O2Micro® International Limited reported its financial results for the first quarter ended March 31, 2008. Net sales for the first quarter of fiscal 2008 were $37.6 million. Q1 sales were up 7% from the first quarter of fiscal 2007. The increase in net sales reflects higher unit volumes and growth in underlying markets.
O2Micro recorded a gross margin of 58.5% in the first quarter of 2008. The gross margin compares favorably to the year-ago quarter when the company achieved a gross margin of 54.6%. The increase in gross margin compared to the year-ago period is claimed to be due to product mix and the company’s ongoing effort to drive cost reductions. In particular, the company states that its "Ocean One" initiative has seen good success and this has translated directly into recent gross margin increases.
Operating expenses were within expected target ranges for the first quarter. R&D expense was $9.8 million, or 26% of net revenue, while SG&A expense was $8.8 million, or 24% of net revenue. These dollar amounts include $258,000 and $415,000 of stock-based compensation, respectively. After tallying all of the net expenses, we delivered GAAP operating income of $2.2 million. The GAAP operating margin was 5.8% in the first quarter of 2008, which compares favorably to a 1% operating loss in Q1 2007.
GAAP net income was $2.3 million in Q1 2008. Net income per fully diluted ADS was $0.06. Both of these compare favorably with Q1 2007 when the company reported GAAP net income of $99,000 and break-even net income per ADS.
