O2MICRO REPORTS SECOND QUATER EARNINGS

Date4-Aug-2004
( BW)(CA-O2MICRO)(OIIM) O2Micro Reports Second Quarter Earnings

 

Business Editors/High-Tech Writers

 

SANTA CLARA, Calif. & GEORGE TOWN, Grand Cayman--(BUSINESS

WIRE)--Aug. 4, 2004--O2Micro(R) International Limited (Nasdaq:OIIM), a leading supplier of innovative power management and security ICs to manufacturers of products for the computer, consumer, industrial, and communications markets, reported its financial results today for the second quarter ended June 30, 2004.

Net sales for the second quarter were $24.1 million. Second quarter revenue of $24.1 million was an increase of 8% from the preceding quarter, and an increase of 15% over the comparable quarter of the prior year. Earnings per share for the second quarter, fully diluted, were 10 cents per share, compared to 10 cents per share in

the preceding quarter and 6 cents per share in the comparable quarter of the prior year.

Net income for the second quarter of $4.1 million was a decrease of 1% from the preceding quarter, and an increase of 70% from the comparable quarter of the prior year. Second quarter R&D expenditures were $4.7 million, an increase of 3% from the preceding quarter, and a decrease of 3% from the comparable quarter of the prior year.

"O2Micro achieved significant revenue growth in Q2 while expanding its patent and product portfolios," said Sterling Du, Chairman and CEO of O2Micro.

Conference Call: O2Micro will hold its second quarter conference call today at 2:00 p.m. PDT, 5:00 p.m. EDT. You may participate by dialing 800-915-4836, no passcode required. A replay of the call will be available by phone until August 11th by dialing 800-428-6051 or 973-709-2089 (for International participants), passcode #363006. A live simulcast will also be available on the company website at www.o2micro.com, and an online replay will be available on the site for one week.

 

About O2Micro

 

Founded in April 1995, O2Micro develops and markets innovative power management and security components for manufacturers of products for the computer, consumer, industrial, and communications markets. Products include Intelligent Lighting, Battery Charger and Management, DC/DC Converter, SmartCardBus(R) and 4-in-1 MemoryCardBus(TM) ICs.

O2Micro International maintains an extensive portfolio of intellectual property with 1524 patent claims granted, and over 5000 more pending. The company maintains offices worldwide. Additional company and product information can be found on the company website at www.o2micro.com.

 

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

(Unaudited)

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

 

Three Months Six Months

Ended June 30, Ended June 30,

---------------- -----------------

2004 2003 2004 2003

------- ------- ------- -------

NET SALES $ 24,065 $ 20,895 $ 46,261 $ 40,236

 

COST OF SALES 9,724 9,222 19,124 17,607

------- ------- ------- -------

GROSS PROFIT 14,341 11,673 27,137 22,629

------- ------- ------- -------

OPERATING EXPENSES

Research and development 4,681 4,843 9,242 9,755

Selling, general and

administrative 4,983 4,319 9,242 8,638

------- ------- ------- -------

Total Operating Expenses 9,664 9,162 18,484 18,393

------- ------- ------- -------

INCOME FROM OPERATIONS 4,677 2,511 8,653 4,236

------- ------- ------- -------

 

NON-OPERATING INCOME (EXPENSES)

Interest income 254 294 485 573

Impairment loss on long-term

investments - (6) - (17)

Gain on sale of long-term

investments - - 340 -

Foreign exchange gain (253) - (31) -

Other - net 7 41 10 5

------- ------- ------- -------

Total Non-operating Income 8 329 804 561

------- ------- ------- -------

 

INCOME BEFORE INCOME TAX 4,685 2,840 9,457 4,797

 

INCOME TAX EXPENSE 537 401 1,103 671

------- ------- ------- -------

NET INCOME 4,148 2,439 8,354 4,126

 

OTHER COMPREHENSIVE INCOME (LOSS)

Translation adjustments on

subsidiaries (109) 112 61 (144)

Unrealized gain (loss) on

available-for-sale securities 19 75 (67) 159

------- ------- ------- -------

Total Other Comprehensive Income

(Loss) (90) 187 (6) 15

------- ------- ------- -------

 

COMPREHENSIVE INCOME $ 4,058 $ 2,626 $ 8,348 $ 4,141

======= ======= ======= =======

EARNINGS PER SHARE:

Basic $ 0.11 $ 0.06 $ 0.21 $ 0.11

======= ======= ======= =======

Diluted $ 0.10 $ 0.06 $ 0.21 $ 0.11

======= ======= ======= =======

SHARES USED IN EARNINGS PER SHARE

CALCULATION:

Basic (in thousands) 39,205 38,216 39,161 38,155

======= ======= ======= =======

Diluted (in thousands) 40,272 39,466 40,467 39,161

======= ======= ======= =======

 

O2Micro International Limited and Subsidiaries

Consolidated Balance Sheets

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

 

June 30, December 31,

ASSETS 2004 2003

------ --------- ----------

(Unaudited)

CURRENT ASSETS

Cash and cash equivalents $ 72,141 $ 66,489

Restricted cash 1,894 1,892

Short-term investments 50,286 53,923

Accounts receivable - net 12,361 9,794

Inventories 7,476 9,613

Prepaid expenses and other current assets 3,595 3,365

--------- ---------

Total Current Assets 147,753 145,076

--------- ---------

 

LONG-TERM INVESTMENTS 7,498 7,865

--------- ---------

 

LAND, PROPERTY AND EQUIPMENT - NET 9,406 4,880

--------- ---------

OTHER ASSETS

Restricted assets - net 12,215 10,044

--------- ---------

Other Assets 1,324 1,428

--------- ---------

 

TOTAL ASSETS $ 178,196 $ 169,293

========= =========

 

LIABILITIES AND SHAREHOLDERS' EQUITY

------------------------------------

CURRENT LIABILITIES

Notes and accounts payable $ 4,720 $ 6,334

Income taxes payable 3,334 2,852

Accrued expenses and other current

liabilities 5,648 5,380

--------- ---------

Total Current Liabilities 13,702 14,566

--------- ---------

 

COMMITMENTS AND CONTINGENCIES

 

SHAREHOLDERS' EQUITY

Preference shares at $0.001 par value per

share

Authorized - 5,000,000 shares - -

Ordinary shares at $0.001 par value per

share

Authorized - 95,000,000 shares

Issued - 39,213,180 and 39,032,616

shares as of June 30, 2004 and December

31, 2003, respectively 39 39

Additional paid-in capital 138,645 137,076

Accumulated other comprehensive loss (527) (521)

Retained earnings 26,337 18,133

--------- ---------

Total Shareholders' Equity 164,494 154,727

--------- ---------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 178,196 $ 169,293

========= =========

 

--30--

 

CONTACT: O2Micro

Gil Goodrich, 408-987-5920 Ext. 8013 (Investor Relations)

gil.goodrich@o2micro.com