GEORGE TOWN, Grand Cayman, July 6, 2006 (PRIMEZONE) -- O2Micro(r) International Limited (Nasdaq:OIIM) (SEHK:0457), a leading supplier of innovative power management, and security components and systems for the Computer, Consumer, Industrial, and Communications markets, announced today that it is reducing its previously announced earnings guidance for the second quarter of 2006.
The company expects that revenues for the second quarter 2006 may be down 3 - 4% from the first quarter. Compared to the same quarter in the prior year, revenues will be up 9 - 10%.
The company attributed the change in revenue guidance to a slowdown in sales of LCD monitors, LCD TVs and notebooks. Additionally, the company expects a fiscal Q2 loss which is attributed to higher than expected litigation expenses and an impairment loss from the company's investment in CSMC Technologies Corporation resulting from a decline in the market value of CSMC on the Hong Kong Stock Exchange. The litigation expenses included in part, expenses incurred for trial against Beyond Innovation Technology Co., Ltd., SPI Electronic Co., Ltd. and Lien Chang Electronic Enterprise Co., Ltd. The trial validated O2Micro's U.S. Patent Numbers 6,259,615, 6,396,722 and 6,804,129 and the jury in the U.S. District Court for the Eastern District of Texas found the defendants to have willfully infringed O2Micro's patents. As part of this legal victory, O2Micro plans to seek attorneys' fees from the Court.
Commenting on this announcement, Sterling Du, Chief Executive Officer, stated, "While the slowdown in sales of LCD monitors, LCD TVs and notebooks is fairly common during the first half of the year and the company expected some cyclical weakness, the magnitude of the slowdown is now expected to be larger than we originally estimated. Due to the sales cycle of these products, the impact to the company was seen relatively late in the quarter. This weakness along with the higher than expected litigation fees and an impairment loss on our investment in CSMC has impacted this quarter."
Mr. Du commented further, "With our current product mix as well as with additional products which O2Micro is bringing to market in the area of notebook computer and consumer electronics, we are confident that the second half of 2006 will show a stronger performance. We believe that the price of our ADSs and ordinary shares does not reflect the true value of the company, and we plan to continue our program to repurchase ADSs of O2Micro."
About O2Micro
Founded in April 1995, O2Micro develops and markets innovative power management, and security components and systems for the Computer, Consumer, Industrial, and Communications markets. Products include Intelligent Lighting, Battery Management, Power Management, SmartCardBus(r) and Security products, such as VPN/Firewall system solutions.
O2Micro International maintains an extensive portfolio of intellectual property with 5,002 patent claims granted, and over 7,000 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, SmartCardBus, and combinations thereof are registered trademarks of O2Micro.
Statements made in this release that are not historical, including statements regarding O2Micro's projection of a second quarter loss, O2Micro's expectation of improved financial performance in the second half of 2006, O2Micro's expectation of revenues for the second quarter of 2006, O2Micro's plans to seek attorneys' fees, O2Micro'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 O2Micro's products due to adverse economic conditions in general or specifically affecting O2Micro'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.