OREANDA-NEWS. 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 2016, ending June 30, 2016.

Financial Highlights for the Second Quarter ending June 30, 2016:

O2Micro International Limited reported Q2 2016 revenue of $13.2 million. Revenue was up 1.8% sequentially and down 10.0% from the comparable year-ago quarter. The gross margin in the second quarter of 2016 was 50.7%. The gross margin was up from 48.8% in the prior quarter and up from 49.6% in the second quarter of 2015. The gross margin remains in our target range and varies primarily with revenue level and product mix. During the second quarter of 2016, the company recorded total GAAP operating expenses of $8.8 million, compared to $8.6 million in the first quarter of 2016 and $10.2 million in the year-ago Q2 period. The respective GAAP operating margins for the second quarter of 2016, the first quarter of 2016, and second quarter of 2015 were (15.8%), (17.6%), and (19.6%).

GAAP net loss was $2.0 million in Q2 2016. This compares to a GAAP net loss of $2.4 million in the first quarter of 2016 and a GAAP net loss of $2.7 million in Q2 2015. GAAP net loss per fully diluted ADS was $0.08 in Q2 2016. This compares to a GAAP net loss per fully diluted ADS of $0.09 in Q1 2016 and a GAAP net loss per fully diluted ADS of $0.10 in Q2 2015.

Financial Highlights for the Six Months ending June 30, 2016:

O2Micro International Limited reported revenue of $26.2 million for the six months ending June 30, 2016. This was down 5.7% from $27.8 million in the comparable six months of 2015. The gross margins were 49.8% and 49.8% during the corresponding periods of 2016 and 2015, respectively. GAAP operating expenses were $17.4 million and $20.3 million in the first half of 2016 and 2015, respectively. The respective GAAP operating margins for the comparable periods were (16.7%) and (23.2%). Pretax loss from operations was $3.9 million in the first half of 2016. This compares to a pretax loss from operations of $5.4 million in the first half of 2015. GAAP net loss was $4.3 million in 1H 2016. This compares to a GAAP net loss of $5.9 million in 1H 2015. The GAAP net loss per fully diluted ADS was $0.17 in the first six months of 2016. This compares to a GAAP net loss per fully diluted ADS of $0.23 in the corresponding first half of 2015.

Supplementary Data:

The company ended the second quarter of 2016 with $47.5 million in unrestricted cash and short-term investments or $1.85 per outstanding ADS. The accounts receivable balance was $6.9 million and represented 42 days sales outstanding at the end of Q2 2016. Inventory was $9.2 million or 128 days and turned over 2.8 times during Q2 2016. As of June 30, 2016, the company had $59.7 million in working capital and the book value was $80.3 million, or $3.13 per outstanding ADS.

As of June 30, 2016, O2Micro International Limited counted 360 employees, including 209 engineers.

Management Commentary:

“Second quarter 2016 financial results were within the range of the guidance that we provided in May as we continue to grow revenue and execute on our business objectives,” said Sterling Du, O2Micro’s Chairman and CEO. “Our third quarter revenue guidance reflects ongoing product ramps in our high potential growth drivers for the consumer and industrial end markets including backlighting for the TV market, power tools, household appliances, LED lighting and smartphones and tablets.  We believe our solutions for these product segments will contribute to top-line growth in upcoming quarters and lead O2Micro back to profitability in the near future.”

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 33,705 patent claims granted, and over 30,000 more pending. The company maintains offices worldwide.

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 Six Months Ended
  June 30, June 30,
   2016    2015  2016  2015
     
NET SALES $   13,222   $   14,690   $   26,207   $   27,791  
         
COST OF SALES       6,521         7,407         13,168         13,953  
         
GROSS PROFIT       6,701         7,283         13,039         13,838  
         
OPERATING EXPENSES        
Research and development (1)     3,775       3,837       7,567       8,297  
Selling, general and administrative (1)     5,020       6,320       9,874       11,991  
Litigation income     -       -         (23 )       -  
         
Total Operating Expenses       8,795         10,157         17,418         20,288  
         
LOSS FROM OPERATIONS     (2,094 )     (2,874 )     (4,379 )     (6,450 )
         
NON-OPERATING INCOME        
Interest income     76       199       153       436  
Foreign exchange loss – net     (303 )     (152 )       (507 )       (143 )
Gain on sale of real estate       -         201         -         499  
Gain on sale of long-term investments       413         -         425         -  
Other – net      179         176           416          250  
Total Non-operating Income     365        424           487         1,042  
         
LOSS BEFORE INCOME TAX     (1,729 )     (2,450 )     (3,892 )     (5,408 )
         
INCOME TAX EXPENSE       237         287         438         528  
         
NET LOSS     (1,966 )     (2,737 )     (4,330 )     (5,936 )
         
OTHER COMPREHENSIVE INCOME        
Foreign currency translation adjustments     139       474       573       427  
Unrealized gain on available-for-sale securities     531       -       531       -  
Unrealized pension gain       -         1         -         3  
Total Other Comprehensive Gain       670         475         1,104         430  
         
COMPREHENSIVE LOSS $   (1,296 ) $   (2,262 ) $   (3,226 ) $   (5,506 )
         
BASIC AND DILUTED LOSS PER ADS $   (0.08 ) $   (0.10 ) $   (0.17 ) $   (0.23 )
         
ADS UNITS USED IN LOSS PER ADS CALCULATION:        
Basic (in thousands)       25,673         26,113         25,686         26,297  
Diluted (in thousands)       25,673         26,113         25,686         26,297  
         
(1) INCLUDES STOCK-BASED COMPENSATION CHARGE AS FOLLOWS:        
Research and development $     60   $     76   $     125   $     170  
Selling, general and administrative $     360   $     371   $     733   $     828  
 
O2MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In Thousand U.S. Dollars, Except Share Amounts)
 
  June 30, December 31,
  2016 2015
ASSETS (Unaudited) (Audited)
     
CURRENT ASSETS    
Cash and cash equivalents $     37,475   $     41,199  
Restricted cash         32           31  
Short-term investments         10,028           11,233  
Accounts receivable – net         6,880           5,197  
Inventories         9,216           9,662  
Prepaid expenses and other current assets         1,464           1,126  
Assets held for sale         1,956           1,956  
Total Current Assets         67,051           70,404  
     
LONG-TERM INVESTMENTS         4,861           9,304  
     
PROPERTY AND EQUIPMENT – NET       13,904      14,011  
     
OTHER ASSETS         2,231        2,489  
     
TOTAL ASSETS $       88,047   $       96,208  
     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
     
CURRENT LIABILITIES    
Notes and accounts payable $       2,746   $       3,333  
Income tax payable         334           2,245  
Deferred tax liabilities         1,030           2,206  
Accrued expenses and other current liabilities         3,244           4,896  
Total Current Liabilities         7,354           12,680  
     
OTHER LONG-TERM LIABILITIES    
Accrued pension liabilities     272       272  
Other liabilities       122         139  
Total Other Long-Term Liabilities     394       411  
     
Total Liabilities         7,748           13,091  
     
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 and 1,660,786,600 shares as of June 30, 2016 and December 31, 2015,respectively
Outstanding –1,281,661,250 and 1,278,661,400 shares as of June 30, 2016 and December 31, 2015, respectively		         33           33  
Additional paid-in capital     142,038       141,886  
Accumulated deficits     (42,716 )     (38,386 )
Accumulated other comprehensive income     5,928       4,824  
Treasury stock – 387,375,350 and 382,125,200 shares as of June 30, 2016 and December 31, 2015, respectively     (24,984 )     (25,240 )
Total Shareholders’ Equity         80,299           83,117  
     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $       88,047   $       96,208