Operational and Strategic Highlights:
- Q3 2019 sequential quarterly revenue was up 12.3% at the high
end of guidance provided on August 2nd, 2019
- GAAP net loss per fully diluted ADS in the third quarter of
2019 was 1 cent, with non-GAAP net loss of 2 cents per fully
diluted ADS.
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
30th, 2019.
Financial Highlights for the
Third Quarter ending September 30th,
2019:O2Micro International Limited (the
“Company”) reported Q3 2019 revenue of $16.0 million. Revenue was
up 12.3% sequentially, and down 4.7% from the same quarter in the
previous year. The gross margin in the third quarter of 2019 was
51.4%, which is up from 50.1% in the prior quarter, and up from
50.5% in the third quarter of 2018. The gross margin remains in our
target range and varies primarily with the quarterly revenue and
product mix. During the third quarter of 2019, the Company recorded
total GAAP operating expenses of $9.4 million, compared to $9.7
million in the second quarter of 2019, and $10.2 million in the
year-ago Q3 period. The GAAP operating margins for the third
quarter of 2019, the second quarter of 2019, and third quarter of
2018 were (6.9 %), (18.1 %), and (10.1 %), respectively.
GAAP net loss was $200,000 in Q3 2019. This
compares to a GAAP net loss of $2.8 million in the second quarter
of 2019 and a GAAP net loss of $3.5 million in Q3 2018. GAAP net
loss per fully diluted ADS was $0.01 in Q3 2019. This compares to a
GAAP net loss per fully diluted ADS of $0.11 in Q2 2019 and a GAAP
net loss per fully diluted ADS of $0.13 in Q3 2018.
Supplementary Data: The Company
ended the third quarter of 2019 with $38.5 million in cash and
short-term investments or $1.46 per outstanding ADS. The accounts
receivable balance was $12.4 million and represented 66 days sales
outstanding at the end of Q3 2019. Inventory was $9.8 million or
114 days and turned over 3.2 times during Q3 2019. As of September
30th, 2019, the Company had $51.5 million in working capital and
the book value was $72.5 million, or $2.75 per outstanding ADS. As
of September 30th, 2019, O2Micro International Limited had a total
of 388 employees worldwide, including 247 engineers.
Management Commentary:"The
third quarter of 2019 saw strong growth in consumer products as our
newer solutions ramp up in production while we continued to design
and provide timely, reliable and quality products. Our battery
product lines offer expanding solutions for all lithium battery
types and we have seen continuing growth in our TV/Monitor product
lines as we further expand into more territory,” said Sterling Du,
O2Micro’s Chairman and CEO. "We are pleased with our recently
announced agreement with Feit Electric and continue expanding our
opportunities for our solutions to provide ongoing growth in a
dynamic market and lead O2Micro into long term profitability."
Conference Call: O2Micro will
hold its third quarter conference call today, November 1, 2019, at
6:00AM Pacific, 9:00AM Eastern. You may participate using the
following dial-in information.
Conference Code: 5456051Participants, Int'l Toll: +1
334-323-0501Participants, US/CAN: 800-353-6461
The Call-in Audio Replay will be available from
November 1, 2019 12:00 Eastern Time (US & Canada) (UTC-05:00)
through November 8th, 2019 12:00 Eastern Time (US & Canada)
(UTC-05:00)https://event.mymeetingroom.com/Public/ReplayNumbers/ZW5jPWNYOTZoeVptcGpYbXdSSjB3WEMyTTVBb2xHcU44dzlyNnJveWZIYkVwdVdqYk5jYU5lYUs2b3ZCdjNrY2drRVJFbnovSVhLbTlicVBNUXdGRGloMVVRPT0%3d
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
SUBSIDIARIESCONSOLIDATED 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, |
| |
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NET SALES |
$ |
16,033 |
|
|
$ |
16,815 |
|
|
$ |
43,067 |
|
|
$ |
46,128 |
|
| |
|
|
|
|
| COST OF SALES |
|
7,792 |
|
|
|
8,322 |
|
|
|
21,233 |
|
|
|
22,498 |
|
| |
|
|
|
|
| GROSS PROFIT |
|
8,241 |
|
|
|
8,493 |
|
|
|
21,834 |
|
|
|
23,630 |
|
| |
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
|
Research and development (1) |
|
4,727 |
|
|
|
5,245 |
|
|
|
14,683 |
|
|
|
14,746 |
|
|
Selling, general and administrative (1) |
|
4,623 |
|
|
|
4,947 |
|
|
|
14,458 |
|
|
|
14,946 |
|
|
|
|
|
|
|
|
Total Operating Expenses |
|
9,350 |
|
|
|
10,192 |
|
|
|
29,141 |
|
|
|
29,692 |
|
| |
|
|
|
|
| LOSS FROM OPERATIONS |
|
(1,109 |
) |
|
|
(1,699 |
) |
|
|
(7,307 |
) |
|
|
(6,062 |
) |
| |
|
|
|
|
| NON-OPERATING INCOME |
|
|
|
|
|
Interest income |
|
163 |
|
|
|
87 |
|
|
|
327 |
|
|
|
298 |
|
|
Net gain (loss) recognized on long-term investments |
|
715 |
|
|
|
(1,687 |
) |
|
|
543 |
|
|
|
11,287 |
|
|
Foreign exchange gain (loss) – net |
|
1 |
|
|
|
3 |
|
|
|
(83 |
) |
|
|
32 |
|
|
Other – net |
|
362 |
|
|
|
122 |
|
|
|
615 |
|
|
|
430 |
|
|
Total Non-operating Income (Loss) |
|
1,241 |
|
|
|
(1,475 |
) |
|
|
1,402 |
|
|
|
12,047 |
|
| |
|
|
|
|
| INCOME (LOSS) BEFORE INCOME
TAX |
|
132 |
|
|
|
(3,174 |
) |
|
|
(5,905 |
) |
|
|
5,985 |
|
| |
|
|
|
|
| INCOME TAX EXPENSE |
|
332 |
|
|
|
281 |
|
|
|
921 |
|
|
|
811 |
|
| |
|
|
|
|
| NET INCOME (LOSS) |
|
(200 |
) |
|
|
(3,455 |
) |
|
|
(6,826 |
) |
|
|
5,174 |
|
| |
|
|
|
|
| OTHER COMPREHENSIVE
INCOME |
|
|
|
|
|
Foreign currency translation adjustments |
|
(308 |
) |
|
|
(290 |
) |
|
|
(441 |
) |
|
|
(583 |
) |
|
Unrealized pension gain |
|
1 |
|
|
|
1 |
|
|
|
4 |
|
|
|
5 |
|
|
Total Other Comprehensive Loss |
|
(307 |
) |
|
|
(289 |
) |
|
|
(437 |
) |
|
|
(578 |
) |
| |
|
|
|
|
| COMPREHENSIVE INCOME
(LOSS) |
$ |
(507 |
) |
|
$ |
(3,744 |
) |
|
$ |
(7,263 |
) |
|
$ |
4,596 |
|
| |
|
|
|
|
| EARNINGS (LOSS) PER ADS |
|
|
|
|
|
Basic |
$ |
(0.01 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
0.20 |
|
|
Diluted |
$ |
(0.01 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.26 |
) |
|
$ |
0.19 |
|
| |
|
|
|
|
| ADS UNITS USED IN EARNINGS
(LOSS) PER ADS CALCULATION: |
|
|
|
|
|
Basic (in thousands) |
|
26,347 |
|
|
|
26,039 |
|
|
|
26,332 |
|
|
|
26,015 |
|
|
Diluted (in thousands) |
|
26,347 |
|
|
|
26,039 |
|
|
|
26,332 |
|
|
|
26,579 |
|
| |
|
|
|
|
| (1) INCLUDES STOCK-BASED
COMPENSATION CHARGE AS FOLLOWS: |
|
|
|
|
|
Research and development |
$ |
68 |
|
|
$ |
60 |
|
|
$ |
204 |
|
|
$ |
182 |
|
|
Selling, general and administrative |
$ |
305 |
|
|
$ |
290 |
|
|
$ |
880 |
|
|
$ |
886 |
|
| |
|
|
|
|
|
|
|
|
O2MICRO INTERNATIONAL LIMITED AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In Thousand U.S. Dollars, Except Share
Amounts) |
| |
|
|
|
|
|
|
|
| |
|
September 30, |
|
|
|
December 31, |
|
| |
|
2019 |
|
|
|
2018 |
|
| ASSETS |
|
(Unaudited) |
|
|
|
(Audited) |
|
| |
|
|
|
|
|
|
|
| CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
19,217 |
|
|
$ |
32,414 |
|
|
Restricted cash |
|
34 |
|
|
|
34 |
|
|
Short-term investments |
|
19,239 |
|
|
|
6,172 |
|
|
Accounts receivable – net |
|
12,358 |
|
|
|
11,388 |
|
|
Inventories |
|
9,807 |
|
|
|
10,288 |
|
|
Prepaid expenses and other current assets |
|
1,633 |
|
|
|
2,276 |
|
|
Total Current Assets |
|
62,288 |
|
|
|
62,572 |
|
| |
|
|
| LONG-TERM INVESTMENTS |
|
4,805 |
|
|
|
10,445 |
|
| |
|
|
| PROPERTY AND EQUIPMENT – NET
(2) |
|
17,139 |
|
|
|
13,714 |
|
| |
|
|
| OTHER ASSETS |
|
2,168 |
|
|
|
2,578 |
|
| |
|
|
| TOTAL ASSETS |
$ |
86,400 |
|
|
$ |
89,309 |
|
| |
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
| |
|
|
| CURRENT LIABILITIES |
|
|
|
Notes and accounts payable |
$ |
3,978 |
|
|
$ |
4,582 |
|
|
Income tax payable |
|
536 |
|
|
|
413 |
|
|
Lease liabilities |
|
916 |
|
|
|
- |
|
|
Accrued expenses and other current liabilities |
|
5,335 |
|
|
|
4,181 |
|
|
Total Current Liabilities |
|
10,765 |
|
|
|
9,176 |
|
| |
|
|
| OTHER LONG-TERM LIABILITIES |
|
|
|
Accrued pension liabilities |
|
277 |
|
|
|
321 |
|
|
Deferred income tax liabilities |
|
717 |
|
|
|
681 |
|
|
Lease liabilities |
|
2,012 |
|
|
|
- |
|
|
Other liabilities |
|
87 |
|
|
|
85 |
|
|
Total Other Long-Term Liabilities |
|
3,093 |
|
|
|
1,087 |
|
| |
|
|
| Total Liabilities |
|
13,858 |
|
|
|
10,263 |
|
| |
|
|
| 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, 2019 and December
31, 2018Outstanding –1,316,729,700 and 1,298,808,750 shares as of
September 30, 2019 and December 31, 2018,
respectively |
|
33 |
|
|
|
33 |
|
|
Additional paid-in capital |
|
143,136 |
|
|
|
143,115 |
|
|
Accumulated deficits |
|
(53,514 |
) |
|
|
(45,912 |
) |
|
Accumulated other comprehensive income |
|
4,237 |
|
|
|
4,674 |
|
|
Treasury stock – 352,306,900 and 370,227,850 shares as of September
30, 2019 and December 31, 2018,
respectively |
|
(21,350 |
) |
|
|
(22,864 |
) |
|
Total Shareholders’ Equity |
|
72,542 |
|
|
|
79,046 |
|
| |
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
86,400 |
|
|
$ |
89,309 |
|
(2) Property and equipment - net includes right-of-used assets
under operating lease of $2,914 as of September 30, 2019.
O2Micro
Daniel Meyberg
Investor Relations
ir@o2micro.com
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