Business Outlook for Fiscal Q4 Ending June 30, 2018
The following statements are based on management's current expectations. These statements are forward-looking, and actual results may differ materially. AOS undertakes no obligation to update these statements. The following statements contain non-GAAP financial measures and please see the section below “Use of Non-GAAP Financial Measures” for more information.
The construction of cleanrooms of our Chongqing joint venture was completed during the March quarter. We are now in the process of increasing headcount, installing equipment, conducting qualification processes, and performing trial productions. As previously announced, a substantial portion of our pre-production costs cannot be capitalized under GAAP accounting. Because these expenses do not reflect our normal business and operations, we exclude such pre-production expenses in our non-GAAP operating expenses. The following sets forth our expectations for the fourth quarter of fiscal year 2018:
- Revenue is expected to be in the range of $106 million to $110 million.
- Gross margin is expected to be approximately 26.5% plus or minus 1%. Non-GAAP gross margin is expected to be approximately 26.8% plus or minus 1%. Non-GAAP gross margin excludes $0.3 million of estimated share-based compensation charge.
- Operating expenses are expected to be in the range of $29.3 million plus or minus $1 million. Non-GAAP operating expenses are expected to be in the range of $23.0 million plus or minus $1 million. Both GAAP and non-GAAP operating expenses include $1.6 million to $1.8 million of estimated expenses relating to the development of our digital power team. Non-GAAP operating expenses exclude an estimated share-based compensation charge of approximately $2.3 million and estimated pre-production expenses relating to the Chongqing joint venture of $4.0 million.
- Tax expenses are expected to be in the range of $1.0 million to $1.2 million.
- Loss attributable to noncontrolling interest is expected to be around $2.6 million. On a non-GAAP basis, excluding estimated pre-production expenses, this item is expected to be approximately $0.5 million. The $2.1 million difference is due to the exclusion of estimated pre-production expenses in non-GAAP operating expenses.
Conference Call and Webcast
AOS plans to hold an investor teleconference and live webcast to discuss the financial results for the fiscal third quarter of 2018 ended March 31, 2018 today, May 2, 2018 at 2:00 p.m. PT / 5:00 p.m. ET. To participate in the live call, analysts and investors should dial 877-312-8797 (or 253-237-1194 if outside the U.S.). To access the live webcast and the subsequent replay of the conference call, which will be available for seven days after the live call, go to the "Events & Presentations" section of the company's investor relations website, http://investor.aosmd.com. In addition, a copy of the script of prepared remarks by CEO and CFO at the investor teleconference and webcast is available prior to the call at the Company’s investor relations website.
Forward-Looking Statements
This press release contains forward-looking statements that are based on
current expectations, estimates, forecasts and projections of future
performance based on management's judgment, beliefs, current trends, and
anticipated product performance. These forward-looking statements
include, without limitation, statements relating to projected amount of
revenue, gross margin, operating income (loss), income tax expenses, net
income (loss), noncontrolling interest, and share-based compensation
expenses, non-GAAP gross margin, non-GAAP operating expenses, tax
expenses, and non-GAAP loss attributable to noncontrolling interest, our
ability and strategy to develop new products, including digital power
controller products, the ability to expand our sales, increase our
capacity and achieve sustained growth and profitability, the
pre-production phase of our Chongqing joint venture, the relationship
with key customers, and other information under the section entitled
“Business Outlook for Fiscal Q4 Ending June 30, 2018”. Forward-looking
statements involve risks and uncertainties that may cause actual results
to differ materially from those contained in the forward-looking
statements. These factors include, but are not limited to, the decline
of the PC industry and our ability to respond to such decline;
difficulties and challenges in executing our diversification strategy
into different market segments; ordering pattern from distributors and
seasonality; our ability to introduce or develop new and enhanced
products that achieve market acceptance, the actual product performance
in volume production, the quality and reliability of our product, our
ability to achieve design wins, the general business and economic
conditions, the state of semiconductor industry and seasonality of our
markets, our ability to maintain factory utilization at a desirable
level, our ability to successfully operate our joint venture in China,
and other risks as described in our SEC filings, including our Annual
Report on Form 10-K for the fiscal year ended June 30, 2017 filed on
September 5, 2017. Other unknown or unpredictable factors or underlying
assumptions subsequently proving to be incorrect could cause actual
results to differ materially from those in the forward-looking
statements. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future
results, level of activity, performance, or achievements. You should not
place undue reliance on these forward-looking statements. All
information provided in this press release is as of today's date, unless
otherwise stated, and AOS undertakes no duty to update such information,
except as required under applicable law.
