Allegro MicroSystems Reports Second Quarter 2025 Results
MANCHESTER, N.H., Oct. 31, 2024 (GLOBE NEWSWIRE) -- Allegro MicroSystems, Inc. ("Allegro" or the "Company") (NASDAQ:ALGM), a global leader in power and sensing semiconductor solutions for motion control and energy efficient systems, today announced financial results for its second quarter ended September 27, 2024.
"We delivered results in-line with our commitments. Second quarter sales were $187 million, with sequential growth in both Automotive and Industrial and Other end markets. Non-GAAP EPS was $0.08, at the high end of our outlook," said Vineet Nargolwala, President and CEO of Allegro. "We are encouraged by the continued demand for our differentiated solutions and the progress made by our customers and partners to rebalance their inventories. We continue to invest for growth to extend our market leadership. The accelerating pace of our new product introductions, as evidenced by our latest product releases, sets the stage for significant growth momentum in the near future."
Second Quarter Financial Highlights:
In thousands, except per share data
Three-Month Period Ended
Six-Month Period Ended
September 27, 2024
June 28, 2024
September 29, 2023
September 27, 2024
September 29, 2023
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Net Sales
Automotive
$
141,893
$
131,184
$
197,321
$
273,077
$
382,751
Industrial and other
45,498
35,735
78,188
81,233
171,051
Total net sales
$
187,391
$
166,919
$
275,509
$
354,310
$
553,802
GAAP Financial Measures
Gross margin %
45.7
%
44.8
%
57.9
%
45.3
%
57.3
%
Operating margin %
2.2
%
(6.4
)%
26.5
%
(1.9
)%
25.9
%
Diluted EPS
$
(0.18
)
$
(0.09
)
$
0.34
$
(0.27
)
$
0.65
Non-GAAP Financial Measures
Gross margin %
48.8
%
48.8
%
58.3
%
48.8
%
58.1
%
Operating margin %
11.7
%
6.0
%
31.3
%
9.0
%
31.0
%
Diluted EPS
$
0.08
$
0.03
$
0.40
$
0.11
$
0.79
Business Outlook
For the third quarter of fiscal year 2025 ending December 27, 2024, the Company expects net sales to be in the range of $170 million to $180 million. This outlook comprehends continued progress toward vehicle electrification and ongoing inventory rebalancing as reflected in the latest third-party estimates, as well as typical December quarter seasonality. The Company also estimates the following results on a non-GAAP basis:
Gross Margin is expected to be between 49% and 51%,
The Company made a voluntary $25 million payment on its term loan facility on October 31, 2024 and now expects Interest Expense to be approximately $6 million, and
Diluted Earnings per Share are expected to be between $0.04 and $0.08.
Allegro has not provided a reconciliation of its third fiscal quarter outlook for non-GAAP Gross Margin, non-GAAP Interest Expense, and non-GAAP Diluted Earnings per Share because estimates of all of the reconciling items cannot be provided without unreasonable efforts. It is difficult to reasonably provide a forward-looking estimate between such forward-looking non-GAAP measures and the comparable forward-looking U.S. generally accepted accounting principles ("GAAP") measures. Certain factors that are materially significant to Allegro's ability to estimate these items are out of its control and/or cannot be reasonably predicted.
Earnings Webcast
A webcast will be held on Thursday, October 31, 2024 at 8:30 a.m., Eastern Time. Vineet Nargolwala, President and Chief Executive Officer, and Derek P. D'Antilio, Executive Vice President and Chief Financial Officer, will discuss Allegro's business and financial results.
The webcast will be available on the Investor Relations section of the Company's website at investors.allegromicro.com. A recording of the webcast will be posted in the same location shortly after the call concludes and will be available for at least 90 days.
About Allegro MicroSystems
Allegro MicroSystems is a leading global designer, developer, fabless manufacturer and marketer of sensor integrated circuits ("ICs") and application-specific analog power ICs enabling emerging technologies in the automotive and industrial markets. Allegro's diverse product portfolio provides efficient and reliable solutions for the electrification of vehicles, automotive ADAS safety features, automation for Industry 4.0 and power saving technologies for data centers and clean energy applications.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, contained in this press release including statements regarding our future results of operations and financial position, business strategy, prospective products and the plans and objectives of management for future operations, including, among others, statements regarding the liquidity, growth and profitability strategies and factors affecting our business are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
Without limiting the foregoing, in some cases, you can identify forward-looking statements by terms such as "aim," "may," "will," "should," "expect," "exploring," "plan," "anticipate," "could," "intend," "target," "project," "would," "contemplate," "believe," "estimate," "predict," "potential," "seek," or "continue" or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. No forward-looking statement is a guarantee of future results, performance or achievements, and one should avoid placing undue reliance on such statements.
Forward-looking statements are based on our management's current expectations, beliefs and assumptions and on information currently available to us. Such beliefs and assumptions may or may not prove to be correct. Additionally, such forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including, but not limited to, those identified in Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended March 29, 2024, as any such factors may be updated from time to time in our Quarterly Reports on Form 10-Q and our other filings with the Securities and Exchange Commission (the "SEC"). These risks and uncertainties include, but are not limited to: downturns or volatility in general economic conditions; our ability to compete effectively, expand our market share and increase our net sales and profitability; our reliance on a limited number of third-party semiconductor wafer fabrication facilities and suppliers of other materials; any failure to adjust purchase commitments and inventory management based on changing market conditions or customer demand; shifts in our product mix, customer mix or channel mix, which could negatively impact our gross margin; the cyclical nature of the semiconductor industry, including the analog segment in which we compete; any downturn or disruption in the automotive market or industry; our ability to successfully integrate the acquisition of other companies or technologies and products into our business; our ability to compensate for decreases in average selling prices of our products and increases in input costs; our ability to manage any sustained yield problems or other delays at our third-party wafer fabrication facilities or in the final assembly and test of our products; our ability to accurately predict our quarterly net sales and operating results and meet the expectations of investors; our dependence on manufacturing operations in the Philippines; our reliance on distributors to generate sales; events beyond our control impacting us, our key suppliers or our manufacturing partners; our ability to develop new product features or new products in a timely and cost-effective manner; our ability to manage growth; any slowdown in the growth of our end markets; the loss of one or more significant customers; our ability to meet customers' quality requirements; uncertainties related to the design win process and our ability to recover design and development expenses and to generate timely or sufficient net sales or margins; changes in government trade policies, including the imposition of export restrictions and tariffs; our exposures to warranty claims, product liability claims and product recalls; our dependence on international customers and operations; the availability of rebates, tax credits and other financial incentives on end-user demands for certain products; risks, liabilities, costs and obligations related to governmental regulations and other legal obligations, including export/trade control, privacy, data protection, information security, cybersecurity, consumer protection, environmental and occupational health and safety, antitrust, anti-corruption and anti-bribery, product safety, environmental protection, employment matters and tax; the volatility of currency exchange rates; our ability to raise capital to support our growth strategy; our indebtedness may limit our flexibility to operate our business; our ability to effectively manage our growth and to retain key and highly skilled personnel; our ability to protect our proprietary technology and inventions through patents or trade secrets; our ability to commercialize our products without infringing third-party intellectual property rights; disruptions or breaches of our information technology systems or confidential information or those of our third-party service providers; our principal stockholders has substantial control over us; anti-takeover provisions in our organizational documents and under the General Corporation Law of the State of Delaware; any failure to design, implement or maintain effective internal control over financial reporting; changes in tax rates or the adoption of new tax legislation; the negative impacts of sustained inflation on our business; the physical, transition and litigation risks presented by climate change; and other events beyond our control. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
You should read this press release and the documents that we reference completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. All forward-looking statements speak only as of the date of this press release, and except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, changed circumstances or otherwise.
This press release includes certain non-GAAP financial measures as defined by the SEC rules. These non-GAAP financial measures are provided in addition to, and not as a substitute for or superior to measures of, financial performance prepared in accordance with GAAP. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of the presented non-GAAP financial measures as tools for comparison.
This press release may not be reproduced, forwarded to any person or published, in whole or in part.
ALLEGRO MICROSYSTEMS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except share and per share amounts)(Unaudited)
Three-Month Period Ended
Six-Month Period Ended
September 27, 2024
September 29, 2023
September 27, 2024
September 29, 2023
Net sales
$
187,391
$
275,509
$
354,310
$
553,802
Cost of goods sold
101,729
116,006
193,877
236,349
Gross profit
85,662
159,503
160,433
317,453
Operating expenses:
Research and development
43,510
43,428
88,714
86,403
Selling, general and administrative
38,085
43,160
78,282
87,389
Total operating expenses
81,595
86,588
166,996
173,792
Operating income (loss)
4,067
72,915
(6,563
)
143,661
Interest and other (expense) income
(12,398
)
156
(18,341
)
(2,486
)
Loss on change in fair value of forward repurchase contract
(34,752
)
—
(34,752
)
—
(Loss) income before income taxes
(43,083
)
73,071
(59,656
)
141,175
Income tax (benefit) provision
(9,470
)
7,400
(8,430
)
14,615
Net (loss) income
(33,613
)
65,671
(51,226
)
126,560
Net income attributable to non-controlling interests
62
54
124
93
Net (loss) income attributable to Allegro MicroSystems, Inc.
$
(33,675
)
$
65,617
$
(51,350
)
$
126,467
Net (loss) income per common share attributable to Allegro MicroSystems, Inc.:
Basic
$
(0.18
)
$
0.34
$
(0.27
)
$
0.66
Diluted
$
(0.18
)
$
0.34
$
(0.27
)
$
0.65
Weighted average shares outstanding:
Basic
189,182,850
192,431,094
191,324,281
192,214,210
Diluted
189,182,850
195,100,855
191,324,281
195,055,495
Supplemental Schedule of Total Net Sales
The following table summarizes total net sales by market within the Company's unaudited condensed consolidated statements of operations:
Three-Month Period Ended
Change
Six-Month Period Ended
Change
September 27, 2024
September 29, 2023
Amount
%
September 27, 2024
September 29, 2023
Amount
%
(Dollars in thousands)
(Dollars in thousands)
Automotive
$
141,893
$
197,321
$
(55,428
)
(28
)%
$
273,077
$
382,751
$
(109,674
)
(29
)%
Industrial and other
45,498
78,188
(32,690
)
(42
)%
81,233
171,051
(89,818
)
(53
)%
Total net sales
$
187,391
$
275,509
$
(88,118
)
(32
)%
$
354,310
$
553,802
$
(199,492
)
(36
)%
ALLEGRO MICROSYSTEMS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)
September 27,2024
March 29,2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
188,751
$
212,143
Restricted cash
10,287
10,018
Trade accounts receivable, net
76,985
118,508
Inventories
176,648
162,302
Prepaid income taxes
38,636
31,908
Prepaid expenses and other current assets
32,253
33,584
Current portion of related party notes receivable
—
3,750
Total current assets
523,560
572,213
Property, plant and equipment, net
325,051
321,175
Deferred income tax assets
61,839
54,496
Goodwill
203,151
202,425
Intangible assets, net
266,753
276,854
Related party notes receivable, less current portion
—
4,688
Equity investment in related party
30,186
26,727
Other assets
81,577
72,025
Total assets
$
1,492,117
$
1,530,603
Liabilities, Non-Controlling Interests and Stockholders' Equity
Current liabilities:
Trade accounts payable
$
50,245
$
35,964
Amounts due to related party
5,546
1,626
Accrued expenses and other current liabilities
62,742
76,389
Current portion of long-term debt
5,475
3,929
Total current liabilities
124,008
117,908
Long-term debt
396,056
249,611
Other long-term liabilities
33,345
31,368
Total liabilities
553,409
398,887
Commitments and contingencies
Stockholders' Equity:
Preferred stock
—
—
Common stock
1,840
1,932
Additional paid-in capital
993,988
694,332
(Accumulated deficit) retained earnings
(31,931
)
463,012
Accumulated other comprehensive loss
(26,583
)
(28,841
)
Equity attributable to Allegro MicroSystems, Inc.
937,314
1,130,435
Non-controlling interests
1,394
1,281
Total stockholders' equity
938,708
1,131,716
Total liabilities, non-controlling interests and stockholders' equity
$
1,492,117
$
1,530,603
ALLEGRO MICROSYSTEMS, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(Unaudited)
Three-Month Period Ended
Six-Month Period Ended
