Operational and Strategic
Highlights:
- Q3 2018 Revenue was up 10.6% sequentially and within the range
of guidance provided on August 1, 2018.
- GAAP net loss per fully diluted ADS in the third quarter of
2018 was 13 cents, with non-GAAP net loss of 5 cents per fully
diluted ADS.
- Revenue growth in the fourth quarter of 2018 is expected to
range between -5% and 5% compared to Q3
2018.
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 third quarter ending September 30, 2018.
Financial Highlights for the Third
Quarter ending September 30, 2018:
O2Micro International Limited (the “Company”) reported Q3 2018
revenue of $16.8 million. Revenue was up 10.6% sequentially, and up
8.3% from the same quarter in the previous year. The gross margin
in the third quarter of 2018 was 50.5%, which was down from 52.1%
in the prior quarter, and up from 50.3% in the third quarter of
2017. The gross margin remains in our target range and varies
primarily with the quarterly revenue and product mix. During the
third quarter of 2018, the Company recorded total GAAP operating
expenses of $10.2 million, compared to $9.7 million in the second
quarter of 2018, and $9.5 million in the year-ago Q3 period. The
GAAP operating margins for the third quarter of 2018, the second
quarter of 2018, and third quarter of 2017 were (10.1%), (11.9%),
and (11.1%), respectively.
GAAP net loss was $3.5 million in Q3 2018. This compares to a
GAAP net income of $1.5 million in the second quarter of 2018 and a
GAAP net loss of $1.4 million in Q3 2017. GAAP net loss per fully
diluted ADS was $0.13 in Q3 2018. This compares to a GAAP net
income per fully diluted ADS of $0.06 in Q2 2018 and a GAAP net
loss per fully diluted ADS of $0.05 in Q3 2017.
Supplementary Data: The Company ended the third
quarter of 2018 with $41.2 million in unrestricted cash and
short-term investments or $1.58 per outstanding ADS. The accounts
receivable balance was $11.3 million and represented 60 days sales
outstanding at the end of Q3 2018. Inventory was $10.0 million or
108 days and turned over 3.3 times during Q3 2018. As of September
30, 2018, the Company had $54.6 million in working capital and the
book value was $82.0 million, or $3.15 per outstanding ADS. As of
September 30, 2018, O2Micro International Limited had a total of
395 employees worldwide, including 249 engineers.
Management Commentary: “Our Fourth quarter of
2018 revenue guidance reflects continued positive design activity
momentum in the consumer and industrial market growth drivers. We
are pleased to see our battery products group continuing to have
new product introductions to the market supporting automotive,
power tools and household appliance sectors. We also see strong
growth drivers for higher end panel backlighting markets utilizing
our innovative IC as consumer trends move toward 4K and HDR, as
well as our intelligent, high performance power solutions for
mobile devices,” said Sterling Du, O2Micro’s Chairman and CEO. “We
believe our solutions design wins for these product segments will
enable ongoing growth despite the dynamic consumer market and lead
O2Micro back to long term profitability.”
Conference Call: O2Micro will hold its third
quarter conference call today, October 31, 2018, at 6:00AM Pacific,
9:00AM Eastern. You may participate using the following dial-in
information.
Conference Code: 3590026Participants, Int'l Toll: +1
334-323-0522Participants, US/CAN: 877-260-1479
The Call-in Audio Replay will be available from November 2nd,
2018, 12:00 Eastern Time (US & Canada) through November 10th,
2018 12:00 Eastern Time (US &
Canada)https://event.mymeetingroom.com/Public/WebRegistration/Y29uZmVyZW5jZUlkPTM1OTAwMjYmdHlwZT1yZXBsYXkmbGFuZ3VhZ2U9ZW5nbGlzaA==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 |
|
|
|
Nine Months Ended |
|
| |
|
September 30, |
|
|
|
September 30, |
|
| |
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET SALES |
$ |
16,815 |
|
|
$ |
15,520 |
|
|
$ |
46,128 |
|
|
$ |
44,988 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COST OF SALES |
|
8,322 |
|
|
|
7,707 |
|
|
|
22,498 |
|
|
|
21,901 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| GROSS PROFIT |
|
8,493 |
|
|
|
7,813 |
|
|
|
23,630 |
|
|
|
23,087 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research
and development (1) |
|
5,245 |
|
|
|
4,662 |
|
|
|
14,746 |
|
|
|
13,215 |
|
| Selling,
general and administrative (1) |
|
4,947 |
|
|
|
4,880 |
|
|
|
14,946 |
|
|
|
14,374 |
|
|
Litigation Income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total
Operating Expenses |
|
10,192 |
|
|
|
9,542 |
|
|
|
29,692 |
|
|
|
27,570 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| LOSS FROM
OPERATIONS |
|
(1,699 |
) |
|
|
(1,729 |
) |
|
|
(6,062 |
) |
|
|
(4,483 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NON-OPERATING
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
income |
|
87 |
|
|
|
88 |
|
|
|
298 |
|
|
|
257 |
|
| Net gain
(loss) recognized on long-term investments |
|
(1,687 |
) |
|
|
- |
|
|
|
11,287 |
|
|
|
- |
|
| Foreign
exchange gain – net |
|
3 |
|
|
|
296 |
|
|
|
32 |
|
|
|
137 |
|
| Other –
net |
|
122 |
|
|
|
199 |
|
|
|
430 |
|
|
|
504 |
|
| Total
Non-operating Income (Loss) |
|
(1,475 |
) |
|
|
583 |
|
|
|
12,047 |
|
|
|
898 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME (LOSS) BEFORE
INCOME TAX |
|
(3,174 |
) |
|
|
(1,146 |
) |
|
|
5,985 |
|
|
|
(3,585 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME TAX EXPENSE |
|
281 |
|
|
|
229 |
|
|
|
811 |
|
|
|
681 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET INCOME (LOSS) |
|
(3,455 |
) |
|
|
(1,375 |
) |
|
|
5,174 |
|
|
|
(4,266 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign
currency translation adjustments |
|
(290 |
) |
|
|
(128 |
) |
|
|
(583 |
) |
|
|
665 |
|
|
Unrealized loss on available-for-sale securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
|
Unrealized pension gain |
|
1 |
|
|
|
- |
|
|
|
5 |
|
|
|
2 |
|
| Total
Other Comprehensive Income (Loss) |
|
(289 |
) |
|
|
(128 |
) |
|
|
(578 |
) |
|
|
666 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COMPREHENSIVE INCOME
(LOSS) |
$ |
(3,744 |
) |
|
$ |
(1,503 |
) |
|
$ |
4,596 |
|
|
$ |
(3,600 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| EARNINGS (LOSS) PER
ADS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.13 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.20 |
|
|
$ |
(0.17 |
) |
|
Diluted |
$ |
(0.13 |
) |
|
$ |
(0.05 |
) |
|
$ |
0.19 |
|
|
$ |
(0.17 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ADS UNITS USED IN
EARNINGS (LOSS) PER ADS CALCULATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic (in
thousands) |
|
26,039 |
|
|
|
25,718 |
|
|
|
26,015 |
|
|
|
25,807 |
|
| Diluted
(in thousands) |
|
26,039 |
|
|
|
25,718 |
|
|
|
26,579 |
|
|
|
25,807 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) INCLUDES
STOCK-BASED COMPENSATION CHARGE AS FOLLOWS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Research
and development |
$ |
60 |
|
|
$ |
54 |
|
|
$ |
182 |
|
|
$ |
168 |
|
| Selling,
general and administrative |
$ |
290 |
|
|
$ |
336 |
|
|
$ |
886 |
|
|
$ |
1,033 |
|
|
|
|
|
|
|
| |
|
|
| O2MICRO INTERNATIONAL LIMITED AND
SUBSIDIARIES |
|
|
|
|
| CONSOLIDATED BALANCE SHEETS(In
Thousand U.S. Dollars, Except Share Amounts) |
| |
|
|
| |
|
September
30, |
|
|
|
December
31, |
|
| |
|
2018 |
|
|
|
2017 |
|
|
ASSETS |
|
(Unaudited) |
|
|
|
(Audited) |
|
| |
|
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
|
|
|
| Cash and
cash equivalents |
$ |
33,856 |
|
|
$ |
28,520 |
|
|
Restricted cash |
|
34 |
|
|
|
35 |
|
|
Short-term investments |
|
7,331 |
|
|
|
17,601 |
|
| Accounts
receivable – net |
|
11,291 |
|
|
|
9,184 |
|
|
Inventories |
|
9,960 |
|
|
|
9,330 |
|
| Prepaid
expenses and other current assets |
|
2,326 |
|
|
|
1,245 |
|
| Total
Current Assets |
|
64,798 |
|
|
|
65,915 |
|
| |
|
|
|
|
|
|
|
| LONG-TERM
INVESTMENTS |
|
13,104 |
|
|
|
3,112 |
|
| |
|
|
|
|
|
|
|
| PROPERTY AND EQUIPMENT
– NET |
|
13,703 |
|
|
|
13,755 |
|
| |
|
|
|
|
|
|
|
| OTHER ASSETS |
|
2,132 |
|
|
|
2,300 |
|
| |
|
|
|
|
|
|
|
| TOTAL ASSETS |
$ |
93,737 |
|
|
$ |
85,082 |
|
| |
|
|
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
|
|
|
|
| Notes and
accounts payable |
$ |
5,138 |
|
|
$ |
2,460 |
|
| Income
tax payable |
|
435 |
|
|
|
341 |
|
| Accrued
expenses and other current liabilities |
|
4,654 |
|
|
|
4,379 |
|
| Total
Current Liabilities |
|
10,227 |
|
|
|
7,180 |
|
| |
|
|
|
|
|
|
|
| OTHER LONG-TERM
LIABILITIES |
|
|
|
|
|
|
|
| Accrued
pension liabilities |
|
333 |
|
|
|
355 |
|
| Deferred
income tax liabilities |
|
1,099 |
|
|
|
906 |
|
| Other
liabilities |
|
86 |
|
|
|
86 |
|
| Total
Other Long-Term Liabilities |
|
1,518 |
|
|
|
1,347 |
|
| |
|
|
|
|
|
|
|
| Total Liabilities |
|
11,745 |
|
|
|
8,527 |
|
| |
|
|
|
|
|
|
|
| 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 September 30, 2018 and December 31, 2017
Outstanding –1,301,978,200 and 1,284,146,100 shares as of September
30, 2018 and December 31, 2017, respectively |
|
33 |
|
|
|
33 |
|
|
Additional paid-in capital |
|
142,794 |
|
|
|
142,946 |
|
|
Accumulated deficits |
|
(42,780 |
) |
|
|
(47,517 |
) |
|
Accumulated other comprehensive income |
|
4,759 |
|
|
|
5,337 |
|
| Treasury
stock – 367,058,400 and 384,890,500 shares as of September 30, 2018
and December 31, 2017, respectively |
|
(22,814 |
) |
|
|
(24,244 |
) |
| Total
Shareholders’ Equity |
|
81,992 |
|
|
|
76,555 |
|
| |
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
93,737 |
|
|
$ |
85,082 |
|
| |
|
|
|
|
|
|
|
O2Micro
Daniel Meyberg
Investor Relations
ir@o2micro.com
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