O2Micro Reports Fourth Quarter Earnings and Record High Sales

Date29-Jan-2003

SANTA CLARA, Calif.& GEORGE TOWN, Grand Cayman--(BUSINESS WIRE)-- Jan. 29, 2003-- O2Micro® International Limited (Nasdaq:OIIM - News), a leading supplier of innovative power management and security ICs to mobile computer and communications manufacturers, reported its financial results today for the fourth quarter and the fiscal year ended December 31, 2002.

Net sales for the fourth quarter were $18.4 million, a record high quarter for O2Micro. Fourth quarter revenue of $18.4 million was an increase of 2% over the preceding quarter, and 19% over the comparable quarter of the prior year. Earnings per share for the fourth quarter, fully diluted, were 6 cents per share, compared to 7 cents per share in the preceding quarter and 7 cents per share in the comparable quarter of the prior year.

 

Net income for the fourth quarter of $2,147,000 was a decrease of 16% from the preceding quarter, and a decrease of 21% from the comparable quarter of the prior year. Fourth quarter R&D expenditures were $4,987,000, an increase of 5% over the preceding quarter, and 13% over the comparable quarter of the prior year.

 

For the fiscal year ended December 31, 2002, total revenues were $70.2 million, an increase of 53% from $45.8 million in fiscal year 2001. O2Micro grew sales revenue and earnings during difficult market conditions. Earnings per share for the year ended December 31, 2002 were 27 cents, compared to 16 cents for the previous year. Net income was $10.7 million, compared to $5.6 million for the previous year. R&D expenditures were $18.9 million, compared to $14.3 million for the previous year, an increase of 32%.

 

"In Q4 we continued to grow revenue and market share in key product areas," said Sterling Du, Chairman and CEO of O2Micro. "We also focused on IP protection, an area that is key to our future growth."

 

Conference Call: O2Micro will hold its fourth quarter conference call today at 2:00 p.m. PST, 5:00 p.m. EST. You may participate by dialing (800) 915-4836 or (973) 317-5319 (for International participants), no passcode required. A replay of the call will be available by phone until February 5th by dialing (800) 428-6051 or (973) 709-2089 (for International participants), passcode #272201. 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 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, Intelligent Lighting and Battery Management IC's.

 

O2Micro International maintains an extensive portfolio of intellectual property with 1028 patent claims granted, and over 3600 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 and Subsidiaries

Consolidated Statements of Operations and Comprehensive Income

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

 

Three Months Ended Year Ended

December 31, December 31,

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

(Unaudited) (Unaudited)

2002 2001 2002 2001

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

NET SALES $ 18,393 $ 15,394 $70,187 $45,819

COST OF SALES 7,736 5,541 28,143 16,465

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

GROSS PROFIT 10,657 9,853 42,044 29,354

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

OPERATING EXPENSES

Research and development

(exclusive of amortization

of deferred stock

compensation of $1 and

$14 for the three months

ended December 31, 2002

and 2001, and $30 and

$91 in 2002 and 2001,

respectively) 4,987 4,430 18,935 14,320

Selling, general and

administrative (exclusive

of amortization of

deferred stock

compensation of $1 and $7

for the three months

ended December 31, 2002

and 2001, and $14 and $75

in 2002 and 2001,

respectively) 3,529 2,604 12,325 9,909

Stock - based compensation 2 21 44 166

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

Total Operating Expenses 8,518 7,055 31,304 24,395

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

INCOME FROM OPERATIONS 2,139 2,798 10,740 4,959

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

 

NONOPERATING INCOME (EXPENSES)

Interest income on bank

deposits 163 343 747 1,511

Interest income on

short-term investments 150 145 1,055 303

Impairment loss on

investment in shares of

stocks - - (483) -

Interest expenses (1) (2) (4) (11)

Other - net 62 (30) 347 24

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

Total Nonoperating Income -

Net 374 456 1,662 1,827

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

 

INCOME BEFORE INCOME TAX 2,513 3,254 12,402 6,786

 

INCOME TAX EXPENSES 366 543 1,673 1,152

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

NET INCOME 2,147 2,711 10,729 5,634

 

OTHER COMPREHENSIVE GAIN

(LOSS)

Translation adjustments on

subsidiaries 61 (254) 132 (489)

Unrealized gain (loss) on

available-for-sale

securities (59) (54) (127) 15

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

Total Other Comprehensive

Gain (Loss) 2 (308) 5 (474)

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

COMPREHENSIVE INCOME $ 2,149 $ 2,403 $10,734 $ 5,160

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

EARNINGS PER SHARE:

Basic $ 0.06 $ 0.07 $ 0.28 $ 0.17

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

Diluted $ 0.06 $ 0.07 $ 0.27 $ 0.16

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

SHARES USED IN EARNINGS

PER SHARE CALCULATION:

Basic (in thousands) 38,116 36,555 38,300 34,020

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

Diluted (in thousands) 38,921 38,480 39,590 35,576

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

 

O2Micro International Limited and Subsidiaries

Consolidated Balance Sheets

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

 

December 31, December 31,

ASSETS 2002 2001

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

 

CURRENT ASSETS

Cash and cash equivalents $ 79,597 $ 108,936

Restricted cash 2,019 1,159

Short-term investments 32,412 10,014

Accounts receivable - net 7,595 3,700

Inventories 6,967 5,361

Prepaid expenses and other current assets 2,891 1,808

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

Total Current Assets 131,481 130,978

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

INVESTMENT IN SHARES OF STOCKS 5,985 500

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

FIXED ASSETS - NET 5,611 3,213

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

OTHER ASSETS

Convertible loans to 3600 Web Ltd. 1,750 750

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

Deferred income taxes - noncurrent - 219

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

Other assets 1,009 759

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

TOTAL ASSETS $ 145,836 $ 136,419

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

 

LIABILITIES AND SHAREHOLDERS' EQUITY

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

 

CURRENT LIABILITIES

Notes and accounts payable $ 5,202 $ 3,570

Income taxes payable 1,957 1,220

Current portion of obligations

under capital lease 7 9

Accrued expenses and other current liabilities 3,522 3,189

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

Total Current Liabilities 10,688 7,988

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

 

OBLIGATIONS UNDER CAPITAL LEASE - NET OF

CURRENT PORTION - 7

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

 

Total Liabilities 10,688 7,995

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

 

CONTINGENCIES AND COMMITMENTS - -

 

SHAREHOLDERS' EQUITY

Ordinary shares at $0.001 par value per share

Authorized - 95,000,000 shares. Issued -

38,136,394 and 38,134,511 shares as

of December 31, 2002 and December 31,

2001, respectively 39 38

Treasury Stock - 720,700 shares as

of December 31, 2002 (6,823) -

Additional paid-in capital 133,016 130,197

Warrants - 51

Deferred compensation - (44)

Accumulated other comprehensive income (692) (697)

Retained earnings (accumulated deficit) 9,608 (1,121)

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

Total Shareholders' Equity 135,148 128,424

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

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 145,836 $ 136,419

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

 

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Contact:

O2Micro

Gil Goodrich, 408/987-5920 x8013 (Investor Relations)

gil.goodrich@o2micro.com