O2Micro Reports Third Quarter 2014 Financial Results
GEORGE TOWN, Grand Cayman, Oct. 30, 2014 (GLOBE NEWSWIRE) --
Operational and Strategic Highlights:
- Company experienced strong design activity in solutions for smartphone and tablet markets; expecting products to ramp in 2015.
- O2Micro continues to lower operating expenses. Company lowers third quarter operating expenses by $2.7 million on a year-over-year basis
O2Micro® International Limited (Nasdaq:OIIM), a global leader in the design, development and marketing of high-performance integrated circuits and solutions, reported its financial results today for the third quarter of 2014, ending September 30, 2014.
Financial Highlights for the Third Quarter ending September 30, 2014:
O2Micro International Limited reported Q3 2014 revenue of $15.4 million. Revenue was down 12% sequentially and down 17% from the comparable year-ago quarter. The gross margin in the third quarter of 2014 was 51.8%. The gross margin was up from 51.5% in the prior quarter and up from 51.4% in the third quarter of 2013. The gross margin remains in our target range and varies primarily with revenue level and product mix. During the third quarter of 2014, the company recorded total GAAP operating expenses of $11.5 million, compared to $12.1 million in the second quarter of 2014 and $14.2 million in the year-ago Q3 period. The respective GAAP operating margins for the third quarter of 2014, the second quarter of 2014, and third quarter of 2013 were (23.0%), (17.9%), and (25.1%).
GAAP net loss was $2.9 million in Q3 2014. This compares to a GAAP net loss of $3.2 million in the second quarter of 2014 and a GAAP net loss of $4.5 million in Q3 2013. GAAP net loss per fully diluted ADS was $0.11 in Q3 2014. This compares to a GAAP net loss per fully diluted ADS of $0.12 in Q2 2014 and a GAAP net loss per fully diluted ADS of $0.16 in Q3 2013.
Financial Highlights for the Nine Months ending September 30, 2014:
O2Micro International Limited reported revenue of $49.3 million for the nine months ending September 30, 2014. This was down 9.9% from $54.7 million in the comparable nine months of 2013. The gross margins were 51.6% and 50.9% during the corresponding periods of 2014 and 2013, respectively. GAAP operating expenses were $35.2 million and $42.9 million in the first nine months of 2014 and 2013, respectively. The respective GAAP operating margins for the comparable periods were (19.8%) and (27.6%). Pretax loss from continuing operations was $8.3 million in the first nine months of 2014. This compares to a pretax loss from continuing operations of $13.3 million in the first nine months of 2013. GAAP net loss was $9.0 million in the first nine months of 2014. This compares to a GAAP net loss of $14.0 million in the first nine months of 2013. The GAAP net loss per fully diluted ADS was $0.33 in the first nine months of 2014. This compares to a GAAP net loss per fully diluted ADS of $0.48 in the first nine months of 2013.
The company ended the third quarter of 2014 with $64.9 million in unrestricted cash and short-term investments or $2.40 per outstanding ADS. The accounts receivable balance was $8.3 million and represented 54 days sales outstanding at the end of Q3 2014. Inventory was $10.2 million or 120 days and turned over 3.0 times during Q3 2014. As of September 30, 2014, the company had $75.3 million in working capital and the book value was $114.7 million, or $4.25 per outstanding ADS.
As of September 30, 2014, O2Micro International Limited counted 478 employees, including 281 engineers.
"Our third quarter results were in-line with the updated guidance that we provided in early October and reflect a difficult quarter in our power management business for notebooks," said Sterling Du, O2Micro's Chairman and CEO. "Despite the unexpected issue with one of our charger IC products in the quarter, we are very confident that our new target of penetrating the white-box smartphone and tablet markets with multiple products, coupled with ongoing growth in our carefully chosen growth drivers including LED general lighting, backlighting and battery management products, will contribute to top-line growth in upcoming quarters and lead O2Micro back to profitability in the near future."
Conference Call: O2Micro will hold its third quarter conference call today, October 30, 2014, at 6:00 a.m. PDT, 9:00 a.m. EDT. You may participate using the following dial-in information.
|In the US and CANADA:||888-397-5352, pass code #7266590|
|INTERNATIONAL participants:||719-325-2244, pass code #7266590|
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, pass code #7266590|
|INTERNATIONAL participants:||719-457-0820, pass code #7266590|
A live webcast will also be available on the company website at www.o2micro.com, and an online replay will be available for one week.
Founded in April 1995, O2Micro develops and markets innovative power management components for the Computer, Consumer, Industrial, Automotive and Communications markets. Products include LED General Lighting, Backlighting, Battery Management and Power Management.
O2Micro International maintains an extensive portfolio of intellectual property with 27,716 patent claims granted, and over 28,000 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, 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 or its 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 and other Federal Securities Laws. Such statements involve risks, speculation and uncertainties that may cause actual results to differ materially from those set forth in these statements or from management's current views and expectations. Risks and uncertainties in this release may include, without limitation, any one or combination of the following: the effect of competitive and economic factors; real property value fluctuations and market demand; legal changes in any relevant rules and regulations pertaining to O2Micro's business; changes in technology and industry standards, and O2Micro's reaction to those factors; consumer and business buying decisions with respect to our customers' products incorporating O2Micro's products; continued competitive pressures in the marketplace; the ability of O2Micro to deliver to the marketplace, and stimulate customer demand therein, for new products and technological innovations on a timely basis; the effect that product introductions and transitions, changes in product pricing or mix, and/or increases in component costs could have on O2Micro's gross margins; the inventory risk associated with O2Micro's need to order, or commit to order, product components and product capacity in advance of forecast customer orders; the continued availability of acceptable terms of certain components and services essential to O2 Micro's business which are currently obtained by the company from sole or limited sources; the effect that O2Micro's dependency on manufacturing and logistics services provided by third parties may have on the quality, quantity, availability or cost of products manufactured or services rendered; risks associated with O2Mcro's international operations; the potential impact of a finding that O2Micro has infringed on the intellectual property rights of others, or that any third party may have infringed on O2Micro's intellectual property that may negatively affect O2Micro's business; O2Micro's legal classifications with governmental and regulatory agencies; O2Micro's dependency on the performance of distributors, carriers, independent sales representatives, and other resellers of O2Micro's products; the effect that product and service quality problems could have on O2Micro's sales ability and operating profits; the ability of O2Micro to deliver its products in a timely fashion to its customers, and the possible negative ramifications if such is not possible; the continued service and availability of key executives and employees; war, terrorism, public health issues, natural disasters, and other circumstances that could disrupt supply, delivery, or demand of products; and unfavorable results of other legal proceedings.
Actual results may differ materially due to numerous risk factors. Such risk factors are more fully enumerated in O2Micro's 20-F Annual Filings, Annual Report(s), 6-K's, the Form F-1 filed in connection with the company's initial public offering in August 2000, information posted on our website at www.o2micro.com, and other documents filed with the SEC, NASDAQ or any other public agency from time to time. The statements herein are based on dated information on the dates mentioned herein, which is subject to change. O2Micro assumes no obligation to update or revise the information provided on today, or any other forward-looking information, whether as a result of new information, future events or any other information that may arise. This information only speaks to the respective dates mentioned in said information.
|O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES|
|CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)|
|(In Thousand U.S. Dollars, Except Per Share Amounts)|
|Three Months Ended||Nine Months Ended|
|September 30,||September 30,|
|COST OF SALES||7,408||9,056||23,828||26,870|
|Research and development (1)||5,499||6,514||16,329||19,824|
|Selling, general and administrative (1)||6,018||7,719||18,876||23,101|
|Total Operating Expenses||11,517||14,233||35,205||42,925|
|LOSS FROM OPERATIONS||(3,541)||(4,672)||(9,772)||(15,114)|
|Foreign exchange gain (loss) - net||201||(128)||174||404|
|Other - net||394||196||493||347|
|Total Non-operating Income||850||377||1,458||1,782|
|LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX||(2,691)||(4,295)||(8,314)||(13,332)|
|INCOME TAX EXPENSE||250||247||734||701|
|LOSS FROM CONTINUING OPERATIONS||(2,941)||(4,542)||(9,048)||(14,033)|
|LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX||--||--||--||(3)|
|OTHER COMPREHENSIVE INCOME (LOSS)|
|Foreign currency translation adjustments||(487)||474||(720)||(23)|
|Unrealized gain (loss) on available-for-sale securities||(255)||112||(232)||141|
|Unrealized pension gain||2||5||5||14|
|Total Other Comprehensive (Loss) Income||(740)||591||(947)||132|
|BASIC EARNINGS (LOSS) PER ADS|
|DILUTED EARNINGS (LOSS) PER ADS|
|ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION:|
|Basic (in thousands)||27,174||28,318||27,436||28,968|
|Diluted (in thousands)||27,174||28,318||27,436||28,968|
|(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:|
|Research and development||$131||$173||$390||$530|
|Selling, general and administrative||$417||$465||$1,232||$1,430|
|O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES|
|CONSOLIDATED BALANCE SHEET|
|(In Thousand U.S. Dollars, Except Share Amounts)|
|September 30,||December 31,|
|Cash and cash equivalents||$33,753||$42,293|
|Accounts receivable - net||8,251||10,024|
|Prepaid expenses and other current assets||1,409||1,437|
|Total Current Assets||84,948||94,750|
|PROPERTY AND EQUIPMENT - NET||21,448||23,039|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Notes and accounts payable||$3,950||$4,169|
|Income tax payable||392||238|
|Accrued expenses and other current liabilities||5,340||5,353|
|Total Current Liabilities||9,682||9,760|
|OTHER LONG-TERM LIABILITIES|
|Accrued pension liabilities||375||391|
|Total Other Long-Term Liabilities||771||1,049|
|COMMITMENTS AND CONTINGENCIES|
|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 - 1,660,786,600 shares as of September 30, 2014 and December 31, 2013, respectively||33||33|
|Additional paid-in capital||140,793||140,198|
|Accumulated other comprehensive income||7,565||8,512|
|Treasury stock - 309,978,100 and 269,042,350 shares as of September 30, 2014 and December 31, 2013,respectively||(22,417)||(19,899)|
|Total Shareholders' Equity||114,692||126,610|
|TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY||$125,145||$137,419|
CONTACT: Scott L. Anderson Director of Investor Relations, O2Micro Phone: 408.987.5920, x8888 Email: email@example.com