Allegro MicroSystems Reports Fourth Quarter Record Revenue and Accelerating Profits

MANCHESTER, N.H., May 05, 2021 (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 fourth fiscal quarter and fiscal year ended March 26, 2021. Record fourth quarter total net sales of $175.1 million for the three-month period exceeded expectations in the fourth quarter and resulted in fiscal year total net sales of $591.2 million. Profitability also exceeded expectations, with improvements in both gross margin and operating income resulting in significant earnings per share growth on both a GAAP and non-GAAP basis sequentially.

Quarter Highlights:

  • Total net sales of $175.1 million was up 6.5% sequentially and on a non-GAAP basis, core end markets grew 22.3% from the same period in fiscal 2020.
  • Automotive and Industrial net sales for the quarter grew 12.3% and 30.7%, respectively, from the same period in fiscal 2020.
  • Gross margin on a GAAP basis was 49.7% and 50.9% on a Non-GAAP basis.
  • Operating margin on a GAAP basis was 11.1% and increased to 19.7% on a non-GAAP basis.
  • GAAP earnings per diluted share was $0.05, up $0.09 sequentially. Non-GAAP earnings per diluted share was $0.15, up $0.02, growing 15.4% sequentially.

“Our strong performance in the fourth quarter was driven by accelerating revenue in our target markets and increased profitability resulting from continued progress toward our manufacturing transformation,” said Ravi Vig, President and CEO of Allegro MicroSystems. “I am pleased with our design win momentum, which has yielded market share gains and is a testament to our industry-leading technologies and alignment with growing markets like vehicle electrification and data centers. We believe our strengthening fundamentals and resilient manufacturing model give us a solid foundation for long-term out-performance of our end markets.”

Business Summary

Record automotive net sales were up 4% sequentially during the fourth fiscal quarter driven by strong global automotive demand and a favorable vehicle production mix, despite supply chain constraints. Shifts to higher value features on automotive platforms are driving increased demand for Allegro products in ADAS and comfort and convenience systems. Automotive net sales grew 1% for the full year, outpacing an 8% reduction in global car production.

Industrial net sales in the fourth quarter exceeded expectations and were up 23% sequentially and up 21% for the full year, reaching new record highs. Growth was driven by data center, building and factory automation, and green energy applications. All three categories were up double-digits sequentially.

Business Outlook

For the first fiscal quarter ending June 25, 2021, the Company expects total net sales to be in the range of $176 million to $179 million. Non-GAAP gross margin is expected to be about 51.0% and non-GAAP earnings per fully-diluted share for the same period is expected to be in the range of $0.15 to $0.17.

Allegro has not provided a reconciliation of its first fiscal quarter outlook for non-GAAP gross margin and non-GAAP earnings per fully-diluted 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 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 Wednesday, May 5, 2021 at 8:30 a.m. Eastern time. Ravi Vig, Chief Executive Officer and Paul Walsh, Chief Financial Officer, will discuss Allegro’s 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 30 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 green energy applications.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements regarding the expected benefits resulting from our acquisition of Voxtel and our expected financial performance for our first fiscal quarter ending June 25, 2021. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate,” “target,” “mission,” “may,” “will,” “would,” “should,” “could,” “target,” “potential,” “project,” “predict,” “contemplate,” “potential,” or the negative thereof and similar words and expressions.

Forward-looking statements are based on management’s current expectations, beliefs and assumptions and on information currently available to us. Such 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 important factors, including, but not limited to: downturns or volatility in general economic conditions, including as a result of the COVID-19 pandemic, particularly in the automotive market; our ability to compete effectively with intense competition, expand our market share and increase our profitability; our ability to compensate for decreases in average selling prices of our products; the cyclical nature of the analog semiconductor industry; 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 fully realize the benefits of past and potential future initiatives designed to improve our competitiveness, growth and profitability; our ability to accurately predict our quarterly net sales and operating results; our ability to adjust our supply chain volume to account for changing market conditions and customer demand; our dependence on manufacturing operations in the Philippines; changes in government trade policies, including the imposition of tariffs and export restrictions; and our ability to protect our proprietary technology and inventions through patents or trade secrets; and other important factors discussed under the caption “Risk Factors” in our final prospectus on Form 424(b) filed with the U.S. Securities and Exchange Commission (“SEC”) on February 8, 2021, as any such factors may be updated from time to time in our other filings with the SEC, which are accessible on the SEC’s website at www.sec.gov and the Investors & Media page of our website at investors.allegromicro.com.

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 contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

ALLEGRO MICROSYSTEMS, INC.
Consolidated Statements of Operations

(in thousands, except share and per share amounts)

  Three-Month Period Ended  Fiscal Year Ended
  (Unaudited)  (Unaudited)  (Unaudited)   
  March 26,
2021
  March 27,
2020
  March 26,
2021
  March 27,
2020
Net sales $ 143,017     $ 121,997     $ 486,546     $ 465,532  
Net sales to related party 32,091     52,607     104,661     184,557  
Total net sales 175,108     174,604     591,207     650,089  
Cost of goods sold 88,102     102,846     312,305     388,813  
Gross profit 87,006     71,758     278,902     261,276  
Operating expenses:              
Research and development 28,140     24,487     108,649     102,052  
Selling, general and administrative 34,799     28,366     153,476     106,396  
Impairment of long-lived assets 7,119         7,119      
Change in fair value of contingent consideration (2,500 )       (2,500 )    
Total operating expenses 67,558     52,853     266,744     208,448  
Operating (loss) income 19,448     18,905     12,158     52,828  
Other (expense) income:              
Loss on debt extinguishment         (9,055 )    
Interest expense, net (668 )   (50 )   (2,603 )   (110 )
Foreign currency transaction (loss) gain (1,558 )   (1,409 )   (2,889 )   1,391  
Income in earnings of equity investment 6         1,413      
Other, net (178   346     (475 )   (831 )
Income (loss) before income taxes 17,050     17,792     (1,451 )   53,278  
Income tax provision (benefit) 8,361     4,463     (19,552 )   16,173  
Net  income 8,689     13,329     18,101     37,105  
Net income attributable to non-controlling interests 45     33     148     134  
Net income attributable to Allegro MicroSystems, Inc. $ 8,644     $ 13,296     $ 17,953     $ 36,971  
Net income attributable to Allegro MicroSystems, Inc. per share:              
Basic $ 0.05     $ 1.33     $ 0.22     $ 3.70  
Diluted $ 0.05     $ 1.33     $ 0.10     $ 3.70  
Weighted average shares outstanding:              
Basic 189,429,893     10,000,000     83,448,055     10,000,000  
Diluted 190,860,556     10,000,000     176,416,645     10,000,000  
                       

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