O2MICRO REPORTS THIRD QUARTER EARNINGS

Date3-Nov-2004
O2Micro Reports Third Quarter Earnings

 

Business Editors

 

SANTA CLARA, Calif. & GEORGE TOWN, Grand Cayman--(BUSINESS WIRE)--Nov. 3, 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 third quarter ended September 30, 2004.

Net sales for the third quarter were $22.1 million. Third quarter revenue of $22.1 million was a decrease of 8% from the preceding quarter, and a decrease of 5% from the comparable quarter of the prior year. Earnings per share for the third quarter, fully diluted, were 8 cents per share, compared to 10 cents per share in the preceding quarter and 10 cents per share in the comparable quarter of the prior year.

Net income for the third quarter of $3.1 million was a decrease of 26% from the preceding quarter, and a decrease of 22% from the comparable quarter of the prior year. Third quarter R&D expenditures were $4.9 million, an increase of 5% from the preceding quarter, and an increase of 1% from the comparable quarter of the prior year.

"O2Micro was profitable and cash flow positive in Q3; a difficult quarter for the semiconductor industry. The company continues to build its base for future growth with the addition of key engineering resources and additions to the product and patent portfolios," commented Sterling Du, Chairman and CEO of O2Micro.

Conference Call: O2Micro will hold its third quarter conference call today at 2:00 p.m. PST, 5:00 p.m. EST. You may participate by dialing (800) 915-4836, passcode #982175 or (913) 905-1086 (for International participants), passcode #982175. A replay of the call will be available by phone until November 10th by dialing (888) 203-1112, passcode #982175 or (719) 457-0820 (for International participants), passcode #982175. 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 Controller, SmartCardBus(R) and MemoryCardBus(TM) ICs.

O2Micro International maintains an extensive portfolio of intellectual property with 1,669 patent claims granted, and over 5,000 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.

 

Note: In "O2Micro," the 2 should read as subscript.

 

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 Nine Months Ended

September 30, September 30,

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

2004 2003 2004 2003

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

 

NET SALES $22,093 $23,193 $68,354 $63,429

 

COST OF SALES 8,793 10,042 27,917 27,649

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

 

GROSS PROFIT 13,300 13,151 40,437 35,780

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

 

OPERATING EXPENSES

Research and development 4,915 4,845 14,157 14,600

Selling, general and

administrative 5,684 4,559 14,926 13,197

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

Total Operating Expenses 10,599 9,404 29,083 27,797

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

 

INCOME FROM OPERATIONS 2,701 3,747 11,354 7,983

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

 

NON-OPERATING INCOME (EXPENSES)

Interest income 448 379 933 952

Impairment loss on long-term

investments -- -- -- (17)

Gain on sale of long-term

investments -- -- 340 --

Foreign exchange gain (loss) (80) 367 (111) 453

Other - net 12 (32) 22 (113)

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

Total Non-operating Income 380 714 1,184 1,275

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

 

INCOME BEFORE INCOME TAX 3,081 4,461 12,538 9,258

 

INCOME TAX EXPENSE 12 502 1,115 1,173

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

 

NET INCOME 3,069 3,959 11,423 8,085

 

OTHER COMPREHENSIVE INCOME

(LOSS)

Translation adjustments on

subsidiaries (75) 54 (14) (90)

Unrealized gain on

available-for-sale securities 242 185 175 344

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

Total Other Comprehensive

Income (Loss) 167 239 161 254

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

 

COMPREHENSIVE INCOME $3,236 $4,198 $11,584 $8,339

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

 

EARNINGS PER SHARE:

 

Basic $0.08 $0.10 $0.29 $0.21

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

Diluted $0.08 $0.10 $0.28 $0.21

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

 

SHARES USED IN EARNINGS PER

SHARE CALCULATION:

Basic (in thousands) 39,117 38,341 39,146 38,217

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

Diluted (in thousands) 39,722 39,845 40,220 39,390

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

 

O2Micro International Limited and Subsidiaries

Consolidated Balance Sheets

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

 

September 30, December 31,

2004 2003

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

A S S E T S (Unaudited)

-----------

 

CURRENT ASSETS

Cash and cash equivalents $80,281 $66,489

Restricted cash 1,896 1,892

Short-term investments 38,057 53,923

Accounts receivable - net 12,594 9,794

Inventories 11,458 9,613

Prepaid expenses and other current assets 3,942 3,365

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

Total Current Assets 148,228 145,076

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

 

LONG-TERM INVESTMENTS 12,202 7,865

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

 

LAND, PROPERTY AND EQUIPMENT - NET 9,619 4,880

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

 

OTHER ASSETS

Restricted assets - net 13,043 10,044

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

Other Assets 1,266 1,428

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

 

TOTAL ASSETS $184,358 $169,293

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

 

LIABILITIES AND SHAREHOLDERS' EQUITY

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

CURRENT LIABILITIES

Notes and accounts payable $6,892 $6,334

Income taxes payable 2,947 2,852

Accrued expenses and other current

liabilities 7,858 5,380

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

Total Current Liabilities 17,697 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 - 39,118,104 and 39,032,616

shares as of September 30, 2004 and

December 31, 2003, respectively 39 39

Additional paid-in capital 138,372 137,076

Accumulated other comprehensive loss (360) (521)

Retained earnings 28,610 18,133

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

Total Shareholders' Equity 166,661 154,727

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

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $184,358 $169,293

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

 

--30--

 

CONTACT: O2Micro

Gil Goodrich, 408-987-5920 ext. 8013

gil.goodrich@o2micro.com