SemiLEDs Reports Second Quarter of Fiscal Year 2013 Financial Results

SemiLEDs Reports Second Quarter of Fiscal Year 2013 Financial Results

HSINCHU, Taiwan--(BUSINESS WIRE)-- SemiLEDs Corporation (NAS: LEDS) , "SemiLEDs" or the "Company," a developer and manufacturer of LED chips and LED components, today announced its financial results for the second quarter of fiscal year 2013, ended February 28, 2013.

Revenue for the second quarter of fiscal 2013 was $4.8 million, a 39% decrease compared to $7.9 million in the second quarter of fiscal 2012. GAAP net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2013 was $6.0 million, or a net loss of $0.22 per diluted share, compared to GAAP net loss attributable to SemiLEDs stockholders of $7.1 million, or a net loss of $0.26 per diluted share, for the second quarter of fiscal 2012.


"Demand has improved; however, the pricing environment for the general lighting market remains challenging," said Trung Doan, Chairman, President and CEO. "I believe we are on the right track and this is a turning point for SemiLEDs. From an execution standpoint, we need to focus on profitable markets and control cost," concluded Doan.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2013 was $5.4 million, or a net loss of $0.19 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $6.1 million, or a net loss of $0.22 per diluted share, for the second quarter of fiscal 2012.

GAAP gross margin for the second quarter of fiscal 2013 was negative 69%, compared with gross margin for the second quarter of fiscal 2012 of negative 9%. Operating margin for the second quarter of fiscal 2013 was negative 145% compared with negative 73% in the second quarter of fiscal 2012. Gross margin for the second quarter of fiscal 2013 was negatively impacted by reduction in revenues, a decrease in the average selling price of LED chips, and an excess capacity charges for our LED chips.

The Company's cash and cash equivalents were $43.9 million at the end of the second quarter of fiscal 2013, compared to the first quarter fiscal 2013, the Company had cash and cash equivalents of $39.3 million and short-term investments consisting of time deposits with initial maturities of greater than three months but less than one year of $8.3 million. Cash used in operating activities was $4.2 million in the second quarter of fiscal 2013.

Conference Call Information

SemiLEDs will discuss these financial results in a conference call today at 8:00 a.m. Eastern Daylight Time (5:00 a.m. Pacific Daylight Time, 8:00 p.m. China Standard Time). The public is invited to listen to a live webcast of the conference call on the Investors section of the Company's website at http://investors.semileds.com/events.cfm.

A replay of the webcast will be available on the Investors section of the Company's website approximately three hours after the conclusion of the call and remain available for approximately 90 calendar days.

About SemiLEDs

SemiLEDs develops and manufactures LED chips and LED components primarily for general lighting applications, including street lights and commercial, industrial and residential lighting, along with specialty industrial applications such as ultraviolet (UV) curing, medical/cosmetic, counterfeit detection, and horticulture. SemiLEDs sells blue, green and UV LED chips.

Non-GAAP Financial Measures

SemiLEDs has provided in this press release adjusted financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. SemiLEDs uses these non-GAAP financial measures internally in analyzing its financial results and believes they are useful to investors, as a supplement to, but not as a substitute for, GAAP measures, in evaluating the Company's operational performance. SemiLEDs believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating operating results and trends, and in comparing its financial results with other companies in SemiLEDs' industry, many of which present similar non-GAAP financial measures to investors. The historical non-GAAP financial measures presented above exclude the following items required to be included by GAAP: non-cash stock-based compensation charges and the related tax effect, if any. In addition to the non-GAAP financial measures discussed above, SemiLEDs also uses free cash flow as a measure of operating performance. Free cash flow represents cash provided by operating activities less capital expenditures.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of historic non-GAAP financial measures to GAAP results has been provided in the financial statement tables included in this press release.

Forward Looking Statements

This press release contains statements that may constitute "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, any projections of future revenues, income, margins or other financial information; any statements about historical results that may suggest trends for SemiLEDs' business; any statements of the plans, strategies and objectives of management for future operations; any statements of expectation or belief regarding recovery of the LED industry, market opportunities and other future events or technology developments; any statements regarding SemiLEDs' position to capitalize on any market opportunities; and any statements of assumptions underlying any of the foregoing. These forward-looking statements are based on current expectations, estimates, forecasts and projections of future SemiLEDs' or industry performance based on management's judgment, beliefs, current trends and market conditions and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. SemiLEDs' Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") and other SemiLEDs filings with the SEC (which you may obtain for free at the SEC's website at http://www.sec.gov) discuss some of the important risks and other factors that may affect SemiLEDs' business, results of operations and financial condition. SemiLEDs undertakes no intent or obligation to publicly update or revise any of these forward looking statements, whether as a result of new information, future events or otherwise, except as required by law.

SEMILEDS CORPORATION

Unaudited Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars)

       

February 28,
2013

August 31,
2012

ASSETS

CURRENT ASSETS:
Cash and cash equivalents $ 43,886 $ 47,228
Short-term investments 8,831
Accounts receivable, net 3,385 4,759
Accounts receivable from related parties, net 47 157
Inventories 10,175 13,016
Prepaid expenses and other current assets   1,490     1,130  
Total current assets 58,983 75,121
Property, plant and equipment, net 43,382 46,642
Intangible assets, net 1,420 1,552
Goodwill 1,082 1,072
Investments in unconsolidated entities 4,331 1,821
Other assets   1,576     1,326  
TOTAL ASSETS $ 110,774   $ 127,534  

LIABILITIES AND EQUITY

CURRENT LIABILITIES:
Notes payable to banks $ $ 1,585
Current installments of long-term debt 1,572 967
Accounts payable 3,357 5,768
Accrued expenses and other current liabilities 4,144 4,969
Deferred income, current portion   51     51  
Total current liabilities 9,124 13,340
Long-term debt, excluding current installments 5,716 4,953
Deferred income, net of current portion   365     390  
Total liabilities   15,205     18,683  
Commitments and contingencies
EQUITY:
SemiLEDs stockholders' equity
Common stock
Additional paid-in capital 168,050 167,070
Accumulated other comprehensive income 6,205 5,179
Accumulated deficit   (79,345 )   (64,431 )
Total SemiLEDs stockholders' equity 94,910 107,818
Noncontrolling interests   659     1,033  
Total equity   95,569     108,851  
TOTAL LIABILITIES AND EQUITY $ 110,774   $ 127,534  
 

SEMILEDS CORPORATION

Unaudited Condensed Consolidated Statements of Operations

(In thousands of U.S. dollars and shares, except per share data)

       
Three Months Ended Six Months Ended
February 28,   February 29, February 28,   February 29,
2013 2012 2013 2012
Revenues, net $ 4,830 $ 7,905 $ 11,057 $ 14,652
Cost of revenues   8,183     8,627     17,698     16,196  
Gross loss   (3,353 )   (722 )   (6,641 )   (1,544 )
Operating expenses:
Research and development 1,034 2,023 2,257 3,712
Selling, general and administrative   2,620     3,045     6,283     6,950  
Total operating expenses   3,654     5,068     8,540     10,662  
Loss from operations (7,007 ) (5,790 ) (15,181 ) (12,206 )
Other income (expenses):
Equity in losses from unconsolidated entities, net (23 ) (1,176 ) (98 ) (2,702 )
Interest income, net 29 12 34 16
Other income, net 54 47 106 95
Foreign currency transaction gain (loss), net   766     (407 )   (160 )   (348 )
Total other income (expenses), net   826     (1,524 )   (118 )   (2,939 )
Loss before income taxes (6,181 ) (7,314 ) (15,299 ) (15,145 )
Income tax expense   3         3      
Net loss (6,184 ) (7,314 ) (15,302 ) (15,145 )
Less: Net loss attributable to noncontrolling interests   (193 )   (200 )   (388 )   (310 )
Net loss attributable to SemiLEDs stockholders $ (5,991 ) $ (7,114 ) $ (14,914 ) $ (14,835 )
Net loss attributable to SemiLEDs common stockholders:
Basic and diluted $ (5,991 ) $ (7,114 ) $ (14,914 ) $ (14,835 )
Net loss per share attributable to SemiLEDs common stockholders:
Basic and diluted $ (0.22 ) $ (0.26 ) $ (0.54 ) $ (0.54 )
Shares used in computing net loss per share attributable to SemiLEDs common stockholders:
Basic and diluted   27,531     27,383     27,513     27,343  
 

SEMILEDS CORPORATION

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(In thousands of U.S. dollars, except per share data)

       
Three Months Ended Six Months Ended
February 28,   February 29, February 28,   February 29,
Non-GAAP Net Loss 2013 2012 2013 2012
 
GAAP net loss attributable to SemiLEDs stockholders $ (5,991 ) $ (7,114 ) $ (14,914 ) $ (14,835 )
Adjustments:
Stock-based compensation expense 641 965 977 1,616
Income tax effect                
Non-GAAP net loss attributable to SemiLEDs stockholders $ (5,350 ) $ (6,149 ) $ (13,937 ) $ (13,219 )
 
Diluted net loss per share attributable to SemiLEDs common stockholders:
GAAP net loss $ (0.22 ) $ (0.26 ) $ (0.54 ) $ (0.54 )
Non-GAAP net loss $ (0.19 ) $ (0.22 ) $ (0.51 ) $

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