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O2Micro Reports Third Quarter 2014 Financial Results(GlobeNewswire Via Acquire Media NewsEdge) GEORGE TOWN, Grand Cayman, Oct. 30, 2014 (GLOBE NEWSWIRE) -- Operational and Strategic Highlights: Company experienced strong design activity in solutions for smartphone and tablet markets; expecting products to ramp in 2015. O2Micro continues to lower operating expenses. Company lowers third quarter operating expenses by $2.7 million on a year-over-year basis 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 of 2014, ending September 30, 2014. Financial Highlights for the Third Quarter ending September 30, 2014: O2Micro International Limited reported Q3 2014 revenue of $15.4 million. Revenue was down 12% sequentially and down 17% from the comparable year-ago quarter. The gross margin in the third quarter of 2014 was 51.8%. The gross margin was up from 51.5% in the prior quarter and up from 51.4% in the third quarter of 2013. The gross margin remains in our target range and varies primarily with revenue level and product mix. During the third quarter of 2014, the company recorded total GAAP operating expenses of $11.5 million, compared to $12.1 million in the second quarter of 2014 and $14.2 million in the year-ago Q3 period. The respective GAAP operating margins for the third quarter of 2014, the second quarter of 2014, and third quarter of 2013 were (23.0%), (17.9%), and (25.1%). GAAP net loss was $2.9 million in Q3 2014. This compares to a GAAP net loss of $3.2 million in the second quarter of 2014 and a GAAP net loss of $4.5 million in Q3 2013. GAAP net loss per fully diluted ADS was $0.11 in Q3 2014. This compares to a GAAP net loss per fully diluted ADS of $0.12 in Q2 2014 and a GAAP net loss per fully diluted ADS of $0.16 in Q3 2013. Financial Highlights for the Nine Months ending September 30, 2014: O2Micro International Limited reported revenue of $49.3 million for the nine months ending September 30, 2014. This was down 9.9% from $54.7 million in the comparable nine months of 2013. The gross margins were 51.6% and 50.9% during the corresponding periods of 2014 and 2013, respectively. GAAP operating expenses were $35.2 million and $42.9 million in the first nine months of 2014 and 2013, respectively. The respective GAAP operating margins for the comparable periods were (19.8%) and (27.6%). Pretax loss from continuing operations was $8.3 million in the first nine months of 2014. This compares to a pretax loss from continuing operations of $13.3 million in the first nine months of 2013. GAAP net loss was $9.0 million in the first nine months of 2014. This compares to a GAAP net loss of $14.0 million in the first nine months of 2013. The GAAP net loss per fully diluted ADS was $0.33 in the first nine months of 2014. This compares to a GAAP net loss per fully diluted ADS of $0.48 in the first nine months of 2013. Supplementary Data: The company ended the third quarter of 2014 with $64.9 million in unrestricted cash and short-term investments or $2.40 per outstanding ADS. The accounts receivable balance was $8.3 million and represented 54 days sales outstanding at the end of Q3 2014. Inventory was $10.2 million or 120 days and turned over 3.0 times during Q3 2014. As of September 30, 2014, the company had $75.3 million in working capital and the book value was $114.7 million, or $4.25 per outstanding ADS. As of September 30, 2014, O2Micro International Limited counted 478 employees, including 281 engineers. Management Commentary: "Our third quarter results were in-line with the updated guidance that we provided in early October and reflect a difficult quarter in our power management business for notebooks," said Sterling Du, O2Micro's Chairman and CEO. "Despite the unexpected issue with one of our charger IC products in the quarter, we are very confident that our new target of penetrating the white-box smartphone and tablet markets with multiple products, coupled with ongoing growth in our carefully chosen growth drivers including LED general lighting, backlighting and battery management products, 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 third quarter conference call today, October 30, 2014, 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: 888-397-5352, pass code #7266590 INTERNATIONAL participants: 719-325-2244, pass code #7266590 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 #7266590 INTERNATIONAL participants: 719-457-0820, pass code #7266590 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 27,716 patent claims granted, and over 28,000 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 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 O2Mcro'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 STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)(In Thousand U.S. Dollars, Except Per Share Amounts) Three Months EndedNine Months Ended September 30,September 30, 2014201320142013 NET SALES $15,384 $18,617 $49,261 $54,681 COST OF SALES 7,408 9,056 23,828 26,870 GROSS PROFIT 7,976 9,561 25,433 27,811 OPERATING EXPENSES Research and development (1) 5,499 6,514 16,329 19,824 Selling, general and administrative (1) 6,018 7,719 18,876 23,101 Total Operating Expenses 11,517 14,233 35,205 42,925 LOSS FROM OPERATIONS (3,541) (4,672) (9,772) (15,114) NON-OPERATING INCOME Interest income 255 309 791 1,031 Foreign exchange gain (loss) – net 201 (128) 174 404 Other – net 394 196 493 347 Total Non-operating Income 850 377 1,458 1,782 LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAX (2,691) (4,295) (8,314) (13,332) INCOME TAX EXPENSE 250 247 734 701 LOSS FROM CONTINUING OPERATIONS (2,941) (4,542) (9,048) (14,033) LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX -- -- -- (3) NET LOSS (2,941) (4,542) (9,048) (14,036) OTHER COMPREHENSIVE INCOME (LOSS) Foreign currency translation adjustments (487) 474 (720) (23) Unrealized gain (loss) on available-for-sale securities (255) 112 (232) 141 Unrealized pension gain 2 5 5 14 Total Other Comprehensive (Loss) Income (740) 591 (947) 132 COMPREHENSIVE LOSS $(3,681) $(3,951) $(9,995) $(13,904) BASIC EARNINGS (LOSS) PER ADS Continuing operations $(0.11) $(0.16) $(0.33) $(0.48) Discontinued operations -- -- -- -- $(0.11) $(0.16) $(0.33) $(0.48) DILUTED EARNINGS (LOSS) PER ADS Continuing operations $(0.11) $(0.16) $(0.33) $(0.48) Discontinued operations -- -- -- -- $(0.11) $(0.16) $(0.33) $(0.48) ADS UNITS USED IN EARNINGS (LOSS) PER ADS CALCULATION: Basic (in thousands) 27,174 28,318 27,436 28,968 Diluted (in thousands) 27,174 28,318 27,436 28,968 (1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS: Research and development $131 $173 $390 $530 Selling, general and administrative $417 $465 $1,232 $1,430 O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIESCONSOLIDATED BALANCE SHEET(In Thousand U.S. Dollars, Except Share Amounts) September 30,December 31, 20142013ASSETS(Unaudited)(Audited) CURRENT ASSETS Cash and cash equivalents $33,753 $42,293 Restricted cash 171 173 Short-term investments 31,177 33,606 Accounts receivable – net 8,251 10,024 Inventories 10,187 7,217 Prepaid expenses and other current assets 1,409 1,437 Total Current Assets 84,948 94,750 LONG-TERM INVESTMENTS 15,300 16,121 PROPERTY AND EQUIPMENT – NET 21,448 23,039 OTHER ASSETS 3,449 3,509 TOTAL ASSETS $125,145 $137,419 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes and accounts payable $3,950 $4,169 Income tax payable 392 238 Accrued expenses and other current liabilities 5,340 5,353 Total Current Liabilities 9,682 9,760 OTHER LONG-TERM LIABILITIES Accrued pension liabilities 375 391 Other liabilities 396 658 Total Other Long-Term Liabilities 771 1,049 Total Liabilities 10,453 10,809 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 September 30, 2014 and December 31, 2013, respectively 33 33 Additional paid-in capital 140,793 140,198 Accumulated deficits (11,282) (2,234) Accumulated other comprehensive income 7,565 8,512 Treasury stock – 309,978,100 and 269,042,350 shares as of September 30, 2014 and December 31, 2013,respectively (22,417) (19,899) Total Shareholders' Equity 114,692 126,610 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $125,145 $137,419CONTACT: Scott L. Anderson Director of Investor Relations, O2Micro Phone: 408.987.5920, x8888 Email: [email protected] Source: O2Micro International Limited 2014 GlobeNewswire, Inc. |