O2 Micro® International Ltd. announced its financial results for the third quarter of fiscal 2008 and for nine months ended September 30, 2008. Net sales for the third quarter of 2008 were $37.8 million, a decrease of 7.4% from the preceding quarter, and a decrease of 16.3% from the third quarter of the prior year. The GAAP gross margin on net sales was 59.3% in the third quarter, up from 58.2% in the preceding quarter, and 57.5% from the third quarter of the prior year.
The company recorded a GAAP operating margin of 1.9% in the third quarter, after including the one-time write-off of $2.9 million in prepayments to foundry services. R&D expenditures were $9.8 million, or 26.0% of net sales, including $284,000 of stock-based compensation. SG&A expenses were $8.9 million, or 23.6% of net sales, including $429,000 of stock-based compensation.
During the third quarter, the company also wrote down investment assets related to the bankruptcy of SinoMos. This resulted in a one-time impairment loss on long-term investments of $13.1 million. It is reflected in the Non-operating Loss that was reported in the quarter.
GAAP Net Loss for the third quarter of 2008 was $12.6 million or $0.34 per American Depositary Share (ADS). This loss includes the one-time write-off of $2.9 million in prepayments to foundry services and the impairment loss on long-term investments of $13.1 million.
