OIIM - Earnings call transcript Q1 2022

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Operator

Good day, and welcome to the 2022 First Quarter Earnings Release Conference Call. Today's call is being recorded. At this time, I'd like to turn the call over to Daniel Meyberg. Please go ahead.

Daniel Meyberg

Thank you. thank the joining ending first XXXX. and conference financial March everyone, for call quarter morning, you OXMicro's for results XX, Good of XXXX, is for This Corporate OXMicro. Meyberg, Daniel Communications

press replay under like posted OXMicro copy a you would will on for call XXX-XXX-XXXX, email the we at the website next There XX XXXX, me issued be Investors. It you you If a can of the copy. heading this the release Investors. a available by website morning, and will www.oXmicro.com the visiting extension at under we is also heading the days OXMicro

Director, OX Such Following by Statements Actual made contains financial from introduce this presentation remind will to results like March with earnings of remarks the for the are opened like within quarter forward-looking ending release documents from Chairman. and this are will be differ questions. to fiscal in to Kuo, historical for of updates Du, not of of meanings that responsibility release, open the Perry of Jim first statements provide and materially with and enumerated for The federal and be Founder, herein for questions OXMicro are, and due to listeners laws. CFO forward-looking that to the point, the XXXX SEC the and discussion risk your are securities referred filed made I and of to Director, risk may this dated me statements fact Micro the forward-looking answers. the a discussion are I'd XXXX, company OX's of these Keim, management, statements. and the the these are year conference factors. the Listeners press gentlemen, The outlook XX, assumes the XX-F SEC filings, and Sterling the the marketing CFO reports our risk filed documents in other CEO, annual highlights At factors understand no time-to-time. associated statements Perry? information. prepared Sales floor company's annual OXMicro Kuo, factors. would information. Head numerous business Perry today After to With

Perry Kuo

Thank you, Dan.

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

GAAP excludes stock-based earlier of first million quarter I $X.X revenue diluted results project we $X.X or million. R&D margin $X.XX. Gross was QX. This XXXX net the $X.XX. compensation release was current following now Communications by will was and was GAAP would fully of QX GAAP was was of mix. fully one-time project the Computer quarter like the XXXX amount $X.XX Our industrial of revenue. X% are XXXX was $XX.X ADS The this the issued $XXX,XXX. non-GAAP ADS. compensation quarter expense amount XXXX, income was of percentage, represents moment, was revenue. expense rate of expense revenue of $X.X expense of press X% effective to to quarter $XX.X in per OXMicro income first net mainly some The GAAP that investments. net of zero. end-markets, in full based million. our each available of in stock-based be today. expense $XXX,XXX, QX income estimated $XXX,XXX net repurchased income special at the per XX% and XX% the and first with unrestricted exclude units Consumer of in if first cash XXXX in $XXX,XXX, ADS XX% in the of XX% SG&A margin first provide $XXX,XXX we Income revenue. onetime in reflects Non-GAAP ADS gross $XXX,XXX. is million finished revenue. product or was short-term location. This to was per the XX.X% stock-based This into quarter compensation the $XXX,XXX. level was additional $XXX,XXX special revenue. tax information. of a expense In diluted tax of XX.X% taxable XXXXXX to million At gross is equivalent cash and XX% cost cash was of the on was $XXX,XXX. almost braced income revenue and of non-operating

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

range turnover XX days, XX% which expected at best guidance million quarter quarter in the QX revenues XXXX, inventory, Net days. the was in and account the mix. strategic million of are first represents equipment. [indiscernible] battery is was for was XXX loading update of Asian stock-based [ph $X.X excluding days XX%. XXXX engineers. to I be to margin the it project expenses, first $XXX,XXX, about and compared Net inventory XXXX. R&D XXX of range million. to excluding of XX expected Inventory to QX employees, DSO more income $XX.X be DSO and in to SG&A This in $X.X the of is At stock-based Income Nigeria markets wafer, expect mainly and first team to $XX.X expenditure the The Depreciation is mainly range the $XXX,XXX foreign $XXX,XXX the are end forecast, goal expected of paint of $XX.X to from million. expense $X.X expected had QX. QX. times million. to than IT was X.X to to be compensation loss. first for the range as end $XXX,XXX. has the one-time Capital quarter, be to is $XX.X expense maximize of XXX,XXX XXX,XXX. million compensation, the range the OXMicro about in gain are XX% die be expected amortization The compensation to in Our excluding the in or million in following exchange was of gross Based Stock-based ICs. quarter. management to our increase $X.X Product on current R&D, $X in value. company expenses, of and Board range to special to to inventory be operating in tax for the $XXX,XXX million shareholder of for of using the million X.X in the of cash Non-operating is Directors million. be and activities of expected to in

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

the the factors had $X.X year business QX, development. in associated of are of million our many remaining dynamic authorization. in As share we buyback still There

and manage inventory carefully XXXX and plan the maintain cash will sheet. strong We the our at a in through balance level

the Given always and we uncertain supply costs in suppliers investing expanding demand We as the continuously completed carefully to filing, in and the our R&D, environment, are manage capacity. chain and product testing watch pattern macro expenses sourcing and continue capabilities estimated. resection

shareholders very the future. current focus light cost to and we based continue our minds Returns to be on on revenue much in Although, we have will believe are current levels. anticipated a a

value for to provide this throughout We update enhance our to to to everyone over thank would and call talk turn measures additional will shareholders' I Jim more year. like participating to about the the business.

Jim Keim

our deliveries China, from also not supply further assembly Thank by our the ongoing wafer impact revenue our key as products. issues chain impact customers' to for end supply, well Good our QX building their supply $XX.X issues all chain for of complicated projected affect business test QX million China existing and suppliers reflect you, morning, Previously and as lockdowns phases of only our including everyone. ability demand Perry. well-publicized in Both customer of needs XXXX project revenue that which were but products. business,

months The Additionally, demand historically areas has internal in in the winter market. management. demand, with greatly the tools, in in the requests delinquencies us coupled enabled to in and customer garden battery China and inventories demand strategic tools some low reduced key power reduce customer slowdown rebuild e-bikes to lockdown China in product

management situation, to see continue inventories their of product. could some Regardless temporary base that QX for as reduce also customer our customers strategic fundamental inventory battery win battery design we have strong built We expanding management any demand believe and remains business activity.

supply. a in and power demand expanding Lighting, battery of we products While we ability high in backing very our garden cleaners energy our systems. as management for household in storage product to Intelligent our tools, e-scooter, and market In remains position our energy the exceeds supply and customer storage strong, tools, business design level remain at constrained e-bikes wins industrial remain see

includes supply. capability. are supply activities expand wafer expanded wafer suppliers supply Lighting existing area. into expanding additional enhance suppliers and We product QX. are are In expansion that working new in existing into our to the at expansion to suppliers product to well contribute assembly underway diligently as continue as in into our Both can additional we our expected wafer well capability Intelligent processes parallel, are to expand and testing This

activity applications Lighting LEDs. to advanced applications continue products well during focused many systems as develop for the win as serving battery using aggressively rapidly as battery remained lithium-ion strong Intelligent in expanding quarter we management Our on as design new as well lighting

Philips, property Makita, Major Bosch, our detail, industrial to products Hai, as battery Dyson, that products As We that Honda, Major expand Sharp, broaden will forward. targeted is that Samsung, market on our customers, CEO footprint these generating can product increase as HP, consumer, expansion new The intellectual revenues and than Lexi, Lenovo, These that much Decker, proceed complex focus Panasonic, believe our penetrated already automotive Toyota. TTI use our our with Sony, and Panasonic, at management; later are Skyworth, TCL, in customer continue Toshiba. more drive our & higher are Foxconn, to applications include use ASPs. Samsung, include LG, OEMs will technology, product our base, Hon a new that. based companies Shark, in while and portfolio company backed we higher our major BOE, Sterling new products; Dell, already significantly patent OEMs and strongly revenue Hitachi, large by Electrolux, Du, carry Hisense, market Murata, more Black that lighting will our explain products we Bissell, we've larger unique our size. most

in Du, ability to long-term our areas the positioning, our will CEO, while over and call our also to major excellent this customer growth we base, expanding are additional confident key pass grow Given remarks. customer Sterling now closing of to to within continue excellent technology for customers. I revenues

Sterling Du

Jim. Thanks,

guidance XXXX, released January with the and opportunity publicly activity the is on very design revenue remains XX, Our our and growth strong.

cloud management Lighting and advanced support markets. technology Management product in analog both high-end Our Intelligent Battery

products with base, well are next-generation industrial, at and that targeted complex, markets consumer but will not automotive only the our product more development. engaged New as customers top-tier as customer expand

by supply while that market hand, map. road strongly other believe unit die proprietary only the chain are continue product large portfolio Therefore, size a the IT producer to not higher continue baked and number, our new technology which high to integrate beyond. a the our On We ASP in XXXX enable will grow the based revenue higher but expansion and new current a to product, on drive demand be will in ASP. larger trend mode,

major also increased penetration of our product our higher to revenue, we product carry their customer our can family. While

high XK continued business become new research. billion according TV mainstream reach rate the -- global great to and Lighting XXXX annual by in a report Our market We and a growth Group compound size end XXXX to foresee $XXX to is grow XX.X% of the Intelligent by will XK expected line product today as beyond.

the dealing full TV rollout data the function mounting solved array the process on solution the further between the and array one two LED a analog in teaming or timing by is part one IC, our support local live next-generation consult The customer ability through TV of designed multiplying mini-LED. the and to our the and with die dominant with to technology channel of consider therefore, chips shots if simplify each LED function, monitor number reducing issue type today, PWM system mini-LED local following the IC design substrate, mode IC. the the either thickness backlit. For we different architect spacing full

level while bright individual very significantly increase and halo also should much mini-LED zones, of dimmed. by in long the reduced zone will technology dimming power be are they multi-scan a Also, the blooming conventional smaller enhanced brightness characteristics can ability system importantly, LED, the package the to which off zones design maintain high-brightness the organic highlight They the the design as dark and contract size More to of the close to background. the a image and number reduce an more more mini-LED much LCD the the displayed effect object performance against and smaller will be over lifetime. the be technology. a enabled it can dark also compared Dimi-layout or consumption This to of by LCD LEDs,

easily smaller our With area the many objects could This redefine to technology mini-LED even display. its compose to represents fast-moving picture crystal-clear the multi-scan, due with smaller local in size.

business mini-LED solution are market. total meet up customers' We different our ramping solution of the our technology, We nine and new different Each will this a expected in have to we step-by-step believe years. need. mini-LED by coming address

curve, year pack. of cost improved, believe strong chain well sector observed number application the took the It the situation. sales supply the all high at more market strongly the sectors. coming and market rate was as grew partly enhanced badly growth activity both the win design sharply quality consumer and industry higher We despite We number dynamic of sales from which a battery as share. Our battery from

Meanwhile, grading new new hand, Type Xst, standard transportation, light produced announced to fuel industrial last On our the battery-powered standard. for delivery growth and higher the next type tool see energy are level. expand and faster C USB innovative to future household year, and from needed. higher USB size expand market storage October a the we to density resolution the XXX-watts power the X, the other supply. means energy XX-watt to XXXX the intra the the power AD converter existing power devices news These of and the the

resolution. our management and management end XX-bit high business is our unit needs, front -- reached converter accurate customer volt high-accuracy meet well designed battery customer could XX-bit performance AD analog expectations. This converter minimum Our AD with were beyond our a

management connected Our un-based and further power enable the all in power be system connectivity. tool to will XG to devices battery IoT deployment one, the a enrich as

a We expect market to business, and dynamic despite the the grow situation chain. supply tight

the optimistic on few source for carefully projects several focus start second to sector. always our of the Dan, for fundamental engineers high-margin, like current the to base in shareholder automotive more ago, momentum. listening to in interest future are conference especially moment, We the and always to mind, expansion reengineering outside drive turn and I'd will you quarters call to We our please? We the a high-performance watch address build China. business base keep in We recruiting the experience situation. back thank At and Dan. market, the the

Daniel Meyberg

you, Thank Sterling.

shortly will lines for questions. the up be opening We

fabrication-related not this be will We any questions on call. addressing

per or cash. FNOF March per of Board press company Limited OXMicro's ordinary the from purchase of the As of as share proposal Limited, release, US$X.XX disclosed XXXX, price XXth, has OXMicro US$X.XX XXth, preliminary received for outstanding of in International shares XXXX, letter, dated March all ADS acquire a Precious nonbinding to Honor the in

advisers. for pursuant the not making any we'll its of of proposed proposal and continue The releases connection International decisions has not filings the SEC open independent and to time, its consider of has transaction encourage a Thank a committee of at consisting respect OXMicro regarding -- issuing the or call SEC evaluation constitutes solely do more proposal. And and proposal indication evaluate and proposal the We special International information proposal you binding questions. does the company's Operator, to legal and directors committee, financial to transaction to in and the interest, and review commitment. The receipt and International preliminary made proposed requirements special OXMicro proposal, own sorry, regulations. proposed and Limited you. constitute is periodically like OXMicro check, SEC transactions. this of the proposal only Limited any formed so, we'd proposed to and continuing transaction. and has filings The press to and the with with engaged rules has to been Following the the

Operator

first Thank you. O'Neill question Litchfield take [Operator We'll Instructions] Hills. our with Theodore from

Theodore O'Neill

Thank Good very much. morning. you

the QX, QX. same your revenue about midpoint for guidance also of is question guidance reported of you my the the the So in number is of range

of So is is a I is and Aero sort for look probably flat. look it's flat. at quarter comparison. I And healthy I this from the the fair electronics question Electronics the electronic increase this quarter, But yours if if not is, and at know, distributor, guiding they're distributors, a next into

if – you give rise more in of seeing And begs us not QX. some sort question, the detail so revenue the why just on your could you're it

Perry Kuo

Yeah.

happy So that. I'd be address to

compared are can they to several the base get everything there Intelligent ship wafer right. demand can't for we you into of distributor, wafer us still we basically their fundamental lighting is is We broad QX. all, can flat. a constrained until being have out that reasons pretty be they be for And We're are There hands of on products simple. they First basically. because get to and limited. expect

put, lighting until So supply. product very simply ship we get wafer additional can't additional we

On are several. issues the battery side, the management

of call. a as seasonality tool First mentioned products, you're going situation tool, garden into some the type in QX all, power for the on we of

shortage, we Secondly, them strategic is which last we some of They've we in able our built inventory year we were place. have with know that deliver major some and some customers, have inventories do even. to – during some to the

point, work are inventory this some at through to going so And they issues.

QX management on. as be area. That's to well flat So battery my the do comments expect in we

Theodore O'Neill

great. That's Thanks very much...

Operator

with from Our Tore Stifel. is next question Svanberg

Tore Svanberg

inventory. first on is the question My you. Thank Yes.

So mainly obviously, be thinking battery going the assume that's about now. on products, it's to mix. I higher the management

happened? that, confirm can that's you if Jim, or inventory Perry where increase either yeah, So the

Perry Kuo

Yeah.

Sorry, yes, yes. conference,

Jim Keim

Go one have word Perry. in Perry. answer Go on to confirm. just I

Perry Kuo

Oh, yeah.

think inventory. increase I is our the inventory – strategic Let's

the customers meet is the it time after inventory, a demand in as they orders, we products, accounts for some to the in last battery this from key very comes key China the QX as areas, indicated. lead other actually, just upside in short I and a experienced And the also future consume Jim actually range some in year. from upside the think

So that's testing why longer product. done type we Also, have for experience also battery inventory. we the some strategic some

to we Yes. support also some area increased customers. let's So our

Tore Svanberg

weak And QX. so they sounds it's just like inventory seasonally with going strategic have it now, if into management, good. sticking Very battery right some

by seasonally then, your their So I mean, have QX also expect But inventory? is you strong. would customers digested usually to

Perry Kuo

Yes.

– starting be -- the terms inventory end the in QX think – from inventory of I the that I are the of QX think will down up. turns

quite similar currently. So, this is a

So Jim, your you'd like comments? add to

Jim Keim

Yes.

So, of I'll terms indicating customers simply reasonable add forecasts Perry, that growth do a we see for us. in QX from

Tore Svanberg

Very mix. that's compared of historical mentioned DSO your And good. to remained because elevated you and

battery you could So, on that the currently seeing dynamics bit a management? Lighting in that? of from this maybe different Is the again sort little being dynamics in elaborate very you're

Perry Kuo

Yes.

I longer customers, account kind there customers to mix. key think we credit this account replaces of of terms the the global why the the and mix, due the they to more asking are the are is line, always manless for is shipping and key

we of in keep are, in XX So area general, we the like days. to it the

Tore Svanberg

and Sterling, we R&D forth good. Sterling. and for so products, initiatives margins more assume will as integrated those solutions for ASPs. you new gross higher higher several question that Should drive so with well? Very eventually including Last about on talked

Sterling Du

yeah, gross how technology, it enjoy new margin, higher the with comes It Yes. is. would

Tore Svanberg

you good. very Thank Okay. much. Very

Sterling Du

Thank you.

Operator

our Lisa Thompson next Zacks. take We'll with question from

Lisa Thompson

Good morning.

you will that I backlighting, revenue trying capacity. that in and more When constraints capacity like how your comes to last that spent per much into you to a have, of back money translate going can quarter? you lot know online, So, increase year

Jim Keim

are we produced we of be supply upon a begin answer move factors you that now because a qualification coming at What difficult is through that customers, based out It's the to high-volume now tell to supply other specific successfully production. to of there's into can a new our and products wafer products been And prepared can for have first wafer that, area. give that in wafer to number us those process products supplier we constraints with areas. have

to wafer that supply with are wafer We working commitments. long-term discuss supplier

describe to to quarter So, that, in will wafers getting we but of it's grow a certainly will QX. this little out them be even enable us our bit that early revenues

and forward amount time. of lot we give you of negotiation. still So can't the going wafers That's under discussion specifics on at this a

Lisa Thompson

increasing So ultimately, capacity, plan your what's the can as far what you produce? what As your now? are for goals

Jim Keim

not constrained. Well, be our is to pretty goal simple, wafer

in in to one fully do we're can only basically, up we're we negotiate not those bringing mentioned that want potential will working wafer and area, us those opportunities, in very have new we're also product the at wafer supply, requirements opportunities Sterling another feel what are with the looking significant, enable many and We So including but supply. LED to areas. supply fulfill we potential that wafer

us, growth significant could it So for be very Lisa.

Lisa Thompson

And the of given do strange be because just constraints, QX QX production that right. significantly going and All the you to larger is expect the year to start than issues?

Jim Keim

this Well, lighting we frame inventory certainly battery increase. the believe through we're the management, lighting, constraints the that in on will once issues once management time QX in the And revenues battery increase. wafer through quarter we're will

of So projections half current is in next in as as product year. situations the market But year. growth are forecasting into for situation. continue of lot we Obviously, of second over half watch everyone good now, both we market of as the are to there's we'll move the our some in areas we revenue aware, second right into concern well move a areas increases the both

Lisa Thompson

China little and about could as in Are worse what's you Because understand things as or far on the bit anything. I a is going over And better, don't heck things? going or there? on getting those what talk lockdowns

Sterling Du

ship The manufacturer raw is transportation. when use cannot are cannot locked or they by that Well, ship the I quite of all they limit kind is factory probably use the the isolated ongoing quarantine because and think still out area Shanghai in they neighborhood is materials experienced down, that, in. the

So transportation that basically, the that's the issue. that issue

area. and the manufacturer Shanghai wafer area, testing have we do near in don't we have when example, assembly for Shanghai So, by but

ship IC And to different or because you some out the do package was And you -- test provinces, line IC for the waiting for takes out to transportation that tester. come some probably then break we a we then or ship for once path. what different you the or maritime some the and have tracing And up. so people all go transport out need a truck is

that dynamic be are under the So however, issue is second about. in But And areas we to or the than solved seeing. Shanghai. Shanghai is fortunately, so so-called that we and by future, probably other that using foundry not but going we outside limited are that's that's foundry expect a in our engineering City issue just near Shanghai Jim a still But will foundries happen talked our of supply, the lockdown that's or that Shanghai. that source different have

Lisa Thompson

Okay.

like a Sounds challenge.

one-time that have Can expect -- that also? something special ever Just I charge you happening you for question about, a you say QX one don't And how remember in is project. the before? that

Sterling Du

the for privatization. a project Yes. special is This

the expense but go So is quarters, probably it onetime this several as through -- may this account we

Lisa Thompson

some make Okay. a I'll what it bid. it at of timing have a takes how give And do long might and to then on you it have the to look decision? -- be the as you takeover Do a idea shot

Sterling Du

have comment no. I this. No, no on

Lisa Thompson

Okay.

you all That's my trying. Just Thank questions.

Operator

question Stifel. another with from take Well Svanberg Tore

Tore Svanberg

probably I about that fair competitors think competitive the Sterling, side say perspective, such is from a a possibly a the front that battery it And had follow-up a there's when XX-bit to deliver product only management can on one NAND that for high-precision Sterling. I analytic is that's end? currently that analog for or other two Yes, landscape shipping? just

Sterling Du

Yes.

that we're So Our this major... up. to doing right? trying new major some And release in is competitor is the ongoing, But meantime, -- of Yes. kind area TI. IC we catch told TI yes, competition also were

Tore Svanberg

But exemting is the shipping XX solution bit point [ph]. analog at or for NAND this

Sterling Du

it right shipping now? Is

Tore Svanberg

Great. very you Thank much.

Sterling Du

Yes

Operator

time. further turn you to I'll questions the back call no at are There this for... Berg,

Daniel Meyberg

with follow-up your Thank Thank (XXX) contact for everyone, at you, XXXX any everyone, thank feel attention free Please at or your questions. and extension XXX-XXXX this I'd day attention. Great. ir@oXmicro.com a like for me you. and time Great. Goodbye. and have morning. to great time to

Operator

today's your -- participation. you call. This Thank for

now may You disconnect.

O2 Micro International (OIIM) 6 May 222022 Q1 Earnings call transcript