O2Micro International Limited revenue started to decline in 2019: decreased 2.8% vs. 4.2% growth a year earliner
02/06/2020 • About O2Micro International Limited (
$OIIM) • By InTwits
O2Micro International Limited reported 2019 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -4.7%
- O2Micro International Limited spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2015-2019 is 0.5%. Average EBITDA Margin for the same period was -10.2%. In 2019 SBC/Revenue was even higher: 2.4%
- O2Micro International Limited has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: $2m in 2019, $1m in 2018, $1m in 2017, $1m in 2016, $1m in 2015
- The company has unprofitable business model: ROIC is -8.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 2.8%. Annual revenue decline showed slowdown in 19Q4 - revenue increased on 8.5%. During the last 5 years Revenue growth topped in 2017 at 6.4% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.7 pp from -10.3% to -4.7% in 2019.
Gross Margin increased slightly on 1.5 pp from 51.0% to 52.5% in 2019. SG&A as a % of Revenue decreased slightly on 0.77 pp from 32.4% to 31.7% in 2019.
Net Income margin dropped on 11.6 pp from 3.3% to -8.3% in 2019.
Investments (CAPEX, working capital and M&A)
O2Micro International Limited's CAPEX/Revenue was 2.7% in 2019. The company showed small growth in CAPEX/Revenue of 1.6 pp from 1.2% in 2016 to 2.7% in 2019. Average CAPEX/Revenue for the last three years was 2.0%. During 2015-2019 CAPEX as a % of Revenue bottomed in 2017 at 1.2% and was growing since that time.
Return on investment
The company operates at negative ROIC (-8.0%) and ROE (-6.5%). ROIC increased on 2.4 pp from -10.4% to -8.0% in 2019. ROE decreased on 9.2 pp from 2.7% to -6.5% in 2019.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and Debt / EBITDA. Debt surged while cash dropped on 67.0%.
O2Micro International Limited has no short term refinancing risk: cash is higher than short term debt (1,293.3%).
Management team
The company has 378 employees. Average revenue per employee in 2019 was
$161,185.
Financial and operational results
FY ended 12/31/2019
O2Micro International Limited ($OIIM) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 54.841 | 56.561 | 60.205 | 62.714 | 60.928 | -2.8% |
| Gross Profit | 27.696 | 29.244 | 30.779 | 31.973 | 31.968 | -0.0% |
| SG&A | 23.632 | 19.481 | 19.047 | 20.332 | 19.286 | -5.1% |
| EBITDA | -11.983 | -4.177 | -4.571 | -6.484 | -2.837 | |
| EBIT | | | | | -4.617 | |
| Net Income | -21.095 | -2.986 | -6.145 | 2.088 | -5.039 | -341.3% |
| Stock Based Compensation | | | | | 1.462 | |
Balance Sheet
|
|---|
| Cash | 41.199 | 31.332 | 28.520 | 32.414 | 10.696 | -67.0% |
| Accounts Receivable | | | | | 10.335 | |
| Inventory | | | | | 8.796 | |
| Accounts Payable | | | | | 4.867 | |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.827 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.932 | |
Cash flow
|
|---|
| Capex | 0.724 | 0.673 | 0.704 | 1.272 | 1.672 | 31.4% |
Ratios
|
|---|
| Revenue growth | -13.8% | 3.1% | 6.4% | 4.2% | -2.8% | |
| EBITDA growth | 18.0% | -65.1% | 9.4% | 41.9% | -56.2% | |
|
|---|
| Gross Margin | 50.5% | 51.7% | 51.1% | 51.0% | 52.5% | 1.5% |
| EBITDA Margin | -21.9% | -7.4% | -7.6% | -10.3% | -4.7% | 5.7% |
| EBIT Margin | | | | | -7.6% |
| SG&A, % of revenue | 43.1% | 34.4% | 31.6% | 32.4% | 31.7% | -0.8% |
| SBC, % of revenue | | | | | 2.4% |
| Net Income Margin | -38.5% | -5.3% | -10.2% | 3.3% | -8.3% | -11.6% |
| CAPEX, % of revenue | 1.3% | 1.2% | 1.2% | 2.0% | 2.7% | 0.7% |
|
|---|
| ROIC | -14.9% | -7.0% | -7.9% | -10.4% | -8.0% | 2.4% |
| ROE | -22.2% | -3.6% | -7.8% | 2.7% | -6.5% | -9.2% |
People
|
|---|
| Employees | | | | | 378 | |
| Revenue/Employee, th. $ | | | | | 161 | |
O2Micro International Limited ($OIIM) key quoterly financial indicators
| mln. $ | 19Q1 | 19Q2 | 19Q3 | 19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 13 | 14 | 16 | 18 | | -7.9% | -7.9% | -4.8% | 8.5% |
| Net Income | -4 | -3 | 0 | 2 | | -155.8% | -305.3% | | |
Balance Sheet
|
|---|
| Cash | 31 | 13 | 19 | 11 | | 22.0% | -44.9% | -43.9% | -66.1% |
| Short Term Debt | 1 | 1 | 1 | 1 | | | | | |
| Long Term Debt | 0 | 2 | 2 | 2 | | | | | |
Ratios
|
|---|
| Gross Margin | 51.0% | 50.0% | 51.0% | 57.0% | | -0.2% | -2.1% | 0.5% | 6.7% |
| Net Income Margin | -30.8% | -21.4% | 0.0% | 11.1% | | -81.6% | -31.0% | 20.5% | 29.7% |
Peers in Semiconductors
Below we provide O2Micro International Limited benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| NanoFlex Power Corp ($OPVS) | | | 72.5% | 354.8% | |
| MoSys, Inc. ($MOSY) | -18.4% | 37.2% | 46.8% | 87.7% | |
| SMART Global Holdings, Inc. ($SGH) | | -16.9% | 42.5% | 69.3% | |
| Micron Technology, Inc. ($MU) | | | 63.9% | 49.5% | -23.0% |
| Adesto Technologies Corporation ($IOTS) | 4.3% | 1.6% | 27.6% | 48.8% | |
| |
|---|
| Median (68 companies) | 10.6% | 6.1% | 11.0% | 4.9% | -12.7% |
|---|
| O2Micro International Limited ($OIIM) | | 3.1% | 6.4% | 4.2% | -2.8% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| CEVA, Inc. ($CEVA) | 90.9% | 91.6% | 92.1% | 89.8% | |
| NVE Corporation ($NVEC) | 80.3% | 76.1% | 78.5% | 79.0% | |
| Rambus, Inc. ($RMBS) | 84.7% | 80.1% | 79.9% | 76.8% | |
| Universal Display Corporation ($OLED) | 64.2% | 83.9% | 80.8% | 75.5% | |
| Intermolecular, Inc. ($IMI) | 57.4% | 66.5% | 67.5% | 70.3% | |
| |
|---|
| Median (67 companies) | 47.3% | 47.2% | 48.6% | 50.2% | 45.7% |
|---|
| O2Micro International Limited ($OIIM) | 50.5% | 51.7% | 51.1% | 51.0% | 52.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| NVE Corporation ($NVEC) | 66.0% | 61.8% | 65.6% | 65.1% | |
| Micron Technology, Inc. ($MU) | | 25.4% | 47.9% | 65.0% | 54.7% |
| NXP Semiconductors N.V. ($NXPI) | 41.5% | 21.6% | 46.2% | 49.9% | |
| Texas Instruments Incorporated ($TXN) | 42.0% | 43.5% | 46.7% | 48.6% | |
| Intel Corp ($INTC) | 41.0% | 35.2% | 41.7% | 45.7% | |
| |
|---|
| Median (68 companies) | 11.4% | 9.2% | 10.7% | 9.8% | 37.4% |
|---|
| O2Micro International Limited ($OIIM) | -21.9% | -7.4% | -7.6% | -10.3% | -4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Alpha and Omega Semiconductor Limited ($AOSL) | 6.6% | 6.5% | 12.2% | 42.2% | |
| Renesola Ltd. ($SOL) | 0.0% | 0.0% | 78.0% | 41.7% | |
| First Solar, Inc. ($FSLR) | 4.0% | 7.9% | 17.5% | 33.0% | |
| Sigma Designs Inc ($SIGM) | 6.5% | 6.2% | 14.1% | 29.3% | |
| Micron Technology, Inc. ($MU) | | 46.9% | 23.3% | 29.2% | 41.8% |
| |
|---|
| Median (68 companies) | 4.0% | 3.7% | 4.7% | 4.4% | 14.9% |
|---|
| O2Micro International Limited ($OIIM) | 1.3% | 1.2% | 1.2% | 2.0% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| SMART Global Holdings, Inc. ($SGH) | | 2.5% | 21.5% | 51.7% | |
| Texas Instruments Incorporated ($TXN) | 29.8% | 34.9% | 43.1% | 47.5% | |
| Micron Technology, Inc. ($MU) | | 0.8% | 21.5% | 42.9% | 18.5% |
| Applied Materials Inc ($AMAT) | 15.2% | 19.0% | 31.2% | 36.4% | |
| NVIDIA Corporation ($NVDA) | 13.3% | 13.1% | 27.3% | 35.3% | |
| |
|---|
| Median (76 companies) | 3.8% | 1.7% | 3.2% | 3.0% | 18.5% |
|---|
| O2Micro International Limited ($OIIM) | -14.9% | -7.0% | -7.9% | -10.4% | -8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.3x | 3.0x | 7.2x | 98.6x | |
| Inphi Corporation ($IPHI) | -6.4x | 4.5x | 33.7x | 32.2x | |
| JinkoSolar Holding Company Limited ($JKS) | 3.3x | 4.1x | 11.0x | 8.2x | |
| Lattice Semiconductor Corporation ($LSCC) | | 6.5x | 19.0x | 3.9x | |
| Renesola Ltd. ($SOL) | 35.0x | 123.6x | 2.3x | 3.3x | |
| |
|---|
| Median (46 companies) | -0.3x | 0.2x | 0.4x | 0.3x | 0.2x |
|---|
