April 5, 2011

SemiLEDs Reports Second Quarter of Fiscal Year 2011 Financial Results

HSINCHU, Taiwan--(BUSINESS WIRE)-- SemiLEDs Corporation (NASDAQ: LEDS), a developer and manufacturer of LED chips and LED components, today announced its financial results for the second quarter of fiscal year 2011, ended February 28, 2011. Revenue for the second quarter of fiscal 2011 was $10.0 million, a 30% increase compared to $7.7 million in the second quarter of fiscal 2010.

"While we believe the long term market opportunity of LEDs has not changed, the quarter did not meet our expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and our decision to preserve our market share," said Trung Doan, Chairman and CEO of SemiLEDs. "Efforts to improve our gross margin include taking actions to improve our yield, transition to four inch wafers in our Taiwan facility, as well as ramping volume production of our new high brightness LED chip, I-Do, which delivers up to 135 lumens per watt, enabling us to provide our customers with a very cost effective lighting solution."

GAAP net loss for the second quarter of fiscal 2011 was $1.2 million, or a loss of $0.05 per diluted share, compared to GAAP net income of $1.9 million, or $0.04 per diluted share, for the second quarter of fiscal 2010. The Company recorded a foreign currency transaction loss of $0.2 million in the quarter. On a non-GAAP basis, net loss for the second quarter of fiscal 2011 was $0.7 million, or a loss of $0.03 per diluted share, compared to non-GAAP net income of $1.9 million, or $0.04 per diluted share, for the second quarter of fiscal 2010.

GAAP gross margin for the second quarter of fiscal 2011 was 23%, compared with 41% in the second quarter of fiscal 2010. GAAP operating margin for the second quarter of fiscal 2011 was negative 6%, compared with 28% in the second quarter of fiscal 2010. Margins were negatively impacted by previously announced pricing pressure, lower capacity utilization, change in product mix, as well as a shortage in metal organic chemical compound.

The Company's cash and cash equivalents was $102.6 million at the end of the second quarter, an increase over the prior quarter ending balance of $9.9 million. SemiLEDs completed an initial public offering in December 2010, generating net proceeds of $95.5 million, before deducting expenses of the offering of $3.4 million. Cash flow from operations was $1.7 million in the second quarter of fiscal 2011 compared to $1.6 million in the first quarter of fiscal 2011.

Financial Outlook

For its third quarter of fiscal 2011 ending May 31, 2011, SemiLEDs expects revenue in a range of $6.0 million to $7.0 million with GAAP net loss of $2.6 million to $2.0 million, or a loss of $0.10 to $0.07 per diluted share, based on an estimated 27.3 million diluted weighted average shares. GAAP gross margin is expected to be in the range of 25% to 30%.

Conference Call Information

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

For those who are unable to participate in the live conference call, an audio replay will be available until Sunday, April 10, 2011 at 11:00 a.m. Eastern Daylight Time (11:00 p.m. China Standard Time). To access the audio replay, dial 888-203-1112 or 719-457-0820 and enter access code 8826161. A replay of the webcast will be available on the Investors section on the Company's web site approximately two 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. SemiLEDs sells blue, green and ultraviolet (UV) LED chips under the MvpLED brand.

Non-GAAP Financial Measures

SemiLEDs has provided in this press release adjusted financial information that has not been prepared in accordance with generally accepted accounting principles, 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 item required to be included by GAAP: non-cash stock-based compensation charges.

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 presented above 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. These forward-looking statements involve a number of risks and uncertainties that could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Further information regarding these and other risks is included in SemiLEDs' filings with the U.S. Securities and Exchange Commission, including its registration statement on Form S-1, as amended from time to time. SemiLEDs does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

 

SEMILEDS CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except for per share amounts)

           

February 28,
2011

August 31,
2010

 
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $

102,637

 

$ 13,520
Accounts receivable, net of allowance for doubtful accounts of $113 and $101 9,903 7,620
Accounts receivable from related parties 741 73
Inventory 15,182 11,362
Prepaid expenses and other current assets   1,694     2,269  
Total current assets 130,157 34,844
Property, plant and equipment, net 43,242 31,929
Intangible assets, net 472 380
Investments in unconsolidated entities 15,435 15,961
Other assets   907     792  
TOTAL ASSETS $ 190,213   $ 83,906  
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,594 $ 2,814
Accrued liabilities 4,607 4,355
Long-term debt, current portion   3,541     1,752  
Total current liabilities 12,742 8,921
Long-term debt, net of current portion   6,628     3,786  
Total liabilities   19,370     12,707  
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Common stock
Convertible preferred stock issuable in Series A to E
Additional paid-in capital 163,109 70,510
Accumulated other comprehensive income (loss) 3,952 (441 )
Retained earnings   3,782     1,130  
Total stockholders' equity   170,843     71,199  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 190,213   $ 83,906  
 
 

SEMILEDS CORPORATION
Condensed Consolidated Statements of Income (Loss)
(Unaudited)
(In thousands, except for per share amounts)

       

Three Months Ended February 28,

Six Months Ended February 28,

2011   2010 2011   2010
 
Revenues, net $ 9,957 $ 7,684 $ 22,973 $ 14,389
Cost of revenues   7,628     4,515     14,004     9,384  
Gross profit   2,329     3,169     8,969     5,005  
Operating expenses:
Research and development 738 337 1,185 908
Selling, general and administrative   2,198     666     3,485     1,325  
Total operating expenses   2,936     1,003     4,670     2,233  
Income (loss) from operations (607 ) 2,166 4,299 2,772
Other income (expense):
Loss from unconsolidated entities (675 ) (10 ) (897 ) (10 )
Interest income (expense), net 14 (6 ) 2 (11 )
Other income, net 44 44
Foreign currency transaction loss, net   (163 )   (141 )   (739 )   (352 )
Total other expense, net   (780 )   (157 )   (1,590 )   (373 )
Income (loss) before income taxes (1,387 ) 2,009 2,709 2,399
Provision (benefit) for income taxes   (219 )   93     57     120  
Net income (loss) $ (1,168 ) $ 1,916   $ 2,652   $ 2,279  
Net income (loss) attributable to common stock:
Basic $ (1,291 ) $ 303   $ (418 ) $ 30  
Diluted $ (1,291 ) $ 325   $ (418 ) $ 33  
Net income (loss) per share attributable to common stock:
Basic $ (0.05 ) $ 0.04   $ (0.03 ) $ 0.00  
Diluted $ (0.05 ) $ 0.04   $ (0.03 ) $ 0.00  
Shares used in computing net income (loss) per share attributable to common stock:
Basic   25,337     7,028     16,346     6,950  
Diluted   25,337     8,009     16,346     8,012  
 
 
SEMILEDS CORPORATION
Reconciliation of GAAP to Non-GAAP Measure
(Unaudited)
(In thousands, except for per share amounts)
           

Three Months Ended February 28,

Six Months Ended February 28,

2011 2010 2011 2010
 
GAAP net income (loss) $ (1,168 ) $ 1,916 $ 2,652 $ 2,279
Adjustments:
Stock-based compensation expense 433 15 540 19
Income tax effect   -     (1 )   (7 )   (1 )
Non-GAAP net income (loss) $ (735 ) $ 1,930   $ 3,185   $ 2,297  
 
Diluted net income (loss) per share:
GAAP net income (loss) $ (0.05 ) $ 0.04   $ (0.03 ) $ 0.00  
Non-GAAP net income (loss) $ (0.03 ) $ 0.04   $ 0.01   $ 0.00  

SemiLEDs Corporation
David Young, 208-546-9018
Chief Financial Officer
investor@semileds.com
or
Sapphire Investor Relations, LLC
Erica Mannion, 212-766-1800 Ext. 203
Investor Relations
investor@semileds.com

Source: SemiLEDs Corporation

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