O2Micro Reports Fourth Quarter and Fiscal Year Financial Results

O2Micro® International Ltd. reported its financial results for the fourth quarter and fiscal year ended December 31, 2006. Net sales for the fourth quarter were $36.3 million. Fourth quarter revenue of $36.3 million was an increase of 15.4% from the preceding quarter and an increase of 27% from the comparable quarter of the prior year. Earnings per American Depositary Share (ADS) for the fourth quarter, fully diluted, were 4 cents, compared to 1 cent per ADS in the preceding quarter and the comparable quarter of the prior year.

Net income for the fourth quarter of $1.7 million was an increase of $1.1 million from the preceding quarter and an increase of $1.4 million from the comparable quarter of the prior year. Fourth quarter R&D expenditures were $8.7 million, an increase of 12.3% from the preceding quarter, and an increase of 21.2% from the comparable quarter of the prior year.

For the fiscal year ended December 31, 2006, total revenues were $124.9 million, an increase of 18.3% from $105.6 million in fiscal year 2005. Earnings per ADS for the year ended December 31, 2006 were 2 cents, fully diluted, compared to 20 cents, fully diluted, for the previous year. Net income was $743,000, compared to $8.1 million for the previous year. R&D expenditures were $31.8 million, compared to $25.4 million for the previous year, an increase of 24.9%.

"Q4 revenue growth of 15.4% over the prior quarter, and fiscal year 2006 revenue increase of 18.3% from the previous year, reflects growth and market share gain in our core markets as well as expansion of revenue from new products," commented Sterling Du, Chairman and CEO of O2Micro. "The company continued its ongoing effort to increase shareholder value through the introduction of innovative technologies and by increasing the company’s patent portfolio, from 239 in Q3 to 260 in Q4, 2006. We continue to build our base for future growth and long term profitability with our investment in O2Micro’s Integrated Circuit (IC) test facility in China, close to customers and suppliers."