SemiLEDs Reports First Quarter Fiscal Year 2024 Financial Results

Rhea-AI Summary

SemiLEDs Corporation (LEDS) reported an increase in revenue for the first quarter of fiscal 2024, reaching $1.6 million compared to $1.5 million in the previous quarter. The GAAP net loss attributable to SemiLEDs stockholders decreased to $598 thousand, or $(0.12) per diluted share, compared to a net loss of $881 thousand, or $(0.18) per diluted share, in the previous quarter. The GAAP gross margin increased to 15%, and the operating margin improved to negative 50%. The company's cash and cash equivalents were $2.3 million at the end of the quarter. SemiLEDs expects revenue for the second quarter to be approximately $1.1 million, with the Chinese New Year affecting operations in February 2024.

Insights

Financial Analyst

The increase in revenue and improvement in gross margin for SemiLEDs Corporation suggest a positive trajectory in operational efficiency. However, the still-present GAAP net loss and decrease in cash and cash equivalents highlight ongoing challenges in achieving profitability. The projected decrease in revenue for the second quarter, potentially due to the Chinese New Year shutdown, may raise concerns about the company's ability to maintain its revenue stream amidst seasonal fluctuations.

Investors should consider the company's cost management strategies and their effectiveness in improving operating margins, which have shown improvement from negative 73% to negative 50%. While this is a significant improvement, it is essential to recognize that a negative operating margin indicates the company is not yet generating enough revenue to cover operating expenses.

Market Research Analyst

The LED industry is highly competitive and subject to rapid technological changes. SemiLEDs' modest revenue increase indicates it is maintaining its market position but does not suggest significant market share gains. The improvement in gross margin from 3% to 15% is a strong indicator of improved product mix or cost reductions, which could be advantageous if sustained over subsequent quarters.

It is also important to note the impact of the seasonal closure due to the Chinese New Year, which is a common occurrence in the region. However, the anticipated revenue dip in the next quarter raises questions about the company's inventory management and ability to mitigate the effects of extended closures.

Economist

The financial results of SemiLEDs must be contextualized within the broader economic environment, particularly the effects of seasonal events such as the Chinese New Year on production and supply chains. The expected revenue decline in the second quarter may reflect not just seasonal production halts but also market demand cycles.

Furthermore, the decreasing cash reserves could limit the company's ability to invest in research and development or expand its operations, potentially impacting its long-term competitiveness. The company's financial health is crucial for its ability to withstand external shocks and invest in growth opportunities, which is particularly pertinent in the fast-evolving LED sector.

HSINCHU, Taiwan--(BUSINESS WIRE)-- SemiLEDs Corporation (NASDAQ: LEDS), “SemiLEDs” or the “Company,” a developer and manufacturer of LED chips and LED components, today announced its financial results for the first quarter of fiscal year 2024, ended November 30, 2023.

Revenue for the first quarter of fiscal 2024 increased to $1.6 million, compared to $1.5 million in the fourth quarter of fiscal 2023. GAAP net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2024 decreased to $598 thousand, or $(0.12) per diluted share, compared to a net loss of $881 thousand, or $(0.18) per diluted share, in the fourth quarter of fiscal 2023.

GAAP gross margin for the first quarter of fiscal 2024 increased to 15%, compared to 3% for the fourth quarter of fiscal 2023. Operating margin for the first quarter of fiscal 2024 was negative 50%, compared with negative 73% for the fourth quarter of fiscal 2023. The Company’s cash and cash equivalents were $2.3 million at November 30, 2023, compared to $2.6 million at the end of the fourth quarter of fiscal 2023.

We expect revenue for the second quarter ending February 29, 2024 to be approximately $1.1 million +/- 10%.

The Chinese New Year (CNY) of 2024 will begin on February 3, 2024. Our office and factory in Chunan will be closed from February 3, 2024 until February 18, 2024 and will resume operations on Monday, February 19, 2024.

About SemiLEDs

SemiLEDs develops, manufactures, and sells LED chips and LED components for general lighting applications, including street lights and commercial, industrial, system 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.

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, revenue expectations for the second quarter ending February 29, 2024, 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 AND SUBSIDIARIES Unaudited Condensed Consolidated Balance Sheets (In thousands of U.S. dollars)
		November 30,				August 31,
		2023				2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	2,322			$	2,572
Restricted cash and cash equivalents			80				78
Accounts receivable (including related parties), net			897				793
Inventories			3,895				4,022
Prepaid expenses and other current assets			145				129
Total current assets			7,339				7,594
Property, plant and equipment, net			3,172				3,233
Operating lease right of use assets			1,362				1,371
Intangible assets, net			100				97
Investments in unconsolidated entities			1,001				974
Other assets			186				186
TOTAL ASSETS		$	13,160			$	13,455
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt		$	5,055			$	5,042
Accounts payable			409				436
Accrued expenses and other current liabilities			2,895				2,711
Other payable to related parties			1,452				1,374
Operating lease liabilities, current portion			88				139
Total current liabilities			9,899				9,702
Long-term debt, excluding current installments			1,237				1,327
Operating lease liabilities, less current portion			1,274				1,232
Total liabilities			12,410				12,261
Commitments and contingencies
EQUITY:
SemiLEDs stockholders’ equity
Common stock			—				—
Additional paid-in capital			184,359				184,246
Accumulated other comprehensive income			3,588				3,550
Accumulated deficit			(187,243	)			(186,645	)
Total SemiLEDs stockholders’ equity			704				1,151
Noncontrolling interests			46				43
Total equity			750				1,194
TOTAL LIABILITIES AND EQUITY		$	13,160			$	13,455

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
		November 30,2023					August 31, 2023
Revenues, net		$		1,650			$		1,453
Cost of revenues				1,405					1,412
Gross profit				245					41
Operating expenses:
Research and development				372					321
Selling, general and administrative				742					787
Gain on disposals of long-lived assets				(50	)				—
Total operating expenses				1,064					1,108
Loss from operations				(819	)				(1,067	)
Other income (expenses):
Investment income				8					(1	)
Interest expenses, net				(88	)				(68	)
Other income, net				259					288
Foreign currency transaction gain (loss), net				44					(32	)
Total other income, net				223					187
Loss before income taxes				(596	)				(880	)
Income tax expense			—					—
Net loss				(596	)				(880	)
Less: Net income (loss) attributable to noncontrolling interests				2					1
Net loss attributable to SemiLEDs stockholders		$		(598	)		$		(881	)
Net loss per share attributable to SemiLEDs stockholders:
Basic and diluted		$		(0.12	)		$		(0.18	)
Shares used in computing net loss per share attributable to SemiLEDs stockholders:
Basic and diluted				4,885					4,903

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240112533556/en/

Christopher Lee

Chief Financial Officer

SemiLEDs Corporation

+886-37-586788

investor@semileds.com

Source: SemiLEDs Corporation

FAQ

What are the financial results for SemiLEDs Corporation (LEDS) for the first quarter of fiscal year 2024?

SemiLEDs Corporation reported a revenue of $1.6 million, a decrease in net loss, an increase in gross margin to 15%, and an improved operating margin.

What is the revenue expectation for the second quarter ending February 29, 2024 for SemiLEDs Corporation (LEDS)?

SemiLEDs Corporation expects revenue for the second quarter to be approximately $1.1 million, with a potential variance of 10%.

How will the Chinese New Year affect operations for SemiLEDs Corporation (LEDS) in February 2024?

The Chinese New Year will result in the closure of SemiLEDs' office and factory in Chunan from February 3, 2024, until February 18, 2024, with operations resuming on Monday, February 19, 2024.