable to common stockholders for the three months ended June 30, 2023, was 60.889million,comparedto60.889 million, compared to 10.283 million for the same period in 2022[53] - Basic net income per share for the three months ended June 30, 2023, was 0.32,comparedto0.32, compared to 0.05 for the same period in 2022[53] - Diluted net income per share for the three months ended June 30, 2023, was 0.31,comparedto0.31, compared to 0.05 for the same period in 2022[53] Cash and Assets - Cash and cash equivalents stood at 353.4millionasofJune30,2023,slightlyupfrom353.4 million as of June 30, 2023, slightly up from 351.6 million as of March 31, 2023[9] - Total assets increased to 1.23billionasofJune30,2023,comparedto1.23 billion as of June 30, 2023, compared to 1.18 billion as of March 31, 2023[9] - The company's cash and cash equivalents and restricted cash at the end of the period on June 30, 2023, were 362.321million[21]−TotalequityasofJune30,2023,was362.321 million[21] - Total equity as of June 30, 2023, was 1,027.765 million, compared to 763.360millionasofJune24,2022[18]−Thecompany′stotalassetsmeasuredatfairvaluewere763.360 million as of June 24, 2022[18] - The company's total assets measured at fair value were 117,796 million as of June 30, 2023, compared to 129,077millionasofMarch31,2023,withadecreaseinmarketablesecuritiesfrom129,077 million as of March 31, 2023, with a decrease in marketable securities from 19,929 million to 5,222million[35]LiabilitiesandEquity−Totalliabilitiesdecreasedto5,222 million[35] Liabilities and Equity - Total liabilities decreased to 206.3 million as of June 30, 2023, down from 214.3millionasofMarch31,2023[9]−Retainedearningsincreasedto214.3 million as of March 31, 2023[9] - Retained earnings increased to 371.2 million as of June 30, 2023, up from 310.3millionasofMarch31,2023[9]−Tradeaccountsreceivable,net,increasedto310.3 million as of March 31, 2023[9] - Trade accounts receivable, net, increased to 121,506 million as of June 30, 2023, from 111,290millionasofMarch31,2023,withreturnsandsalesallowancesrisingto111,290 million as of March 31, 2023, with returns and sales allowances rising to 37,094 million from 26,269million[37]ResearchandDevelopment−Researchanddevelopmentexpensesgrewto26,269 million[37] Research and Development - Research and development expenses grew to 43.0 million in Q2 2023, up from 33.9millioninQ22022,reflectinga26.933.9 million in Q2 2022, reflecting a 26.9% increase[12] Sales Breakdown - Total net sales for the three months ended June 30, 2023, were 278.293 million, with automotive sales contributing 189.698millionandindustrialsalescontributing189.698 million and industrial sales contributing 68.184 million[31] - Power integrated circuits sales were 103.988million,andmagneticsensorssaleswere103.988 million, and magnetic sensors sales were 174.305 million for the three months ended June 30, 2023[32] - Net sales in the Americas increased to 57,332millioninQ22023,upfrom57,332 million in Q2 2023, up from 34,878 million in Q2 2022, driven by strong growth in the United States (48,824millionvs.48,824 million vs. 28,391 million) and Other Americas (8,508millionvs.8,508 million vs. 6,487 million)[33] - EMEA net sales grew to 55,388millioninQ22023,comparedto55,388 million in Q2 2023, compared to 35,333 million in Q2 2022, with Europe being the primary contributor[33] - Asia net sales reached 165,573millioninQ22023,upfrom165,573 million in Q2 2023, up from 147,542 million in Q2 2022, led by Greater China (62,216millionvs.62,216 million vs. 55,116 million) and South Korea (29,513millionvs.29,513 million vs. 20,979 million)[33] - Total net sales for Q2 2023 were 278,293million,asignificantincreasefrom278,293 million, a significant increase from 217,753 million in Q2 2022[33] Inventory and Property - Inventories grew to 174,170millionasofJune30,2023,upfrom174,170 million as of June 30, 2023, up from 151,301 million as of March 31, 2023, with work in process increasing to 119,630millionfrom119,630 million from 98,836 million[40] - Property, plant, and equipment, net, increased to 285,200millionasofJune30,2023,from285,200 million as of June 30, 2023, from 263,099 million as of March 31, 2023, with machinery and equipment being the largest component at 641,453million[41]GoodwillandIntangibleAssets−Goodwillincreasedto641,453 million[41] Goodwill and Intangible Assets - Goodwill increased to 28,048 million as of June 30, 2023, from 27,691millionasofMarch31,2023,duetoadjustmentsandforeigncurrencytranslation[44]−Intangibleassets,net,were27,691 million as of March 31, 2023, due to adjustments and foreign currency translation[44] - Intangible assets, net, were 51,969 million as of June 30, 2023, with patents being the largest component at 22,105million[45]CreditandFinancing−Thecompanyenteredintoa22,105 million[45] Credit and Financing - The company entered into a 224 million secured revolving credit facility with a 20millionletterofcreditsubfacility,maturingonJune21,2028[47]−Interestonthe2023RevolvingCreditAgreementrangesfromTermSOFRplus1.5020 million letter of credit subfacility, maturing on June 21, 2028[47] - Interest on the 2023 Revolving Credit Agreement ranges from Term SOFR plus 1.50% to 1.75% or the highest of Federal funds rate plus 0.50%, prime lending rate, or one-month Term SOFR plus 1.0% plus 0.50% to 0.75%[48] - The company is required to maintain a Total Net Leverage Ratio of no more than 4.00 to 1.00, which can be increased to 4.50 to 1.00 for four fiscal quarters after an acquisition exceeding 500 million[48] Stock-Based Compensation - Stock-based compensation for the three months ended June 30, 2023, was 11.042million,comparedto11.042 million, compared to 34.136 million for the same period in 2022[21] - Total stock-based compensation expense for the three months ended June 30, 2023, was 11.042million,comparedto11.042 million, compared to 34.136 million for the same period in 2022[60] Tax and Shareholder Information - The company's effective tax rate for the three months ended June 30, 2023, was 10.6%, compared to 16.0% for the same period in 2022[61] - Sanken holds approximately 51.2% of the company's outstanding common stock as of June 30, 2023[62] Customer and Supplier Relationships - One customer accounted for 14.8% of the company's outstanding trade accounts receivable as of June 30, 2023[27] - For the three months ended June 30, 2023, one customer accounted for 12.2% of total net sales[27] - Net sales to Sanken dropped to 0inQ22023from0 in Q2 2023 from 41,709 in Q2 2022, reflecting the termination of the distribution agreement[63] - The company made a one-time payment of 5,000toSankenforthecancellationofexclusivedistributionrightsinJapan[63]−PurchasesfromPSLincreasedto5,000 to Sanken for the cancellation of exclusive distribution rights in Japan[63] - Purchases from PSL increased to 16,102 in Q2 2023 from 14,671inQ22022[63]−TheoutstandingbalanceofthePSLPromissoryNoteswas14,671 in Q2 2022[63] - The outstanding balance of the PSL Promissory Notes was 11,250 as of June 30, 2023[64] - PSL made quarterly payments totaling 1,005,including1,005, including 67 of interest, in Q2 2023[64] - The new Wafer Foundry Agreement with PSL has a three-year term with auto-renewal for subsequent one-year terms[63] - The company will provide a rolling annual forecast for three years, with the first two years being binding under the WFA[63] - Accounts payable to PSL totaled 5,091asofJune30,2023,upfrom5,091 as of June 30, 2023, up from 4,682 as of March 31, 2023[63] - The company allowed a one-time sales return from Sanken of resalable inventory worth $4,200[63] Market Risk - No material changes in market risk exposures since March 31, 2023[101]