Operational and Strategic
Highlights:
- Q4 2017 results were within the range of guidance provided in
November 2017.
- Fiscal 2017 revenue increased 6.4% over fiscal 2016.
- GAAP net loss per ADS in the fourth quarter of 2017 was 7
cents, with non-GAAP net loss of 6 cents per ADS.
- Due to market seasonality, revenue in Q1 2018 is expected to
range between -2% and -8% compared to Q4 2017.
- We remain optimistic about our growth drivers including
backlighting, battery management and power products.
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 and year ending
December 31, 2017.
Financial Highlights for the
Fourth Quarter and Fiscal Year ending
December 31, 2017: O2Micro International Limited
(“Company”) reported yearly revenue of $60.2 million, a 6.4%
increase over 2016. Fourth quarter 2017 revenue was $15.2 million
which was down 2% sequentially and down 4.3% from the same quarter
in the previous year. The gross margin in the fourth quarter of
2017 was 50.5%, which was up from 50.3% in the prior quarter, and
down from 54.1% in the fourth quarter of 2016. The gross margin
remains in our target range and varies primarily with the quarterly
revenue and product mix. During the fourth quarter of 2017, the
Company recorded total GAAP operating expenses of $9.4 million,
compared to $9.5 million in the third quarter of 2017, and $9.0
million in the year-ago Q4 period. The GAAP operating margins for
the fourth quarter of 2017, the third quarter of 2017, and fourth
quarter of 2016 were (11.5%), (11.1%), and (2.4%),
respectively.
Q4 2017 GAAP net loss was $1.9 million. This compares to a GAAP
net loss of $1.4 million in the third quarter of 2017 and a GAAP
net income of $12,000 in Q4 2016. GAAP net loss per fully diluted
ADS was $0.07 in Q4 2017. This compares to a GAAP net loss per
fully diluted ADS of $0.05 in Q3 2017 and a GAAP net income per
fully diluted ADS of $0.00 in Q4 2016.
Yearly GAAP net loss was $6.1 million in 2017. GAAP net loss in
2016 was $3.0 million including a $2.7 million one-time gain. GAAP
net loss per fully diluted ADS was $0.24 in 2017. This compares to
a GAAP net loss of per fully diluted ADS of $0.12 in 2016.
Supplementary Data: The Company ended the
fourth quarter of 2017 with $46.1 million in unrestricted cash and
short-term investments or $1.80 per outstanding ADS. The accounts
receivable balance was $9.2 million and represented 54 days sales
outstanding at the end of Q4 2017. Inventory was $9.3 million or
119 days and turned over 3 times during Q4 2017. As of December 31,
2017, the Company had $58.7 million in working capital and the book
value was $76.6 million, or $2.98 per outstanding ADS. As of
December 31, 2017, O2Micro International Limited had a total of 372
employees worldwide, including 228 engineers.
Management Commentary: “Our first quarter
of 2018 revenue guidance reflects continuing design activities in
the growth drivers of the consumer and industrial markets. We are
pleased with our continued acceptance our technology including high
end backlighting for the TV, power tools, household appliances, and
automotive, despite the current dynamic market,”
said Sterling Du, O2Micro’s Chairman and CEO. “We believe our
solutions for these product segments will continue to contribute to
our top-line growth in upcoming quarters and lead O2Micro back to
long term profitability.”
Conference Call: O2Micro will hold its fourth
quarter conference call today, January 31st, 2018, at 6:00AM.
Pacific, 9:00AM Eastern. You may participate using the following
dial-in information.
Conference ID: 3027751Participants, Int'l
Toll: 719-325-2370Participants, US/CAN: 800-967-7134
The Call-in Audio Replay will be available from January 31st,
2018 12:00 Eastern Time (US & Canada) through February 7th,
2018 12:00 Eastern Time (US &
Canada)https://event.mymeetingroom.com/Public/WebRegistration/Y29uZmVyZW5jZUlkPTE3MTA4OTYmdHlwZT1yZXBsYXkmbGFuZ3VhZ2U9ZW5nbGlzaA==
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, |
| |
2017 |
2016 |
2017 |
2016 |
| |
(Unaudited) |
(Unaudited) |
(audited) |
| |
|
|
| NET SALES |
$ |
15,217 |
|
$ |
15,909 |
|
$ |
60,205 |
|
$ |
56,561 |
|
| |
|
|
|
|
| COST OF SALES |
|
7,525 |
|
|
7,302 |
|
|
29,426 |
|
|
27,317 |
|
| |
|
|
|
|
| GROSS PROFIT |
|
7,692 |
|
|
8,607 |
|
|
30,779 |
|
|
29,244 |
|
| |
|
|
|
|
| OPERATING EXPENSES |
|
|
|
|
| Research
and development (1) |
|
4,774 |
|
|
4,118 |
|
|
17,989 |
|
|
15,645 |
|
| Selling,
general and administrative (1) |
|
4,673 |
|
|
4,866 |
|
|
19,047 |
|
|
19,481 |
|
|
Litigation income |
|
- |
|
|
- |
|
|
(19 |
) |
|
(23 |
) |
| Total
Operating Expenses |
|
9,447 |
|
|
8,984 |
|
|
37,017 |
|
|
35,103 |
|
| |
|
|
|
|
| LOSS FROM
OPERATIONS |
|
(1,755 |
) |
|
(377 |
) |
|
(6,238 |
) |
|
(5,859 |
) |
| |
|
|
|
|
| NON-OPERATING
INCOME |
|
|
|
|
| Interest
income |
|
87 |
|
|
77 |
|
|
344 |
|
|
301 |
|
| Foreign
exchange (loss) gain – net |
|
(84 |
) |
|
367 |
|
|
53 |
|
|
63 |
|
| Gain on
sale of real estate |
|
- |
|
|
- |
|
|
- |
|
|
1,725 |
|
| Gain on
sale of long-term investments |
|
- |
|
|
- |
|
|
20 |
|
|
948 |
|
| Other –
net |
|
202 |
|
|
283 |
|
|
686 |
|
|
894 |
|
| Total
Non-operating Income |
|
205 |
|
|
727 |
|
|
1,103 |
|
|
3,931 |
|
| |
|
|
|
|
| INCOME (LOSS) BEFORE
INCOME TAX |
|
(1,550 |
) |
|
350 |
|
|
(5,135 |
) |
|
(1,928 |
) |
| |
|
|
|
|
| INCOME TAX EXPENSE |
|
329 |
|
|
338 |
|
|
1,010 |
|
|
1,058 |
|
| |
|
|
|
|
| NET INCOME (LOSS) |
|
(1,879 |
) |
|
12 |
|
|
(6,145 |
) |
|
(2,986 |
) |
| |
|
|
|
|
| OTHER COMPREHENSIVE
INCOME |
|
|
|
|
| Foreign
currency translation adjustments |
|
319 |
|
|
(905 |
) |
|
984 |
|
|
(397 |
) |
|
Unrealized (loss) gain on available-for-sale securities |
|
- |
|
|
- |
|
|
(1 |
) |
|
1 |
|
|
Unrealized pension loss |
|
(63 |
) |
|
(14 |
) |
|
(61 |
) |
|
(13 |
) |
| Total
Other Comprehensive Income (Loss) |
|
256 |
|
|
(919 |
) |
|
922 |
|
|
(409 |
) |
| |
|
|
|
|
| COMPREHENSIVE LOSS |
$ |
(1,623 |
) |
$ |
(907 |
) |
$ |
(5,223 |
) |
$ |
(3,395 |
) |
| |
|
|
|
|
| EARNINGS (LOSS) PER
ADS |
|
|
|
|
|
Basic |
$ |
(0.07 |
) |
$ |
- |
|
$ |
(0.24 |
) |
$ |
(0.12 |
) |
|
Diluted |
$ |
(0.07 |
) |
$ |
- |
|
$ |
(0.24 |
) |
$ |
(0.12 |
) |
| |
|
|
|
|
| |
|
|
|
|
| ADS UNITS USED IN
EARNINGS (LOSS) PER ADS CALCULATION: |
|
|
|
|
| Basic (in
thousands) |
|
25,696 |
|
|
25,592 |
|
|
25,780 |
|
|
25,643 |
|
| Diluted
(in thousands) |
|
25,696 |
|
|
26,050 |
|
|
25,780 |
|
|
25,643 |
|
| |
|
|
|
|
| (1) INCLUDES
STOCK-BASED COMPENSATION CHARGE AS FOLLOWS: |
|
|
|
|
| Research
and development |
$ |
53 |
|
$ |
52 |
|
$ |
221 |
|
$ |
231 |
|
| Selling,
general and administrative |
$ |
335 |
|
$ |
320 |
|
$ |
1,368 |
|
$ |
1,375 |
|
| |
|
|
|
|
| |
| O2MICRO INTERNATIONAL LIMITED AND
SUBSIDIARIES |
| |
| CONSOLIDATED BALANCE SHEETS |
| (In Thousand U.S. Dollars, Except Share
Amounts) |
| |
| |
December 31, |
December 31, |
| |
2017 |
2016 |
|
ASSETS |
(Unaudited) |
(Audited) |
| |
|
|
| CURRENT ASSETS |
|
|
| Cash and
cash equivalents |
$ |
28,520 |
|
$ |
31,332 |
|
|
Restricted cash |
|
35 |
|
|
32 |
|
|
Short-term investments |
|
17,601 |
|
|
21,532 |
|
| Accounts
receivable – net |
|
9,184 |
|
|
7,205 |
|
|
Inventories |
|
9,330 |
|
|
9,275 |
|
| Prepaid
expenses and other current assets |
|
1,245 |
|
|
1,106 |
|
| Total
Current Assets |
|
65,915 |
|
|
70,482 |
|
| |
|
|
| LONG-TERM
INVESTMENTS |
|
3,112 |
|
|
4,253 |
|
| |
|
|
| PROPERTY AND EQUIPMENT
– NET |
|
13,755 |
|
|
13,736 |
|
| |
|
|
| OTHER ASSETS |
|
2,300 |
|
|
2,218 |
|
| |
|
|
| TOTAL ASSETS |
$ |
85,082 |
|
$ |
90,689 |
|
| |
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
| |
|
|
| CURRENT
LIABILITIES |
|
|
| Notes and
accounts payable |
$ |
2,460 |
|
$ |
4,329 |
|
| Income
tax payable |
|
341 |
|
|
180 |
|
| Accrued
expenses and other current liabilities |
|
4,379 |
|
|
4,102 |
|
| Total
Current Liabilities |
|
7,180 |
|
|
8,611 |
|
| |
|
|
| OTHER LONG-TERM
LIABILITIES |
|
|
| Accrued
pension liabilities |
|
355 |
|
|
281 |
|
| Deferred
income tax liabilities |
|
906 |
|
|
930 |
|
| Other
liabilities |
|
86 |
|
|
83 |
|
| Total
Other Long-Term Liabilities |
|
1,347 |
|
|
1,294 |
|
| |
|
|
| Total Liabilities |
|
8,527 |
|
|
9,905 |
|
| |
|
|
| 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, 2017 and 2016, respectively
Outstanding –1,284,146,100 and 1,279,124,900 shares as of December
31, 2017 and 2016, respectively |
|
33 |
|
|
33 |
|
|
Additional paid-in capital |
|
142,946 |
|
|
142,738 |
|
|
Accumulated deficits |
|
(47,517 |
) |
|
(41,372 |
) |
|
Accumulated other comprehensive income |
|
5,337 |
|
|
4,415 |
|
| Treasury
stock – 384,890,500 and 389,911,700 shares as of December 31, 2017
and 2016, respectively |
|
(24,244 |
) |
|
(25,030 |
) |
| Total
Shareholders’ Equity |
|
76,555 |
|
|
80,784 |
|
| |
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
$ |
85,082 |
|
$ |
90,689 |
|
| |
|
|
|
|
|
|
Contact Information:
Investor Relations, O2Micro
Phone: 408.987.5920, x8888
Email: ir@o2micro.com
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