Alpha and Omega Semiconductor Reports Financial Results for the

Alpha and Omega Semiconductor Reports Financial Results for the Fiscal Third Quarter of 2023 Ended March 31, 2023

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 technologies, product design, and advanced packaging know-how to develop high performance power management solutions. AOS’ portfolio of products targets high-volume applications, including 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 condensed consolidated financial statements are prepared in accordance with U.S. GAAP.

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

	Three Months Ended									Nine Months Ended
	March 31, 2023			December 31, 2022			March 31, 2022			March 31, 2023			March 31, 2022

Revenue	$	132,560		$	188,760		$	203,239		$	529,796		$	583,593
Cost of goods sold		101,774			135,719			130,837			374,841			378,259
Gross profit		30,786			53,041			72,402			154,955			205,334
Gross margin		23.2	%		28.1	%		35.6	%		29.2	%		35.2	%

Operating expenses:
Research and development		22,578			21,468			16,545			65,435			50,873
Selling, general and administrative		22,610			22,788			24,625			69,603			70,563
Total operating expenses		45,188			44,256			41,170			135,038			121,436
Operating income (loss)		(14,402	)		8,785			31,232			19,917			83,898

Other income (loss), net		(513	)		(903	)		263			(1,432	)		720
Interest income (expense), net		5			(397	)		(308	)		(1,000	)		(3,025	)
Gain on deconsolidation of the JV Company		—			—			—			—			399,093
Gain (loss) on changes of equity interest in the JV Company, net		—			—			4,501			—			(3,140	)
Net income (loss) before income taxes		(14,910	)		7,485			35,688			17,485			477,546

Income tax expense		2,517			1,659			2,902			5,550			38,318
Net income (loss) before income (loss) from equity method investment		(17,427	)		5,826			32,786			11,935			439,228
Equity method investment income (loss) from equity investee		(1,480	)		511			(1,136	)		1,533			(1,136	)
Net income (loss)		(18,907	)		6,337			31,650			13,468			438,092
Net loss attributable to noncontrolling interest		—			—			—			—			20
Net income (loss) attributable to Alpha and Omega Semiconductor Limited	$	(18,907	)	$	6,337		$	31,650		$	13,468		$	438,072

Net income (loss) per common share attributable to Alpha and Omega Semiconductor Limited
Basic	$	(0.68	)	$	0.23		$	1.18		$	0.49		$	16.47
Diluted	$	(0.68	)	$	0.21		$	1.11		$	0.46		$	15.58

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share
Basic		27,710			27,511			26,829			27,537			26,596
Diluted		27,710			29,576			28,423			29,576			28,116

Alpha and Omega Semiconductor Limited
Condensed Consolidated Balance Sheets
(in thousands, except par value per share)
(unaudited)
	March 31, 2023			June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	265,946		$	314,352
Restricted cash		218			299
Accounts receivable, net		19,434			65,681
Inventories		179,783			158,040
Other current assets		9,969			11,220
Total current assets		475,350			549,592
Property, plant and equipment, net		358,157			318,666
Operating lease right-of-use assets		22,962			23,674
Intangible assets, net		7,577			10,050
Equity method investment		368,042			378,378
Deferred income tax assets		561			592
Other long-term assets		20,658			17,677
Total assets	$	1,253,307		$	1,298,629
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	54,689		$	87,377
Accrued liabilities		90,029			116,893
Payable related to equity investee, net		18,393			28,989
Income taxes payable		6,651			4,248
Short-term debt		24,877			25,563
Deferred revenue		14,370			—
Finance lease liabilities		851			802
Operating lease liabilities		4,457			3,850
Total current liabilities		214,317			267,722
Long-term debt		41,237			42,486
Income taxes payable - long-term		2,261			2,158
Deferred income tax liabilities		27,764			28,757
Finance lease liabilities - long-term		3,439			3,932
Operating lease liabilities - long-term		19,332			20,878
Other long-term liabilities		57,699			78,603
Total liabilities		366,049			444,536
Equity:
Preferred shares, par value $0.002 per share:
Authorized: 10,000 shares; issued and outstanding: none at March 31, 2023 and June 30, 2022		—			—
Common shares, par value $0.002 per share:
Authorized: 100,000 shares; issued and outstanding: 34,575 shares and 27,858 shares, respectively at March 31, 2023 and 33,988 shares and 27,371 shares, respectively at June 30, 2022		69			68
Treasury shares at cost: 6,717 shares at March 31, 2023 and 6,617 shares at June 30, 2022		(68,605	)		(66,000	)
Additional paid-in capital		321,548			288,951
Accumulated other comprehensive income (loss)		(9,156	)		1,080
Retained earnings		643,402			629,994
Total equity		887,258			854,093
Total liabilities and equity	$	1,253,307		$	1,298,629

Alpha and Omega Semiconductor Limited
Selected Cash Flow Information
( in thousands, unaudited)

	Nine Months Ended March 31,
	2023			2022
Net cash provided by operating activities	$	48,654		$	193,196
Net cash used in investing activities		(90,603	)		(91,142	)
Net cash provided by (used in) financing activities		(6,417	)		16,351
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(121	)		152
Net increase (decrease) in cash, cash equivalents and restricted cash		(48,487	)		118,557
Cash, cash equivalents and restricted cash at beginning of period		314,651			204,813
Cash, cash equivalents and restricted cash at end of period	$	266,164		$	323,370

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, 2023			December 31, 2022			March 31, 2022			March 31, 2023			March 31, 2022

GAAP gross profit	$	30,786		$	53,041		$	72,402		$	154,955		$	205,334
Share-based compensation		1,723			1,748			1,282			5,259			3,560
Amortization of purchased intangible		812			811			812			2,435			2,435
Non-GAAP gross profit	$	33,321		$	55,600		$	74,496		$	162,649		$	211,329
Non-GAAP gross margin as a % of revenue		25.1	%		29.5	%		36.7	%		30.7	%		36.2	%

GAAP operating expense	$	45,188		$	44,256		$	41,170		$	135,038		$	121,436
Share-based compensation		8,709			11,343			6,990			28,860			17,894
Legal costs related to government investigation		304			110			221			556			946
Non-GAAP operating expense	$	36,175		$	32,803		$	33,959		$	105,622		$	102,596

GAAP operating income (loss)	$	(14,402	)	$	8,785		$	31,232		$	19,917		$	83,898
Share-based compensation		10,432			13,091			8,272			34,119			21,454
Amortization of purchased intangible		812			811			812			2,435			2,435
Legal costs related to government investigation		304			110			221			556			946
Non-GAAP operating income (loss)	$	(2,854	)	$	22,797		$	40,537		$	57,027		$	108,733
Non-GAAP operating margin as a % of revenue		(2.2	)%		12.1	%		19.9	%		10.8	%		18.6	%

GAAP net income (loss) attributable to AOS	$	(18,907	)	$	6,337		$	31,650		$	13,468		$	438,072
Share-based compensation		10,432			13,091			8,272			34,119			21,454
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	)		—			(395,953	)
Equity method investment (income) loss from equity investee		1,480			(511	)		1,136			(1,533	)		1,136
Legal costs related to government investigation		304			110			221			556			946
Income tax effect of non-GAAP adjustments		3			122			630			244			33,431
Non-GAAP net income (loss) attributable to AOS	$	(5,876	)	$	19,960		$	38,220		$	49,289		$	101,521
Non-GAAP net margin attributable to AOS as a % of revenue		(4.4	)%		10.6	%		18.8	%		9.3	%		17.4	%

GAAP net income (loss) attributable to AOS	$	(18,907	)	$	6,337		$	31,650		$	13,468		$	438,072
Share-based compensation		10,432			13,091			8,272			34,119			21,454
Amortization and depreciation		11,006			10,804			8,603			31,162			34,263
Gain on deconsolidation and changes of the equity interest in the JV Company		—			—			(4,501	)		—			(395,953	)
Equity method investment (income) loss from equity investee		1,480			(511	)		1,136			(1,533	)		1,136
Interest expense (income), net		(5	)		397			308			1,000			3,025
Income tax expense		2,517			1,659			2,902			5,550			38,318
EBITDAS	$	6,523		$	31,777		$	48,370		$	83,766		$	140,315

GAAP diluted net income (loss) per share attributable to AOS	$	(0.68	)	$	0.21		$	1.11		$	0.46		$	15.58
Share-based compensation		0.38			0.44			0.29			1.15			0.76
Amortization of purchased intangible		0.03			0.03			0.03			0.08			0.09
Gain on deconsolidation and changes of the equity interest in the JV Company		—			—			(0.16	)		—			(14.08	)
Equity method investment (income) loss from equity investee		0.05			(0.02	)		0.04			(0.05	)		0.04
Legal costs related to government investigation		0.01			0.00			0.01			0.02			0.03
Income tax effect of non-GAAP adjustments		0.00			0.01			0.02			0.01			1.19
Non-GAAP diluted net income (loss) per share attributable to AOS	$	(0.21	)	$	0.67		$	1.34		$	1.67		$	3.61

Shares used to compute GAAP diluted net income (loss) per share		27,710			29,576			28,423			29,576			28,116
Shares used to compute Non-GAAP diluted net income (loss) per share		27,710			29,576			28,423			29,576			28,116

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