News Article
SemiLEDs revenue suffers due to competitive pricing
The quarter did not meet the firm’s expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and the firm’s decision to preserve its market share.
SemiLEDs, a developer and manufacturer of LED chips and LED components, has 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,” he continued.
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.
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.
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%.
SemiLEDs discussed these financial results in a conference call. An audio replay will be available until Sunday, April 10, 2011 and may be accessed by dialling
888-203-1112 or 719-457-0820
and entering access code 8826161. A replay of the webcast will be available on the Investors section on the Company’s web site and will remain available for approximately 90 calendar days.
