For fiscal fourth-quarter 2013 (to end-August), LED chip and component maker SemiLEDs Corp of Hsinchu, Taiwan has reported revenue of $3.4m, down 29% on $4.8m last quarter and down 38% on $5.5m a year ago. Revenue for full-year fiscal 2013 was $18m, down 39% on $29.3m for fiscal 2012.
Revenue from LED chips fell 7% sequentially and 30% for the full-year (comprising 27% of total revenue in Q4 and 30% for the full-year). Revenue from LED components fell 25% sequentially and 53% for the full-year (comprising 34% of total revenue in Q4 and 39% for the full-year). Revenue from lighting products rose 13% sequentially but fell 5% for the full-year (comprising 29% of total revenue in Q4 and 23% for the full-year).
Compared with negative 55% a year ago, gross margin has recovered slightly from negative 129% last quarter to negative 103%.
R&D expenses have been cut from $1.5m a year ago, but have risen slightly from $1.15m last quarter to $1.19m. Selling, general & administrative (SG&A) expenses are down from $4.1m a year ago but up from $2.2m last quarter to $2.9m due to the write-off of certain property, plant and equipment and an increase in bad debt expense. Total operating expenses have fallen from $5.6m a year ago and $m last quarter to $4.1m.
Operating margin has worsened to negative 523%, compared with negative 278% last quarter and negative 296% a year ago. However, in addition to the reduction in revenues and an excess capacity charge for LED chips, margins for fiscal Q4/2013 were also impacted by a $10.1m charge for impairment of long-lived assets, triggered mainly by significant under-utilization of the firm’s LED epiwafer and chip manufacturing facilities for a sustained period of time.
On a non-GAAP basis (excluding stock-based compensation expense of $523,000 and the $10.1m impairment charge), net loss was $7.3m, cut from $16.6m a year ago but up from $6.6m last quarter. Net loss for full-year fiscal 2013 (excluding stock-based compensation expense of $2m and impairment charges on long-lived assets, goodwill and investments of $13.9m) was $27.8m, cut from $37.8m for fiscal 2012.
Cash used in operating activities was $4.7m, doubling from $2.3m last quarter. However, capital expenditure has been cut from $1.2m a year ago to just $83,000. Hence, total cash burn (operating cash flow) has been reduced from $6.5m a year ago to $4.7m. Consequently, during the quarter, cash and cash equivalents have fallen from $41.4m to $36.3m.
“We continue to pursue our strategy of lowering our dependency on general lighting chip sales, where supply is exceeding demand, while at the same time broadening our component and UV product lines, where pricing pressure is reduced,” says chairman, president & CEO Trung Doan. “Our goal is to improve gross margin and operating cash flow.”
For fiscal first-quarter 2014, SemiLEDs expects revenue to grow slightly to $3.5m, but gross margin to continue to be negative as the firm will not fully utilize its production capacity.
“With regard to manufacturing resources, as our product mix evolves, we will continue to invest in our component manufacturing assets,” says Doan. “We recently acquired an additional LED component production line and added an array of new LED component products and related technology to our existing products and technology portfolios. Our current LED chip technology, together with this new LED component technology, will provide an advantage in the niche markets we target,” he adds.
“As an example of the steps we are taking to develop new products for these higher-value markets, we announced our 10-Watt M63 RGBW integrated 6363 LED, which delivers more than 410 total lumens of combined red, green, blue and white light output (for color-changing applications spanning entertainment, large-scale displays and architectural lighting),” Doan continues. “The M63 RGBW brings together for the first time SemiLEDs’ vertical, white chip and ceramic packaging technologies with the industry trend for high integration to reduce component count and simplified designs.”
However, in the immediate term, due to the acquisition of the additional LED component production line and the added array of new LED component products, SemiLEDs expects that cash use will increase next quarter, notes interim chief financial officer Tim Lin.
