SemiLEDs Reports Third Quarter Fiscal Year 2024 Financial Results and Engages Financial Advisor

Rhea-AI Summary

SemiLEDs (NASDAQ: LEDS) announced its financial results for Q3 FY 2024, ending May 31, 2024.

Revenue increased to $1.3 million from $886 thousand in the previous quarter. GAAP net loss decreased to $319 thousand, or $(0.06) per diluted share, from a net loss of $559 thousand, or $(0.11) per diluted share in Q2 FY 2024.

The GAAP gross margin improved to 41% from 13% in the last quarter. The operating margin also showed improvement, rising to negative 36% from negative 94% in Q2 FY 2024.

Cash and cash equivalents rose to $1.7 million, up from $1.6 million at the end of the prior quarter. The company expects Q4 FY 2024 revenue to be around $1.0 million +/- 10%.

SemiLEDs has engaged Roth Capital Partners to explore potential strategic alternatives.

Positive

• Revenue increased to $1.3 million (up from $886 thousand in Q2 FY 2024).
• GAAP net loss decreased to $319 thousand (down from $559 thousand in Q2 FY 2024).
• GAAP gross margin improved to 41% (up from 13% in Q2 FY 2024).
• Operating margin improved to negative 36% (up from negative 94% in Q2 FY 2024).
• Cash and cash equivalents increased to $1.7 million (up from $1.6 million at the end of Q2 FY 2024).

Negative

• Expected revenue for Q4 FY 2024 is around $1.0 million +/- 10%, indicating a potential decrease from Q3 FY 2024's $1.3 million.

Insights

Financial Analyst

SemiLEDs Corporation's third quarter fiscal year 2024 financial results show a notable improvement in several key metrics. The revenue increased from $886 thousand in Q2 to $1.3 million in Q3, marking a significant growth. This 46.7% revenue increase is a positive signal for investors as it indicates the company's ability to generate more sales. However, it's essential to consider the context. The company's net loss decreased from $559 thousand to $319 thousand, representing an improvement but still a loss. The gross margin improvement from 13% to 41% is particularly striking. This suggests effective cost management or higher efficiency in production. Operating margin also improved markedly from negative 94% to negative 36%, indicating a significant but still incomplete turnaround.

Despite these improvements, the company remains in a precarious financial position, with cash and cash equivalents of $1.7 million, a slight increase from Q2. Investors should be cautious, as the company's future is uncertain, especially given its ongoing losses and relatively low cash reserves. The engagement of Roth Capital Partners, LLC to explore strategic alternatives introduces potential for significant future changes, such as mergers or acquisitions, which could drastically alter the company's trajectory.

For long-term investors, it's important to watch how these strategic alternatives unfold. In the short term, the company’s forecast for Q4 revenue of approximately $1.0 million +/- 10% suggests a potential decline, which could be seen as a red flag.

Market Research Analyst

From a market perspective, SemiLEDs' financial performance in Q3 shows both progress and ongoing challenges. The revenue increase to $1.3 million is a positive indicator of market demand and sales growth. However, the company's projected revenue for Q4 points to a potential decrease, which may cause concern among investors. The gross margin leap from 13% to 41% suggests that the company may have improved its product pricing strategy or production efficiency.

Engaging Roth Capital Partners, LLC to explore strategic alternatives signals that the company is actively seeking solutions to optimize its market position. This could involve restructuring, strategic partnerships, or even an acquisition. Each of these paths carries its own set of risks and opportunities. For example, a merger could provide the company with the necessary resources to scale, but it could also dilute existing shareholder value.

Investors should keep an eye on any announcements regarding these strategic alternatives as they could significantly impact the company's stock performance. Additionally, understanding the competitive landscape in the LED market and how SemiLEDs positions itself within that space will be important for making informed investment decisions.

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 third quarter of fiscal year 2024, ended May 31, 2024.

Revenue for the third quarter of fiscal 2024 increased to $1.3 million, compared to $886 thousand in the second quarter of fiscal 2024. GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2024 decreased to $319 thousand, or $(0.06) per diluted share, compared to a net loss of $559 thousand, or $(0.11) per diluted share, in the second quarter of fiscal 2024.

GAAP gross margin for the third quarter of fiscal 2024 increased to 41%, compared to 13% for the second quarter of fiscal 2024. Operating margin for the third quarter of fiscal 2024 was negative 36%, compared with negative 94% for the second quarter of fiscal 2024. The Company’s cash and cash equivalents were $1.7 million at May 31, 2024, compared to $1.6 million at the end of the second quarter of fiscal 2024.

We expect revenue for the fourth quarter ending August 31, 2024 to be approximately $1.0 million +/- 10%.

The Company has engaged Roth Capital Partners, LLC as the Company’s financial advisor to explore potential strategic alternatives.

About SemiLEDs

SemiLEDs develops and manufactures 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 fourth quarter ending August 31, 2024, the consideration of potential strategic alternatives, 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. There can be no assurance that SemiLEDs will be able to identify or execute upon any strategic alternatives or, if alternatives are identified, the possible terms of any such strategic agreement. 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)
		May 31,				February 29,
		2024				2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	1,676			$	1,613
Restricted cash and cash equivalents			77				79
Accounts receivable (including related parties), net			668				748
Inventories			3,673				3,751
Prepaid expenses and other current assets			282				245
Total current assets			6,376				6,436
Property, plant and equipment, net			2,788				2,996
Operating lease right of use assets			1,109				1,313
Intangible assets, net			91				96
Investments in unconsolidated entities			957				986
Other assets			190				192
TOTAL ASSETS		$	11,511			$	12,019
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current installments of long-term debt		$	2,848			$	2,859
Accounts payable			203				179
Accrued expenses and other current liabilities			2,665				2,562
Other payable to related parties			952				904
Operating lease liabilities, current			108				132
Total current liabilities			6,776				6,636
Long-term debt, excluding current installments			969				1,110
Operating lease liabilities, less current portion			1,001				1,181
Total liabilities			8,746				8,927
Commitments and contingencies
EQUITY:
SemiLEDs stockholders’ equity
Common stock			—				—
Additional paid-in capital			187,306				187,275
Accumulated other comprehensive income			3,530				3,571
Accumulated deficit			(188,121	)			(187,802	)
Total SemiLEDs stockholders' equity			2,715				3,044
Noncontrolling interests			50				48
Total equity			2,765				3,092
TOTAL LIABILITIES AND EQUITY		$	11,511			$	12,019

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 29,
		2024				2024
Revenues, net		$	1,323			$	886
Cost of revenues			780				774
Gross profit			543				112
Operating expenses:
Research and development			320				251
Selling, general and administrative			696				693
Total operating expenses			1,016				944
Loss from operations			(473	)			(832	)
Other income (expenses):
Investment loss from unconsolidated entities			(3	)			(5	)
Interest expenses, net			(58	)			(65	)
Other income, net			277				377
Foreign currency transaction loss, net			(59	)			(32	)
Total other income, net			157				275
Loss before income taxes			(316	)			(557	)
Income tax expense			—				—
Net loss			(316	)			(557	)
Less: Net income attributable to noncontrolling interests			3				2
Net loss attributable to SemiLEDs stockholders		$	(319	)		$	(559	)
Net loss per share attributable to SemiLEDs stockholders:
Basic and diluted		$	(0.06	)		$	(0.11	)
Shares used in computing net loss per share attributable to SemiLEDs stockholders:
Basic and diluted			4,914				4,905

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240708812696/en/

Christopher Lee

Chief Financial Officer

SemiLEDs Corporation

+886-37-586788

investor@semileds

Source: SemiLEDs Corporation

FAQ

What were SemiLEDs' Q3 FY 2024 revenue results?

SemiLEDs reported Q3 FY 2024 revenue of $1.3 million, up from $886 thousand in Q2 FY 2024.

What was SemiLEDs' GAAP net loss for Q3 FY 2024?

The GAAP net loss for Q3 FY 2024 was $319 thousand, or $(0.06) per diluted share.

How did SemiLEDs' gross margin change in Q3 FY 2024?

SemiLEDs' GAAP gross margin improved to 41% in Q3 FY 2024, up from 13% in Q2 FY 2024.

What are SemiLEDs' expectations for Q4 FY 2024 revenue?

SemiLEDs expects Q4 FY 2024 revenue to be approximately $1.0 million +/- 10%.

Who has SemiLEDs engaged as a financial advisor?

SemiLEDs has engaged Roth Capital Partners as their financial advisor to explore potential strategic alternatives.