O2Micro Reports Third Quarter Financial Results

Nov 2, 2011

GEORGE TOWN, Grand Cayman, Nov. 2, 2011 (GLOBE NEWSWIRE) -- O2Micro® International Limited (Nasdaq:OIIM) reported its financial results today for the third quarter of fiscal 2011, ending September 30, 2011.

Financial Highlights for the Third Quarter ending September 30, 2011:

O2Micro International Limited reported revenue of $32.0 million for the third quarter of 2011. Revenue was down 1% from the prior Q2 period. The gross margin was 55.5% in Q3 2011 and it was 175 basis points lower than Q2 2011. GAAP operating expenses rose from $15.6 million in Q2 2011 to $16.5 million in Q3 2011. The corresponding GAAP operating margins for the respective quarters were 9% and 4%. These results from operations yielded GAAP net income that declined from $3.0 million in Q2 2011 to $1.4 million in Q3 2011. The corresponding GAAP net income per fully diluted ADS was $0.09 and $0.04 for the respective Q2 and Q3 2011 periods.

Financial Highlights for the Nine Months ending September 30, 2011:

O2Micro International Limited produced revenue of $95.6 million for the nine months ending September 30, 2011. Revenue was down 11% from the comparable nine months of 2010. The gross margin was 57.4% for the first nine months of 2011 and 61.7% for the corresponding period of 2010. GAAP operating expenses were $47.4 million during the first nine months of 2011 and $46.4 million through the first nine months of 2010. Corresponding GAAP operating margins were 8% and 19%, respectively. The GAAP net income was $7.5 million during the first nine months of 2011 and $12.8 million through the first nine months of 2010. Corresponding net income per fully diluted ADS was $0.22 and $0.36, respectively.

Supplementary Data:

The company ended the third quarter of 2011 with $119.1 million in unrestricted cash and short-term investments or $3.60 per outstanding ADS. The accounts receivable balance was $14.0 million and represented 41 days sales outstanding at the end of Q3 2011. Inventory was $9.3 million or 66 days and turned over 5.5 times during Q3 2011. As of September 30, 2011, the company had $130.8 million in working capital and the book value was $185.4 million, or $5.60 per outstanding ADS.

As of September 30, 2011, O2Micro International Limited counted 765 employees, including 422 engineers.

Management Commentary:

Sterling Du, Chairman and CEO, commented, "We are successfully diversifying our business. We continue to be a leader in backlighting, our DC/DC products are gaining market acceptance, and our investment in general lighting is showing great promise."

Conference Call: O2Micro will hold its third quarter conference call today, November 2, 2011, at 7:00 a.m. PDT, 10:00 a.m. EDT. You may participate using the following dial-in information.

In the US and CANADA: 800-227-9428, passcode # 9100437
INTERNATIONAL participants: 785-830-1925, passcode # 9100437

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 # 9100437
INTERNATIONAL participants: 719-457-0820, passcode # 9100437

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 17,633 patent claims granted, and over 18,000 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 development 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 (UNAUDITED)
(In Thousand U.S. Dollars, Except Per Share Amounts)
         
 Three Months EndedNine Months Ended
 September 30,September 30,
 2011201020112010
         
NET SALES $32,046 $33,775 $95,617 $107,602
         
COST OF SALES 14,265 12,857 40,696 41,199
         
GROSS PROFIT 17,781 20,918 54,921 66,403
         
OPERATING EXPENSES (INCOME)         
Research and development (1) 8,452 7,734 25,046 22,920
Selling, general and administrative (1)  8,094 7,740 23,213 23,526
Litigation income --  -- (850) --
Total Operating Expenses 16,546 15,474 47,409 46,446
         
INCOME FROM OPERATIONS 1,235 5,444 7,512 19,957
         
NON-OPERATING INCOME         
Interest income  320 241 883 722
Foreign exchange gain (loss) — net  207 (184) 7 (175)
Other — net (12) 16 122 (11)
Total Non-operating Income  515 73 1,012 536
         
INCOME FROM CONTINUING OPERATIONS BEFORE 1,750 5,517 8,524 20,493
INCOME TAX        
         
INCOME TAX EXPENSE  279 449 942 1,271
         
NET INCOME FROM CONTINUING OPERATIONS 1,471 5,068 7,582 19,222
         
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (1) 36 3,380 40 6,384
         
NET INCOME 1,435 1,688 7,542 12,838
         
OTHER COMPREHENSIVE INCOME         
Foreign currency translation adjustments  (449) 1,063 626 1,179
Unrealized gain on available-for-sale securities 622 740 255 1,994
Unrealized pension gain  4 2 12 5
Total Other Comprehensive Income  177 1,805 893 3,178
         
COMPREHENSIVE INCOME  $1,612 $3,493 $8,435 $16,016
         
BASIC EARNINGS (LOSS) PER ADS        
Continuing operations $0.04 $0.15 $0.23 $0.56
Discontinued operations -- (0.10) -- (0.19)
  $0.04 $0.05 $0.23 $0.37
         
DILUTED EARNINGS (LOSS) PER ADS        
Continuing operations $0.04 $0.15 $0.22 $0.54
Discontinued operations -- (0.10) -- (0.18)
  $0.04 $0.05 $0.22 $0.36
         
ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION:        
Basic (in thousands) 33,070 33,576 33,285 34,355
Diluted (in thousands) 33,678 34,491 34,121 35,282
         
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:        
Research and development $236 $232 $976 $707
Selling, general and administrative $614 $798 $1,918 $2,180
Discontinued operations $ -- $15 $ -- $53
 
 
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousand U.S. Dollars, Except Share Amounts)
     
 September 30,December 31,
 20112010
ASSETS(Unaudited)(Audited)
     
CURRENT ASSETS    
Cash and cash equivalents $29,805 $42,277
Restricted cash 168 562
Short-term investments 89,330 68,728
Accounts receivable — net 14,036 13,239
Inventories 9,275 13,683
Prepaid expenses and other current assets 2,040 2,434
Total Current Assets 144,654 140,923
     
LONG-TERM INVESTMENTS 20,948 20,676
     
PROPERTY AND EQUIPMENT — NET 28,271 29,739
     
OTHER ASSETS    
Intangible assets 1,648 1,936
Other Assets 4,762 4,360
Total Other Assets 6,410 6,296
     
TOTAL ASSETS $200,283 $197,634
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES    
Notes and accounts payable $5,855 $8,299
Income tax payable 583 494
Accrued expenses and other current liabilities 7,401 8,031
Total Current Liabilities 13,839 16,824
     
OTHER LONG-TERM LIABILITIES    
Accrued pension liabilities  592 679
Long-term income tax liabilities 302 302
Other liabilities 129 129
Total Other Long-Term Liabilities 1,023 1,110
     
Total Liabilities 14,862 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 — 1,655,496,600 and 1,675,021,100 shares as of September 30, 2011 and December 31, 2010, respectively 33 34
Additional paid-in capital 136,018 135,703
Retained earnings 41,282 36,937
Accumulated other comprehensive income  8,495 7,602
Treasury stock — 4,282,500 and 5,000,000 shares as of September 30, 2011 and December 31,  (407) (576)
2010,respectively     
Total Shareholders' Equity  185,421 179,700
     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $200,283 $197,634
CONTACT: Gary E. Abbott

         Director of Investor Relations, O2Micro

         Phone: 408.987.5920, x8888

         Email: gary.abbott@o2micro.com