EX-99.1 2 a52546139_ex991.htm EXHIBIT 99.1
Exhibit 99.1


ALPHA AND OMEGA SEMICONDUCTOR LIMITED
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(Unaudited)

On December 1, 2021 (the “Effective Date”), Alpha & Omega Semiconductor (Shanghai) Ltd. (“AOS SH”) and Agape Package Manufacturing (Shanghai) Limited (“APM SH” and, together with AOS SH, the “Sellers”), each a wholly-owned subsidiary of Alpha and Omega Semiconductor Limited (the “Company” or “AOS”), entered into a share transfer agreement with a third-party investor to sell a portion of the Company's equity interest in the joint venture (the “JV Company”) which consists of a power semiconductor packaging, testing and 12-inch wafer fabrication facility in Chongqing, China (the “Transaction”).  The Transaction closed on December 2, 2021 (the “Closing Date”).  The Transaction reduced the Company’s equity interest in the JV Company from 50.9% to 48.8%.  Therefore, the Company no longer has a controlling financial interest in the JV Company and has made a preliminary determination that the JV Company will be deconsolidated from the Company’s consolidated financial statements effective as of the Closing Date.  The assessment as to whether the JV Company will be deconsolidated is ongoing and will be finalized in conjunction with the Company’s financial statement close process for the three months ending December 31, 2021.

The unaudited pro forma consolidated condensed balance sheet data as of September 30, 2021 is presented as if the deconsolidation of the JV Company had occurred on September 30, 2021.  The unaudited pro forma consolidated condensed statements of operations for the year ended June 30, 2021 and the three months ended September 30, 2021 are presented as if the deconsolidation of the JV Company had occurred on July 1, 2020.  The unaudited pro forma consolidated condensed financial information is subject to adjustment and is presented for informational purposes only and does not purport to represent what the Company’s results of operations or financial position would actually have been if deconsolidation had in fact occurred on the dates discussed above.  It also does not project or forecast the Company’s consolidated results of operations or financial position for any future date or period.  Actual results may differ significantly from those reflected here in the unaudited pro forma consolidated financial statements for various reasons, including but not limited to, the differences between the assumptions used to prepare the unaudited pro forma consolidated financial statements and actual results.

The pro forma consolidated condensed financial statements of the Company should be read in conjunction with the historical consolidated financial statements of the Company and the related notes included in its 2021 Annual Report on Form 10-K and other periodic reports the Company filed with the SEC.


ALPHA AND OMEGA SEMICONDUCTOR LIMITED
 
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET
 
(Unaudited in thousands)
 
   
As of September 30, 2021
 
   
As Reported
   
Transaction
Accounting
Adjustments (a)
       
Pro Forma
 
ASSETS
                     
Current assets:
                     
Cash and cash equivalents
 
$
252,453
   
$
(4,070
)
   (b)  
$
248,383
 
Restricted cash
   
342
     
(109
)
       
233
 
Accounts receivable, net
   
39,317
     
(31
)
       
39,286
 
Receivable from equity investee, net
   
     
13,115
     (c)    
13,115
 
     Inventories
   
163,437
     
(53,966
)
       
109,471
 
Other current assets
   
17,518
     
(7,026
)
       
10,492
 
Total current assets
   
473,067
     
(52,087
)
       
420,980
 
Property, plant and equipment, net
   
441,279
     
(266,211
)
       
175,068
 
Operating lease right-of-use assets, net
   
33,437
     
(11,754
)
       
21,683
 
Intangible assets, net
   
12,570
     
         
12,570
 
Equity method investment in equity investee
   
     
391,360
     (d)    
391,360
 
Deferred income tax assets
   
5,216
     
(4,775
)
  (g)
   
441
 
Restricted cash - long-term
   
2,168
     
(2,168
)
       
 
Other long-term assets
   
23,941
     
(1,647
)
       
22,294
 
Total assets
 
$
991,678
   
$
52,718
       
$
1,044,396
 
LIABILITIES AND EQUITY
                           
Current liabilities:
                           
Accounts payable
 
$
81,681
   
$
(32,329
)
     
$
49,352
 
Accrued liabilities
   
92,207
     
(18,253
)
       
73,954
 
Income taxes payable
   
3,004
     
2,192
     (f)    
5,196
 
Short-term debt
   
57,955
     
(49,645
)
       
8,310
 
Finance lease liabilities
   
16,722
     
(16,722
)
       
 
Operating lease liabilities
   
5,537
     
(1,010
)
       
4,527
 
Total current liabilities
   
257,106
     
(115,767
)
       
141,339
 
Long-term debt
   
75,991
     
(62,068
)
       
13,923
 
Income taxes payable - long-term
   
1,332
     
         
1,332
 
Deferred income tax liabilities
   
3,136
     
26,641
     (g)    
29,777
 
Finance lease liabilities - long-term
   
8,516
     
(8,516
)
       
 
Operating lease liabilities - long-term
   
29,342
     
(10,748
)
       
18,594
 
Other long-term liabilities
   
74,265
     
(454
)
       
73,811
 
Total liabilities
   
449,688
     
(170,912
)
       
278,776
 
                             
Equity:
                           
Preferred shares
   
     
         
 
Common shares
   
66
     
         
66
 
Treasury shares at cost
   
(66,052
)
   
         
(66,052
)
Additional paid-in capital
   
264,321
     
         
264,321
 
Accumulated other comprehensive income
   
2,229
     
(1,002
)
   (a)    
1,227
 
Retained earnings
   
200,307
     
365,751
     (e)    
566,058
 
Total Alpha and Omega Semiconductor Limited shareholder's equity
   
400,871
     
364,749
         
765,620
 
Noncontrolling interest
   
141,119
     
(141,119
)
       
 
Total equity
   
541,990
     
223,630
         
765,620
 
Total liabilities and equity
 
$
991,678
   
$
52,718
       
$
1,044,396
 



ALPHA AND OMEGA SEMICONDUCTOR LIMITED
 
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 
(in thousands, except per share data)
 
   
Year Ended June 30, 2021
 
   
As Reported
   
Transaction
Accounting
Adjustments (h)
       
Pro Forma
 
Revenue
 
$
656,902
   
$
(489
)
     
$
656,413
 
Cost of goods sold
   
452,359
     
4,927
         
457,286
 
Gross profit
   
204,543
     
(5,416
)
       
199,127
 
                             
Operating expenses:
                           
Research and development
   
62,953
     
(4,735
)
       
58,218
 
Selling, general and administrative
   
77,514
     
(2,849
)
       
74,665
 
Total operating expenses
   
140,467
     
(7,584
)
       
132,883
 
Operating income
   
64,076
     
2,168
         
66,244
 
                             
Interest expense and other income (loss), net
   
(3,852
)
   
1,553
         
(2,299
)
Gain on deconsolidation of the JV Company
   
     
398,357
    (e)
   
398,357
 
Net income before income taxes
   
60,224
     
402,078
         
462,302
 
Income tax expense
   
3,935
     
33,608
         
37,543
 
Net income before loss from equity method investments
   
56,289
     
368,470
         
424,759
 
Equity method investment loss from equity investee, net of tax
   
     
10,152
         
10,152
 
Net income
   
56,289
     
358,318
         
414,607
 
Net loss attributable to noncontrolling interest
   
(1,827
)
   
1,827
         
 
Net income attributable to Alpha and Omega Semiconductor Limited
 
$
58,116
   
$
356,491
       
$
414,607
 
                             
Net income per common share attributable to Alpha and Omega Semiconductor Limited
                           
Basic
 
$
2.25
               
$
16.08
 
Diluted
 
$
2.13
               
$
15.20
 
                             
Weighted average number of common share attributable to Alpha and Omega Semiconductor Limited used to compute net income per share:
                           
Basic
   
25,786
                 
25,786
 
Diluted
   
27,272
                 
27,272
 



ALPHA AND OMEGA SEMICONDUCTOR LIMITED
 
UNAUDITED PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 
(Unaudited, in thousands except per share data)
 
   
Three Months Ended September 30, 2021
 
   
As Reported
   
Transaction
Accounting
Adjustments (h)
   
Pro Forma
 
Revenue
 
$
187,035
   
$
(379
)
 
$
186,656
 
Cost of goods sold
   
122,468
     
(352
)
   
122,116
 
Gross profit
   
64,567
     
(27
)
   
64,540
 
Operating expenses
                       
Research and development
   
17,812
     
(1,142
)
   
16,670
 
Selling, general and administrative
   
21,806
     
(965
)
   
20,841
 
Total operating expenses
   
39,618
     
(2,107
)
   
37,511
 
Operating income
   
24,949
     
2,080
     
27,029
 
                         
Interest expense and other income (loss), net
   
(2,192
)
   
1,966
     
(226
)
Net income before income taxes
   
22,757
     
4,046
     
26,803
 
Income tax expense
   
1,320
     

   
1,320
 
Net income before loss from equity method investments
   
21,437
     
4,046
     
25,483
 
Equity method investment loss from equity investee, net of tax
   
     
3,632
     
3,632
 
Net income
   
21,437
     
414
     
21,851
 
Net loss attributable to noncontrolling interest
   
(1,987
)
   
1,987
     
 
Net income attributable to Alpha and Omega Semiconductor Limited
 
$
23,424
   
$
(1,573
)
 
$
21,851
 
Net income per common share attributable to Alpha and Omega Semiconductor Limited
                       
Basic
 
$
0.89
           
$
0.83
 
Diluted
 
$
0.85
           
$
0.79
 
Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income per share
                       
Basic
   
26,365
             
26,365
 
Diluted
   
27,638
             
27,638
 



ALPHA AND OMEGA SEMICONDUCTOR LIMITED
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(Unaudited)

(a) This adjustment reflects the deconsolidation of the assets, liabilities, accumulated other comprehensive income, and noncontrolling interests related to the JV Company as of September 30, 2021 in accordance with ASC 810-10-40-4(c) due to a loss control of the JV Company that occurred on December 2, 2021.

(b) This adjustment includes cash consideration from sale of 2.1% equity interest in the JV Company by AOS for approximately $16.9 million.

(c)This adjustment includes the net receivable from the JV Company as of September 30, 2021, which was eliminated as an intercompany balance in consolidation by AOS.

(d) This adjustment reflects the preliminary estimated fair value of the AOS retained investment in the JV Company on December 2, 2021.  This amount was determined using a market approach by multiplying 48.8% equity interest of the JV Company AOS held on December 2, 2021, by the $801.7 million enterprise value of the JV Company determined based upon the sale transaction by AOS to the unrelated investor. The estimated fair value may be subject to change upon finalization of our financial statement close process.

(e) This adjustment reflects the shareholders’ equity and recognizes a proforma estimated gain, net of tax, of $364.8 million upon the deconsolidation of the JV Company.  The pro forma estimated gain, net of tax, was computed based upon the carrying amount of noncontrolling interest, deferred income taxes and the JV Company’s net assets as of September 30, 2021.  The actual gain on deconsolidation, net of taxes, will be determined based upon the carrying amount of the noncontrolling interest, deferred income taxes and the JV Company’s net assets as of December 2, 2021.  We are not able to calculate the actual gain or income tax impact on this gain until we determine the actual balances of our carrying amounts, as applicable as of December 2, 2021, which will be completed during the second fiscal quarter ending December 31, 2021. The actual gain, including related income taxes, may differ materially from the proforma estimated gain, net of tax, shown herein.

The pro forma estimated gain, net of tax, was computed as follows:

(in millions)
     
Cash received (net of transaction costs)
 
$
16.9
 
Plus: Fair value of AOS's retained investment in the JV Company as of December 2, 2021
   
391.4
 
Plus: Carrying amount of noncontrolling interest as of September 30, 2021
   
141.1
 
Less: Carrying value of the JV Company’s net assets as of September 30, 2021
   
151.0
 
       Pro forma net estimated gain on deconsolidation of the JV Company before income taxes
   
398.4
 
         
Less: Deferred long-term income taxes as of September 30, 2021
   
31.4
 
Less: Current pro forma tax provision on deconsolidation of the JV Company
   
2.2
 
Pro forma net estimated gain on deconsolidation of the JV Company
 
$
364.8
 

(f) This adjustment reflects an increase in current tax liabilities of $2.2 million as a result of the net estimated gain recognized on deconsolidation of the JV Company.  The tax effect of the pro forma adjustments was calculated using our historical statutory rates in effect for the periods presented, as applicable.

(g) This adjustment is an increase in deferred taxes of $31.4 million as a result of the net estimated gain recognized on deconsolidation of the JV Company and the Company no longer asserting permanent reinvestment related to its investment in the JV Company.  The tax effect of the pro forma adjustments was calculated using our historical statutory rates in effect for the periods presented, as applicable.

(h) This adjustment reflects the elimination of revenues, expenses and net loss attributable to noncontrolling interest related to the deconsolidation of the JV Company and the recording of investment loss from the JV Company under the equity method for the respective periods presented.