SemiLEDs(LEDS) - 2024 Q4 - Annual Report

Financial Performance - Revenues decreased by 13% from $6.0 million in 2023 to $5.2 million in 2024, primarily due to a $689 thousand decrease in LED components sales[202] - Cost of revenues decreased by 17% from $5.0 million in 2023 to $4.1 million in 2024, mainly due to lower product volumes sold[208] - Gross profit increased from $1.0 million in 2023 to $1.1 million in 2024, with a gross margin percentage of 20% compared to 17% in 2023[209] - Revenues from LED components represented 51% of total revenues in 2024, down from 56% in 2023, indicating a decrease in sales volume[203] - Revenues from lighting products decreased from $321 thousand in 2023 to $212 thousand in 2024, representing 4% of total revenues[204] - Other revenues increased from 37% of total revenues in 2023 to 43% in 2024, driven by service provisions and raw material sales[206] - Net losses attributable to SemiLEDs stockholders were $2.0 million and $2.7 million for the years ended August 31, 2024 and 2023, respectively[243] Cash and Debt Management - Cash and cash equivalents decreased from $2.6 million in 2023 to $1.7 million in 2024[155] - Long-term debt decreased from $6.4 million in 2023 to $3.7 million in 2024[171] - Cash requirements to service debt and contractual obligations for fiscal 2025 are estimated at approximately $3.4 million, expected to be funded through additional equity issuance and loan extensions[244] - Outstanding principal of notes decreased from $1.4 million in 2023 to zero in 2024[248] - Cash and cash equivalents as of August 31, 2024, totaled $1.7 million[243] Customer Concentration - Sales to the three largest customers accounted for 61% of revenues in 2024, up from 53% in 2023[155] - Revenues from the ten largest customers represented 91% of total revenues for both 2024 and 2023[161] - Net revenues from the Netherlands, Taiwan, the United States, and Japan accounted for 91% of total revenues in 2024, compared to 89% in 2023[162] Operational Efficiency - The company plans to focus on high-quality LED module solutions to improve gross margins and operating results[153] - The average selling prices for LED products have been declining, impacting revenues and gross margins[151] - The company is exploring opportunities to sell equipment related to vertical LED chip manufacturing to reduce idle capacity charges[155] - The company anticipates fluctuations in gross margins due to changes in product mix and manufacturing capacity utilization[153] - The company aims to continue innovating in product design and manufacturing efficiencies to meet evolving customer requirements[153] - The company adopted a strategy to adjust its product mix by exiting low-margin product lines to focus on more profitable products[207] Research and Development - Research and development expenses primarily consist of employee salaries, bonuses, and other benefits, with no specific figures provided[167] - Research and development expenses were $1.2 million in 2024, down from $1.4 million in 2023, primarily due to reduced payroll and material costs[210] Expenses and Taxation - Selling, general and administrative expenses are expected to decrease due to cost reduction initiatives, although specific figures are not mentioned[168] - Selling, general and administrative expenses decreased from $3.1 million in 2023 to $2.9 million in 2024, attributed to lower payroll and insurance expenses[211] - The corporate income tax rate in Taiwan is 20%, with an alternative minimum tax rate of 12% applicable[180] - The effective tax rate is expected to be approximately zero for both fiscal years 2024 and 2023 due to incurred losses and full valuation allowance on deferred tax assets[217] - Full valuation allowances on net deferred tax assets were $13.6 million in 2024, down from $23.8 million in 2023, reflecting a decrease of 42.5%[218] Asset Management - A gain of $49 thousand was recognized on the disposal of long-lived assets for the year ended August 31, 2024, compared to zero in 2023[169] - Inventory write-downs totaled $411 thousand for the year ended August 31, 2024, compared to $627 thousand in 2023, primarily due to obsolescence[184] - Inventory write-downs were $411 thousand in 2024 and $627 thousand in 2023, primarily related to finished goods and work in process[208] - No asset impairment was recognized for the year ended August 31, 2024, as expected undiscounted cash flows exceeded carrying value[189] Investment and Financing Activities - Capital expenditures were $123 thousand in 2024, down from $200 thousand in 2023, with future investments planned based on market conditions and customer demand[255] - Net cash used in investing activities decreased from $321 thousand in 2023 to $101 thousand in 2024, attributed to reduced cash used for machinery and equipment purchases[253] - Net cash used in financing activities slightly decreased from $456 thousand in 2023 to $449 thousand in 2024, primarily due to a decrease in long-term debt repayment[254] - Investment loss from unconsolidated entities increased from $1 thousand in 2023 to $3 thousand in 2024, primarily due to increased losses of the unconsolidated entities[214] - Other income, net rose from $1.1 million in 2023 to $1.2 million in 2024, reflecting a growth of approximately 9.1%[215] - Net foreign currency transaction loss was $13 thousand in 2024 compared to $52 thousand in 2023, indicating a reduction of 75%[216]