Alpha and Omega Semiconductor Reports Financial Results for the

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal First Quarter of 2022 Ended September 30, 2021

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, 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.

Condensed Consolidated Statements of Operations
(in thousands, except percentages and per share amounts)
(unaudited)

	Three Months Ended
	September 30, 2021			June 30, 2021			September 30, 2020

Revenue	$	187,035		$	177,309		$	151,551
Cost of goods sold		122,468			116,729			109,028
Gross profit		64,567			60,580			42,523
Gross margin		34.5	%		34.2	%		28.1	%

Operating expenses:
Research and development		17,812			17,282			14,691
Selling, general and administrative		21,806			20,935			17,505
Total operating expenses		39,618			38,217			32,196
Operating income		24,949			22,363			10,327

Interest expense and other income (loss), net		(2,192	)		(1,107	)		(549	)
Income before income taxes		22,757			21,256			9,778

Income tax expense		1,320			1,241			1,011
Net income including noncontrolling interest		21,437			20,015			8,767
Net income (loss) attributable to noncontrolling interest		(1,987	)		476			(807	)
Net income attributable to Alpha and Omega Semiconductor Limited	$	23,424		$	19,539		$	9,574

Net income per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	0.89		$	0.74		$	0.38
Diluted	$	0.85		$	0.71		$	0.36

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income per share
Basic		26,365			26,251			25,340
Diluted		27,638			27,705			26,314

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	September 30, 2021			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	252,453		$	202,412
Restricted cash		342			233
Accounts receivable, net		39,317			35,789
Inventories		163,437			154,293
Other current assets		17,518			14,595
Total current assets		473,067			407,322
Property, plant and equipment, net		441,279			436,977
Operating lease right-of-use assets, net		33,437			34,660
Intangible assets, net		12,570			13,410
Deferred income tax assets		5,216			5,167
Restricted cash - long-term		2,168			2,168
Other long-term assets		23,941			18,869
Total assets	$	991,678		$	918,573
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	81,681		$	80,699
Accrued liabilities		92,207			69,494
Income taxes payable		3,004			2,604
Short-term debt		57,955			58,030
Finance lease liabilities		16,722			16,724
Operating lease liabilities		5,537			5,679
Total current liabilities		257,106			233,230
Long-term debt		75,991			77,990
Income taxes payable - long-term		1,332			1,319
Deferred income tax liabilities		3,136			2,448
Finance lease liabilities - long-term		8,516			12,698
Operating lease liabilities - long-term		29,342			30,440
Other long-term liabilities		74,265			44,123
Total liabilities		449,688			402,248
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at September 30, 2021 and June 30, 2021		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 32,996 shares and 26,373 shares, respectively at September 31, 2021 and 32,975 shares and 26,350 shares, respectively at June 30, 2021		66			66
Treasury shares at cost: 6,623 shares at September 30, 2021 and 6,625 shares at June 30, 2021		(66,052	)		(66,064	)
Additional paid-in capital		264,321			259,993
Accumulated other comprehensive income		2,229			2,315
Retained earnings		200,307			176,895
Total Alpha and Omega Semiconductor Limited shareholder's equity		400,871			373,205
Noncontrolling interest		141,119			143,120
Total equity		541,990			516,325
Total liabilities and equity	$	991,678		$	918,573

Supplemental disclosures of financial information:
(in thousands)

	As of September 30, 2021							As of June 30, 2021
	AOS		CQJV			Consolidated		AOS		CQJV			Consolidated
Cash and cash equivalents	$	231,508	$	20,945		$	252,453	$	164,933	$	37,479		$	202,412
Bank borrowings liabilities	$	22,233	$	136,951	*	$	159,184	$	24,307	$	141,135	*	$	165,442
Inventory	$	109,471	$	53,966		$	163,437	$	100,246	$	54,047		$	154,293
Property, plant and equipment, net	$	175,068	$	266,211		$	441,279	$	174,507	$	262,470		$	436,977

* AOS is not a guarantor of CQJV's (Chongqing Joint Venture) debts.

	Three Months Ended September 30, 2021								Three Months Ended June 30, 2021							Three Months Ended September 30, 2020
	AOS		CQJV				Consolidated		AOS		CQJV			Consolidated		AOS		CQJV				Consolidated
Net cash provided by (used in) operating activities	$	84,384	$	(3,777	)		$	80,607	$	32,646	$	11,574		$	44,220	$	12,701	$	(2,853	)		$	9,848
Purchase of property and equipment, net of government grant	$	15,560	$	8,351			$	23,911	$	25,072	$	7,087		$	32,159	$	7,944	$	3,393			$	11,337
EBITDAS	$	39,866	$	3,424		**	$	45,277	$	33,602	$	7,780	**	$	40,906	$	22,156	$	4,609		**	$	27,572

** CQJV EBITDAS includes amounts attributable to noncontrolling interest.

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
	September 30, 2021			June 30, 2021			September 30, 2020

GAAP gross profit	$	64,567		$	60,580		$	42,523
Share-based compensation		569			561			385
Amortization of purchased intangible		812			812			812
Production ramp up costs related to joint venture		—			—			275
Non-GAAP gross profit	$	65,948		$	61,953		$	43,995
Non-GAAP gross margin as a % of revenue		35.3	%		34.9	%		29.0	%

GAAP operating expense	$	39,618		$	38,217		$	32,196
Share-based compensation		4,066			4,838			2,491
Legal costs related to government investigation		431			553			1,107
Non-GAAP operating expense	$	35,121		$	32,826		$	28,598

GAAP operating income	$	24,949		$	22,363		$	10,327
Share-based compensation		4,635			5,399			2,876
Amortization of purchased intangible		812			812			812
Production ramp up costs related to joint venture		—			—			275
Legal costs related to government investigation		431			553			1,107
Non-GAAP operating income	$	30,827		$	29,127		$	15,397
Non-GAAP operating margin as a % of revenue		16.5	%		16.4	%		10.2	%

GAAP net income attributable to AOS	$	23,424		$	19,539		$	9,574
Share-based compensation		4,635			5,399			2,876
Amortization of purchased intangible		812			812			812
Production ramp up costs related to joint venture		—			—			135
Legal costs related to government investigation		431			553			1,107
Income tax effect of non-GAAP adjustments		1			(2	)		(8	)
Non-GAAP net income attributable to AOS	$	29,303		$	26,301		$	14,496
Non-GAAP net margin attributable to AOS as a % of revenue		15.7	%		14.8	%		9.6	%

GAAP net income attributable to AOS	$	23,424		$	19,539		$	9,574
Share-based compensation		4,635			5,399			2,876
Amortization and depreciation		13,722			13,251			12,489
Interest expense (income), net		2,176			1,476			1,622
Income tax expense		1,320			1,241			1,011
EBITDAS	$	45,277		$	40,906		$	27,572




GAAP diluted net income per share attributable to AOS	$	0.85		$	0.71		$	0.36
Share-based compensation		0.16			0.19			0.11
Production ramp up costs related to joint venture		—			—			0.01
Legal costs related to government investigation		0.02			0.02			0.04
Amortization of purchased intangible		0.03			0.03			0.03
Income tax effect of non-GAAP adjustments		0.00			(0.00	)		(0.00	)
Non-GAAP diluted net income per share attributable to AOS	$	1.06		$	0.95		$	0.55
Shares used to compute Non-GAAP diluted net income per share		27,638			27,705			26,314

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