O2Micro Reports Fourth Quarter 2019 Financial Results

Feb 6, 2020

GEORGE TOWN, Grand Cayman, Feb. 06, 2020 (GLOBE NEWSWIRE) --

Operational and Strategic Highlights:

  • Q4 2019 revenue was up 7.7% from the same quarter in the previous year and up 11.4% sequentially and within the range of guidance provided on December 2nd, 2019.

  • GAAP net income per fully diluted ADS in the fourth quarter of 2019 was 7 cents, with non-GAAP net income of 5 cents per fully diluted ADS.

  • O2Micro expects the Q1 2020 revenue to be $14.5 million to $16 million compared to $12.8 million in the comparable quarter of the previous year.     

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 fourth quarter ending December 31, 2019.

Financial Highlights for the Fourth Quarter ending December 31, 2019:
O2Micro International Limited (the “Company”) reported Q4 2019 revenue of $17.9 million. Revenue was up 11.4 % sequentially, and up 7.7% from the same quarter in the previous year. The gross margin in the fourth quarter of 2019 was 56.7%, which was up from 51.4% in the prior quarter, and up from 50.3 % in the fourth quarter of 2018. During the fourth quarter of 2019, the Company recorded total GAAP operating expenses of $ 9.2 million, compared to $9.4 million in the third quarter of 2019, and $ 10.4 million in the year-ago Q4 period. The GAAP operating margins for the fourth quarter of 2019, the third quarter of 2019, and fourth quarter of 2018 were 5.2 %, (6.9 %), and (12.4 %), respectively.

GAAP net income was $1.8 million in Q4 2019. This compares to a GAAP net loss of $200,000 in the third quarter of 2019 and a GAAP net loss of $3.1 million in Q4 2018. GAAP net income per fully diluted ADS was $0.07 in Q4 2019. This compares to a GAAP net loss per fully diluted ADS of $0.01 in Q3 2019 and a GAAP net loss per fully diluted ADS of $0.12 in Q4 2018.

Supplementary Data:
The Company ended the fourth quarter of 2019 with $46.4 million in unrestricted cash and short-term investments or $1.76 per outstanding ADS. The accounts receivable balance was $10.3 million and represented 57 days sales outstanding at the end of Q4 2019. Inventory was $8.8 million or 108 days and turned over 3.3 times during Q4 2019. As of December 31, 2019, the Company had $ 55.7 million in working capital and the book value was $ 75.1 million, or $2.85 per outstanding ADS. As of December 31, 2019, O2Micro International Limited had a total of 378 employees worldwide, including 238 engineers.

Management Commentary:
"Our primary growth drivers continue to show promise and projected growth into 2020. Our TV products continued their upward drive in Q4, and our battery products experienced excellent growth driven by expanded use and increased capacities of Li-Ion batteries with new and existing customers supporting the automotive, power tools, IOT and household appliance sectors. Our smartphone products see increasing design wins and revenue expected to follow." said Sterling Du, O2Micro’s Chairman and CEO. “We believe our solutions and design wins for these product segments will provide for ongoing growth in a dynamic market and lead O2Micro back to long term profitability.”

Conference Call:
O2Micro will hold its fourth quarter conference call today, February 6th, at 6:00AM. Pacific, 9:00AM Eastern. You may participate using the following dial-in information.

Conference ID: 2629343
Participants, Int'l Toll: +1 334-323-0501
Participants, US/CAN Toll Free: 800-353-6461
The Call-in Audio Replay will be available from February 6th2020 Eastern Time (US & Canada) through February 13th 2020  12:00 Eastern Time (US & Canada)
https://events.globalmeet.com/Public/WebRegistration/ZW5jPXNhQWNoekF6VklmZjJUZkwzRThwaUtJK0FsK2VXaXNCNFIzcUF2RFcrcSt3WU5HZTN0M3lzQ1dnd1lMOXlFSlRtSSt6NTAraExzV2RScFB3QVRxOFJ3PT0=
A live webcast will also be available on the Company's website at http://ir.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 components for the Computer, Consumer, Industrial, Automotive and Communications markets. Products include LED General Lighting, Backlighting, Battery Management, and Power Management. 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 O2Micro'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 O2Micro'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 STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
 (In Thousand U.S. Dollars, Except Per Share Amounts)
 
  Three Months Ended Year Ended
      December 31,        December 31, 
       2019         2018         2019         2018   
  (Unaudited) (Unaudited) (Audited)
NET SALES $   17,861   $   16,586   $   60,928   $   62,714  
         
COST OF SALES       7,727         8,243         28,960         30,741  
         
GROSS PROFIT       10,134         8,343         31,968         31,973  
         
OPERATING EXPENSES        
Research and development (1)     4,382       5,020       19,065       19,766  
Selling, general and administrative (1)       4,828         5,386         19,286         20,332  
                 
Total Operating Expenses       9,210         10,406         38,351         40,098  
         
INCOME (LOSS) FROM OPERATIONS       924       (2,063 )     (6,383 )     (8,125 )
 
NON-OPERATING INCOME
Interest income     216       71       543       369  
Net gain (loss) recognized on long-term investments       245       (1,370 )       788         9,916  
Foreign exchange gain (loss) – net     (79 )     76         (162 )       108  
Gain on sale of real estate     500       -       500       -  
Other – net       231         530          846          961   
Total Non-operating Income (Loss)       1,113         (693 )       2,515         11,354  
         
INCOME (LOSS) BEFORE INCOME TAX     2,037       (2,756 )     (3,868 )     3,229  
         
INCOME TAX EXPENSE       250         330         1,171         1,141  
         
NET INCOME (LOSS)     1,787       (3,086 )     (5,039 )     2,088  
 
OTHER COMPREHENSIVE INCOME
Foreign currency translation adjustments     356       (94 )     (85 )     (677 )
Unrealized pension gain       61         9         65         14  
Total Other Comprehensive Income (Loss)       417         (85 )       (20 )       (663 )
         
COMPREHENSIVE INCOME (LOSS) $     2,204   $   (3,171 ) $   (5,059 ) $     1,425  
         
EARNINGS (LOSS) PER ADS        
Basic $     0.07   $   (0.12 ) $   (0.19 ) $     0.08  
Diluted $     0.07   $   (0.12 ) $   (0.19 ) $     0.08  
         
ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION:                        
Basic (in thousands)       26,347         26,019         26,321         26,016  
Diluted (in thousands)       27,095         26,019         26,321         26,616  
         
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:        
Research and development $     68   $     59   $     272   $     241  
Selling, general and administrative $     310   $     294   $     1,190   $     1,180  


 
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In Thousand U.S. Dollars, Except Share Amounts)
 
  December 31, December 31,
      2019        2018    
ASSETS (Unaudited) (Audited)
 
CURRENT ASSETS
Cash and cash equivalents $     10,696   $     32,414  
Restricted cash         35           34  
Short-term investments         35,693           6,172  
Accounts receivable – net         10,335           11,388  
Inventories         8,796           10,288  
Prepaid expenses and other current assets         1,295           2,276  
Total Current Assets         66,850           62,572  
 
LONG-TERM INVESTMENTS         4,172           10,445  
 
PROPERTY AND EQUIPMENT – NET (2)       15,551         13,714  
 
OTHER ASSETS         2,426           2,578  
 
TOTAL ASSETS $       88,999   $       89,309  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
CURRENT LIABILITIES
Notes and accounts payable $       4,867   $       4,582  
Income tax payable         611           413  
Lease liabilities         827           -  
Accrued expenses and other current liabilities         4,839           4,181  
Total Current Liabilities         11,144           9,176  
 
OTHER LONG-TERM LIABILITIES
Accrued pension liabilities     214       321  
Deferred income tax liabilities         589           681  
Lease liabilities         1,932           -  
Other liabilities       65         85  
Total Other Long-Term Liabilities     2,800       1,087  
 
Total Liabilities         13,944           10,263  
 
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 – 1,669,036,600 shares as of December 31, 2019 and December 31, 2018
Outstanding –1,314,798,600 and 1,298,808,750 shares as of December 31, 2019 and
December 31, 2018, respectively
        33           33  
Additional paid-in capital       143,484         143,115  
Accumulated deficits     (51,773 )     (45,912 )
Accumulated other comprehensive income     4,654       4,674  
Treasury stock – 354,238,000 and 370,227,850 shares as of December 31, 2019 and
  December 31, 2018, respectively
    (21,343 )     (22,864 )
Total Shareholders’ Equity         75,055           79,046  
 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $       88,999   $       89,309  

(2) Property and equipment- net includes right-of-used assets under operating lease of $2,742 as of December 31, 2019.

O2MicroDaniel Meyberg
Investor Relations
ir@o2micro.com

O2Micro International Limited Logo

Source: O2Micro, Inc.