O2Micro Reports Third Quarter Sales and Earnings

Date2-Nov-2001
Wednesday October 31, 4:06 pm Eastern Time

Press Release

SOURCE: O2Micro

O2Micro Reports Third Quarter Sales and Earnings

SANTA CLARA, Calif. and GEORGE TOWN, Grand Cayman--(BUSINESS WIRE)--Oct. 31, 2001--O2Micro International Limited (Nasdaq:OIIM - news), a leading supplier of innovative power management and security ICs to mobile computer and communications manufacturers, reported today its financial results for the third quarter ended September 30, 2001.

 

Net sales for the third quarter, were $11.9 million. Third quarter revenue of $11.9 million was an increase of 21% over the preceding quarter. O2Micro grew sales revenue despite the industry inventory correction and general economic conditions.

 

Earnings per share for the third quarter, fully diluted, were 4 cents per share, compared 3 cents per share in the preceding quarter.

 

Net income for the third quarter, was $1,318,000, compared to $2,098,000 for the comparable quarter of the prior year. Third quarter net income of $1,318,000 was an increase of 37% over the preceding quarter. Due to the focus given to proprietary products business, margin expectations were exceeded and profitability was maintained while aggressively expanding the investment in R&D. R&D expenditures in the 3rd quarter were $3,771,000, an increase of 49% over the comparable quarter of the prior year, and an increase of 16% over the preceding quarter.

 

``This quarter, much like the second quarter, was one of investment for O2Micro,'' said Sterling Du, Chairman and CEO. ``We invested in the growth of our design centers and continued to strengthen our market position through intellectual property expansion, and the introduction of new high-performance products.''

 

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 800/360-9865 or 973/694-6836. A replay of the call will be available by phone until November 7th by dialing 800/428-6051 or 973/709-2089, pass code No. 211816. 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 March 1995, O2Micro designs, develops and markets innovative power management and security components for mobile communication, computer, information appliance, and LCD products. Products include AudioDJ®, SmartCardBus® for secure on line e-commerce, LCD Backlight Inverters and Battery Management IC's.

 

O2Micro maintains an extensive portfolio of intellectual property with 345 patent claims granted, and over 600 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 development process, and errors in the products. You are also referred to the documents filed by O2Micro with the SEC from time to time, including but not limited to the Form F-1 in connection with the company's initial public offering in August 2000, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.

 

O2Micro International Limited

Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

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

 

Three Months Nine Months

Ended September 30 Ended September 30

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

2001 2000 2001 2000

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

(Unaudited) (Unaudited)

 

NET SALES $ 11,855 $ 11,149 $ 30,425 $ 29,021

 

COST OF SALES 4,306 4,410 10,924 11,090

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

 

GROSS PROFIT 7,549 6,739 19,501 17,931

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

 

OPERATING EXPENSES

Research and development 3,771 2,528 9,890 6,936

Selling, general

and administrative 2,510 2,262 7,305 6,465

Stock-based compensation 47 119 145 390

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

Total Operating Expenses 6,328 4,909 17,340 13,791

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

 

INCOME FROM OPERATIONS 1,221 1,830 2,161 4,140

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

 

NON-OPERATING INCOME

Interest - net 403 230 1,316 313

Other - net ( 49) ( 6) 55 101

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

Total Nonoperating Income - Net 354 224 1,371 414

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

 

INCOME BEFORE INCOME TAX 1,575 2,054 3,532 4,554

 

INCOME TAX (EXPENSE) BENEFIT ( 257) 44 ( 609) 58

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

 

NET INCOME 1,318 2,098 2,923 4,612

 

OTHER COMPREHENSIVE INCOME (LOSS)

Translation adjustments

on subsidiaries ( 71) ( 9) ( 235) ( 92)

Unrealized gain on

available-for-sale

securities 69 - 69 -

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

Total other

comprehensive

income (loss) ( 2) ( 9) ( 166) ( 92)

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

 

COMPREHENSIVE INCOME $ 1,316 $ 2,089 $ 2,757 $ 4,520

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

 

EARNINGS PER SHARE:

Basic $ 0.04 $ 0.08 $ 0.09 $ 0.31

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

Diluted $ 0.04 $ 0.06 $ 0.08 $ 0.15

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

 

NUMBER OF THOUSAND SHARES

USED IN EARNINGS PER

SHARE CALCULATION:

Basic 33,351 24,977 33,175 14,966

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

Diluted 34,944 33,276 34,618 31,494

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

 

O2Micro International Limited

Consolidated Balance Sheets

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

 

September December

30, 2001 31, 2000

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

A S S E T S (Unaudited)

-----------

 

CURRENT ASSETS

Cash $ 30,931 $ 37,448

Restricted cash 1,159 1,199

Short-term investments 9,719 -

Accounts receivable - net 5,493 5,420

Inventories 5,413 5,472

Prepaid expenses

and other current assets 1,214 1,148

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

Total Current Assets 53,929 50,687

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

 

LONG-TERM INVESTMENT 500 500

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

 

FIXED ASSETS - NET 2,986 2,102

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

 

OTHER ASSETS

Receivables from 360(degree) Web Ltd. 750 750

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

Deferred income tax - noncurrent 133 133

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

Other assets 676 435

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

 

TOTAL ASSETS $ 58,974 $ 54,607

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

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

CURRENT LIABILITIES

Notes and accounts payable $ 3,554 $ 3,767

Income tax payable 630 449

Current portion of

obligations under

capital lease 17 41

Accrued expenses and

other current liabilities 2,957 2,358

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

Total Current Liabilities 7,158 6,615

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

 

OBLIGATIONS UNDER CAPITAL

LEASE - NET OF CURRENT PORTION 9 13

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

 

GUARANTEE DEPOSITS - 51

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

 

Total Liabilities 7,167 6,679

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

 

SHAREHOLDERS' EQUITY

Ordinary shares at $0.001

par value per share

Authorized - 95,000,000

shares. Issued - 33,366,173

and 32,788,238 shares as of

September 30, 2001 and

December 31, 2000, respectively 33 33

Additional paid-in capital 56,014 55,071

Warrants 51 51

Deferred compensation ( 70) ( 249)

Accumulated other

comprehensive income ( 389) ( 223)

Accumulated deficit ( 3,832) ( 6,755)

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

Total Shareholders' Equity 51,807 47,928

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

 

TOTAL LIABILITIES

AND SHAREHOLDERS' EQUITY $ 58,974 $ 54,607

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