O2Micro Sets New Q2 Earnings Record


GEORGE TOWN, Grand Cayman, Aug. 4, 2010 (GLOBE NEWSWIRE) -- O2Micro® International Limited (Nasdaq:OIIM) reported its financial results today for the second quarter of fiscal 2010, ending June 30, 2010.

Financial Results for the Second Quarter ending 6/30/2010:

Revenue was $39.9 million in the second quarter of fiscal 2010. This was up 14% sequentially and 15% versus the year-ago period. Gross margin was 61.7% in the second quarter. This was approximately flat with 61.6% in the prior quarter and up from 58.8% in the year-ago period.

Total Q2 operating expenses were $17.3 million, versus $17.2 million in the first quarter, and $20.5 million in the second quarter of 2009. These results yielded a GAAP operating margin of 18.3% in the second quarter of 2010, compared to 12.2% in the first quarter of 2010, and (0.3)% in the second quarter of 2009.

Pretax income was $7.5 million in Q2, which was up from $4.5 in Q1, and reversed a pretax loss of $158,000 in the year-ago quarter. Net income was $7.1 million in Q2, up from $4.1 million in Q1, and up from a net loss of $505,000 in the year-ago quarter. GAAP net income per fully diluted ADS was $0.20 in Q2 2010, versus $0.11 in Q1 2010, and improved over a net loss per ADS of $0.01 in Q2 2009.

Financial Results for the Six Months ending 6/30/2010:

Revenue for the first half of 2010 was $74.7 million. This compares favorably to $57.7 million in the first half of 2009. The gross margin in the six months ending June 30, 2010 was 61.7%, up from 57.5% in the comparable half-year. GAAP operating expenses declined to $34.5 million in the first half of 2010 from $37.2 million in the first half of 2009. The corresponding GAAP operating margins for the six month periods were 15.4% and (7.0)% in the respective halves of 2010 and 2009. Pretax income was $12.0 million in the first half of 2010 and reversed a pretax loss of $3.2 million in the first half of 2009. After taxes, GAAP net income was $11.2 million in the first half of 2010, compared to a GAAP net loss of $4.0 million in the first half of 2009. The corresponding GAAP net income per fully diluted ADS was $0.31 in the first half of 2010, which also compares favorably to a GAAP net loss per ADS of $0.11 in the first half of 2009.

Supplementary Data:

The company ended the second quarter of 2010 with $106.1 million in unrestricted cash and short-term investments, or $3.02 per outstanding ADS. The ending cash balance comes after the repurchase of more than 1.1 million ADS units in the second quarter for approximately $7.8 million. The accounts receivable balance was $18.8 million and represented 40 days sales outstanding at the end of the Q2 2010. Inventory was $13.0 million. Inventory stood at 67 days at the end of the second quarter and turned over 5.4 times during Q2 2010. As of June 30, 2010, the company had $116.9 million in working capital and the book value was $176.0 million, or $5.01 per outstanding ADS.

As of June 30, 2010, O2Micro International Limited counted 827 employees, including 518 engineers.

Management Commentary:

Sterling Du, Chairman and CEO, commented, "We set a new Q2 earnings record with high margins and solid sequential and year-to-year revenue growth. These financial accomplishments are the fruits of our ongoing R&D investment." Mr. Du continued, "Our financial success comes from market leading customers who value the superior power efficiency of our 'green' semiconductor chips, including our LED Driver, Battery, DC/DC, Charger, and Security offerings."

Conference Call: O2Micro will hold its second quarter conference call on August 4, 2010 at 7:00 a.m. PDT, 10:00 a.m. EDT. You may participate using the following dial-in information.

In the U.S. and CANADA: 877-852-6575, passcode #7861418
INTERNATIONAL participants: 719-325-4915, passcode #7861418

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 U.S. and CANADA: 888-203-1112, passcode #7861418
INTERNATIONAL participants:  719-457-0820, passcode #7861418

A live simulcast will also be available on the company website at www.o2micro.com, and an online replay will be available on the company's 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 14,483 patent claims granted, and over 16,000 more pending. The company maintains offices worldwide. Additional company and product information can be found on the company website at www.o2micro.com.

The O2Micro International Limited logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6567

O2Micro, the O2Micro logo, SmartCardBus, and combinations thereof are registered trademarks of O2Micro. All other trademarks are the property of their respective owners.

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
June 30,  
 
Six Months Ended
June 30, 
    2010    2009    2010    2009 
       
NET SALES  $ 39,854  $ 34,605  $ 74,707  $ 57,715
         
COST OF SALES   15,249   14,247   28,647   24,533
         
GROSS PROFIT   24,605   20,358   46,060   33,182
         
OPERATING EXPENSES        
Research and development (1)  8,483   7,998   16,859   15,982 
Selling, general and administrative (1)   8,836   12,469   17,672   21,252
Total Operating Expenses   17,319   20,467   34,531   37,234
         
INCOME (LOSS) FROM OPERATIONS   7,286   (109 )   11,529    (4,052 )
         
NON-OPERATING INCOME (LOSS)        
Interest income  230  384  487  828
Foreign exchange gain (loss)  (7 )  (405 )  (8 )  82 
Other – net   3   (28 )   (26 )   (39 )
Total Non-operating Income (Loss)   226   (49 )   453   871
         
INCOME (LOSS) BEFORE INCOME TAX  7,512  (158 )  11,982   (3,181 )
         
INCOME TAX EXPENSE   456    347    832    865 
         
NET INCOME (LOSS)  7,056   (505 )  11,150   (4,046 )
         
OTHER COMPREHENSIVE INCOME (LOSS)        
Foreign currency translation adjustments  4   555   116  (89 )
Unrealized gain (loss) on available-for-sale securities  (530 )  (751 )  1,254  752
Unrealized pension gain   1   2   3   3
Total Other Comprehensive Income (Loss)   (525 )   (194 )   1,373   666
         
COMPREHENSIVE INCOME (LOSS)  $ 6,531  $ (699 )  $ 12,523  $ (3,380 )
         
EARNINGS (LOSS) PER SHARE:        
Basic  $ 0.0042 $(0.0003)  $ 0.0064 $ (0.0022)
Diluted  $ 0.0040  NA  $ 0.0063  NA
         
EARNINGS (LOSS) PER ADS        
Basic  $ 0.21  $ (0.01 )  $ 0.32  $ (0.11 )
Diluted  $ 0.20  NA  $ 0.31  NA
         
SHARES USED IN EARNINGS (LOSS) PER
SHARE CALCULATION:
       
Basic (in thousands) 1,695,983 1,846,359 1,737,260 1,842,521
Diluted (in thousands) 1,744,127  NA 1,783,874  NA
         
ADS UNITS USED IN EARNINGS (LOSS) PER
ADS CALCULATION:
       
Basic (in thousands)  33,920   36,927   34,745   36,850
Diluted (in thousands)  34,883  NA   35,677  NA
         
(1) INCLUDES STOCK-BASED COMPENSATION
CHARGE AS FOLLOWS:
       
Research and development  $ 238  $ 334  $ 513  $ 616
Selling, general and administrative  $ 730  $ 620  $ 1,382  $ 1,109
         
 
O2Micro International Limited and Subsidiaries
Consolidated Balance Sheets
(In Thousand U.S. Dollars, Except Share Amounts)
     
  June 30,
2010
December 31,
2009
ASSETS (Unaudited) (Audited)
     
CURRENT ASSETS    
Cash and cash equivalents  $ 35,025   $ 38,831
Restricted cash    159    236
Short-term investments    71,072    74,502
Accounts receivable, net    18,801    14,556
Inventories    12,981    9,457
Prepaid expenses and other current assets    1,979    3,342
Total Current Assets    140,017    140,924
     
LONG-TERM INVESTMENTS    20,255    15,190
     
PROPERTY AND EQUIPMENT, NET   29,468   30,570
     
OTHER ASSETS    
Restricted assets   1,435   1,443
Intangible assets  3,935  4,266
Other Assets   4,881   4,921
   10,251  10,630
     
TOTAL ASSETS   $199,991   $197,314
     
LIABILITIES AND SHAREHOLDERS' EQUITY    
     
CURRENT LIABILITIES    
Notes and accounts payable   $ 11,944   $ 8,760
Income tax payable    483    411
Accrued expenses and other current liabilities    10,653    7,731
Total Current Liabilities    23,080    16,902
     
OTHER LONG-TERM LIABILITIES    
Accrued pension liabilities  467  498
Long-term income tax payable  335  341
Other liabilities   129   129
    931   968
     
Total Liabilities    24,011    17,870
     
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 – 1,754,594,750 and 1,809,461,200 shares as of June 30, 2010 and
December 31, 2009, respectively
   35    36
Additional paid-in capital   139,498   142,679
Retained earnings  40,777  33,214
Accumulated other comprehensive income  4,888  3,515
Treasury stock – 68,538,500 shares and nil as of June 30, 2010 and
December 31, 2009, respectively
  (9,218 )   --
Total Shareholders' Equity    175,980    179,444
     
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $199,991   $197,314


            

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