O2Micro International Limited (NASDAQ:OIIM) Q2 2020 Earnings Conference Call - Final Transcript

Jul 31, 2020 • 09:00 am ET


O2Micro International Limited (NASDAQ:OIIM) Q2 2020 Earnings Conference Call - Final Transcript


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Good morning and thank you for joining us today to discuss O2Micro's Financial Results for the Second Quarter of Fiscal Year 2020.

If you would like a copy of the press release we issued this morning, please call Daniel Meyberg at (408) 987-5920, extension 8888, and we will e-mail you a copy immediately. It is also posted on the O2Micro website at www.o2micro.com, under the heading Investors. There will be a replay available through August 12, 2020, 9:00 AM Pacific time or by visiting the O2Micro website under the heading Investors.

Following the presentation by management, the conference will be open for question-and-answers as time permits. Gentlemen, you may begin.

Daniel Meyberg

Thank you. Good morning, everyone, and thank you for joining O2Micro's financial results conference call for the second quarter of 2020, ending June 30, 2020.

This is Daniel Meyberg, Corporate Communications for O2Micro. I'd like to remind listeners that the discussions of business outlook for O2Micro contains forward-looking statements. Statements made in this release that are not historical fact are forward-looking statements within the meaning of the Federal Securities Laws.

Actual results may differ materially due to numerous risk factors. Such risk factors are enumerated in the company's 20-F annual filings, our annual reports and other documents filed with the SEC from time-to-time. Listeners are referred to the O2Micro earnings press release and the documents filed with the SEC to understand these forward-looking statements and the associated risk factors. The statements made herein are dated information. The company assumes no responsibility to provide updates to this information.

With me today are Perry Kuo, CFO and Director, Jim Keim, Head of Marketing, Sales and Director, and Sterling Du, O2's Founder, CEO and Chairman. After the prepared remarks from these gentlemen, the floor will be open for your questions.

At this moment, I'd like to introduce Perry Kuo, CFO of O2Micro, for a discussion of the financial highlights of the second quarter of fiscal year 2020 ending June 30, 2020. Perry?

Chuan Chiung Kuo

Thank you, Dan.

We will now review our financial results for Q2 2020. Please note that financial results will be presented on a GAAP basis, unless we designate otherwise. The non-GAAP result excludes stock-based compensation expense, one-time charges, non-recurring gains and the losses. Our full GAAP results are available in our press release that was issued earlier today.

GAAP revenue in the second quarter of 2020 was $17.3 million. GAAP net income in the second quarter of 2020 was $380,000. If we exclude stock-based compensation of $327,000, one-time charges of $1.2 million and net gain recognized on long-term investment of $1.1 million, the non-GAAP net income will be $805,000. GAAP net income per ADS in the second quarter of 2020 was $0.01. Non-GAAP net income per ADS was $0.03. Gross margin was 51.2% in Q2. The gross margin reflects the current revenue level and the product mix. R&D expense was $4 million or 23.1% of revenue. This amount excludes stock-based compensation expense of $67,000 and one-time severance payment of $957,000.

SG&A expense