O2Micro Reports First Quarter Financial Results

Apr 29, 2009
GEORGE TOWN, Grand Cayman--(BUSINESS WIRE)--Apr. 29, 2009-- O2Micro®International Limited (NASDAQ®:OIIM) (SEHK:0457), a leading supplier of innovative power management and security components, reported its financial results today for the first quarter ended March 31, 2009.

 

Financial Results for the First Quarter ending 3/31/2009:

Net sales in the first quarter of 2009 were $23.1 million. Sales exceeded our expectations, although they declined by 38.5% from the comparable year-ago quarter. The decline in sales reflects the global economic slowdown and the corresponding impact on our business.

The GAAP gross margin was 55.5% in Q1 2009 and also exceeded our expectations. The gross margin fell from 58.5% in the year-ago period due to the fixed component of this expense relative to total revenue.

GAAP operating expenses were $16.8 million. These expenses were comprised of $8.0 million in R&D expenses, and $8.8 million in SG&A expenses. Both R&D and SG&A spending were at the low-end of our targeted ranges. In addition, the operating expenses were lower than the Q1 2008 period when the company recorded $19.8 million of expense, including $9.8 million of R&D and $12.0 million of SG&A spending, as well as $2.0 million of offset from litigation income.

During the first quarter of 2009, we reported a GAAP operating loss of $3.9 million, compared with operating income of $2.2 million in the year-ago quarter. The loss in the recent quarter was smaller than expected due to higher revenue, higher gross margin, and lower expenses.

Our GAAP net loss in Q1 2009 was $3.5 million, compared with net income of $2.2 million in the year-ago quarter. The net loss we reported in Q1 2009 was also smaller than we had expected due to the same drivers as our operating income. The GAAP loss per ADS was $0.10 in Q1 2009 and GAAP net income per ADS was $0.06 in Q1 2008.

Supplementary Data:

As of March 31, 2009, O2Microhad unrestricted cash and short-term investments of $105.5 million, or $2.87 per fully diluted ADS. Net accounts receivable was $12.1 million, and there were 44 days sales outstanding in accounts receivable at the end of the first quarter. Inventory was $13.0 million and turned over 2.8 times in the first quarter.

As of March 31, 2009, O2Micro headcount consisted of 845 employees, of which 564 are engineers. This headcount was down from 876 employees at the end of the fourth quarter of 2008.

Management Commentary:

Sterling Du, Chairman and CEO, commented, "We have adapted to the reset in global business activity and we are continuing to deliver the best-in-class technology to major OEM customers." He continued, "At the same time, we are laser-focused on successfully bringing key new products to market in the battery, DC/DC, and Internet security segments. We are continuing to invest our R&D dollars in several young product lines and we are seeing early signs of success with them."

Conference Call: O2Micro will hold its first quarter conference call at 5:00 a.m. PDT, 8:00 a.m. EDT, and 8:00 p.m.Hong Kong time. You may participate using the following dial-in information.

In the US and CANADA:   888-389-5979, pass code #3193459
In HONG KONG:   800-968-103, pass code #3193459
Other INTERNATIONAL participants:   719-325-2204, pass code #3193459
 

A replay of the call will be available by phone until May 6th using the following dial-in information.

 
In the US and CANADA:   888-203-1112, pass code #3193459
In HONG KONG:   800-901-108, pass code #3193459
Other INTERNATIONAL participants:   719-457-0820, pass code #3193459
     

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

About O2Micro

Founded in April 1995, O2Micro develops and markets innovative power management and security components for the Computer, Consumer, Industrial, and Communications markets. Products include Intelligent Lighting, Battery Management, Power Management, and SmartCardBus® products.

O2Micro International maintains an extensive portfolio of intellectual property with 11,830 patent claims granted, and over 14,000 more pending. The company maintains offices worldwide. Additional company and product information can be found on the company website at www.o2micro.com.

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

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They include statements regarding O2Micro's future growth, long term profitability, increases in shareholder value, introduction of innovative technologies, expansion of O2Micro's product and patent portfolios, legal expenditures, litigation activity and other statements regarding O2Micro's or management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future. 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 Ended
    March 31,
     

2009

     

2008

 
                 
NET SALES   $ 23,110     $ 37,556  
                 
COST OF SALES     10,286       15,596  
                 
GROSS PROFIT     12,824       21,960  
                 
OPERATING EXPENSES (INCOME)                
Research and development (1)     7,984       9,756  
Selling, general and administrative (1)     8,783       12,021  
Litigation income     -       (2,000 )
Total Operating Expenses     16,767       19,777  
                 
INCOME (LOSS) FROM OPERATIONS     (3,943 )     2,183  
                 
NON-OPERATING INCOME                
Interest income     444       670  
Foreign exchange gain (loss)     487       (114 )
Other – net     (11 )     13  
Total Non-operating Income     920       569  
                 
INCOME (LOSS) BEFORE INCOME TAX     (3,023 )     2,752  
                 
INCOME TAX EXPENSE     518       492  
                 
NET INCOME (LOSS)     (3,541 )     2,260  
                 
OTHER COMPREHENSIVE INCOME (LOSS)                
Foreign currency translation adjustments     (644 )     2,010  
Unrealized gain (loss) on available-for-sale securities     1,503       (2,864 )
Unrealized pension gain     1       -  
Total Other Comprehensive Income (Loss)     860       (854 )
                 
COMPREHENSIVE INCOME (LOSS)   $ (2,681 )   $ 1,406  
                 
EARNINGS (LOSS) PER SHARE:                
Basic   $ (0.0019 )   $ 0.0012  
Diluted   NA     $ 0.0012  
                 
EARNINGS (LOSS) PER ADS                
Basic   $ (0.10 )   $ 0.06  
Diluted   NA     $ 0.06  
                 
SHARES USED IN EARNINGS (LOSS) PER SHARE CALCULATION:                
Basic (in thousands)     1,838,683       1,894,334  
Diluted (in thousands)   NA       1,903,655  
                 
ADS UNITS USED IN EARNINGS PER ADS CALCULATION:                
Basic (in thousands)     36,774       37,887  
Diluted (in thousands)   NA       38,073  
                 
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:                
Research and development   $ 282     $ 258  
Selling, general and administrative   $ 489     $ 415  
                 

O2Micro International Limited and Subsidiaries

Consolidated Balance Sheets

(In Thousand U.S. Dollars, Except Share Amounts)

         
    March 31,   December 31,
   

2009

 

2008

ASSETS

  (Unaudited)    
         
CURRENT ASSETS        
Cash and cash equivalents   $ 37,755   $ 31,844
Restricted cash     1,151     1,153
Short-term investments     67,747     72,344
Accounts receivable – net     12,109     10,578
Inventories     12,950     16,388
Prepaid expenses and other current assets     2,614     2,314
Total Current Assets     134,326     134,621
         
LONG-TERM INVESTMENTS     14,689     13,199
         
PROPERTY AND EQUIPMENT – NET     33,384     34,353
         
OTHER ASSETS        
Restricted assets – net     1,361     1,411
Intangible assets     4,763     4,929
Other Assets     4,551     4,760
         
TOTAL ASSETS   $ 193,074   $ 193,273
         

LIABILITIES AND SHAREHOLDERS' EQUITY

       
         
CURRENT LIABILITIES        
Notes and accounts payable   $ 5,074   $ 4,120
Income tax payable     443     226
Accrued expenses and other current liabilities     8,670     8,269
Total Current Liabilities     14,187     12,615
         
OTHER LONG-TERM LIABILITIES        
Accrued pension liabilities     513     553
FIN 48 tax liabilities     302     302
Other liabilities     23     23
      838     878
         
Total Liabilities     15,025     13,493
         
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 – 1,839,591,200 and 1,832,788,400 shares as of March 31, 2009 and December 31, 2008, respectively     37     37
Additional paid-in capital     142,734     141,784
Retained earnings     33,205     36,746
Accumulated other comprehensive income     2,073     1,213
Total Shareholders' Equity     178,049     179,780
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 193,074   $ 193,273

 

 

Source: O2Micro International Limited

O2Micro
Gary E. Abbott, 408-987-5920 ext. 8888
Director of Investor Relations
gary.abbott@o2micro.com