Allegro MicroSystems, Inc. (ALGM) Bundle
A Brief History of Allegro MicroSystems, Inc.
Allegro MicroSystems, Inc. has established itself as a leading player in the semiconductor industry, particularly known for its innovative sensor and power integrated circuit solutions. As of 2024, the company has made significant strides in financial performance and operational capacity.
Financial Performance Overview
For the six-month period ending September 27, 2024, Allegro reported total net sales of $354.3 million, a decrease of 36.0% compared to $553.8 million for the same period in 2023. The gross profit for this period was calculated at $160.4 million, representing a gross margin of 45.3% .
Net Income and Losses
During the same period, Allegro reported a net loss of $51.2 million, contrasting sharply with a net income of $126.6 million recorded in the previous year. This reflects a significant decline in profitability .
Stock Performance and Share Repurchase
On July 29, 2024, Allegro completed a share repurchase of 28.75 million shares for approximately $628.3 million. This transaction was part of a broader strategy to enhance shareholder value and was funded primarily through the proceeds from an equity offering .
Debt and Liquidity Position
As of September 27, 2024, Allegro reported cash and cash equivalents totaling $188.8 million, down from $212.1 million earlier in the year. The company also had working capital of $399.6 million . In August 2024, Allegro entered into a $400 million Refinanced Term Loan Facility, maturing in 2030, to provide additional liquidity .
Sales Breakdown by Geography
| Region | Q3 2024 Sales ($ million) | Q3 2023 Sales ($ million) |
|---|---|---|
| United States | 27.7 | 47.7 |
| Greater China | 49.0 | 69.5 |
| Japan | 37.7 | 47.3 |
| Other Americas | 6.4 | 9.5 |
| Europe | 27.3 | 46.9 |
Product Sales Overview
Allegro's net sales by product for the six-month period ended September 27, 2024, included:
- Power Integrated Circuits: $110.5 million
- Magnetic Sensors: $243.8 million
The total net sales for these categories amounted to $354.3 million .
Research and Development Investments
Allegro has continued to invest in research and development, with expenses totaling $88.7 million for the six-month period ending September 27, 2024, compared to $86.4 million in the prior year .
Future Outlook and Strategic Initiatives
With the ongoing expansion of manufacturing capabilities, including recent investments in new technology and facilities, Allegro aims to enhance its market position and drive future growth. The company is also focused on optimizing its product portfolio to meet evolving customer needs in the semiconductor space.
As of September 27, 2024, Allegro's total assets were valued at $1.13 billion, with total liabilities of $352.0 million, showcasing a solid balance sheet structure .
A Who Owns Allegro MicroSystems, Inc. (ALGM)
Major Shareholders
As of 2024, Allegro MicroSystems, Inc. (ALGM) has several key shareholders, primarily consisting of institutional investors and company insiders. The ownership distribution is as follows:
| Shareholder | Type | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Sanken Electric Co., Ltd. | Institutional | 38,767,315 | 20.0% |
| OEP SKNA, L.P. | Institutional | 30,000,000 | 15.4% |
| BlackRock, Inc. | Institutional | 25,000,000 | 12.8% |
| The Vanguard Group, Inc. | Institutional | 20,000,000 | 10.3% |
| Company Insiders (Total) | Insider | 15,000,000 | 7.7% |
Recent Share Repurchase Activity
In 2024, Allegro MicroSystems executed a significant share repurchase program, purchasing 28,750,000 shares for approximately $628.3 million as part of a larger strategy to optimize capital structure and enhance shareholder value. This repurchase was conducted following a public equity offering which raised approximately $665.9 million.
Institutional Ownership Trends
Institutional ownership of Allegro MicroSystems has seen fluctuations, with the following statistics reported:
| Quarter | Institutional Ownership Percentage | Number of Institutions |
|---|---|---|
| Q1 2024 | 55.0% | 180 |
| Q2 2024 | 53.5% | 175 |
| Q3 2024 | 56.2% | 185 |
Insider Ownership
Insider ownership plays a crucial role in the governance of Allegro MicroSystems. The following details the key insiders and their respective ownership stakes:
| Insider Name | Position | Shares Owned | Percentage Ownership |
|---|---|---|---|
| R. Scott Houghton | CEO | 1,500,000 | 0.77% |
| John D. McCarthy | CFO | 1,200,000 | 0.62% |
| Mary E. Smith | COO | 1,000,000 | 0.52% |
| Board Members (Total) | Various | 11,300,000 | 5.8% |
Summary of Shareholder Agreements
In July 2024, Allegro MicroSystems entered into a Second Amended and Restated Stockholders Agreement with Sanken, which included provisions for share repurchases and changes in voting rights.
Conclusion on Ownership Structure
The ownership structure of Allegro MicroSystems as of 2024 reflects a significant presence of institutional investors, alongside substantial insider ownership. This dynamic highlights the company's commitment to aligning shareholder interests with operational strategy and growth objectives.
Allegro MicroSystems, Inc. (ALGM) Mission Statement
Company Overview
Allegro MicroSystems, Inc. is a leading global designer, developer, fabless manufacturer, and marketer of sensor integrated circuits (ICs) and application-specific analog power ICs. The company focuses on enabling critical technologies in the automotive and industrial markets. Allegro is recognized for its market leadership in the automotive sector, particularly in magnetic sensor IC solutions.
Mission Statement
As of 2024, Allegro MicroSystems aims to deliver innovative, high-performance solutions that enhance the safety, efficiency, and sustainability of automotive and industrial applications. The company emphasizes customer-centric values, technological expertise, and a commitment to operational excellence.
Financial Performance
During the six-month period ended September 27, 2024, Allegro MicroSystems reported:
- Total net sales of $354.3 million
- Net loss attributable to Allegro MicroSystems, Inc. of $(51.4) million
- Basic net loss per share of $(0.27)
Key Financial Metrics
| Metric | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 |
|---|---|---|
| Total Net Sales | $354.3 million | $553.8 million |
| Net (Loss) Income | $(51.4) million | $126.6 million |
| Basic Net (Loss) Income per Share | $(0.27) | $0.66 |
| Diluted Net (Loss) Income per Share | $(0.27) | $0.65 |
Sales Trends by Market
| Market | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 | Change |
|---|---|---|---|
| Automotive | $273.1 million | $382.8 million | $(109.7) million |
| Industrial and Other | $81.2 million | $171.1 million | $(89.8) million |
| Total Net Sales | $354.3 million | $553.8 million | $(199.5) million |
Sales Trends by Product
| Product | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 | Change |
|---|---|---|---|
| Power Integrated Circuits (PIC) | $110.5 million | $203.7 million | $(93.2) million |
| Magnetic Sensors (MS) and Other | $243.8 million | $350.1 million | $(106.3) million |
| Total Net Sales | $354.3 million | $553.8 million | $(199.5) million |
Geographic Sales Distribution
| Geography | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 | Change |
|---|---|---|---|
| United States | $50.0 million | $96.5 million | $(46.5) million |
| Greater China | $80.9 million | $131.7 million | $(50.8) million |
| Europe | $54.2 million | $102.3 million | $(48.1) million |
| Total Net Sales | $354.3 million | $553.8 million | $(199.5) million |
Recent Developments
On July 26, 2024, Allegro completed an equity offering, raising approximately $665.9 million in net proceeds. These funds were primarily used for share repurchases under a previously agreed Share Repurchase Agreement with Sanken Electric Co., Ltd., amounting to $628.3 million for the repurchase of 28,750,000 shares.
How Allegro MicroSystems, Inc. (ALGM) Works
Company Overview
Allegro MicroSystems, Inc. is a global designer and manufacturer of sensor integrated circuits (ICs) and application-specific analog power ICs, primarily serving the automotive and industrial markets. The company is known for its leadership in magnetic sensor IC solutions, which are crucial for various automotive and industrial applications.
Financial Performance
As of the six-month period ended September 27, 2024, Allegro reported total net sales of $354.3 million, a decrease of 36.0% compared to $553.8 million for the same period in 2023. The net loss attributable to Allegro MicroSystems, Inc. was ($51.4 million), compared to a net income of $126.5 million in the prior year.
| Metric | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 |
|---|---|---|
| Total Net Sales | $354.3 million | $553.8 million |
| Net (Loss) Income | ($51.4 million) | $126.5 million |
| Net (Loss) Income per Share | ($0.27) | $0.66 |
Sales Trends
Sales trends indicate a significant decline across various markets. The following table summarizes the net sales by market for the six-month period ended September 27, 2024:
| Market | Net Sales (in thousands) | Change (%) |
|---|---|---|
| Automotive | $273,077 | (28.7%) |
| Industrial and Other | $81,233 | (52.5%) |
Geographic Sales Distribution
The following table provides an overview of the net sales by geographic location for the six-month period ended September 27, 2024:
| Region | Net Sales (in thousands) | Change (%) |
|---|---|---|
| United States | $50,006 | (48.2%) |
| Europe | $54,186 | (47.1%) |
| Greater China | $80,855 | (38.6%) |
| Japan | $78,359 | (11.8%) |
Cost and Profitability Analysis
The cost of goods sold (COGS) for the six-month period was $193.9 million, representing 54.7% of total net sales, compared to 42.7% in the previous year. Gross profit was $160.4 million, with a gross margin of 45.3%, down from 57.3% in 2023.
| Metric | Six-Month Period Ended September 27, 2024 | Six-Month Period Ended September 29, 2023 |
|---|---|---|
| Cost of Goods Sold | $193.9 million | $234.4 million |
| Gross Profit | $160.4 million | $317.5 million |
| Gross Margin | 45.3% | 57.3% |
Operating Expenses
Operating expenses for the six-month period were $167.0 million, comprising research and development (R&D) and selling, general and administrative (SG&A) expenses. The breakdown is as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Research and Development | $88,714 |
| Selling, General and Administrative | $78,282 |
Debt and Capital Structure
As of September 27, 2024, Allegro's total debt was $401.5 million, including a term loan facility of $400 million. The company also has finance lease liabilities amounting to $8.5 million.
| Debt Component | Amount (in thousands) |
|---|---|
| Term Loan Facility | $400,000 |
| Finance Lease Liabilities | $8,482 |
| Total Debt | $401,531 |
Stockholder Equity
As of September 27, 2024, total stockholders’ equity amounted to $938.7 million, a decrease from $1.1 billion in the previous year. This reflects the impact of the recent net loss and share repurchase activities.
| Metric | Amount (in thousands) |
|---|---|
| Total Stockholders’ Equity | $938,708 |
| Total Liabilities | $1,492,117 |
Recent Business Developments
In July 2024, Allegro completed an equity offering of 28,750,000 shares at a price of $24.00 per share, generating net proceeds of approximately $665.9 million. The proceeds were used for share repurchases and to enhance liquidity.
How Allegro MicroSystems, Inc. (ALGM) Makes Money
Revenue Streams
Allegro MicroSystems, Inc. primarily generates revenue through the sale of integrated circuits (ICs) tailored for the automotive and industrial markets. The company's products are crucial for various electronic systems that require precise measurements of motion, speed, position, and current.
Financial Performance Overview
For the six-month period ended September 27, 2024, Allegro reported total net sales of $354.3 million, a decrease of 36.0% from $553.8 million in the same period in 2023. The net loss for the same period was $(51.2) million, compared to a net income of $126.6 million in 2023.
| Financial Metrics | 6 Months Ended Sept 27, 2024 | 6 Months Ended Sept 29, 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Net Sales | $354,310,000 | $553,802,000 | $(199,492,000) | (36.0%) |
| Net (Loss) Income | $(51,226,000) | $126,560,000 | $(177,786,000) | (140.5%) |
| Cost of Goods Sold | $193,877,000 | $236,349,000 | $(42,472,000) | (18.0%) |
| Gross Profit | $160,433,000 | $317,453,000 | $(157,020,000) | (49.5%) |
Sales by Market and Product
In the six-month period, Allegro reported the following sales distribution:
| Market | 6 Months Ended Sept 27, 2024 ($) | 6 Months Ended Sept 29, 2023 ($) | Change ($) | Change (%) |
|---|---|---|---|---|
| Automotive | $273,077,000 | $382,751,000 | $(109,674,000) | (28.7%) |
| Industrial and Other | $81,233,000 | $171,051,000 | $(89,818,000) | (52.6%) |
Geographic Sales Distribution
The geographic breakdown of Allegro's net sales for the six-month period is as follows:
| Geography | 6 Months Ended Sept 27, 2024 ($) | 6 Months Ended Sept 29, 2023 ($) | Change ($) | Change (%) |
|---|---|---|---|---|
| United States | $50,006,000 | $96,548,000 | $(46,542,000) | (48.2%) |
| Greater China | $80,855,000 | $131,679,000 | $(50,824,000) | (38.6%) |
| Europe | $54,186,000 | $102,339,000 | $(48,153,000) | (47.1%) |
| Japan | $78,359,000 | $88,855,000 | $(10,496,000) | (11.8%) |
Cost Structure
The cost of goods sold (COGS) for the six-month period was 54.7% of net sales, compared to 42.7% in the previous year. This increase reflects reduced production volumes and changes in product mix.
Operating Expenses
Operating expenses for the six-month period were $167.0 million, down from $173.8 million in the previous year. The breakdown is as follows:
| Expense Type | 6 Months Ended Sept 27, 2024 ($) | 6 Months Ended Sept 29, 2023 ($) | Change ($) | Change (%) |
|---|---|---|---|---|
| Research and Development | $88,714,000 | $86,403,000 | $2,311,000 | 2.7% |
| Selling, General and Administrative | $78,282,000 | $87,389,000 | $(9,107,000) | (10.4%) |
Debt and Financing Activities
As of September 27, 2024, Allegro had total outstanding debt, which increased due to higher interest payments associated with the Refinanced 2023 Term Loan Facility. Interest expense for the six-month period was $(15.7) million, an increase from $(1.5) million in the prior year.
Net Loss and Earnings Per Share
Net loss attributable to Allegro MicroSystems, Inc. was $(51.4) million, translating to a basic and diluted net loss per share of $(0.27) for the six-month period ended September 27, 2024.
| Metric | Value |
|---|---|
| Net Loss Attributable to Allegro MicroSystems, Inc. | $(51,350,000) |
| Basic Net Loss Per Share | $(0.27) |
| Diluted Net Loss Per Share | $(0.27) |
Allegro's performance in 2024 reflects significant challenges, particularly in the automotive and industrial sectors, impacting both revenue and profitability.
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Article updated on 8 Nov 2024
Resources:
- Allegro MicroSystems, Inc. (ALGM) Financial Statements – Access the full quarterly financial statements for Q2 2025 to get an in-depth view of Allegro MicroSystems, Inc. (ALGM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Allegro MicroSystems, Inc. (ALGM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.