10 Nov Transphorm Announces Fiscal 2023 Second Quarter Financial Results and Provides Business Update
Product Revenue up 38% from Fiscal 2022 Q2
Company to Host Webcast Today at 5:00 p.m. ET
GOLETA, Calif.–(BUSINESS WIRE)–Transphorm, Inc. (NASDAQ: TGAN)—a pioneer in and global supplier of high-reliability, high-performance gallium nitride (GaN) power conversion products, announced today financial results for its 2023 fiscal second quarter ended September 30, 2022.
Fiscal 2023 Second Quarter and Recent Highlights
(All comparisons are to the second quarter of fiscal 2022, unless otherwise noted.)
- Revenue of $3.7 million, compared to revenue of $11.3 million in the prior year, which included one-time licensing revenue of $8.0 million. Excluding the one-time licensing revenue, revenue was up 11% on a year-over-year basis.
- Product revenue was up 38% compared to the same period in fiscal 2022.
- Improved supply from Japan Epi reactors and completed acquisition of additional MOCVD reactors.
- Increased shipments on previously announced Fortune 100 laptop adapter win, a top 3 world-wide laptop manufacturer, and secured new Fortune 100 laptop adapter design-win.
- Strengthened senior operations, sales and marketing teams with the addition of seasoned industry leaders.
- Secured ARPA-E program to innovate on Transphorm’s unique bi-directional GaN technology that replaces 2-4 silicon devices with a single FQS GaN in applications like microinverters and motor drives.
- Secured approval for Shenzhen, China WFOE (Wholly Foreign Owned Enterprise) to enhance local customer support, sales, field applications and marketing.
- Expanded package offerings by adding Industry Standard PQFN products, which enable pin-to-pin with multiple sources. This complements Transphorm’s existing High Performance PQFN products, both validated to deliver superior results versus competing GaN.
Transphorm President, COO, and co-founder, Primit Parikh, commented, “We continue to maintain our leadership position in high power GaN which comprised over 65% of our fiscal Q2 revenue, while winning marquee new designs in fast chargers and adapters, enabled by superior and easy to interface SuperGaN® FETs. We are also executing on our stated plan of increasing capacity, with notable improvements from our Japan Epi reactors, giving us confidence we can better address demand.“
Mr. Parikh added, “We exceeded our fiscal Q2 revenue target and remain well-positioned to resume revenue growth of 20% sequentially in fiscal Q3, with the opportunity to achieve 25%, despite persistent macroeconomic headwinds. We continue to aggressively pursue new customer wins and are fulfilling our existing backlog, while managing both internal and external supply chain constraints. With our wide range of product offerings and notably high power GaN, we continue to be well-positioned for growth across multiple market segments – including consumer, data centers, blockchain, and industrial. We also continue to pursue near-term opportunities in two-wheel and three-wheel EVs and longer-term opportunities in the automotive EV market.”
“This quarter saw solid execution and lower operational burn despite reduced revenue. The Company remains well-positioned with a solid balance sheet to continue to invest in staffing and capital equipment to realize its short and long-term objectives”, stated Cameron McAulay, Chief Financial Officer.
Fiscal 2023 Second Quarter Financial Results
Revenue for the second quarter of fiscal 2023 was $3.7 million, compared to $11.3 million for the second quarter of fiscal 2022. Excluding $8.0 million of one-time licensing revenue in the second quarter of fiscal 2022, revenue for the second quarter of fiscal 2023 was up $0.4 million, or 11%, year-over-year. Product revenue reflected yet another strong quarter from ramping shipments of GaN products for a broad range of power conversion applications, with a 38% increase from the second quarter of fiscal 2022.
Operating expenses on a GAAP basis were $5.9 million in the second quarter of fiscal 2023, compared to $6.1 million in the prior quarter and $5.1 million in the second quarter of fiscal 2022. Second quarter of fiscal 2023 operating expenses consisted of R&D expenses of $1.8 million and SG&A expenses of $4.1 million. On a non-GAAP basis, operating expenses in the second quarter of fiscal 2023 were $5.1 million, compared with non-GAAP operating expenses of $5.4 million in the prior quarter and $4.5 million in the second quarter of fiscal 2022.
GAAP net profit (loss) for the second quarter of fiscal 2023 was ($6.0) million, or ($0.10) per share, compared to GAAP net loss of ($5.4) million, or ($0.10) per share, in the prior quarter, and a GAAP net profit of $6.0 million, or $0.15 per share, in the second quarter of fiscal 2022. On a non-GAAP basis, net loss for the second quarter of fiscal 2023 was ($5.1) million, or ($0.09) per share, compared to non-GAAP net loss of ($4.5) million, or ($0.08) per share, in the prior quarter, and a non-GAAP net profit of $3.6 million, or $0.09 per share, in the second quarter of fiscal 2022.
Cash, cash equivalents and restricted cash as of September 30, 2022 were $34.0 million.
Webcast
Transphorm will host a webcast today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) to review the Company’s 2023 fiscal second quarter results and provide a business update. The webcast can be accessed at: https://edge.media-server.com/mmc/p/bp5xfkie.
Upon registration, telephone participants will receive a confirmation email detailing how to join the audio version of the webcast, including the dial-in number and a unique registrant ID. The live webcast will be available via Transphorm’s Investor Relations website at https://www.transphormusa.com/en/investors/.
About Transphorm
Transphorm, Inc., a global leader in the GaN revolution, designs and manufactures high performance and high reliability GaN semiconductors for high voltage power conversion applications. Having one of the largest Power GaN IP portfolios of more than 1,000 owned or licensed patents, Transphorm produces the industry’s first JEDEC and AEC-Q101 qualified high voltage GaN semiconductor devices. The Company’s vertically integrated device business model allows for innovation at every development stage: design, fabrication, device, and application support. Transphorm’s innovations are moving power electronics beyond the limitations of silicon to achieve over 99% efficiency, 40% more power density and 20% lower system cost. Transphorm is headquartered in Goleta, California and has manufacturing operations in Goleta and Aizu, Japan. For more information, please visit www.transphormusa.com. Follow us on Twitter @transphormusa and WeChat @ Transphorm GaN.
Non-GAAP Financial Measures
This press release includes and makes reference to certain non-GAAP financial measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
Transphorm believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Transphorm believes that these non-GAAP financial measures provide additional insight into Transphorm’s ongoing performance and core operational activities and has chosen to provide these measures for more consistent and meaningful comparison between periods. These measures should only be used to evaluate Transphorm’s results of operations in conjunction with the corresponding GAAP measures. The non-GAAP results exclude the effect of stock-based compensation, depreciation, amortization, change in fair value of promissory note and other income in joint venture.
A reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this press release.
Forward-Looking Statements
This press release contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company’s ability to manage supply chain constraints, expand its manufacturing capacity and meet demand, industry acceptance of GaN technology, and the Company’s pipeline and future anticipated growth. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “plan,” “believe,” “intend,” “look forward,” and other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: risks related to Transphorm’s operations, such as additional financing requirements and access to capital; competition; the ability of Transphorm to protect its intellectual property rights; and other risks set forth in the Company’s filings with the Securities and Exchange Commission. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
|
Transphorm, Inc. Condensed Consolidated Balance Sheets (in thousands) |
|||||||
|
|
September 30, 2022 |
|
March 31, 2022 |
||||
|
Assets |
|
|
|
||||
|
Current assets: |
|
|
|
||||
|
Cash and cash equivalents |
$ |
33,496 |
|
|
$ |
33,435 |
|
|
Restricted cash |
|
500 |
|
|
|
500 |
|
|
Accounts receivable |
|
1,617 |
|
|
|
2,558 |
|
|
Inventory |
|
8,966 |
|
|
|
6,330 |
|
|
Prepaid expenses and other current assets |
|
2,068 |
|
|
|
1,971 |
|
|
Total current assets |
|
46,647 |
|
|
|
44,794 |
|
|
Property and equipment, net |
|
5,328 |
|
|
|
1,649 |
|
|
Operating lease right-of-use assets |
|
3,312 |
|
|
|
— |
|
|
Goodwill |
|
996 |
|
|
|
1,180 |
|
|
Intangible assets, net |
|
469 |
|
|
|
617 |
|
|
Investment in joint venture |
|
414 |
|
|
|
143 |
|
|
Other assets |
|
784 |
|
|
|
263 |
|
|
Total assets |
$ |
57,950 |
|
|
$ |
48,646 |
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Current liabilities: |
|
|
|
||||
|
Accounts payable and accrued expenses |
$ |
4,492 |
|
|
$ |
3,588 |
|
|
Deferred revenue |
|
263 |
|
|
|
346 |
|
|
Accrued interest |
|
184 |
|
|
|
180 |
|
|
Accrued payroll and benefits |
|
1,331 |
|
|
|
1,171 |
|
|
Operating lease liabilities |
|
532 |
|
|
|
— |
|
|
Revolving credit facility |
|
12,000 |
|
|
|
— |
|
|
Total current liabilities |
|
18,802 |
|
|
|
5,285 |
|
|
Revolving credit facility, net of current portion |
|
— |
|
|
|
12,000 |
|
|
Operating lease liabilities, net of current portion |
|
2,803 |
|
|
|
— |
|
|
Total liabilities |
|
21,605 |
|
|
|
17,285 |
|
|
Commitments and contingencies |
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
||||
|
Common stock |
|
6 |
|
|
|
5 |
|
|
Additional paid-in capital |
|
228,178 |
|
|
|
211,190 |
|
|
Accumulated deficit |
|
(189,986 |
) |
|
|
(178,638 |
) |
|
Accumulated other comprehensive loss |
|
(1,853 |
) |
|
|
(1,196 |
) |
|
Total Stockholders’ equity |
|
36,345 |
|
|
|
31,361 |
|
|
Total liabilities and stockholders’ equity |
$ |
57,950 |
|
|
$ |
48,646 |
|
|
Transphorm, Inc. Condensed Consolidated Statements of Operations (unaudited) (in thousands except share and per share data) |
|||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
||||||||||
|
Revenue, net |
$ |
3,670 |
|
|
$ |
5,156 |
|
|
$ |
11,303 |
|
|
$ |
8,826 |
|
|
$ |
14,519 |
|
|
Cost of goods sold |
|
3,232 |
|
|
|
4,050 |
|
|
|
2,239 |
|
|
|
7,282 |
|
|
|
4,806 |
|
|
Gross profit |
|
438 |
|
|
|
1,106 |
|
|
|
9,064 |
|
|
|
1,544 |
|
|
|
9,713 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
||||||||||
|
Research and development |
|
1,830 |
|
|
|
1,740 |
|
|
|
1,591 |
|
|
|
3,570 |
|
|
|
3,414 |
|
|
Sales and marketing |
|
1,066 |
|
|
|
1,083 |
|
|
|
825 |
|
|
|
2,149 |
|
|
|
1,512 |
|
|
General and administrative |
|
3,044 |
|
|
|
3,317 |
|
|
|
2,714 |
|
|
|
6,361 |
|
|
|
5,457 |
|
|
Total operating expenses |
|
5,940 |
|
|
|
6,140 |
|
|
|
5,130 |
|
|
|
12,080 |
|
|
|
10,383 |
|
|
(Loss) income from operations |
|
(5,502 |
) |
|
|
(5,034 |
) |
|
|
3,934 |
|
|
|
(10,536 |
) |
|
|
(670 |
) |
|
Interest expense |
|
184 |
|
|
|
182 |
|
|
|
220 |
|
|
|
366 |
|
|
|
424 |
|
|
Loss in joint venture |
|
684 |
|
|
|
582 |
|
|
|
1,092 |
|
|
|
1,266 |
|
|
|
2,582 |
|
|
Changes in fair value of promissory note |
|
— |
|
|
|
— |
|
|
|
(1,629 |
) |
|
|
— |
|
|
|
(605 |
) |
|
Other income, net |
|
(375 |
) |
|
|
(445 |
) |
|
|
(1,729 |
) |
|
|
(820 |
) |
|
|
(1,999 |
) |
|
(Loss) income before tax expense |
|
(5,995 |
) |
|
|
(5,353 |
) |
|
|
5,980 |
|
|
|
(11,348 |
) |
|
|
(1,072 |
) |
|
Tax expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Net (loss) income |
$ |
(5,995 |
) |
|
$ |
(5,353 |
) |
|
$ |
5,980 |
|
|
$ |
(11,348 |
) |
|
$ |
(1,072 |
) |
|
Net loss per share – basic |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
0.15 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
|
Net loss per share – diluted |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
0.14 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
|
Weighted average common shares outstanding – basic |
|
56,619,662 |
|
|
|
54,404,830 |
|
|
|
41,196,139 |
|
|
|
55,518,297 |
|
|
|
40,918,203 |
|
|
Weighted average common shares outstanding – diluted |
|
56,619,662 |
|
|
|
54,404,830 |
|
|
|
41,847,103 |
|
|
|
55,518,297 |
|
|
|
40,918,203 |
|
|
Transphorm, Inc. Reconciliation of GAAP and Non-GAAP Financial Information (unaudited) (in thousands except share and per share data) |
|||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
||||||||||
|
GAAP net (loss) income |
$ |
(5,995 |
) |
|
$ |
(5,353 |
) |
|
$ |
5,980 |
|
|
$ |
(11,348 |
) |
|
$ |
(1,072 |
) |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
|
Stock-based compensation |
|
636 |
|
|
|
582 |
|
|
|
511 |
|
|
|
1,218 |
|
|
|
1,008 |
|
|
Depreciation |
|
165 |
|
|
|
152 |
|
|
|
134 |
|
|
|
317 |
|
|
|
257 |
|
|
Amortization |
|
74 |
|
|
|
74 |
|
|
|
74 |
|
|
|
148 |
|
|
|
148 |
|
|
Changes in fair value of promissory note |
|
— |
|
|
|
— |
|
|
|
(1,629 |
) |
|
|
— |
|
|
|
(605 |
) |
|
Other income in joint venture |
|
— |
|
|
|
— |
|
|
|
(1,455 |
) |
|
|
— |
|
|
|
(1,455 |
) |
|
Total adjustments to GAAP net (loss) income |
|
875 |
|
|
|
808 |
|
|
|
(2,365 |
) |
|
|
1,683 |
|
|
|
(647 |
) |
|
Non-GAAP net (loss) income |
$ |
(5,120 |
) |
|
$ |
(4,545 |
) |
|
$ |
3,615 |
|
|
$ |
(9,665 |
) |
|
$ |
(1,719 |
) |
|
GAAP net (loss) income per share – basic |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
0.15 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
|
Adjustment |
|
0.01 |
|
|
|
0.02 |
|
|
|
(0.06 |
) |
|
|
0.03 |
|
|
|
(0.01 |
) |
|
Non-GAAP net (loss) income per share – basic |
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
|
$ |
0.09 |
|
|
$ |
(0.17 |
) |
|
$ |
(0.04 |
) |
|
GAAP net (loss) income per share – diluted |
$ |
(0.10 |
) |
|
$ |
(0.10 |
) |
|
$ |
0.14 |
|
|
$ |
(0.20 |
) |
|
$ |
(0.03 |
) |
|
Adjustment |
|
0.01 |
|
|
|
0.02 |
|
|
|
(0.05 |
) |
|
|
0.03 |
|
|
|
(0.01 |
) |
|
Non-GAAP net (loss) income per share – diluted |
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
|
$ |
0.09 |
|
|
$ |
(0.17 |
) |
|
$ |
(0.04 |
) |
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
|
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
|||||
|
GAAP operating expenses |
$ |
5,940 |
|
$ |
6,140 |
|
$ |
5,130 |
|
$ |
12,080 |
|
$ |
10,383 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||
|
Stock-based compensation |
|
583 |
|
|
543 |
|
|
472 |
|
|
1,126 |
|
|
942 |
|
Depreciation |
|
165 |
|
|
152 |
|
|
134 |
|
|
317 |
|
|
257 |
|
Amortization |
|
74 |
|
|
74 |
|
|
74 |
|
|
148 |
|
|
148 |
|
Total adjustments to GAAP operating expenses |
|
822 |
|
|
769 |
|
|
680 |
|
|
1,591 |
|
|
1,347 |
|
Non-GAAP operating expenses |
$ |
5,118 |
|
$ |
5,371 |
|
$ |
4,450 |
|
$ |
10,489 |
|
$ |
9,036 |
|
Transphorm, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) (in thousands) |
|||||||
|
|
Six Months Ended September 30, |
||||||
|
|
2022 |
|
2021 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net loss |
$ |
(11,348 |
) |
|
$ |
(1,072 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
|
Inventory write-off |
|
56 |
|
|
|
194 |
|
|
Depreciation and amortization |
|
465 |
|
|
|
405 |
|
|
Amortization of right-of-use assets |
|
286 |
|
|
|
— |
|
|
Perpetual licensing revenue from a related party |
|
— |
|
|
|
(8,000 |
) |
|
Stock-based compensation |
|
1,219 |
|
|
|
1,008 |
|
|
Interest cost |
|
4 |
|
|
|
108 |
|
|
Gain on sale of equipment |
|
(110 |
) |
|
|
— |
|
|
Loss in joint venture |
|
1,266 |
|
|
|
1,127 |
|
|
Changes in fair value of promissory note |
|
— |
|
|
|
(605 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
941 |
|
|
|
33 |
|
|
Inventory |
|
(2,692 |
) |
|
|
(2,745 |
) |
|
Prepaid expenses and other current assets |
|
(97 |
) |
|
|
124 |
|
|
Other assets |
|
(521 |
) |
|
|
15 |
|
|
Accounts payable and accrued expenses |
|
904 |
|
|
|
657 |
|
|
Deferred revenue |
|
(83 |
) |
|
|
102 |
|
|
Accrued payroll and benefits |
|
160 |
|
|
|
37 |
|
|
Operating lease liabilities |
|
(263 |
) |
|
|
— |
|
|
Net cash used in operating activities |
|
(9,813 |
) |
|
|
(8,612 |
) |
|
Cash flows from investing activities: |
|
|
|
||||
|
Purchases of property and equipment |
|
(4,026 |
) |
|
|
(409 |
) |
|
Proceeds from sale of equipment |
|
110 |
|
|
|
— |
|
|
Investment in joint venture |
|
(1,537 |
) |
|
|
(3,081 |
) |
|
Net cash used in investing activities |
|
(5,453 |
) |
|
|
(3,490 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from stock option exercise |
|
56 |
|
|
|
134 |
|
|
Proceeds from issuance of common stock |
|
16,000 |
|
|
|
5,000 |
|
|
Cost associated with issuance of common stock |
|
(280 |
) |
|
|
— |
|
|
Payment for taxes related to net share settlement of restricted stock units |
|
(6 |
) |
|
|
||
|
Net cash provided by financing activities |
|
15,770 |
|
|
|
5,134 |
|
|
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash |
|
(443 |
) |
|
|
(44 |
) |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
61 |
|
|
|
(7,012 |
) |
|
Cash and cash equivalents and restricted cash at beginning of period |
|
33,435 |
|
|
|
9,500 |
|
|
Cash and cash equivalents at end of period |
|
33,496 |
|
|
|
1,988 |
|
|
Restricted cash at end of period |
|
500 |
|
|
$ |
500 |
|
|
Cash and cash equivalents and restricted cash at end of period |
$ |
33,996 |
|
|
$ |
2,488 |
|
Contacts
Investor Contacts:
David Hanover or Jack Perkins
KCSA Strategic Communications
Company Contact:
Cameron McAulay
Chief Financial Officer
1-805-456-1300 ext. 140
Sorry, the comment form is closed at this time.