EX-99 2 dex99.txt PRESS RELEASE EXHIBIT 99 O/2/MICRO(R) REPORTS FIRST QUARTER EARNINGS Santa Clara, CA and George Town, Grand Cayman, May 5, 2004. O/2/Micro(R) International Limited (Nasdaq: OIIM), a leading supplier of innovative power management and security ICs to manufacturers of products for the computer, consumer, industrial, and communications markets, reported its financial results today for the first quarter ended March 31, 2004. Net sales for the first quarter were $22.2 million. First quarter revenue of $22.2 million was a decrease of 12% from the preceding quarter, and an increase of 15% over the comparable quarter of the prior year. Earnings per share for the first quarter, fully diluted, were 10 cents per share, compared to 13 cents per share in the preceding quarter and 4 cents per share in the comparable quarter of the prior year. Net income for the first quarter of $4.2 million was a decrease of 18% from the preceding quarter, and an increase of 149% from the comparable quarter of the prior year. First quarter R&D expenditures were $4.6 million, a decrease of 1% from the preceding quarter, and a decrease of 7% from the comparable quarter of the prior year. "Despite an unexpectedly difficult quarter in the notebook market, O/2/Micro was able to achieve significant growth vs. the prior year by successfully expanding our markets and customer base," said Sterling Du, Chairman and CEO of O/2/Micro. Conference Call: O/2/Micro will hold its fourth quarter conference call today at 2:00 p.m. PST, 5:00 p.m. EST. You may participate by dialing (800) 915-4836 or (973) 317-5319 (for International participants), no passcode required. A replay of the call will be available by phone until May 11th by dialing (800) 428-6051 or (973) 709-2089 (for International participants), passcode #349247. A live simulcast will also be available on the company website at www.o2micro.com, and an online replay will be available on the site for one week. ABOUT O/2/MICRO Founded in April 1995, O/2/Micro designs, develops and markets innovative power management and security components for manufacturers of products for the computer, consumer, industrial, and communications markets. Products include Intelligent Lighting, Battery Charger and Management, DC/DC Converter, SmartCardBus(R) and 4-in-1 MemoryCardBus(TM) ICs. O/2/Micro International maintains an extensive portfolio of intellectual property with 1514 patent claims granted, and over 5000 more pending. The company maintains offices worldwide. Additional company and product information can be found on the company website at www.o2micro.com. Statements made in this release that are not historical, including statements regarding O/2/Micro's or 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. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Factors that could cause actual results to differ materially include risks and uncertainties such as reduced demand for products of electronic equipment manufacturers which include O/2/Micro's products due to adverse economic conditions in general or specifically affecting O/2/Micro's markets, technical difficulties and delays in the developments process, and errors in the products. You are also referred to the Form F-1 in connection with the company's initial public offering in August 2000, Form F-3 in connection with the company's public offering in November 2001, and the annual reports on Form 20-F, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. The company assumes no obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Contact Information: Gil Goodrich Director of Investor Relations, O/2/Micro Phone: 408.987.5920 x8013 Email: gil.goodrich@o2micro.com O/2/MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) (In Thousand U.S. Dollars, Except Share Amounts) Three Months Ended March 31 2004 2003 ------------ ------------ NET SALES $ 22,196 $ 19,341 COST OF SALES 9,400 8,384 ------------ ------------ GROSS PROFIT 12,796 10,957 ------------ ------------ OPERATING EXPENSES Research and development 4,561 4,912 Selling, general and administrative 4,259 4,319 ------------ ------------ Total Operating Expenses 8,820 9,231 ------------ ------------ INCOME FROM OPERATIONS 3,976 1,726 ------------ ------------ NON-OPERATING INCOME (EXPENSES) Interest income 231 279 Impairment loss on long-term investments - (11) Gain on sale of long-term investments 340 - Foreign exchange gain - net 222 46 Other - net 3 (83) ------------ ------------ Total Non-operating Income 796 231 ------------ ------------ INCOME BEFORE INCOME TAX 4,772 1,957 INCOME TAX EXPENSE 566 270 ------------ ------------ NET INCOME 4,206 1,687 OTHER COMPREHENSIVE INCOME (LOSS) Translation adjustments on subsidiaries 170 (256) Unrealized gain (loss) on available-for-sale securities (86) 84 ------------ ------------ Total Other Comprehensive income (Loss) 84 (172) COMPREHENSIVE INCOME $ 4,290 $ 1,515 ============ ============ EARNINGS PER SHARE: Basic $ 0.11 $ 0.04 ============ ============ Diluted $ 0.10 $ 0.04 ============ ============ SHARES USED IN EARNINGS PER SHARE CALCULATION: Basic (in thousands) 39,054 38,091 ============ ============ Diluted (in thousands) 40,617 38,828 ============ ============ O/2/MICRO INTERNATIONAL LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousand U.S. Dollars, Except Per Share Amounts) March 31, December 31, 2004 2003 ------------ ------------ (Unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 59,929 $ 66,489 Restricted cash 1,901 1,892 Short-term investments 64,158 53,923 Accounts receivable - net 11,522 9,794 Inventories 8,139 9,613 Prepaid expenses and other current assets 3,419 3,365 ------------ ------------ Total Current Assets 149,068 145,076 ------------ ------------ LONG-TERM INVESTMENTS 7,505 7,865 ------------ ------------ FIXED ASSETS - NET 4,841 4,880 ------------ ------------ OTHER ASSETS Restricted assets - net 10,528 10,044 ------------ ------------ Other Assets 1,380 1,428 ------------ ------------ TOTAL ASSETS $ 173,322 $ 169,293 ============ ============ LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes and accounts payable $ 5,235 $ 6,334 Income taxes payable 3,410 2,852 Accrued expenses and other current liabilities 4,999 5,380 ------------ ------------ Total Current Liabilities 13,644 14,566 ------------ ------------ COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Preference shares at $0.001 par value per share Authorized - 5,000,000 shares - - Ordinary shares at $0.001 par value per share Authorized - 95,000,000 shares Issued - 39,123,609 and 39,032,616 shares as of March 31, 2004 and December 31, 2003, respectively 39 39 Additional paid-in capital 137,874 137,076 Accumulated other comprehensive loss (437) (521) Retained earnings 22,202 18,133 ------------ ------------ Total Shareholders' Equity 159,678 154,727 ------------ ------------ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 173,322 $ 169,293 ============ ============