O2Micro Reports Second Quarter 2013 Financial Results

Wed Jul 31, 2013 8:00am EDT

* Reuters is not responsible for the content in this press release.

GEORGE TOWN, Grand Cayman, July 31, 2013 (GLOBE NEWSWIRE) -- 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 second quarter of 2013, ending June 30, 2013.

Financial Highlights for the Second Quarter ending June 30, 2013:

O2Micro International Limited reported Q2 2013 revenue of $18.7 million. Revenue was up 8% sequentially and down 34% from the comparable year-ago quarter. The gross margin in the second quarter of 2013 was 51.2%. The gross margin was up from 50.0% in the prior quarter and down from 55.7% in the second quarter of 2012. The gross margin remains in our target range and varies primarily with revenue level and product mix. During the second quarter of 2013, the company recorded total GAAP operating expenses of $14.6 million, compared to $14.1 million in the first quarter of 2013 and $27.2 million in the year-ago Q2 period. The respective GAAP operating margins for the second quarter of 2013, the first quarter of 2013, and second quarter of 2012 were (26.8%), (31.2%), and (40.3%).

GAAP net loss was $4.4 million in Q2 2013. This compares to a GAAP net loss of $5.1 million in the first quarter of 2013 and a GAAP net loss of $10.9 million in Q2 2012. GAAP net loss per fully diluted ADS was $0.15 in Q2 2013. This compares to a GAAP net loss per fully diluted ADS of $0.17 in Q1 2013 and a GAAP net loss per fully diluted ADS of $0.35 in Q2 2012.

Financial Highlights for the Six Months ending June 30, 2013:

O2Micro International Limited reported revenue of $36.1 million for the six months ending June 30, 2013. This was down 37.8% from $58.0 million in the comparable six months of 2012. The gross margins were 50.6% and 56.0% during the corresponding periods of 2013 and 2012, respectively. GAAP operating expenses were $28.7 million and $44.3 million in the first half of 2013 and 2012, respectively. The respective GAAP operating margins for the comparable periods were (29.0%) and (20.4%). Pretax loss from continuing operations was $9.0 million in the first half of 2013. This compares to a pretax loss from continuing operations of $11.2 million in the first half of 2012. GAAP net loss was $9.5 million in 1H 2013. This compares to a GAAP net loss of $10.9 million in 1H 2012. The GAAP net loss per fully diluted ADS was $0.32 in the first six months of 2013. This compares to a GAAP net loss per fully diluted ADS of $0.35 in the corresponding first half of 2012.

Supplementary Data:

The company ended the second quarter of 2013 with $82.0 million in unrestricted cash and short-term investments or $2.88 per outstanding ADS. The accounts receivable balance was $11.3 million and represented 50 days sales outstanding at the end of Q2 2013. Inventory was $7.9 million or 74 days and turned over 4.9 times during Q2 2013. As of June 30, 2013, the company had $92.8 million in working capital and the book value was $135.9 million, or $4.77 per outstanding ADS.

As of June 30, 2013, O2Micro International Limited counted 600 employees, including 334 engineers.

Management Commentary:

"Our second quarter results demonstrate our commitment to revenue growth and represent continued acceptance of our new products through solid design win activity and market share gains," said Sterling Du, O2Micro's Chairman and CEO. "Revenue grew 8% sequentially and we have great confidence in our carefully chosen growth drivers including LED general lighting, backlighting, battery management and power management. We continue to believe that these drivers will contribute to top-line growth in upcoming quarters and lead O2Micro back to profitability in the near future."

Conference Call: O2Micro will hold its second quarter conference call today, July 31, 2013, at 6:00 a.m. PDT, 9:00 a.m. EDT. You may participate using the following dial-in information.

In the US and CANADA: 888-401-4668, pass code #1291083
INTERNATIONAL participants: 719-325-2435, pass code #1291083

A replay of the call will be available by phone for one week following the live call. The replay can be accessed using the following dial-in information.

In the US and CANADA: 888-203-1112, pass code #1291083
INTERNATIONAL participants: 719-457-0820, pass code #1291083

A live webcast will also be available on the company website at www.o2micro.com, and an online replay will be available 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.

O2Micro International maintains an extensive portfolio of intellectual property with 24,081 patent claims granted, and over 25,000 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, 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'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 developments 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 STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
(In Thousand U.S. Dollars, Except Per Share Amounts)
     
  Three Months Ended Six Months Ended
     June 30,      June 30,  
  2013 2012 2013 2012
     
NET SALES  $ 18,715  $ 28,313  $ 36,064  $ 58,000
         
COST OF SALES   9,133   12,530   17,814   25,543
         
GROSS PROFIT   9,582   15,783   18,250   32,457
         
OPERATING EXPENSES (INCOME)        
Research and development (1)  6,746  8,842  13,310  17,465
Selling, general and administrative (1)  7,858  8,942  15,382  17,473
Provision for litigation   --   9,422   --   9,422
Litigation income   --   --    --   (100)
Total Operating Expenses   14,604   27,206   28,692   44,260
         
LOSS FROM OPERATIONS   (5,022)   (11,423)   (10,442)   (11,803)
         
NON-OPERATING INCOME        
Interest income  343  441  722  876
Foreign exchange gain (loss) – net  320  (134)   532  (244)
Other – net   146   8   151   14 
Total Non-operating Income     809   315   1,405   646
         
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX  (4,213)  (11,108)  (9,037)  (11,157)
         
INCOME TAX EXPENSE   224   299   454   544
         
LOSS FROM CONTINUING OPERATIONS  (4,437)  (11,407)  (9,491)  (11,701)
         
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAX   --   465   (3)   803
         
NET LOSS   (4,437)   (10,942)   (9,494)   (10,898)
         
OTHER COMPREHENSIVE INCOME        
Foreign currency translation adjustments  61  (249)  (497)  261
Unrealized gain (loss) on available-for-sale securities  (36)  (121)  29  53
Unrealized pension gain   5   4   9   8
Total Other Comprehensive (Loss) Income   30   (366)   (459)   322
         
COMPREHENSIVE LOSS  $ (4,407)  $ (11,308)  $ (9,953)  $ (10,576)
         
BASIC EARNINGS (LOSS) PER ADS        
Continuing operations  $ (0.15)  $ (0.35)  $ (0.32)  $ (0.35)
Discontinued operations   --   --   --   --
   $ (0.15)  $ (0.35)  $ (0.32)  $ (0.35)
         
DILUTED EARNINGS (LOSS) PER ADS        
Continuing operations  $ (0.15)  $ (0.35)  $ (0.32)  $ (0.35)
Discontinued operations   --   --   --   --
   $ (0.15)  $ (0.35)  $ (0.32)  $ (0.35)
         
ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION:        
Basic (in thousands)   28,852   31,591   29,293   31,446
Diluted (in thousands)   28,852   31,591   29,293   31,446
         
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:        
Research and development  $ 174  $ 251  $ 357  $ 503
Selling, general and administrative  $ 466  $ 570  $ 965  $ 1,038
 
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In Thousand U.S. Dollars, Except Share Amounts)
     
  June 30, December 31,
  2013 2012
ASSETS (Unaudited) (Audited)
     
CURRENT ASSETS    
Cash and cash equivalents  $ 25,454  $ 27,898
Restricted cash    172    177
Short-term investments    56,510    69,427
Accounts receivable – net    11,304    8,773
Inventories    7,863    7,917
Prepaid expenses and other current assets    1,853    1,957
Total Current Assets    103,156    116,149
     
LONG-TERM INVESTMENTS    15,568    15,530
     
PROPERTY AND EQUIPMENT – NET   24,263   26,142
     
OTHER ASSETS    
Restricted assets    10,000    10,000
Intangible assets  --  31
Other Assets   3,499   3,474
Total Other Assets    13,499    13,505
     
TOTAL ASSETS   $156,486   $171,326
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES    
Notes and accounts payable   $ 4,780   $ 3,756
Income tax payable    231    362
Accrued expenses and other current liabilities    5,336    6,577
Total Current Liabilities    10,347    10,695
     
OTHER LONG-TERM LIABILITIES    
Accrued pension liabilities  672  708
Other liabilities   9,551   9,551
Total Other Long-Term Liabilities  10,223  10,259
     
Total Liabilities    20,570    20,954
     
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 – 1,660,786,600 shares as of June 30, 2013 and December 31, 2012, respectively    33    33
Additional paid-in capital   138,971   138,793
Retained earnings  7,371  16,865
Accumulated other comprehensive income  7,406  7,865
Treasury stock – 235,558,700 and 162,072,500 shares as of June 30, 2013 and December 31, 2012, respectively   (17,865)   (13,184)
Total Shareholders' Equity    135,916    150,372
     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $156,486   $171,326
CONTACT: Scott L. Anderson
         Director of Investor Relations, O2Micro
         Phone: 408.987.5920, x8888
         Email: scott.anderson@o2micro.com
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