O2Micro Reports Q4 2011 and Year-End Results

Feb 1, 2012

GEORGE TOWN, Grand Cayman, Feb. 1, 2012 (GLOBE NEWSWIRE) -- O2Micro® International Limited (Nasdaq:OIIM) reported its financial results today for the fourth quarter of 2011 and full fiscal year, ending December 31, 2011.

Financial Highlights for the Fourth Quarter ending December 31, 2011:

O2Micro International Limited reported Q4 2011 revenue of $28.7 million. Revenue was down 11% from the prior quarter and 5% below the comparable year-ago quarter. The gross margin was 56.1% in the recent quarter, up from 55.5% in Q3 2011 and below the 60.2% that was reported in Q4 2010. During the fourth quarter of 2011, the company incurred $16.5 million in GAAP operating expenses. Q4 2011 GAAP operating expenses were flat with Q3 2011 and slightly above the comparable year-ago period when operating expenses were $15.7 million. These results yielded a GAAP operating loss of $408,000 in Q4 2011, compared to operating income of $1.2 million and $2.5 million in the prior and comparable year-ago quarters, respectively. The corresponding GAAP operating margins for Q4 2011, Q3 2011, and Q4 2010 were (1.4%), 3.9%, and 8.2%, respectively. Pretax income from continuing operations was $2.0 million in the fourth quarter of 2011, compared to $1.8 million in the prior quarter and $2.9 million in Q4 2010. The recent quarter included a one-time gain of $1.6 million in non-operating income for the sale of a long-term investment. GAAP net income was $1.9 million in Q4 2011, up from $1.4 million in the third quarter of 2011 and reversed a loss of $636,000 from the comparable Q4 2010 period. In Q4 2010, the company recorded an after-tax loss of $3.5 million from discontinued operations with related after-tax gain of $49,000 and after-tax loss of $36,000 that were included in Q4 2011 and Q3 2011, respectively. The corresponding GAAP net income per ADS was $0.06 in the fourth quarter of 2011, $0.04 in the third quarter of 2011, and a net loss of $0.02 in the fourth quarter of 2010.

Financial Highlights for the Twelve Months ending December 31, 2011:

O2Micro International Limited produced revenue of $124.3 million in 2011. Revenue was down by 10% from 2010 when the company reported revenue of $137.8 million. The gross margin in 2011 was 57.1%, compared to 61.4% in 2010. GAAP operating expenses totaled $63.9 million and $62.1 million in 2011 and 2010, respectively. The 2011 operating expenses reflected a reduction of $850,000 in operating expenses from litigation income received during the year. The GAAP operating income was $7.1 million in 2011 and $22.4 million in 2010. The corresponding GAAP operating margins were 5.7% and 16.3% in 2011 and 2010, respectively. Pretax income from continuing operations was $10.5 million in 2011 and $23.4 million in 2010. In 2011, the company recorded a one-time gain of $1.6 million net of taxes that was related to the sale of a long-term investment. GAAP net income in 2011 and 2010 was $9.4 million and $12.2 million, respectively. In 2010, the company recorded an after-tax loss of $9.8 million from discontinued operations and a related after-tax gain of $9,000 that was included in the 2011 results. The corresponding GAAP net income per fully diluted ADS was $0.28 in 2011 and $0.35 in 2010.

Supplementary Data:

The company ended the fourth quarter of 2011 with $125.6 million in unrestricted cash and short-term investments or $3.80 per outstanding ADS. The accounts receivable balance was $12.1 million and represented 41 days sales outstanding at the end of Q4 2011. Inventory was $7.9 million or 62 days and turned over 5.8 times during Q4 2011. As of December 31, 2011, the company had $132.5 million in working capital and the book value was $182.5 million, or $5.52 per outstanding ADS.

As of December 31, 2011, O2Micro International Limited counted 786 employees, including 427 engineers.

Management Commentary:

Sterling Du, Chairman and CEO, commented, "In 2011 we diversified our business with strong growth in power products and general lighting." Mr. Du continued, "As we look forward to 2012, we are excited about the market opportunity that is developing in general lighting and a continuation of our success in core power and backlighting markets."

Conference Call: O2Micro will hold its fourth quarter conference call on February 1, 2012 at 6:00 a.m. PST, 9:00 a.m. EST. You may participate using the following dial-in information.

In the US and CANADA: 800-227-9428, passcode # 3477998
INTERNATIONAL participants: 785-830-1925, passcode # 3477998

A replay of the call will be available by phone for one week following the live call. The replay can be accessed using the following dial-in information.

In the US and CANADA: 888-203-1112, passcode # 3477998
INTERNATIONAL participants: 719-457-0820, passcode # 3477998

A live simulcast will also be available on the company website at www.o2micro.com, and an online replay will be available on the company's website for one week.

About O2Micro

Founded in April 1995, O2Micro develops and markets innovative power management and e-commerce components for the Computer, Consumer, Industrial, and Communications markets. Products include Intelligent Lighting, Battery Management, and Power Management.

O2Micro International maintains an extensive portfolio of intellectual property with 18,727 patent claims granted, and over 20,000 more pending. The company maintains offices worldwide. Additional company and product information can be found on the company website at www.o2micro.com.

The O2Micro International Limited logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6567

O2Micro, the O2Micro logo, and combinations thereof are registered trademarks of O2Micro. All other trademarks or registered trademarks are the property of their respective owners.

Statements made in this release that are not historical, including statements regarding O2Micro's or management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Factors that could cause actual results to differ materially include risks and uncertainties such as reduced demand for products of electronic equipment manufacturers which include O2Micro's products due to adverse economic conditions in general or specifically affecting O2Micro's markets, technical difficulties and delays in the developments process, and errors in the products. You are also referred to the Form F-1 in connection with the company's initial public offering in August 2000, Form F-3 in connection with the company's public offering in November 2001, and the annual reports on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

     
     
     
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES    
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME    
(In Thousand U.S. Dollars, Except Per Share Amounts)    
     
 Three Months EndedYears Ended
 December 31,December 31,
 2011201020112010
 (Unaudited)(Unaudited)(Audited)
NET SALES  $ 28,666  $ 30,187 $ 124,283 $ 137,789
         
COST OF SALES   12,577   12,006   53,273   53,205
         
GROSS PROFIT   16,089   18,181   71,010   84,584
         
OPERATING EXPENSES (INCOME)        
Research and development (1)  8,545  8,135  33,591  31,055
Selling, general and administrative (1)  7,952  7,561  31,165  31,087
Litigation Income   --   --   (850)   --
Total Operating Expenses   16,497   15,696   63,906   62,142
         
INCOME (LOSS) FROM OPERATIONS   (408)   2,485   7,104   22,442
         
NON-OPERATING INCOME        
Interest income  379  205  1,262  927
Gain on sale of long-term investment   1,619   --   1,619   --
Foreign exchange gain (loss) — net  39  25  46  (150)
Other — net   329   162   451   151
Total Non-operating Income     2,366   392   3,378   928
         
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAX   1,958   2,877 10,482   23,370
         
INCOME TAX EXPENSE   121   54   1,063   1,325
         
NET INCOME FROM CONTINUING OPERATIONS  1,837  2,823  9,419  22,045
         
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX (1)   49    (3,459)   9    (9,843)
         
NET INCOME (LOSS)   1,886   (636)   9,428   12,202
         
OTHER COMPREHENSIVE INCOME (LOSS)        
Foreign currency translation adjustments  315  1,404  941  2,583
Unrealized gain (loss) on available-for-sale securities  (1,874)  (307)  (1,619)  1,687
Unrealized pension loss   (37)   (188)   (25)   (183)
Total Other Comprehensive Income (loss)   (1,596)   909   (703)   4,087
         
COMPREHENSIVE INCOME  $ 290  $ 273  $ 8,725  $ 16,289
         
BASIC EARNINGS (LOSS) PER ADS        
Continuing operations  $ 0.06  $ 0.08  $ 0.28  $ 0.65
Discontinued operations   --    (0.10)   --    (0.29)
   $ 0.06  $ (0.02)  $ 0.28  $ 0.36
         
DILUTED EARNINGS PER ADS        
Continuing operations  $ 0.06  $ 0.08  $ 0.28  $ 0.63
Discontinued operations   --    (0.10)   --    (0.28)
   $ 0.06  $ (0.02)  $ 0.28  $ 0.35
         
ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION:        
Basic (in thousands)   32,633   33,467   33,122   34,133
Diluted (in thousands)   33,182   33,467   33,886   35,057
         
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:        
Research and development  $ 223  $ 216  $ 1,199  $ 923
Selling, general and administrative  $ 555  $ 725  $ 2,473  $ 2,905
Discontinued operations  $ --  $ 13  $ --  $ 66
         
     
     
     
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES    
CONSOLIDATED BALANCE SHEETS    
(In Thousand U.S. Dollars, Except Share Amounts)    
 December 31,December 31,
 20112010
ASSETS(Unaudited)(Audited)
     
CURRENT ASSETS    
Cash and cash equivalents   $ 32,562  $ 42,277
Restricted cash    169    562
Short-term investments    93,016    68,728
Accounts receivable — net    12,062    13,239
Inventories    7,926    13,683
Prepaid expenses and other current assets    2,228    2,434
Total Current Assets    147,963    140,923
     
LONG-TERM INVESTMENTS    16,361    20,676
     
PROPERTY AND EQUIPMENT — NET   28,330   29,739
     
OTHER ASSETS    
Intangible assets  1,565  1,936
Other Assets   4,614   4,360
Total Other Assets    6,179    6,296
     
TOTAL ASSETS   $198,833   $197,634
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES    
Notes and accounts payable   $ 6,641   $ 8,299
Income tax payable    606    494
Accrued expenses and other current liabilities    8,237    8,031
Total Current Liabilities    15,484    16,824
     
OTHER LONG-TERM LIABILITIES    
Accrued pension liabilities  628  679
Long-term income tax liabilities  66  302
Other liabilities   129   129
Total Other Long-Term Liabilities   823   1,110
     
Total Liabilities    16,307    17,934
     
COMMITMENTS AND CONTINGENCIES    
     
SHAREHOLDERS' EQUITY    
Preference shares at $0.00002 par value per share    
 Authorized — 250,000,000 shares    --    --
Ordinary shares at $0.00002 par value per share    
 Authorized — 4,750,000,000 shares    
 Issued — 1,653,265,600 and 1,675,021,100 shares as of December 31, 2011 and 2010, respectively    33    34
Additional paid-in capital   136,625   135,703
Retained earnings  43,080  36,937
Accumulated other comprehensive income  6,899  7,602
Treasury stock — 47,990,100 and 5,000,000 shares as of December 31, 2011 and 2010,  respectively   (4,111)   (576)
Total Shareholders' Equity    182,526    179,700
     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $198,833   $197,634
CONTACT:  Gary E. Abbott

          Director of Investor Relations, O2Micro

          Phone: 408.987.5920, x8888

          Email: gary.abbott@o2micro.com