Operational and Strategic Highlights:
- Q1 2018 results were within the range of guidance provided in
January 2018.
- GAAP net income per fully diluted ADS in the first quarter of
2018 was 27 cents, with non-GAAP net loss of 9 cents per fully
diluted ADS.
- Revenue growth in the second quarter of 2018 is expected to
range between 2-10% compared to Q1 2018.
- We expect to see acceleration in our growth for 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 first quarter ending March 31, 2018.
Financial Highlights for the First
Quarter ending March 31, 2018: O2Micro
International Limited (“Company”) reported Q1 2018 revenue of $14.1
million. Revenue was down 7.3% sequentially, and down 5.7% from the
same quarter in the previous year. The gross margin in the first
quarter of 2018 was 51.2 %, which was up from 50.5% in the prior
quarter, and down from 52.7 % in the first quarter of 2017. The
gross margin remains in our target range and varies primarily with
the quarterly revenue and product mix. During the first quarter of
2018, the Company recorded total GAAP operating expenses of $9.8
million, compared to $9.4 million in the fourth quarter of 2017,
and $9.1 million in the year-ago Q1 period. The GAAP operating
margins for the first quarter of 2018, the fourth quarter of 2017,
and first quarter of 2017 were (18.1 %), (11.5 %), and (8.0 %),
respectively.
GAAP net income was $ 7.2 million in Q1 2018. This compares to a
GAAP net loss of $1.9 million in the fourth quarter of 2017 and a
GAAP net loss of $1.5 million in Q1 2017. GAAP net income per fully
diluted ADS was $0.27 in Q1 2018. This compares to a GAAP net loss
per fully diluted ADS of $0.07 in Q4 2017 and a GAAP net loss per
fully diluted ADS of $0.06 in Q1 2017.
Supplementary Data: The Company ended the first
quarter of 2018 with $45.1 million in unrestricted cash and
short-term investments or $1.73 per outstanding ADS. The accounts
receivable balance was $8.0 million and represented 55 days sales
outstanding at the end of Q1 2018. Inventory was $9.7 million or
124 days and turned over 2.9 times during Q1 2018. As of March 31,
2018, the Company had $57.2 million in working capital and the book
value was $84.6 million, or $3.25 per outstanding ADS. As of March
31, 2018, O2Micro International Limited had a total of 375
employees worldwide, including 232 engineers.
Management Commentary: “Our second quarter of
2018 revenue guidance reflects continuing design activities in the
growth drivers of the consumer and industrial markets. We are
pleased to see our customer acceptance including high end
backlighting for the TV/monitor, power tools, household appliances,
and automotive, despite the dynamic consumer
market,” said Sterling Du, O2Micro’s Chairman and CEO. “We believe
our solutions for these product segments will accelerate growth in
upcoming quarters through the year and lead O2Micro back to long
term profitability.”
Conference Call: O2Micro will hold its first
quarter conference call today, May 2, 2018, at 6:00AM. Pacific,
9:00AM Eastern. You may participate using the following dial-in
information.
Conference ID: 6863988Participants,
Int'l Toll: +1 323-794-2551 Participants, US/CAN
Toll Free: 800-239-9838
The Call-in Audio Replay will be available from May 2nd, 2018
12:00 Eastern Time (US & Canada) through February 8thth, 2018
12:00 Eastern Time (US &
Canada)https://event.mymeetingroom.com/Public/WebRegistration/Y29uZmVyZW5jZUlkPTY4NjM5ODgmdHlwZT1yZXBsYXkmbGFuZ3VhZ2U9ZW5nbGlzaA==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 |
| |
|
March 31, |
| |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
|
| NET
SALES |
|
$ |
14,108 |
|
|
$ |
14,954 |
|
| |
|
|
|
| COST OF
SALES |
|
|
6,886 |
|
|
|
7,067 |
|
| |
|
|
|
| GROSS
PROFIT |
|
|
7,222 |
|
|
|
7,887 |
|
| |
|
|
|
| OPERATING
EXPENSES |
|
|
|
| Research
and development (1) |
|
|
4,806 |
|
|
|
4,052 |
|
| Selling,
general and administrative (1) |
|
|
4,964 |
|
|
|
5,054 |
|
|
Litigation Income |
|
|
- |
|
|
|
(19 |
) |
| Total
Operating Expenses |
|
|
9,770 |
|
|
|
9,087 |
|
| |
|
|
|
| LOSS FROM
OPERATIONS |
|
|
(2,548 |
) |
|
|
(1,200 |
) |
| |
|
|
|
| NON-OPERATING
INCOME |
|
|
|
| Interest
income |
|
|
97 |
|
|
|
79 |
|
|
Unrealized fair value gain on long-term investments |
|
|
9,774 |
|
|
|
- |
|
| Foreign
exchange loss – net |
|
|
(157 |
) |
|
|
(216 |
) |
| Other –
net |
|
|
267 |
|
|
|
102 |
|
| Total
Non-operating (Loss) Income |
|
|
9,981 |
|
|
|
(35 |
) |
| |
|
|
|
| INCOME (LOSS)
BEFORE INCOME TAX |
|
|
7,433 |
|
|
|
(1,235 |
) |
| |
|
|
|
| INCOME TAX
EXPENSE |
|
|
265 |
|
|
|
222 |
|
| |
|
|
|
| NET INCOME
(LOSS) |
|
|
7,168 |
|
|
|
(1,457 |
) |
| |
|
|
|
| OTHER
COMPREHENSIVE INCOME |
|
|
|
| Foreign
currency translation adjustments |
|
|
675 |
|
|
|
721 |
|
|
Unrealized gain on available-for-sale securities |
|
|
- |
|
|
|
(1 |
) |
|
Unrealized pension gain |
|
|
2 |
|
|
|
1 |
|
| Total
Other Comprehensive Income |
|
|
677 |
|
|
|
721 |
|
| |
|
|
|
| COMPREHENSIVE
INCOME(LOSS) |
|
$ |
7,845 |
|
|
$ |
(736 |
) |
| |
|
|
|
| EARNINGS
(LOSS) PER ADS |
|
|
|
|
Basic |
|
$ |
0.28 |
|
|
$ |
(0.06 |
) |
|
Diluted |
|
$ |
0.27 |
|
|
$ |
(0.06 |
) |
| |
|
|
|
| ADS UNITS
USED IN EARNINGS (LOSS) PER ADS CALCULATION: |
|
|
|
| Basic (in
thousands) |
|
|
25,977 |
|
|
|
25,840 |
|
| Diluted
(in thousands) |
|
|
26,477 |
|
|
|
25,840 |
|
| |
|
|
|
| (1) INCLUDES
STOCK-BASED COMPENSATION CHARGE AS FOLLOWS: |
|
|
|
| Research
and development |
|
$ |
62 |
|
|
$ |
60 |
|
| Selling,
general and administrative |
|
$ |
302 |
|
|
$ |
372 |
|
| |
|
|
|
| |
| O2MICRO INTERNATIONAL LIMITED AND
SUBSIDIARIES |
| |
| CONSOLIDATED BALANCE SHEETS |
| (In Thousand U.S. Dollars, Except Share
Amounts) |
| |
| |
March 31, |
|
December 31, |
| |
2018 |
|
2017 |
|
ASSETS |
(Unaudited) |
|
(Audited) |
| |
|
|
|
|
|
| CURRENT
ASSETS |
|
|
| Cash and
cash equivalents |
$ |
25,417 |
|
|
$ |
28,520 |
|
|
Restricted cash |
|
36 |
|
|
|
35 |
|
|
Short-term investments |
|
19,695 |
|
|
|
17,601 |
|
| Accounts
receivable – net |
|
8,043 |
|
|
|
9,184 |
|
|
Inventories |
|
9,662 |
|
|
|
9,330 |
|
| Prepaid
expenses and other current assets |
|
1,685 |
|
|
|
1,245 |
|
| Total
Current Assets |
|
64,538 |
|
|
|
65,915 |
|
| |
|
|
| LONG-TERM
INVESTMENTS |
|
12,849 |
|
|
|
3,112 |
|
| |
|
|
| PROPERTY AND
EQUIPMENT – NET |
|
13,751 |
|
|
|
13,755 |
|
| |
|
|
| OTHER
ASSETS |
|
2,232 |
|
|
|
2,300 |
|
| |
|
|
| TOTAL
ASSETS |
$ |
93,370 |
|
|
$ |
85,082 |
|
| |
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
| |
|
|
| CURRENT
LIABILITIES |
|
|
| Notes and
accounts payable |
$ |
3,290 |
|
|
$ |
2,460 |
|
| Income
tax payable |
|
292 |
|
|
|
341 |
|
| Accrued
expenses and other current liabilities |
|
3,761 |
|
|
|
4,379 |
|
| Total
Current Liabilities |
|
7,343 |
|
|
|
7,180 |
|
| |
|
|
| OTHER
LONG-TERM LIABILITIES |
|
|
| Accrued
pension liabilities |
|
358 |
|
|
|
355 |
|
| Deferred
income tax liabilities |
|
1,012 |
|
|
|
906 |
|
| Other
liabilities |
|
88 |
|
|
|
86 |
|
| Total
Other Long-Term Liabilities |
|
1,458 |
|
|
|
1,347 |
|
| |
|
|
| Total
Liabilities |
|
8,801 |
|
|
|
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 March 31, 2018 and December 31, 2017
Outstanding –1,301,657,500 and 1,284,146,100 shares as of March 31,
2018 and December 31, 2017, respectively |
|
33 |
|
|
|
33 |
|
|
Additional paid-in capital |
|
142,128 |
|
|
|
142,946 |
|
|
Accumulated deficits |
|
(40,702 |
) |
|
|
(47,517 |
) |
|
Accumulated other comprehensive income |
|
6,014 |
|
|
|
5,337 |
|
| Treasury
stock – 367,379,100 and 384,890,500 shares as of March 31, 2018 and
December 31, 2017, respectively |
|
(22,904 |
) |
|
|
(24,244 |
) |
| Total
Shareholders’ Equity |
|
84,569 |
|
|
|
76,555 |
|
| |
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
93,370 |
|
|
$ |
85,082 |
|
| |
|
|
|
|
|
|
|
Contact Information:
Investor Relations, O2Micro
Phone: 408.987.5920, x8888
Email: ir@o2micro.com
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