Alpha and Omega Semiconductor Limited

Good afternoon. My name is Christine, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Alpha and Omega Semiconductor Fiscal Year and Q4 2019 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star and the number 1 on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. Soyeon Jeong, Investor Relations, you may begin your conference.

Thank you, Christine. Good afternoon, everyone, and welcome to Alpha and Omega Semiconductor's conference call to discuss fiscal 2019 fourth quarter and year-end financial results. I am Soyeon Jeong, Investor Relations representative for the company. With me today are Dr. Mike Chang, our CEO, Yifan Liang, our CFO, and Stephen Cheng, our Senior VP of Marketing. This call is being recorded and broadcasted live over the web and can be accessed for seven days following the call via the LinkedIn Investor Relations section of our website at www.aosmd.com. Yifan will begin with a review of financial results for the fourth quarter and the fiscal year. Then, Mike will review the business highlights, followed by Stephen, who will provide a detailed segment report. After that, Yifan will conclude what guidance for the next quarter. Then we'll have the questions and answer sessions. The earnings release was distributed by Business Wire today, August 7, 2019, after the close of market. The release is also posted on the company's website. Our earnings release and this presentation include certain non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors in conjunction with the GAAP measures that we provide. A reconciliation of these non-GAAP measures to comparable GAAP measures is included in our earnings release. We remind you that during the course of the conference call, we'll make certain forward-looking statements including discussion of business outlook and financial projections. These forward-looking statements are based on management's current expectations and involve risks and uncertainties that could cause actual results to differ materially from such expectations. For more detailed description of these risks and uncertainties, please refer to our recent and subsequent filings with the SEC. We assume no obligations to update the information provided in today's call. Now, I'll turn the call over to our CFO, Yifan, to provide an overview of the fourth fiscal quarter and the fiscal year 2019 financial results. Yifan?

Thank you, Sohyang. Good afternoon, everyone, and thank you for joining us. Revenue for the June quarter was $111.9 million, up two point six percent when compared to the prior quarter and up one point eight percent from the same quarter last year. In terms of product mix, MOSFET revenue was ninety six point four million dollars, up seven point one percent sequentially and up seven point eight percent year over year. PowerAC revenue was thirteen point eight million dollars, down twenty one point eight percent from the prior quarter and down 21.4% from a year ago. Assembly service revenue was $1.7 million as compared to $1.6 million for the prior quarter and $3 million for the same quarter last year. Regarding the segment mix, computer represented 44% of the total revenue, consumer 18.7%, power supply and industrial 20.5%, communications 15.3%, and service 1.5%. For the fiscal year 2019, revenue was $450.9 million, up 7% year over year. Non-GAAP gross margin for the June quarter was 27.4%, as compared to 27% for the prior quarter, and for the same quarter last year. The quarter-over-quarter increase in non-GAAP growth margin was mainly driven by the improved product mix. Non-GAAP growth margin excluded $0.4 million share-based compensation charge for the June quarter as compared to $0.5 million for the prior quarter and for the same quarter last year. Non-GAAP gross margin also excluded $2.6 million of production ramp-up costs related to the Chongqing joint venture for the June quarter as compared to $3.4 million for the prior quarter. For the fiscal year 2019, Non-GAAP gross margin was 28.4% as compared to 26.9% for the last fiscal year, representing an increase of 150 basis points driven mainly by the improved product mix. Non-GAAP operating expenses for the June quarter were $22.6 million compared to $23.2 million for the prior quarter and $21.8 million for the same quarter last year. The quarter-over-quarter decrease in non-GAAP operating expenses was primarily due to the fluctuation of R&D engineering expenses. Non-GAAP operating expenses excluded $2.1 million of share-based compensation charge as compared to $2.6 million for the prior quarter and $2.5 million for the same quarter last year. Non-GAAP operating expenses also excluded $3.9 million of pre-production expenses related to our JV company as compared to $3.6 million in the prior quarter and $5 million for the same quarter last year. Both GAAP and non-GAAP operating expenses included $2.3 million of digital power controller team expenses for the quarter as compared to $2.3 million for the prior quarter and $1.3 million for the same quarter last year. Our digital power controller team continues to engage with customers in product designs and is making steady progress toward our product roadmap. Non-GAAP operating expenses for the fiscal year 2019 were $95.3 million compared to $86 million for the prior fiscal year. Non-GAAP operating expenses excluded $11.2 million of share-based compensation charge and $15.8 million of pre-production expenses related to our JV company in the current fiscal year. as compared to $9.8 million of share-based compensation charge and $7.8 million pre-production expenses in the prior fiscal year. Income tax benefits for the quarter were $.6 million as compared to tax expense of $.6 million for the prior quarter and $.7 million for the same quarter last year. The tax expense for the quarter was offset by the benefits of $1.1 million. This included a $.3 million benefit from the true-up of subsidiary tax provisions to the actual tax returns. We also had a $.8 million benefit from electing the IRS directive method for the R&D credit. Income tax expense for the Fiscal year was $1.3 million. Income tax expense for last fiscal year was $0.7 million, which included $2.7 million of one-time tax benefit from the impact of the US tax reform. Non-GAAP EPS attributable to AOS for the quarter was $0.35 per share, as compared to $0.22 earnings per share for the prior quarter and $0.31 earnings per share for the same quarter last year. Non-GAAP EPS attributable to AOS for the fiscal year was $1.23 as compared to $1.14 earnings per share for the prior fiscal year. AOS continued to generate positive operating cash flow. In the June quarter, We generated $15.2 million operating cash flow attributable to AOS as compared to $9.5 million for the prior quarter and $8.7 million for the same quarter last year. Cash flow used in operations attributable to our JV company was $6.9 million for the June quarter compared to $17.5 million for the prior quarter and $19.5 million for the same quarter last year. Cash flow from operations attributable to AOS for the fiscal year was $65.3 million as compared to $36.9 million for the prior year. Cash flow used in operations attributable to the JV company was $33.9 million for the year compared to $33.4 million for the prior fiscal year. Consolidated EBITDAs for the June quarter was $14.2 million compared to $11.8 million for the prior quarter and $12.8 million for the same quarter last year. EBITDAs attributable to AOS for the quarter was $15.1 million as compared to $13.5 million for the prior quarter and $15.3 million for the same quarter last year. Consolidated EBITDAs for the full fiscal year was $55 million as compared to $56.1 million in the fiscal year 2018. EBITDAs attributable to AOS for the year was $61 million as compared to $58.4 million a year ago. Now let's look at the balance sheet. We completed June quarters with cash and cash equivalent balance of $121.9 million, including $100.7 million at AOS and $21.2 million at our JV company. This compares to $139.1 million at the end of last quarter, which included $90.9 million at AOS and $48.2 million at the JV company. Our cash balance a year ago was $131.5 million, including $88.2 million at AOS and $43.3 million at the JV company. The bank borrowing balance at the end of the June quarter was $140.9 million, including $41 million at AOS and $99.9 million at the JV company. During the June quarter, AOS paid down $2.1 million of loans, and our JV company paid down $1.7 million of its financing lease. During the fiscal year 2019, AOS borrowed a total of $21.7 million of loans and repaid $11.5 million. The JV Company borrowed a total of $45.8 million and repaid $3.5 million. Net treat receivables were for the same quarter last year. Day sales outstanding for the quarter was 24 days compared to 23 days in the prior quarter. Net inventory was $111.6 million at the quarter end, up from from $107.9 million last quarter and from $90.2 million in the prior year. Average days in inventory were 117 days for the quarter as compared to 114 days in the prior quarter. Net property plant and equipment was $409.7 million as compared to $391.6 million last quarter and $331.7 million last year. Capital expenditures were $22.1 million for the quarter, including $4.6 million at AOS and $17.5 million at the JBE company. Capital expenditures for the fiscal year were $112.1 million, including $36 million for AOS, and $76.1 million for the JVE company. Before I turn the call over to Mike, I would like to share the progress at our JVE company. During the June quarter, assembly and test production continued to ramp and the 12-inch fab's product sampling and customer qualification process went well. In July, the 12-inch fab started small mass production. We expect to continue to ramp up phase one in the next 12 months or so. With that, now I would like to turn the call over to our CEO, Dr. Mac Chen, who will provide the business highlights for the quarter. Mike.