Operational and Strategic
Highlights:
- Q4 2018 revenue was up 9.0% from the same quarter in the
previous year and down 1.4% sequentially and within the range of
guidance provided on October 31, 2018.
- GAAP net loss per fully diluted ADS in the fourth quarter of
2018 was 12 cents, with non-GAAP net loss of 5 cents per fully
diluted ADS.
- O2Micro expects the Q1 2019 revenue midpoint to be up around 4%
from the comparable quarter in 2018 and down 12% plus or minus 4%
sequentially.
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 fourth quarter ending December 31,
2018.
Financial Highlights for the
Fourth Quarter ending December 31,
2018: O2Micro International Limited (the
“Company”) reported Q4 2018 revenue of $16.6 million. Revenue was
down 1.4% sequentially, and up 9.0% from the same quarter in the
previous year. The gross margin in the fourth quarter of 2018 was
50.3%, which was down from 50.5% in the prior quarter, and down
from 50.5% in the fourth quarter of 2017. The gross margin remains
in our target range and varies primarily with the quarterly revenue
and product mix. During the fourth quarter of 2018, the Company
recorded total GAAP operating expenses of $10.4 million, compared
to $10.2 million in the third quarter of 2018, and $9.4 million in
the year-ago Q4 period. The GAAP operating margins for the fourth
quarter of 2018, the third quarter of 2018, and fourth quarter of
2017 were (12.4%), (10.1%), and (11.5%), respectively.
GAAP net loss was $3.1 million in Q4 2018. This
compares to a GAAP net loss of $3.5 million in the third quarter of
2018 and a GAAP net loss of $1.9 million in Q4 2017. GAAP net loss
per fully diluted ADS was $0.12 in Q4 2018. This compares to a GAAP
net loss per fully diluted ADS of $0.13 in Q3 2018 and a GAAP net
loss per fully diluted ADS of $0.07 in Q4 2017.
Supplementary Data: The Company
ended the fourth quarter of 2018 with $38.6 million in unrestricted
cash and short-term investments or $1.49 per outstanding ADS. The
accounts receivable balance was $11.4 million and represented 62
days sales outstanding at the end of Q4 2018. Inventory was $10.3
million or 111 days and turned over 3.3 times during Q4 2018. As of
December 31, 2018, the Company had $53.4 million in working capital
and the book value was $79.0 million, or $3.04 per outstanding ADS.
As of December31, 2018, O2Micro International Limited had a total
of 400 employees worldwide, including 256 engineers.
Management Commentary: "Our
primary growth drivers continue to show promise and projected
growth into 2019. Our TV products have had increased design wins
and our battery products show increased adoption and promise with
new and existing customers supporting automotive, power tools, IOT
and household appliance sectors. Our smartphone products, although
still breaking into the market, see considerable growth
opportunities," said Sterling Du, O2Micro’s Chairman and CEO. “We
believe our solutions and design wins for these product segments
will provide for ongoing growth in a dynamic consumer market and
lead O2Micro back to long term profitability.”
Conference Call: O2Micro will hold
its fourth quarter conference call today, January 30, 2019, at
6:00AM. Pacific, 9:00AM Eastern. You may participate using the
following dial-in information.
Conference Code: 5810328Participants, Int'l
Toll: +1 334-323-0522Participants, US/CAN:
877-260-1479The Call-in Audio Replay will be available from
January 30th, 2019 12:00 Eastern Time (US & Canada) (UTC-05:00)
through February, 06 2019 12:00 Eastern Time (US & Canada)
(UTC-05:00).
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 (In Thousand U.S.
Dollars, Except Per Share Amounts)
|
Three Months Ended |
|
Years Ended |
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(audited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES |
$ |
16,586 |
|
|
$ |
15,217 |
|
|
$ |
62,714 |
|
|
$ |
60,205 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF SALES |
|
8,243 |
|
|
|
7,525 |
|
|
|
30,741 |
|
|
|
29,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
8,343 |
|
|
|
7,692 |
|
|
|
31,973 |
|
|
|
30,779 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development (1) |
|
5,020 |
|
|
|
4,774 |
|
|
|
19,766 |
|
|
|
17,989 |
|
Selling,
general and administrative (1) |
|
5,386 |
|
|
|
4,673 |
|
|
|
20,332 |
|
|
|
19,047 |
|
Litigation Income |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Operating Expenses |
|
10,406 |
|
|
|
9,447 |
|
|
|
40,098 |
|
|
|
37,017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS |
|
(2,063 |
) |
|
|
(1,755 |
) |
|
|
(8,125 |
) |
|
|
(6,238 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
71 |
|
|
|
87 |
|
|
|
369 |
|
|
|
344 |
|
Net gain
(loss) recognized on long-term investments |
|
(1,370 |
) |
|
|
- |
|
|
|
9,916 |
|
|
|
- |
|
Foreign
exchange gain (loss) – net |
|
76 |
|
|
|
(84 |
) |
|
|
108 |
|
|
|
53 |
|
Other –
net |
|
530 |
|
|
|
202 |
|
|
|
961 |
|
|
|
706 |
|
Total
Non-operating Income (Loss) |
|
(693 |
) |
|
|
205 |
|
|
|
11,354 |
|
|
|
1,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAX |
|
(2,756 |
) |
|
|
(1,550 |
) |
|
|
3,229 |
|
|
|
(5,135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX EXPENSE |
|
330 |
|
|
|
329 |
|
|
|
1,141 |
|
|
|
1,010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS) |
|
(3,086 |
) |
|
|
(1,879 |
) |
|
|
2,088 |
|
|
|
(6,145 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
currency translation adjustments |
|
(94 |
) |
|
|
319 |
|
|
|
(677 |
) |
|
|
984 |
|
Unrealized loss on available-for-sale securities |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1 |
) |
Unrealized pension gain (loss) |
|
9 |
|
|
|
(63 |
) |
|
|
14 |
|
|
|
(61 |
) |
Total
Other Comprehensive Income (Loss) |
|
(85 |
) |
|
|
256 |
|
|
|
(663 |
) |
|
|
922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE INCOME
(LOSS) |
$ |
(3,171 |
) |
|
$ |
(1,623 |
) |
|
$ |
1,425 |
|
|
$ |
(5,223 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER
ADS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.12 |
) |
|
$ |
(0.07 |
) |
|
$ |
0.08 |
|
|
$ |
(0.24 |
) |
Diluted |
$ |
(0.12 |
) |
|
$ |
(0.07 |
) |
|
$ |
0.08 |
|
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADS UNITS USED IN
EARNINGS (LOSS) PER ADS CALCULATION: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (in
thousands) |
|
26,019 |
|
|
|
25,696 |
|
|
|
26,016 |
|
|
|
25,780 |
|
Diluted
(in thousands) |
|
26,019 |
|
|
|
25,696 |
|
|
|
26,616 |
|
|
|
25,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) INCLUDES
STOCK-BASED COMPENSATION CHARGE AS FOLLOWS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
and development |
$ |
59 |
|
|
$ |
53 |
|
|
$ |
241 |
|
|
$ |
221 |
|
Selling,
general and administrative |
$ |
294 |
|
|
$ |
335 |
|
|
$ |
1,180 |
|
|
$ |
1,368 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
O2MICRO INTERNATIONAL LIMITED AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS(In Thousand U.S. Dollars, Except Share
Amounts)
|
December 31, |
|
December 31, |
|
2018 |
|
2017 |
ASSETS |
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
Cash and
cash equivalents |
$ |
32,414 |
|
$ |
28,520 |
|
Restricted cash |
|
34 |
|
|
35 |
|
Short-term investments |
|
6,172 |
|
|
17,601 |
|
Accounts
receivable – net |
|
11,388 |
|
|
9,184 |
|
Inventories |
|
10,288 |
|
|
9,330 |
|
Prepaid
expenses and other current assets |
|
2,276 |
|
|
1,245 |
|
Total
Current Assets |
|
62,572 |
|
|
65,915 |
|
|
|
|
|
|
|
|
LONG-TERM
INVESTMENTS |
|
10,445 |
|
|
3,112 |
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT
– NET |
|
13,714 |
|
|
13,755 |
|
|
|
|
|
|
|
|
OTHER ASSETS |
|
2,578 |
|
|
2,300 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
89,309 |
|
$ |
85,082 |
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES |
|
|
|
|
|
|
Notes and
accounts payable |
$ |
4,582 |
|
$ |
2,460 |
|
Income
tax payable |
|
413 |
|
|
341 |
|
Accrued
expenses and other current liabilities |
|
4,181 |
|
|
4,379 |
|
Total
Current Liabilities |
|
9,176 |
|
|
7,180 |
|
|
|
|
|
|
|
|
OTHER LONG-TERM
LIABILITIES |
|
|
|
|
|
|
Accrued
pension liabilities |
|
321 |
|
|
355 |
|
Deferred
income tax liabilities |
|
681 |
|
|
906 |
|
Other
liabilities |
|
85 |
|
|
86 |
|
Total
Other Long-Term Liabilities |
|
1,087 |
|
|
1,347 |
|
|
|
|
|
|
|
|
Total Liabilities |
|
10,263 |
|
|
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 December 31, 2018 and 2017 Outstanding
–1,298,808,750 and 1,284,146,100 shares as of December 31, 2018 and
2017, respectively |
|
33 |
|
|
33 |
|
Additional paid-in capital |
|
143,115 |
|
|
142,946 |
|
Accumulated deficits |
|
(45,912 |
) |
|
(47,517 |
) |
Accumulated other comprehensive income |
|
4,674 |
|
|
5,337 |
|
Treasury
stock – 370,227,850 and 384,890,500 shares as of December 31, 2018
and 2017, respectively |
|
(22,864 |
) |
|
(24,244 |
) |
Total
Shareholders’ Equity |
|
79,046 |
|
|
76,555 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
89,309 |
|
$ |
85,082 |
|
O2Micro
Daniel Meyberg
Investor Relations
ir@o2micro.com
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