O2Micro Reports First Quarter Financial Results

GEORGE TOWN, Grand Cayman--(Business Wire)--
O2Micro® International Limited (NASDAQ®:OIIM) (SEHK:0457), a leading supplier of
innovative power management and security components, reported its financial
results today for the first quarter ended March 31, 2009.

Financial Results for the First Quarter ending 3/31/2009:

Net sales in the first quarter of 2009 were $23.1 million. Sales exceeded our
expectations, although they declined by 38.5% from the comparable year-ago
quarter. The decline in sales reflects the global economic slowdown and the
corresponding impact on our business.

The GAAP gross margin was 55.5% in Q1 2009 and also exceeded our expectations.
The gross margin fell from 58.5% in the year-ago period due to the fixed
component of this expense relative to total revenue.

GAAP operating expenses were $16.8 million. These expenses were comprised of
$8.0 million in R&D expenses, and $8.8 million in SG&A expenses. Both R&D and
SG&A spending were at the low-end of our targeted ranges. In addition, the
operating expenses were lower than the Q1 2008 period when the company recorded
$19.8 million of expense, including $9.8 million of R&D and $12.0 million of
SG&A spending, as well as $2.0 million of offset from litigation income.

During the first quarter of 2009, we reported a GAAP operating loss of $3.9
million, compared with operating income of $2.2 million in the year-ago quarter.
The loss in the recent quarter was smaller than expected due to higher revenue,
higher gross margin, and lower expenses.

Our GAAP net loss in Q1 2009 was $3.5 million, compared with net income of $2.2
million in the year-ago quarter. The net loss we reported in Q1 2009 was also
smaller than we had expected due to the same drivers as our operating income.
The GAAP loss per ADS was $0.10 in Q1 2009 and GAAP net income per ADS was $0.06
in Q1 2008.

Supplementary Data:

As of March 31, 2009, O2Micro had unrestricted cash and short-term investments
of $105.5 million, or $2.87 per fully diluted ADS. Net accounts receivable was
$12.1 million, and there were 44 days sales outstanding in accounts receivable
at the end of the first quarter. Inventory was $13.0 million and turned over 2.8
times in the first quarter.

As of March 31, 2009, O2Micro headcount consisted of 845 employees, of which 564
are engineers. This headcount was down from 876 employees at the end of the
fourth quarter of 2008.

Management Commentary:

Sterling Du, Chairman and CEO, commented, "We have adapted to the reset in
global business activity and we are continuing to deliver the best-in-class
technology to major OEM customers." He continued, "At the same time, we are
laser-focused on successfully bringing key new products to market in the
battery, DC/DC, and Internet security segments. We are continuing to invest our
R&D dollars in several young product lines and we are seeing early signs of
success with them."

Conference Call: O2Micro will hold its first quarter conference call at 5:00
a.m. PDT, 8:00 a.m. EDT, and 8:00 p.m. Hong Kong time. You may participate using
the following dial-in information.

In the US and CANADA: 888-389-5979, pass code #3193459
In HONG KONG: 800-968-103, pass code #3193459
Other INTERNATIONAL participants: 719-325-2204, pass code #3193459

A replay of the call will be available by phone until May 6th using the following
dial-in information.

In the US and CANADA: 888-203-1112, pass code #3193459
In HONG KONG: 800-901-108, pass code #3193459
Other INTERNATIONAL participants: 719-457-0820, pass code #3193459

A live simulcast will also be available on the company website at
www.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
and security components for the Computer, Consumer, Industrial, and
Communications markets. Products include Intelligent Lighting, Battery
Management, Power Management, and SmartCardBus® products.

O2Micro International maintains an extensive portfolio of intellectual property
with 11,830 patent claims granted, and over 14,000 more pending. 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, SmartCardBus, and combinations thereof are registered
trademarks of O2Micro. All other trademarks are the property of their respective
owners.

Certain statements in this release are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. They include
statements regarding O2Micro`s future growth, long term profitability, increases
in shareholder value, introduction of innovative technologies, expansion of
O2Micro`s product and patent portfolios, legal expenditures, litigation activity
and other statements regarding O2Micro`s or management`s intentions, hopes,
beliefs, expectations, representations, projections, plans or predictions of the
future. 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 Form F-1 in connection with the company`s initial
public offering in August 2000, Form F-3 in connection with the company`s public
offering in November 2001, and the annual reports on Form 20-F, which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements. The company assumes no obligation
to update or revise any forward-looking information, whether as a result of new
information, future events or otherwise.

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,
2009 2008

NET SALES $ 23,110 $ 37,556

COST OF SALES 10,286 15,596

GROSS PROFIT 12,824 21,960

OPERATING EXPENSES (INCOME)
Research and development (1) 7,984 9,756
Selling, general and administrative (1) 8,783 12,021
Litigation income - (2,000 )
Total Operating Expenses 16,767 19,777

INCOME (LOSS) FROM OPERATIONS (3,943 ) 2,183

NON-OPERATING INCOME
Interest income 444 670
Foreign exchange gain (loss) 487 (114 )
Other - net (11 ) 13
Total Non-operating Income 920 569

INCOME (LOSS) BEFORE INCOME TAX (3,023 ) 2,752

INCOME TAX EXPENSE 518 492

NET INCOME (LOSS) (3,541 ) 2,260

OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation adjustments (644 ) 2,010
Unrealized gain (loss) on available-for-sale securities 1,503 (2,864 )
Unrealized pension gain 1 -
Total Other Comprehensive Income (Loss) 860 (854 )

COMPREHENSIVE INCOME (LOSS) $ (2,681 ) $ 1,406

EARNINGS (LOSS) PER SHARE:
Basic $ (0.0019 ) $ 0.0012
Diluted NA $ 0.0012

EARNINGS (LOSS) PER ADS
Basic $ (0.10 ) $ 0.06
Diluted NA $ 0.06

SHARES USED IN EARNINGS (LOSS) PER SHARE CALCULATION:
Basic (in thousands) 1,838,683 1,894,334
Diluted (in thousands) NA 1,903,655

ADS UNITS USED IN EARNINGS PER ADS CALCULATION:
Basic (in thousands) 36,774 37,887
Diluted (in thousands) NA 38,073

(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:
Research and development $ 282 $ 258
Selling, general and administrative $ 489 $ 415

O2Micro International Limited and Subsidiaries

Consolidated Balance Sheets

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

March 31, December 31,
2009 2008
ASSETS (Unaudited)

CURRENT
ASSETS
Cash and $ 37,755 $ 31,844
cash
equivalents
Restricted 1,151 1,153
cash
Short-term 67,747 72,344
investments
Accounts 12,109 10,578
receivable
- net
Inventories 12,950 16,388
Prepaid 2,614 2,314
expenses
and other
current
assets
Total 134,326 134,621
Current
Assets

LONG-TERM 14,689 13,199
INVESTMENTS

PROPERTY 33,384 34,353
AND
EQUIPMENT -
NET

OTHER
ASSETS
Restricted 1,361 1,411
assets -
net
Intangible 4,763 4,929
assets
Other 4,551 4,760
Assets

TOTAL $ 193,074 $ 193,273
ASSETS

LIABILITIES
AND
SHAREHOLDER
S` EQUITY

CURRENT
LIABILITIES
Notes and $ 5,074 $ 4,120
accounts
payable
Income tax 443 226
payable
Accrued 8,670 8,269
expenses
and other
current
liabilities
Total 14,187 12,615
Current
Liabilities

OTHER LONG
-TERM
LIABILITIES
Accrued 513 553
pension
liabilities
FIN 48 tax 302 302
liabilities
Other 23 23
liabilities
838 878

Total 15,025 13,493
Liabilities

COMMITMENTS
AND
CONTINGENCI
ES

SHAREHOLDER
S` 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
-
4,750,000,0
00 shares
Issued - 37 37
1,839,591,2
00 and
1,832,788,4
00 shares
as of March
31, 2009
and
December
31, 2008,
respectivel
y
Additional 142,734 141,784
paid-in
capital
Retained 33,205 36,746
earnings
Accumulated 2,073 1,213
other
comprehensi
ve income
Total 178,049 179,780
Shareholder
s` Equity

TOTAL $ 193,074 $ 193,273
LIABILITIES
AND
SHAREHOLDER
S` EQUITY

O2Micro
Gary E. Abbott, 408-987-5920 ext. 8888
Director of Investor Relations
gary.abbott@o2micro.com

Copyright Business Wire 2009