SemiLEDs Reports Third Quarter Fiscal Year 2017 Financial Results

SemiLEDs Corporation, “SemiLEDs” or the “Company,” a developer and manufacturer of LED chips and LED components, announced its financial results for the third quarter of fiscal year 2017, ended May 31, 2017.

(Image: SemiLEDs)

Revenue for the third quarter of fiscal 2017 was $2.1 million, a 15% increase compared to $1.8 million in the second quarter of fiscal 2017. GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2017 was $1.6 million, or a net loss of $0.45 per diluted share, compared to a loss of $1.1 million, or a net loss of $0.32 per diluted share for the second quarter of fiscal 2017. The GAAP net loss of $1.6 million for the third quarter of fiscal 2017 included impairment loss of $352 thousand pertained to cost method investment.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2017 was $1.2 million, or a net loss of $0.34 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $1.1 million, or a net loss of $0.30 in the second quarter of 2017.

GAAP gross margin for the third quarter of fiscal 2017 was negative 9%, compared with gross margin for the second quarter of fiscal 2017 of breakeven. Operating margin for the third quarter of fiscal 2017 was negative 61%, compared with negative 62% in the second quarter of fiscal 2017. The Company’s cash and cash equivalents was $3.1 million at May 31, 2017, compared to $4.1 million at the end of the second quarter of fiscal 2017. Cash used in operating activities was $0.9 million in the third quarter of fiscal 2017, compared with $0.6 million in the second quarter of fiscal 2017.

It expects revenue for the fourth quarter ending August 31, 2017 to be approximately $2.2 million +/- 10%.

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, horticulture, architectural lighting and entertainment lighting. SemiLEDs sells blue, white, green and UV LED chips.


SEMILEDS CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (In thousands of U.S. dollars)

	May 31,			February 28,
	2017			2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,137		$	4,068
Accounts receivable (including related parties), net		1,277			1,075
Inventories		3,369			3,782
Prepaid expenses and other current assets		537			589
Total current assets		8,320			9,514
Property, plant and equipment, net		8,558			8,588
Intangible assets, net		63			63
Investments in unconsolidated entities		995			1,330
Other assets		361			368
TOTAL ASSETS	$	18,297		$	19,863
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt	$	335		$	327
Accounts payable		837			1,079
Advance receipt toward the convertible note		500			500
Accrued expenses and other current liabilities		5,437			5,242
Total current liabilities		7,109			7,148
Long-term debt, excluding current installments		2,484			2,521
Total liabilities		9,593			9,669
Commitments and contingencies
EQUITY:
SemiLEDs stockholders’ equity
Common stock		—			—
Additional paid-in capital		175,568			175,548
Accumulated other comprehensive income		3,733			3,634
Accumulated deficit		(170,597	)		(169,011	)
Total SemiLEDs stockholders’ equity		8,704			10,171
Noncontrolling interests		—			23
Total equity		8,704			10,194
TOTAL LIABILITIES AND EQUITY	$	18,297		$	19,863

SEMILEDS CORPORATION AND SUBSIDIARIES Unaudited Condensed Consolidated Statements of Operations (In thousands of U.S. dollars and shares, except per share data)

	Three Months Ended
	May 31,			February 28,
	2017			2017
Revenues, net	$	2,111		$	1,830
Cost of revenues		2,297			1,823
Gross profit (loss)		(186	)		7
Operating expenses:
Research and development		257			195
Selling, general and administrative		879			941
Gain on disposals of long-lived assets		(33	)		—
Total operating expenses		1,103			1,136
Loss from operations		(1,289	)		(1,129	)
Other income (expenses):
Impairment loss on investment		(352	)		—
Equity in loss from unconsolidated entities		—			(2	)
Interest expenses, net		(9	)		(8	)
Other income, net		29			20
Foreign currency transaction gain (loss), net		35			(30	)
Total other income (expenses), net		(297	)		(20	)
Loss before income taxes		(1,586	)		(1,149	)
Income tax expense		—			—
Net loss		(1,586	)		(1,149	)
Less: Net loss attributable to noncontrolling interests		—			(7	)
Net loss attributable to SemiLEDs stockholders	$	(1,586	)	$	(1,142	)
Net loss per share attributable to SemiLEDs stockholders:
Basic and diluted	$	(0.45	)	$	(0.32	)
Shares used in computing net loss per share attributable to SemiLEDs stockholders:
Basic and diluted		3,544			3,532

SEMILEDS CORPORATION AND SUBSIDIARIES Unaudited Reconciliation of GAAP to Non-GAAP Measures (In thousands of U.S. dollars, except per share data)

	Three Months Ended
	May 31,			February 28,
Non-GAAP Net Loss	2017			2017
GAAP net loss attributable to SemiLEDs stockholders	$	(1,586	)	$	(1,142	)
Adjustments:
Stock-based compensation expense		43			81
Impairment loss related to cost method investment		352			—
Income tax effect		—			—
Non-GAAP net loss attributable to SemiLEDs stockholders	$	(1,191	)	$	(1,061	)
Diluted net loss per share attributable to SemiLEDs stockholders:
GAAP net loss	$	(0.45	)	$	(0.32	)
Non-GAAP net loss	$	(0.34	)	$	(0.30	)

	Three Months Ended
	May 31,			February 28,
Free Cash Flow	2017			2017
Net cash used in operating activities	$	(858	)	$	(638	)
Less: Capital expenditures		61			20
Total free cash flows	$	(919	)	$	(658	)

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