OIIM - Earnings call transcript Q1 2021

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Operator

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

If you would like a copy of the press release we issued this morning, please call Daniel Meiberg at 408–987–5920 extension 8888, 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 May 14, 2021, 9 am Pacific time or by visiting the O2micro website under the heading Investors.

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

Daniel Meiberg

laws. Corporate morning, outlook conference Actual historical risk of thank ending of are quarter the founder, I fiscal year call XX, from point, Statements would Securities the other the After OX’s for open Du, this XXXX. Daniel ending quarter to not Good the SEC filed to of in Director; the dated I’d OXMicro’s understand release time the March listeners Sterling are Jim made of information. OXMicro press are CEO these discussion With questions. the OXMicro Director; to to SEC assumes and filings, due associated Perry remind statements and The within forward–looking herein factors of XX, of for Perry Perry? contains annual the filed and annual Head provide financial our March and to forward–looking that Meiberg, a referred financial At Marketing this highlights is This Company like CFO these are results this for in Such CFO the no Kuo, of prepared XXXX. earnings that may meaning for documents gentlemen, for the Kuo, factors. from results remarks everyone, OXmicro statements to Chairman. you. XXXX numerous me fact of information. and to OXMicro. you the Keim, and responsibility floor first like and statements risk The enumerated Company’s business updates introduce Sales your with factors. time. will the be to today the and materially and discussion XX–F joining with XXXX, are Communications documents for Thank release the reports differ statements. Federal risk first forward–looking are Listeners

Perry Kuo

Dan. you, Thank

We that basis now stock–based XXXX. be and review Please note The a will for we charges, expense, compensation GAAP non–GAAP gains exclude results non–recurring unless otherwise. will QX results on financial losses. designate our onetime financial presented results

$X.XX in $XX.X zero. would mainly I XX.X% XX% in equivalent Our in today. income quarter X% revenue was was exclude available XX% was XXXX, $XXX,XXX, $XXX,XXX. quarter almost the net XXXX was of first are At per to moment, stock–based store the in down income in compensation based first this quarter OXMicro with cash of press information. short–term investment. like we and revenue. of issued or additional revenue million to X% cash per of first ADS $XX.X net ADS fully and percentages. end margin was net the each was will gross no diluted The level diluted to GAAP income revenue. expense of SG&A repurchase. million, $X.X was results on full of R&D revenue. This was stock–based In first release $X.X finished net million in Computer the revenue. tax and mix. provide some compensation excludes of to Communications represents taxable amount unrestricted quarter XX% by $X.X Income was earlier the of of Industrial ADS. of the This This of million. cash XXXX, XX% was expense or market margin is If million. current $XXX,XXX. XXXX revenue. estimated was there that expense $X.X GAAP XX.X% Gross GAAP our GAAP the income Non–GAAP first quarter revenue excludes $XX,XXX. per was compensation $XXX,XXX rate $X.XX. the was of was Consumer and product into non–operating amount breaks QX tax the QX $X.XX. non–GAAP was fully XX.X% in be XXXX QX. effective million. of the stock–based expense location. income The reflects following

OXMicro end debt. of the Account has $XX.X million. at was no addition, QX receivable In

excluding income X% in of in of of are the $X.X or is gains be expense to of to $XXX,XXX goal to $XXX,XXX team is compensation, QX best our flat quarter of be was Our of updated the DSO XXX first excluding more million. days. million Income Net shareholder range mainly Capital first which difficulty] guidance $X.X XX%. to losses. in account turnover QX to are stock–based situation from is to to expected $XXX,XXX, is end days the At in to Board expenditure XXX of Stock–based of be $XXX,XXX. the million first of in maximize the expected was XX end value. engineers. from or the material $XX.X X.X activities market Inventory XX in management QX. has on quarter are foreign and and XXXX, first inventory in the $XX.X of to in $XXX,XXX R&D the $X.X of should expected stock–based to million $XXX,XXX and Non–operating exchange expected for OXMicro and to forecast, SG&A Based DSO Depreciation Directors million. $XXX,XXX. compensation tax is in following to gross be rolling Net in operating [technical the inventory are for million, the generated range expected XX% $X.X was XXXX. the to up million. cash Company as QX. to amortization The had million margin be be was about XX% compensation, than and the excluding $X.X range equipment. was range be the million the $X.X This to IT the expected current employees, represents quarter. quarter to of revenues range at Product compared the about $XX.X expenses, range times of mix. XXXX. R&D expenses, days

we to taking in this We share our shares accomplished million which on and this XX.X included have ADS In million. XXXX, program for $XXX.X balance managing necessary repurchase expenses over steps, operating Since we historically. been by active have regards repurchased sheet. have monetizing program, assets the the

we $X.X factors end of difficulty] our There the million of [technical business dynamic As share in had QX, many associated in the buyback development. authorization. are

target of We will to half execute carefully plan the and first gross margin maintain growth in revenue XXXX. and

products advanced resources be support. development advanced more March And through will First, XXXX. placed while shipped and was invest continue in quarter is testing the testing R&D and ship source the new in capacity some for center for to second allocating to ICs testers for in–house

account multiple the in and are monitor end future. be a shareholders process also chain the continue Returns much to and support dynamic our timely market. in We to inventory in added supply have on minds will focus tightly both the label very demand from and will to

to update additional an enhance shareholder provide value will year. We the to throughout this measures

prepared the Given environment, costs uncertain demand and to needed. to macro continue are the as we manage

Although over business. talk have based would like and on aligned costs call current participating Keim more revenue everyone Jim turn we we current the to about to and for to our believe anticipated thank levels. I

James Keim

the QX XXXX XX% Perry. XX% the everyone. and Good XXXX over QX over revenue. with revenue growth XXXX pleased morning, you, was QX that revenue were Thank our We up

We and many create issues supply team. semiconductor expect limitations chain issues in Despite that our the QX XXXX revenues production operations to for remain ongoing strong.

to profitability resulting and be growth revenue several by Our driven continued factors.

groups First, to appeal products developed our next name have brand product and successfully top generation that OEMs. tier

life of noted Secondly, breathing mobility, our customer our market focus as new developing in company critical Company’s of into logo products enhancing mobility.

Company garden monitors As of leading mandates work tablets, battery sales learning, being of stated distancing, thrust notebooks, for social the from Hospitalizations was equipment, restraints, COVID–XX high–end markets home to surge diagnosis. gaming, advanced to high–end computers upward cleaners. sale a increasing drive TVs, monitors. serve number vacuum a and sales the surging including, employees power rapid previously, factors with from our demand. in of and with limelight that mobility we monitors. and Travel revenues helped COVID–XX, sales Stay–at–home into of From the for experienced monitors and equipped e–bikes. of increasing Remote a as tools, managed pandemic increasing

lives increased to see at Even continuing as sophisticated and power continue entertainment. is to education vacuum mobility cleaners, as are home expand from to stay. managed to will usage and normal more we home our enabled home, Battery status, part vaccines from tools, to e–vehicles garden of increased e–bikes, more work return a tools, here

has product flowing about our express to tirelessly continue fabs customers. appreciation overcome abbreviated to wafer COVID–XX shipment test team some make assembly from We I to which our keep to our and will to line. obstacles, and now remarks dedicated operations product onward many disciplined that worked

and and XK expanded as a many monitors product gaming, of include in lighting applications our intelligent both expansion XK usage. that has line Our design along result industrial TV, with excellent the medical growth HDR wins of an enjoyed home

products patent now introduced ensuing focused more are on products of applications mini, detail HDR next to Our are generation HDR markets. key market highlighted volume in in LED the in will high being mini These be and quarters. pending LED

products involves of end activity integrated and we continue overall and using design to products, ignored products edge much lower expand While monitor focus our with patented MOSFETs. leading not our TV market design and have our backlighting share

acceptance. where for the intelligent driving in design our robotics we in automotive progress products wins. industrial lighting This advanced efforts seeing ongoing autonomous Additionally, good enabled are lighting and applications, product have R&D includes and

wins longer generate to help this enable of group. we design take will our revenue, these long–term lighting intelligent While believe growth

power also energy excellent growth, of our storage OEMs, major the management vacuum tools, ongoing tools, to designs garden Our and product line cleaners, with e–bikes, e–vehicles, battery expansion enjoy by continues driven systems.

higher include existing management. more our noted, end us with battery where previously energy As storage market. engage sophisticated applications for to our enabled customers, the microcontroller growing rapidly has ARM–based This including a battery market management ICs in customers those products

into customers continue products to next–generation management more forward ARM–based high–performance design We see the battery moving our to systems.

Bissell, our are high–performance digital I wins closing key and turn count name applications enable for continues Lexi, that CEO, including already to brand garden products Major front–end Additionally, have call customers. and safety by products. utilizing Dyson, Makita, LG, key patent cleaners Sterling, sell products desired OEMs expand includes tool, Panasonic, remarks. Samsung, over power vacuum battery enhanced Decker, our OEMs We TTI. Murata, Sharp, the and Electrolux, management now Black features Philips, we higher to will design for for with tool, introducing pending these

Sterling Du

report line previous of gross XXXX. average revenue gross million. XXXX was range, release from our the which and you, margin OXMicro in quarter, XX% the year. X and publicly quarter morning And The $XX.X the everyone. from previous the up in Thank first Revenue Jim. is of the XX.X% was on XXXX was XX.X%. prior same from first guidance in our was quarter The quarter up margin company good up quarter revenue February

of all tablet. including demands rising intelligent Our a sectors TV, lighting sees group monitor,

market LED TV means which same the technology local will deploy mini effective. higher unit size. the to. contrast TV, XK, LED HDR mini would is close designer high–end HDR, Our trend the gaming the fine mini advanced much backlighting LED the more X% to achieved LED It focused a Therefore, deployment product following high XXX offers by leader. Further more dimming AAA which all, the market market becomes it to continue much of first with conventional end times when ratio. package XK, for on of higher only in could size be monitor, smaller much pixel the panel next if be area the resolution for wants more high–end The

according display way LED. in multi–scan station. instantaneously. bottom to mini and comes and and very combination be or motion could a full market market blur Most pixel common multi–scan transition object. TV XK global even LED new mini instead With Motion sample effect expect LED this the way. display top blur the all a to a display Grandview even when dimming of We mini of crystal the lots and pixel panel the the up reach local about technology. the size from the and creates visual scale $XXX the to way billion halo improved by XX%, applied experience in optimized motion to LCD LCD hold several The A to scan the Research. fast–moving the our or to technology multi–scan being scans monitor transitions it for factors and at U.S. persistency refresh XXXX high one only talk reduces of creates The the if persistence. about us area backlighting, address report methodology including XX Let blur use a the scan. ability market CAGR It

so internal The grew appliance voltage are the with system. power floor and system energy revenue battery or product sector, temperature battery strongly accurate Our IC Battery as current storage older measurements. an density such management and higher care cordless, cordless household product. resolution require improve

with and meet Management Our while high DC accuracy high see were beyond minute expectation. Unit Business BMU needs. analog front a designed resolution to bit performance accuracy A a XX end customer’s both converter customer well AD XX which

power economy. tool of the the to billion XXXX increasing of from cordless in and the growth The construction the the projected in billion growth tool faster the the key a adoption potential, power industrial by environment Regarding in for in market, U.S. the factor including tools, XXXX. growing U.S. industry emerging market, $XX the industry rising demand $XX.X

production and power the The And hand battery the the with are involved tool is XXXX, limited current extend a the management We number expected contractor the time. the by to are seasoned and market. in DIY to tools, tool not e–bike but the industry range. global the single tools to labor cell e–bike, to not connectivity the business, of in e–bike growth growth other offer power speed which to industry. part tool the to market the We notice unit. utilizes grow At simplify the $XX the the the On unit IoT more into the production of $XX grow helped battery up power the of XXXX. any billion billion from project home, only

to be IC a protection level cascade Second cell connection and designed system. support to up XX

grow dynamic a continue to the We despite market situation. business

as performance expense keep back We of in call management operating as high the best to always focus for best are to order conference dynamic you the for We please. current We fundamental in create especially the optimistic in and shareholder business. Dan, high well business for shareholders. At moment, return this the to interest margin, mind, thank situation. our turn our on listening

Daniel Meiberg

we’d questions. to you, Thank open this point to at Sterling. like call Operator the

Operator

Tore Today’s is open. line coming first is Thank from Please Stifel. question [Operator Instructions]. calling you. from your ahead, Svanberg, go

Tore Svanberg

you. thank Yes,

industrial that big the a they of how us more now us of question, I your of sub power give is some little give First is be But segment. tools color still great there largest size Could segments any you the you the two–thirds can segments? sense the for business. would are? approaching sub assume relative

James Keim

in Yes, management that the activity grow tool well, very battery We’ve continued management area the an is whole the quickly. to includes indeed battery seen power activity. really expansion

forward the we have also in of that energy many we with storage have mentioned, you As activities systems seen significant forward. design mentioned steps some going

Some activity at category. of that point products heavier the into garden that lumped tool mowers includes this in are things like power duty time,

So we to activity going content, cell management larger continue forward. see higher battery count,

is this activity. driven management by largely the So battery

Tore Svanberg

for Great, And question thank Sterling. for Jim. you or you, a

a LEDs there’s mean, should think be need How for about we LED probably like content many driver each. As we think market. I OXMicro, the about opportunity it sounds going mini to they more will so and

or from a whether factors, LED you by percentage monitor could to if sort So, you have as regular you of on opportunity one? content mini comment what can going

Sterling Du

factors, it the number about size mini compared smaller three one – LED package LED. is, looking LED conventional the is Yes, to at

usage design mini always of the more is Number So, smaller. opportunity number driver. that LED be two, go number mini will the package the because the will also the the of for much create That’s and for LED one.

and that with driver a and single lot content packaging, means is continue capability coming the the size conventional be is mini accommodate using And we the than effective actually not much that we is the a So, much that’s smaller Number smaller, and driving increase is the is external total of more paying and that not have the – a of LED. losing for cannot use driver If the much when mini one. combined conventional MOSFET. but the LED our one solution driver, MOSFET out the and to IC package three, so, reduced. to IC going of that also area

for the is the MOSFET integrate LED. the see we that, trend So mini

the So also are to we in ship going a feel design. each for SP driver, that current content

also a of LED bigger number driver increased three to MOSFET. this be right. applicable the to And will market. IC with the It’s yes, integrated are So factor; mini you going be

Tore Svanberg

Sterling. adding That’s tight situation Perry, you especially at comment you your you remain foundries point far us that an going the anything question some are suppliers Last of are any or for could is your you would on your more foundry agree? suppliers, this on as just on very give Perry. to that as assuming could capacity this helpful industry year, semiconductor update

Perry Kuo

XXXX Yes, are resources And indeed are for ourselves. tester source the adding on only support also end. on in–house coming This like from also, happening the also we second actually the HR later, with we we quarter ending to our I we quarters. adding to back the the with you not customers be as the also supplier, reported inventory see foundry the the in the will costs [Indiscernible] we but as sheet allocate in level. inventory And demand even may balance

inventory So the in have before. a QX to compared support higher to we QX

earlier to compared So quarter.

So we to inventory support. adding are also the

however So our can the just offer it. we take incremental will foundry part, that

we limited foundry. This relationship of is So the have my it’s kind long–term with extra always we update. get the supply helpful. can is but And our

Tore Svanberg

do year? Do in an And million CapEx quarter. to spent you the Perry you meant you this related full $X.X estimate have that for

Perry Kuo

of the delivery million, year CapEx we from actually, the the on our based the request in it million coming $XX customers. full $XX and For be speculated whole will year area speculate the on depends I I this to But the on based delivery. the

Tore Svanberg

thank very much. Great, you

Operator

go ahead. [indiscernible] Litchfield Research. from Hills in calling now today to We’ll go Please

Unidentified Analyst

seeing on equipment? time seeing your the issues test test getting constraints you I Thanks was Are are equipment you lead in very or much. any wondering, side.

James Keim

add Sterling, comment. a you may

Sterling Du

so, Yes, same Yes, we currently the in Kuo? Perry thing.

Perry Kuo

start shipment, received to also the house longer are [ph] faith, delivery see the good we in in we to and in–house as our and first But think Wuhan I if we support also longer. testing unit Yes. we program are added getting testing testing. in Yes,

So we its are schedule. in own QX

Unidentified Analyst

systems your see runaway? preventing thermal have in And a expect or Do battery your trends customers so, role to you in there? minimizing management what if do

Sterling Du

say Could [indiscernible] you runaway? from again that

Unidentified Analyst

In thermal terms services of runaway?

Sterling Du

secondary together analog ICs go protection the to we with Yes, front–end ICs.

front voltage, the of analog can course, detect our thermal. end current and So

becomes the a we to we way to we fast thermal the management then and CPU. the to is thermal provide it send and So a sample signal, responding digital finite contribute and very can this time very the

protection quickly And or shut can stay over–temperature shut throughput battery. CPU the down so–called of for instruction. can While [Indiscernible]. IC down power protection. don’t the our the do secondary They can They waiting that need the we the point the do they trigger the

we functionality the that’s thermal So of whole terms in our the IC management system.

the we parts, are whole up system also whole other in made critical thermal course, one management by but a system. Of

Unidentified Analyst

or Do important? the less where in you differentiation that’s see any important more marketplace

Sterling Du

density, density It pack because unit cubic, thermal means is square very that to more the the does increase, That you sometimes functionality, it’s same space, also important not energy which when energy. so the standard increase. go linear a and density only

throughput handle speed. and to by is more your battery, you those linear thermal that you just detection also your that your to where So responding not importance than management, go it’s to the sometimes going only is

So that going requirement continue is up.

Unidentified Analyst

much. very you Thank

Operator

Lisa now Zacks Please go go today ahead, Research. ma’am. from Thompson to We’ll Investment calling

Lisa Thompson

mini LEDs. conventional, times television a more you how that’s idea. same a wanted LEDs a Could much times XX it size your give or versus Good big idea mini morning, follow Is vague us the is on ASP content? just give two us set to just of up using I the

Sterling Du

mini still maybe range the Number is analytical one, Okay, expensive now. LED in right give factor.

to any coming going large die especially the TV. go see don’t we is soon TV be So very to

much is fast–moving LEDs to mini monitor course, So and a some gaming object. gaming And followed because first of probably is by tablet. to they in happening be just much, be high–end going monitor is handle into mini the the TV the going the LED better

the from high–end gaming a tablet monitor in the to TV. So

you then that Now, with secondarily, TV future. LED you by our scan. at mini combinational effective that looked we and the how have so the in drop set the up can market compared which is the if the cost your LED And utilize

you’re So in we multi–scan. use. are of In database going pioneer multi–scan, the many to combination technology for a the a how

that end two scan But that at look mini example, it’s LED mini will For the scan arrangement. the high the more XX the the be XX LED more and of even scan, performers. low you at

the up. the of go so And IC, also number ASP

second that’s So the at that. we factor look to have

know popular vague, gives a more to Just going TV. you which don’t be very who the really is, I future in much is

coming XX IC when scan, tool the you right bigger but IC, it’s of the growth. scan now So IC go scans because to is all number ICs our way the to go small XX the

be So the count itself, the pin could IC double.

Okay, up. of LED, number mini mini the that’s because go and can also sector number one. unit LED pack two, IC And the they more

growth close the So but I get number the will how providing, will the silicon XX% to be together think effective area more I And to a with shipment. on future. a of will will become to total And really to a be terms or LED it mini in TV XX% depend initially much we of going to ICU silicon present monitor I be will the expect expensive, area.

about So Thank idea. you. vague that’s the

Lisa Thompson

could don’t same user until in to yes, tablet grow, in. even out units. your sold show the a how know that much if just we that But I’m product amount Okay, you already But didn’t this trying up units, designed at first you end figure help. of is

Perry Kuo

educational now and on institutions lot market tablet be we in expanding at point will tablet, devices. see of growth to Yes, really us. into design turning education, Because with we focus a that tablets. from activity good market have going we travel tablet type see many, a Everything to for fact this many the

do to market for open expect us. up we opportunity significant that So

Lisa Thompson

where into? bit about design end battery what more Okay, said in that pending introducing digital about is that’s management, you are what to front key with I you could get going something a Can talk little and patent wins. back you

Sterling Du

make decision is to to the front power measurement related digital fast–responding end. this the mentioned, time the you As

maybe don’t the we coming. issue on cell and has and of a protection decision. from without time we patent temperature make CPU our conventional is to power also behind the make situation providing that’s complicated that aging receive we complicated the And battery, a end current analog immediate not four responding front thermal faster CPU decisions a maybe issues. are the certain of the end the is, only but the the battery, the one digital and or As battery make algorithms notify decision front one. they what to for number the providing charging they too number And signal more technology which fast wait certain complicated to handle the two, there’s but We and which have effect do management related as course, late. we measure the more number for the sometimes data IC we so–called pending secondary the And is based also such decision

Lisa Thompson

see we first? would in products user end that what And

Sterling Du

And the the vacuum more the segment. have think potential fast–growing the in more also make reduce a which I because battery weight cleaner, and the is higher critical. density to a cell using e–bike we very market battery management e–bike

need digital front IC end. sophisticated they also DFE more So and protection a

Lisa Thompson

is, bigger up mentioned as again in you Okay, that to e–vehicles. you you things? and what’s one Can move tell happening question last us area

Sterling Du

thing do But we plan a e–vehicle different. in the undergoing but e–bike. will I for the have Yes, same we that’s that what can R&D and said. it’s stage, [Indiscernible] still be in And still

lot you in need e–vehicle cascade the one of you to give difference have is Just and an sticks. example, the a

big of have a will several So battery module many which battery small then module a module as a pack, out you mega of the is and be a come to big inside in pack lot e–vehicle. made and

be So, totally different. will communication

are technology are we we the working that’s So, on.

Lisa Thompson

great. question. my you. Okay, That’s all Thank

Sterling Du

Thank you.

Operator

much. like additional so Dan closing And any for questions you Thank call back further to Thank queue. the over we remarks. in you. or I’ll no have the

Daniel Meiberg

follow questions. attention Thank Thank or XXX–XXX–XXXX morning. Please with time have great at up for you, everyone Daniel a Meiberg me today XXX everyone, OXMicro.com at I’d IR contact and like this any to extension for your feel day. to free time your and at you. thank

O2 Micro International (OIIM) 30 Apr 212021 Q1 Earnings call transcript