Alpha and Omega Semiconductor Reports Financial Results for the

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Third Quarter of 2022 Ended March 31, 2022

Use of Non-GAAP Financial Measures

To supplement our unaudited consolidated financial statements presented on a basis consistent with U.S. GAAP, we disclose certain non-GAAP financial measures for our historical performance, including non-GAAP gross profit, gross margin, operating income, net loss attributable to AOS, net income, diluted earnings per share ("EPS") and EBITDAS. These supplemental measures exclude, among other items, share-based compensation expenses, legal and profession fees related to government investigation, amortization of purchased intangible, income tax effect of non-GAAP adjustments, and equity method investment loss from equity investee, as well as gain on deconsolidation and changes of equity interest in the JV Company. We also disclose certain non-GAAP financial measures in our guidance for the next quarter, including non-GAAP gross margin, operating expenses and earnings/loss in equity method investment. We believe that these historical and forecast non-GAAP financial measures provide useful information to both management and investors by excluding certain items and expenses that are not indicative of our core operating results or do not reflect our normal business operations. In addition, our management uses non-GAAP measures to compare our performance relative to forecasts and to benchmark our performance externally against competitors. Our use of non-GAAP financial measures has certain limitations in that such non-GAAP financial measures may not be directly comparable to those reported by other companies. For example, the terms used in this press release, such as non-GAAP net income (loss) or non-GAAP operating expenses, do not have a standardized meaning. Other companies may use the same or similarly named measures, but exclude different items, which may not provide investors with a comparable view of our performance in relation to other companies. In addition, we included amount of income tax effect of non-GAAP adjustments in the non-GAAP net income of reconciliation table for all periods presented as the management believes that such non-GAAP presentation provides useful information to investors, even though the amounts are not significant. We seek to compensate for the limitation of our non-GAAP presentation by providing a detailed reconciliation of the non-GAAP financial measures to the most directly comparable U.S. GAAP measures both in the text in this press release and in the tables attached hereto. Investors are encouraged to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures.

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, 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									Nine Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021			March 31, 2022			March 31, 2021

Revenue	$	203,239		$	193,319		$	169,212		$	583,593		$	479,593
Cost of goods sold		130,837			124,954			116,521			378,259			335,630
Gross profit		72,402			68,365			52,691			205,334			143,963
Gross margin		35.6	%		35.4	%		31.1	%		35.2	%		30.0	%

Operating expenses:
Research and development		16,545			16,516			15,557			50,873			45,671
Selling, general and administrative		24,625			24,132			19,338			70,563			56,579
Total operating expenses		41,170			40,648			34,895			121,436			102,250
Operating income		31,232			27,717			17,796			83,898			41,713

Other income (loss), net		263			473			(253	)		720			2,087
Interest income (expense), net		(308	)		(541	)		(1,562	)		(3,025	)		(4,832	)
Gain on deconsolidation of the JV Company		—			399,093			—			399,093			—
Gain (loss) on changes of equity interest in the JV Company, net		4,501			(7,641	)		—			(3,140	)		—
Net income before income taxes		35,688			419,101			15,981			477,546			38,968

Income tax expense		2,902			34,096			1,014			38,318			2,694
Net income before loss from equity method investment		32,786			385,005			14,967			439,228			36,274
Equity method investment loss from equity investee		1,136			—			—			1,136			—
Net income		31,650			385,005			14,967			438,092			36,274
Net gain (loss) attributable to noncontrolling interest		—			2,007			(1,133	)		20			(2,303	)
Net income attributable to Alpha and Omega Semiconductor Limited	$	31,650		$	382,998		$	16,100		$	438,072		$	38,577

Net income per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	1.18		$	14.40		$	0.62		$	16.47		$	1.51
Diluted	$	1.11		$	13.54		$	0.58		$	15.58		$	1.42

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income per share
Basic		26,829			26,593			25,882			26,596			25,631
Diluted		28,423			28,287			27,716			28,116			27,128

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	March 31, 2022			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	323,134		$	202,412
Restricted cash		236			233
Accounts receivable, net		39,207			35,789
Inventories		143,538			154,293
Other current assets		11,698			14,595
Total current assets		517,813			407,322
Property, plant and equipment, net		245,770			436,977
Operating lease right-of-use assets, net		24,971			34,660
Intangible assets, net		10,890			13,410
Equity method investment		379,824			—
Deferred income tax assets		436			5,167
Restricted cash - long-term		—			2,168
Other long-term assets		29,465			18,869
Total assets	$	1,209,169		$	918,573
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	69,758		$	80,699
Accrued liabilities		91,333			69,494
Other payable, equity investee		15,171			—
Income taxes payable		6,733			2,604
Short-term debt		11,332			58,030
Finance lease liabilities		862			16,724
Operating lease liabilities		4,303			5,679
Total current liabilities		199,492			233,230
Long-term debt		53,887			77,990
Income taxes payable - long-term		1,359			1,319
Deferred income tax liabilities		29,192			2,448
Finance lease liabilities - long-term		3,834			12,698
Operating lease liabilities - long-term		22,120			30,440
Other long-term liabilities		72,384			44,123
Total liabilities		382,268			402,248
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at March 31, 2022 and June 30, 2021		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 33,681 shares and 27,063 shares, respectively at March 31, 2022 and 32,975 shares and 26,350 shares, respectively at June 30, 2021		67			66
Treasury shares at cost: 6,618 shares at March 31, 2022 and 6,625 shares at June 30, 2021		(66,006	)		(66,064	)
Additional paid-in capital		276,509			259,993
Accumulated other comprehensive income		1,422			2,315
Retained earnings		614,909			176,895
Total Alpha and Omega Semiconductor Limited shareholder's equity		826,901			373,205
Noncontrolling interest		—			143,120
Total equity		826,901			516,325
Total liabilities and equity	$	1,209,169		$	918,573

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									Nine Months Ended
	March 31, 2022			December 31, 2021			March 31, 2021			March 31, 2022			March 31, 2021

GAAP gross profit	$	72,402		$	68,365		$	52,691		$	205,334		$	143,963
Share-based compensation		1,282			1,709			427			3,560			1,195
Amortization of purchased intangible		812			811			812			2,435			2,435
Production ramp up costs related to joint venture		—			—			—			—			275
Non-GAAP gross profit	$	74,496		$	70,885		$	53,930		$	211,329		$	147,868
Non-GAAP gross margin as a % of revenue		36.7	%		36.7	%		31.9	%		36.2	%		30.8	%

GAAP operating expense	$	41,170		$	40,648		$	34,895		$	121,436		$	102,250
Share-based compensation		6,990			6,838			3,398			17,894			8,730
Legal costs related to government investigation		221			293			563			946			2,513
Non-GAAP operating expense	$	33,959		$	33,517		$	30,934		$	102,596		$	91,007

GAAP operating income	$	31,232		$	27,717		$	17,796		$	83,898		$	41,713
Share-based compensation		8,272			8,547			3,825			21,454			9,925
Amortization of purchased intangible		812			811			812			2,435			2,435
Production ramp up costs related to joint venture		—			—			—			—			275
Legal costs related to government investigation		221			293			563			946			2,513
Non-GAAP operating income	$	40,537		$	37,368		$	22,996		$	108,733		$	56,861
Non-GAAP operating margin as a % of revenue		19.9	%		19.3	%		13.6	%		18.6	%		11.9	%

GAAP net income attributable to AOS	$	31,650		$	382,998		$	16,100		$	438,072		$	38,577
Share-based compensation		8,272			8,547			3,825			21,454			9,925
Amortization of purchased intangible		812			811			812			2,435			2,435
Gain on deconsolidation and changes of the equity interest in the JV Company		(4,501	)		(391,452	)		—			(395,953	)		—
Production ramp up costs related to joint venture		—			—			—			—			135
Legal costs related to government investigation		221			293			563			946			2,513
Equity method investment loss from equity investee		1,136			—			—			1,136			—
Income tax effect of non-GAAP adjustments		630			32,800			64			33,431			55
Non-GAAP net income attributable to AOS	$	38,220		$	33,997		$	21,364		$	101,521		$	53,640
Non-GAAP net margin attributable to AOS as a % of revenue		18.8	%		17.6	%		12.6	%		17.4	%		11.2	%

GAAP net income attributable to AOS	$	31,650		$	382,998		$	16,100		$	438,072		$	38,577
Share-based compensation		8,272			8,547			3,825			21,454			9,925
Gain on deconsolidation and changes of the equity interest in the JV Company		(4,501	)		(391,452	)		—			(395,953	)		—
Equity method investment loss from equity investee		1,136			—			—			1,136			—
Amortization and depreciation		8,603			11,938			13,745			34,263			39,434
Interest expense (income), net		308			541			1,562			3,025			4,832
Income tax expense		2,902			34,096			1,014			38,318			2,694
EBITDAS	$	48,370		$	46,668		$	36,246		$	140,315		$	95,462

GAAP diluted net income per share attributable to AOS	$	1.11		$	13.54		$	0.58		$	15.58		$	1.42
Share-based compensation		0.29			0.30			0.14			0.76			0.37
Gain on deconsolidation changes of the equity interest in the JV Company		(0.16	)		(13.84	)		—			(14.08	)		—
Equity method investment loss from equity investee		0.04			—			—			0.04			—
Production ramp up costs related to joint venture		—			—			—			—			0.01
Legal costs related to government investigation		0.01			0.01			0.02			0.03			0.09
Amortization of purchased intangible		0.03			0.03			0.03			0.09			0.09
Income tax effect of non-GAAP adjustments		0.02			1.16			0.00			1.19			0.00
Non-GAAP diluted net income per share attributable to AOS	$	1.34		$	1.20		$	0.77		$	3.61		$	1.98

Shares used to compute GAAP diluted net income per share		28,423			28,287			27,716			28,116			27,128
Shares used to compute Non-GAAP diluted net income per share		28,423			28,287			27,716			28,116			27.128

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