O2micro International Ltd (OIIM) 2019 Q4 法說會逐字稿

Good morning, and thank you for joining us today to discuss O2Micro's financial results for the fourth quarter of fiscal year 2019. If you would like a copy of the press release we issued this morning, please call Daniel Meiberg at (408) 987-5920, extension 8888, and we will e-mail you a copy immediately. It's also posted on the O2Micro website at, www.o2micro.com under the heading Investors. There will be a replay available through February 13, 2020, 9:00 a.m. Pacific Time or by visiting the O2Micro website under the heading Investors. (Operator Instructions) Gentlemen, you may begin.

早安，感謝您今天加入我們討論凹凸科技 2019 財年第四季的財務表現。如果您想要一份我們今天早上發布的新聞稿，請致電 Daniel Meiberg，電話 (408) 987-5920，分機號 8888，我們將立即透過電子郵件向您發送副本。它也發佈在 O2Micro 網站 www.o2micro.com 的「投資者」標題下。重播截止時間為 2020 年 2 月 13 日上午 9:00。太平洋時間或造訪 O2Micro 網站的「投資者」標題下。（操作員指示）先生們，你們可以開始了。

Thank you. Good morning, everyone, and thank you for joining O2Micro's financial results conference call for the fourth quarter of 2019, ending December 31, 2019. This is Daniel Meiberg, Corporate Communications for O2Micro. I'd like to remind you listeners that the discussions of business outlook for O2Micro contains forward-looking statements. Statements made in this release that are not historical facts are forward-looking statements within the meaning of the federal securities laws. Actual results may differ materially due to numerous risk factors. Such factors are enumerated in the company's 20-F annual filings, our annual reports and other documents filed with the SEC from time to time. Listeners are referred to the O2Micro earnings press release and the documents filed with the SEC to understand these forward-looking statements and the associated risk factors. Statements made herein are dated information. The company assumes no responsibility to provide updates to this information. With me today are Perry Kuo, CFO and Director; Jim Keim, Head of Marketing and Sales and Director; and Sterling Du, O2's founder, CEO and Chairman. After the prepared remarks from these gentlemen, the floor will be open for your questions.

謝謝。大家早安，謝謝您參加凹凸科技截至2019年12月31日的2019年第四季財務業績電話會議。我是 Daniel Meiberg，O2Micro 企業傳播部門的負責人。我想提醒各位聽眾，關於凹凸科技業務前景的討論包含前瞻性陳述。本新聞稿中的非歷史事實陳述屬於聯邦證券法意義內的前瞻性陳述。由於眾多風險因素，實際結果可能存在重大差異。這些因素在公司的 20-F 年度文件、我們的年度報告以及不時向 SEC 提交的其他文件中都有列舉。聽眾可參閱 O2Micro 的獲利新聞稿和向 SEC 提交的文件，以了解這些前瞻性陳述和相關風險因素。本文中的陳述是過時的資訊。本公司不承擔提供此資訊更新的責任。今天和我在一起的有財務長兼董事 Perry Kuo； Jim Keim，行銷與銷售主管兼總監；以及 O2 創辦人、執行長兼董事長杜斯特林 (Sterling Du)。在這些先生們準備好發言後，將開始提問。

At this point, I would like to introduce Perry Kuo, CFO of O2Micro for a discussion of the financial highlights of the fourth quarter of fiscal year 2019 ending December 31, 2019.

在此，我想介紹一下凹凸科技財務長 Perry Kuo，討論截至 2019 年 12 月 31 日的 2019 財年第四季的財務亮點。

Thank you, Dan. We will now review our financial results for Q4 2019. Please note that financial results will be presented on a GAAP basis unless we designate otherwise. The non-GAAP result excludes stock-based compensation expense, onetime charges, nonrecurring gains and losses. Our full year results are available in our press release that was issued earlier today.

謝謝你，丹。我們現在將回顧 2019 年第四季的財務表現。請注意，除非我們另有指定，否則財務表現將按照公認會計原則（GAAP）公佈。非公認會計原則的結果不包括以股票為基礎的補償費用、一次性費用、非經常性損益。我們的全年業績可在今天早些時候發布的新聞稿中查看。

GAAP revenue in the fourth quarter of 2019 was $17.9 million. GAAP net income in the fourth quarter of 2019 was $1,787,000. If we exclude stock-based compensation of $378,000, net gain recognized on long-term investment of $245,000 and a gain on sales of real estate of $500,000, the non-GAAP net income will be $1,420,000. GAAP net income per ADS in the fourth quarter of 2019 was $0.07. Non-GAAP net loss per ADS was $0.05. Gross margin was 57.7% in Q4. The higher gross margin remained 49% to 51% guided earlier, reflect the product mix of factors from the strategic agreement with Feit Electric. R&D expense was $4.3 million or 24.2% of revenue. This amount excludes stock-based compensation expense of $68,000. SG&A expense was $4.5 million or 25.3% of revenue. This amount excludes stock-based compensation expense of $310,000. The nonoperating income was $1.1 million. Income tax was $250,000 in the fourth quarter and is mainly reflected in the actual tax provision of each taxable location.

2019 年第四季 GAAP 營收為 1,790 萬美元。2019 年第四季 GAAP 淨利潤為 1,787,000 美元。如果我們排除 378,000 美元的股票薪酬、245,000 美元的長期投資確認的淨收益以及 500,000 美元的房地產銷售收益，則非 GAAP 淨利潤將為 1,420,000 美元。2019 年第四季 GAAP 每股美國存託股淨利為 0.07 美元。非 GAAP 每份 ADS 淨虧損為 0.05 美元。第四季毛利率為 57.7%。較高的毛利率仍保持在先前指引的 49% 至 51% 之間，反映了與 Feit Electric 策略協議中的產品組合因素。研發費用為 430 萬美元，佔營收的 24.2%。該金額不包括 68,000 美元的股票補償費用。SG&A 費用為 450 萬美元，佔營收的 25.3%。該金額不包括 31 萬美元的股票補償費用。非營業收入為 110 萬美元。第四季所得稅為25萬美元，主要反映在各應稅地點的實際稅金撥備。

In Q4 2019, we repurchased 71,390 ADS unit at the cost of $91,000. Q4 2019, revenue by end market breaks down into the following percentages: consumer was 43% to 45% of revenue, computer was 5% to 7% of revenue, industrial was 48% to 50% of revenue, communication was almost 0.

2019年第四季度，我們以91,000美元的成本回購了71,390個ADS單位。2019年第四季，終端市場收入細分為以下百分比：消費者佔收入的43％至45％，電腦佔收入的5％至7％，工業佔收入的48％至50％，通訊幾乎為0 。

At this moment, I would like to provide some additional information. O2Micro finished the fourth quarter with $46.4 million in unrestricted cash and short-term investment. This represents cash and cash equivalent of $1.76 per ADS. In addition, O2Micro has no debt. Accounts receivable at the end of Q4 was $10.3 million. Our DSO is 57 days. DSO is less than 60 days, mainly from account mixed. Inventory was $8.8 million at the end of the fourth quarter. This represents 108 days of inventory, and inventory turnover was 3.3x in Q4.

此時此刻，我想提供一些補充資料。O2Micro 在第四季結束時擁有 4,640 萬美元的非限制性現金和短期投資。這意味著每份 ADS 為 1.76 美元的現金和現金等價物。此外，凹凸科技沒有債務。第四季末的應收帳款為 1,030 萬美元。我們的 DSO 是 57 天。DSO 少於 60 天，主要來自帳戶混合。第四季末庫存為 880 萬美元。這相當於 108 天的庫存，第四季的庫存週轉率為 3.3 倍。

Net cash provided by operating activities in the fourth quarter was about $5.2 million, mainly from the net profit of $1.8 million, decreases in AR $2 million and the increase in account payable $889,000. Capital expenditures were about $371,000 in the fourth quarter for testers and the IT equipment.

第四季經營活動提供的現金淨額約為520萬美元，主要來自淨利180萬美元、減少AR 200萬美元、應付帳款增加889,000美元。第四季測試器和 IT 設備的資本支出約為 371,000 美元。

Depreciation and amortization was $470,000 in Q4. At the end of the fourth quarter of 2019, O2Micro had 378 employees, 63% of which are engineers. Based on our current market situations and the best updated [majority] of rolling forecast the company has following guidance for Q1 2020: net sales are expected to be down 15%, plus and minus 4%, compared to Q4 2019. Our net sales are expected to be up 19%, plus and minus 6%, from comparable quarter of Q1 in 2019. Product gross margin for Q1 is expected from 15% to 52%. R&D expenses, excluding stock-based compensation, are expected to be in the range of $4.5 million to $5 million. SG&A expenses, excluding stock-based compensation, are expected to be in the range of $4.5 million to $5 million. Stock-based compensation should be in the range of $350,000 to $400,000 in the first quarter. Nonoperating income are expected to be in the range of $200,000 to $300,000 in the first quarter, excluding foreign exchange gain or loss and net gain or loss recognized on long-term investment. Income tax expense is expected to be in the range of $200,000 to $300,000.

第四季的折舊和攤提為 47 萬美元。截至2019年第四季末，凹凸科技擁有員工378人，其中工程師佔63%。根據我們目前的市場狀況和最佳更新的滾動預測，公司對 2020 年第一季的指導如下：與 2019 年第四季相比，淨銷售額預計將下降 15%，正負 4%。我們的淨銷售額預計將比 2019 年第一季可比季成長 19%，正負 6%。第一季產品毛利率預計為15%至52%。研發費用（不含股票薪酬）預計在 450 萬美元至 500 萬美元之間。SG&A 費用（不含股票薪酬）預計在 450 萬美元至 500 萬美元之間。第一季的股票薪酬應在 35 萬至 40 萬美元之間。預計第一季營業外收入在20萬至30萬美元之間，不包括外匯損益和長期投資確認的淨損益。所得稅費用預計在 20 萬美元至 30 萬美元之間。

The goal of our management team and Board of Directors is to maximize shareholders value. We have accomplished this by taking the necessary steps, which included managing operating expenses and monetizing asset on the balance sheet. In regards to our share repurchase program, we have been active in this program historically, and we plan to continue going forward. Since 2002, we have repurchased over 20.2 million ADS shares for $101.1 million. As of the end of Q4, we had $7.8 million remaining in our share buyback authorization. As reported in last quarter, we will continue to manage the operating expenses in Q1, but we will continue to invest in new product development with full support of underlying expenses and the related tools, as these projects are important -- as this new project are important growth drivers for 2020.

我們管理團隊和董事會的目標是實現股東價值最大化。我們透過採取必要的措施來實現這一目標，其中包括管理營運費用和將資產負債表上的資產貨幣化。關於我們的股票回購計劃，我們歷來一直積極參與該計劃，並且計劃繼續進行。自 2002 年以來，我們已以 1.011 億美元的價格回購了超過 2,020 萬股 A​​DS 股票。截至第四季末，我們的股票回購授權還剩 780 萬美元。正如上季報告的那樣，我們將繼續管理第一季的營運費用，但我們將繼續投資於新產品開發，並全力支持基礎費用和相關工具，因為這些項目很重要——因為這個新項目是2020年重要的成長動力。

We believe our cash breakeven point now is between $16 million to $18 million in quarterly revenue, and our profitability breakeven point is between $18 million to $20 million in quarterly revenue.

我們認為，目前我們的現金損益平衡點在季度營收 1,600 萬美元至 1,800 萬美元之間，獲利盈虧平衡點在季度營收 1,800 萬美元至 2,000 萬美元之間。

In Q4 2019, 227,000 shares of EMC were sold, and USD $869,000 cash-in. The average selling price of EMC in Q4 is around $3.84 per share with original cost of $0.53 per share.

2019年第四季，共售出227,000股EMC股票，套現869,000美元。EMC第四季的平均售價約為每股3.84美元，原始成本為每股0.53美元。

We will continue to sell EMC shares in Q1. As of December 31, 2019, we owned around 800,000 shares of EMC, real estate in Taiwan sold in Q4 and the 500,000 gains booked in Q4 too. Returns to shareholders are very much on our minds, and will continue to be a focus in the future. We will provide update to the additional measures to enhance shareholders' value throughout this year. Given the uncertain demand status of the new coronavirus and the dynamic changes in macro environment, we are prepared to continue to manage the cost as needed. Although we believe we have aligned current cost based on current and the anticipated revenue levels. I would like to thank everyone for participating and turn the call over to Jim Keim to talk more about our business. Jim, please?

我們將在第一季繼續出售 EMC 股票。截至2019年12月31日，我們持有約80萬股EMC股票、第四季出售的台灣房地產以及第四季入帳的50萬股收益。股東回報是我們非常關心的問題，並將繼續成為未來的重點。我們將提供今年全年提升股東價值的額外措施的最新資訊。鑑於新型冠狀病毒需求狀況的不確定性和宏觀環境的動態變化，我們準備繼續按需管理成本。儘管我們相信我們已經根據當前和預期的收入水平調整了當前成本。我要感謝大家的參與，並將電話轉給吉姆凱姆 (Jim Keim)，詳細討論我們的業務。吉姆，請嗎？

Thank you, Perry. Good morning, everyone. We were very pleased with our Q4 revenue results that reflected another strong quarter for battery management as well as ongoing expansion of our high-end intelligent lighting product sales. We also experienced ongoing growth in our new smartphone and tablet products. We expect ongoing growth in all these product areas in 2020 but realized Q1 will have typically typical seasonality as well as turmoil from China-based customers and supply chains that faced some labor shortages due to the coronavirus. However, most customers have not changed their targeted revenue for 2020 and have indicated that they expect to make up any Q1 shipment shortfalls in Q2. We will closely monitor the situation and have lowered our revenue target in Q1 to reflect the situation while remaining optimistic about our revenue growth in 2020. Let's update our business in each of our product areas in more detail.

謝謝你，佩里。大家，早安。我們對第四季度的營收結果感到非常滿意，這反映出電池管理領域又一個強勁的季度以及我們高端智慧照明產品銷售的持續擴張。我們的新智慧型手機和平板電腦產品也持續成長。我們預計所有這些產品領域在 2020 年將持續成長，但意識到第一季將具有典型的季節性特徵，以及中國客戶和供應鏈因冠狀病毒而面臨勞動力短缺的動盪。不過，大多數客戶並未改變 2020 年的營收目標，並表示希望在第二季彌補第一季的出貨量缺口。我們將密切關注事態發展，並降低了第一季的收入目標以反映這一情況，同時對 2020 年的收入成長保持樂觀。讓我們更詳細地更新我們每個產品領域的業務。

Revenues in our largest product line, intelligent lighting, continue to be driven upward in Q4 by our many design wins that include both 4K and 8k TV and expansion of HDR monitors into gaming, medical and industrial applications. While continuing to expand our product offering and position in high-end TVs and monitors, we are not ignoring our strong overall market share and continue to expand design activity and lower-end TV and monitor products using our new line of patented backlighting products with integrated MOSFETs. Our general lighting portion of our lighting products enjoyed good Q4 revenue as we added Feit Electric as a U.S.-based partner to accompany our already established partners in Greater Asia, that includes a new proprietary design for a major Japanese customer that is now going into production.

我們最大的產品線智慧照明的收入在第四季度繼續增長，得益於我們的許多設計勝利，包括 4K 和 8k 電視以及將 HDR 顯示器擴展到遊戲、醫療和工業應用。在繼續擴大我們的產品供應和在高端電視和顯示器領域的地位的同時，我們並沒有忽視我們強大的整體市場份額，並繼續擴大設計活動和低端電視和顯示器產品，使用我們新的專利背光產品系列，整合了MOSFET。我們的照明產品中的通用照明部分在第四季度獲得了良好的收入，因為我們增加了Feit Electric 作為美國合作夥伴，以配合我們在大亞洲地區已經建立的合作夥伴，其中包括為日本主要客戶提供的新專有設計，現已投入生產。

Finally, our R&D products in the industrial and automotive lighting have enabled excellent progress in design wins. This includes advanced products for robotics and autonomous driving applications, where we are seeing good acceptance of our new products. Our patented battery management product offering continued to experience excellent growth in Q4 as it has over the past 4 years. This Q4 growth continued to be driven by the rapid expansion of lithium-ion batteries into more and more product areas as lithium-ion batteries have become more cost-effective with greater energy capability. With our patented lithium-ion cell balancing methodology, we continue to see ongoing growth opportunities with major OEMs in power tool, e-bike, e-vehicle, vacuum cleaners, garden tools and energy storage systems. We believe each of these market areas will continue to expand for the foreseeable future.

最後，我們在工業和汽車照明領域的研發產品在設計方面取得了巨大進展。這包括用於機器人和自動駕駛應用的先進產品，我們的新產品在這些領域得到了很好的接受。我們的專利電池管理產品在第四季度繼續經歷過去 4 年的出色成長。第四季的成長繼續受到鋰離子電池快速擴展到越來越多產品領域的推動，因為鋰離子電池變得更具成本效益和更大的能量容量。憑藉我們專利的鋰離子電池平衡方法，我們繼續看到電動工具、電動自行車、電動車、吸塵器、園藝工具和儲能係統領域主要原始設備製造商的持續成長機會。我們相信，在可預見的未來，這些市場領域都將持續擴大。

As previously noted, our battery management products now include more complex ARM-based microcontrollers for market applications where our existing customers need more sophisticated battery management. This is enabling us to engage with additional [higher-end] customers, including those in the rapidly growing energy storage market. Customers have successfully evaluated our first ARM-based battery management products and are moving forward to design our products into the next-generation of high-performance systems.

如前所述，我們的電池管理產品現在包括更複雜的基於 ARM 的微控制器，適用於我們現有客戶需要更複雜的電池管理的市場應用。這使我們能夠與更多的[高端]客戶合作，包括快速成長的能源儲存市場中的客戶。客戶已成功評估了我們首款基於 ARM 的電池管理產品，並正在繼續將我們的產品設計成下一代高性能係統。

We continue to file battery management patent claims for our new products to protect both our company and our customers' market positions. Our major customer list continues to grow and includes Bissell, Black & Decker, Dyson, Electrolux, Lexi, LG, Makita, Narada, Panasonic, Philips, Samsung, Sharp and TTI.

我們繼續為我們的新產品提交電池管理專利申請，以保護我們公司和客戶的市場地位。我們的主要客戶名單持續成長，包括 Bissell、Black & Decker、Dyson、Electrolux、Lexi、LG、Makita、Narada、Panasonic、Philips、Samsung、Sharp 和 TTI。

Our new power products continue to make progress with increasing revenues in smartphones and tablet markets. As stated last quarter, we are moving forward toward production with 8 key customers, including product that is going into smartphones for brand-name carriers. These design wins involve chargers for applications, including high-powered 2-cell charging, IoT product and express charging as well as gas gauges and complex, integrated custom product for key customers.

隨著智慧型手機和平板電腦市場收入的增加，我們的新電源產品不斷取得進展。如上季所述，我們正在向 8 個主要客戶進行生產，其中包括將用於品牌營運商智慧型手機的產品。這些設計成果涉及應用充電器，包括高功率 2 節電池充電、物聯網產品和快速充電，以及電量計和為主要客戶提供的複雜整合客製化產品。

I will now turn the call over to our CEO, Sterling, for closing remarks.

現在我將把電話轉給我們的執行長史特林，讓其致閉幕詞。

Thank you, Jim. O2Micro reported fourth quarter 2019 revenue of $17.9 million, was up 11.4% from the previous quarter and up 7.7% from the same quarter prior year. The gross margin in fourth quarter of 2019 was 56.7%, that gross margin was up from 51.4% of previous quarter and up from the 50.3% in the same quarter prior year.

謝謝你，吉姆。凹凸科技公佈 2019 年第四季營收為 1,790 萬美元，季增 11.4%，季增 7.7%。2019年第四季毛利率為56.7%，高於上一季的51.4%，高於去年同期的50.3%。

Our revenue was in line with the guided range publicly released on December 2, 2019. Our strong gross margin is a result of product mix, strategic alliance program, strong growth in consumer products and the many new products ramping up in battery market. While our local area dimming backlight solution expanded to HDTV and HDR TV monitor, we start to sample new technology product of multiple skin LED backlighting, which was essentially the flashing backlight for the LCD display. The technology reduces motion blur caused by eye-tracking and the movement during a fast motion. With a local area dimming and a multiple skin technology, enjoying more TV experience will further enhance.

我們的收入與2019年12月2日公開發布的指導範圍一致。我們強勁的毛利率是產品組合、策略聯盟計劃、消費產品的強勁成長以及電池市場上許多新產品不斷湧現的結果。當我們的局部調光背光解決方案擴展到HDTV和HDR電視顯示器時，我們開始樣品多層LED背光的新技術產品，本質上是LCD顯示器的閃爍背光。該技術減少了由眼球追蹤和快速運動過程中的移動引起的運動模糊。憑藉局部調光和多重皮膚技術，享受更多電視體驗將進一步增強。

I'd like to recap the number of the ICs used in a high-end HDR TV monitor for local area dimming backlighting grows at higher performance needed. The latest Sony MASTER Series 85 inch, HDR, 8K, and 64 ICs of ours is an example. This particular high-precision timing control driver IC controls the 5,000 LED per stream. Our special IC synchronize each LED in a very precise timing control and could be used as many as 1,000 tiny local area LED. Our patent parallel drive architecture with multiple SPI channel support fast frame refresh rate, also called VSYNC, versus the conventional daisy chain technology topology, only support 30 megahertz that restrict the frame's refresh rate and at a number of LED stream could be deployed.

我想回顧一下高階 HDR 電視顯示器中用於局部區域調光背光的 IC 數量，隨著所需效能的提高而增加。我們最新的索尼MASTER系列85吋、HDR、8K、64 IC就是一個例子。這款特殊的高精度時序控制驅動器 IC 可控制每串 5,000 個 LED。我們的特殊 IC 以非常精確的時序控制同步每個 LED，並且可以使用多達 1,000 個微型局部區域 LED。我們的專利並行驅動架構具有多個SPI 通道，支援快速幀刷新率（也稱為VSYNC），而傳統的菊花鏈技術拓撲僅支援30 兆赫，限制了幀的刷新率，並且可以部署多個LED 流。

The China TV monitor market in Q4 last year has been improved, recover, as we mentioned previous quarter, but the new coronavirus spread impacted the supply chain from normal operation. As Jim indicated, we are at early stage to assess this dynamic situation.

正如我們上一季提到的，去年第四季中國電視顯示器市場已經有所改善、復甦，但新冠病毒的傳播影響了供應鏈的正常運作。正如吉姆所指出的，我們正處於評估這種動態情況的早期階段。

Our battery product line offer solution for all types of lithium-ion battery including variety of functions are DFE, which is Digital Front End; and AFE, Analog Front End; and now we have battery management unit. The battery management unit either are [state] machine-driven with a second level protection or MCU-based gas gauge BMS. Those BMS product reliability has been high standard. Our BMS product support key advanced features including the (inaudible) cell connection, battery cell placed reversely protection, [sync] current compensation from plug and play and also the special 10 ohm for the RF resistor with a maximized battery voltage control.

我們的電池產品線為所有類型的鋰離子電池提供解決方案，包括多種功能：DFE（數位前端）；和 AFE，模擬前端；現在我們有了電池管理單元。電池管理單元要么是由具有二級保護的機器驅動的，要么是基於 MCU 的電量監測計 BMS。這些BMS產品的可靠性一直是高標準的。我們的 BMS 產品支援關鍵的高級功能，包括（聽不清楚）電池連接、電池反接保護、即插即用的[同步]電流補償以及具有最大電池電壓控制的特殊 10 歐姆射頻電阻。

The previous quarter battery product revenue came with a very strong growth from all the market sectors. We see outdoor power tool was getting its momentum and the indoor power tool grew even stronger as indoor power tool look for flexible and performance solutions. Many of our customers' safety protection using our ICs is because our new MCU-based BMS provide high-level performance, reliability and are flexible enough to meet variety customer request. As each customer has own architect when address their safety issues.

上一季所有市場領域的電池產品收入都出現了非常強勁的成長。我們看到戶外電動工具正在蓬勃發展，隨著室內電動工具尋求靈活和高性能的解決方案，室內電動工具變得更加強大。我們的許多客戶使用我們的 IC 獲得安全保護是因為我們基於 MCU 的新型 BMS 提供了高水準的性能、可靠性，並且足夠靈活，可以滿足各種客戶的要求。由於每個客戶都有自己的架構師來解決他們的安全問題。

Our charging product for phone, tablet continue to show the good design wins. This -- there are opportunities for the new phone replacement cycle in the coming years, which is 5G, which needs high current charger and a high accuracy gas gauge. We expect more complicated and sophisticated solution for 5G will be the trend, which benefit our product and the technology. With a good result of previous quarter, we are optimistic for the fundamental of our business, while the risk factor of the new coronavirus remains a top concern, we need more time to assess the impact. We continue to monitor with our business expense, biz operation to optimize operating cycle because of the operations expense and monetizing the asset of company.

我們的手機、平板電腦充電產品持續展現出良好的設計優勢。這——未來幾年新的手機更換週期有機會，即5G，它需要大電流充電器和高精度電量計。我們預計更複雜和精密的5G解決方案將成為趨勢，這對我們的產品和技術有利。憑藉著上一季的良好業績，我們對業務基本面持樂觀態度，而新冠病毒的風險因素仍然是首要關注因素，我們需要更多時間來評估其影響。我們繼續監控我們的業務費用、業務運營，以優化營運週期，因為營運費用和公司資產貨幣化。

At this time, I'd like to thank you for listening to our conference call, and I'll turn it back to Dan. Dan, please?

這次，我要感謝您收聽我們的電話會議，我會將其轉回給丹。丹，請問？

Thank you, Sterling. At this point, we'd like to open the call to questions. Operator?

謝謝你，斯特林。現在，我們想開始提問。操作員？

(Operator Instructions) The first question will come from Tore Svanberg with Stifel Nicolaus.

（操作員說明）第一個問題將由 Tore Svanberg 和 Stifel Nicolaus 提出。

Congratulations on the year-over-year growth. First question on the gross margin for Q4, could you elaborate a little bit more on what happened there? You did mention the element of mix, but were there any onetime benefits as well?

恭喜您的年增長。關於第四季毛利率的第一個問題，您能否詳細說明一下那裡發生的情況？您確實提到了混合元素，但是是否也有任何一次性好處？

Jim, would you like to...

吉姆，你願意...

Tore, this is Perry. Yes, there is some factor from the onetime, but it's kind of the mix -- sorry, there is some onetime. That's why I also -- I just guided the Q1 gross margin will be 50% to 52%.

托爾，這是佩里。是的，有一些來自一次性的因素，但這是一種混合——抱歉，有一些一次性的因素。這就是為什麼我剛剛預測第一季毛利率將為 50% 至 52%。

Very good. Got it. Second question is, obviously, there could be some supply chain issues in Q1. Could you perhaps elaborate a little bit in which segments of your business this is happening? I assume it's primarily TV, but if you could share any other information there, that would be great.

非常好。知道了。第二個問題是，顯然，第一季可能會出現一些供應鏈問題。您能否詳細說明您業務的哪些部分正在發生這種情況？我認為主要是電視，但如果您可以在那裡分享任何其他信息，那就太好了。

Jim?

吉姆？

Tore, this is Jim. You are correct that TV is the #1 area because, certainly, a major portion of the TV manufacturing is done in China, but also, as you are aware, we do sell a lot of product to all of the major TV manufacturers that are Chinese and also ship heavily into China. So we do expect some supply chain situations there. The customers are indicating that, at this point, they're maintaining their forecasts. And as we mentioned, they will plan on catching up with any production in Q2. Nevertheless, we have reduced the forecast for Q1 because we do believe there will be some sales impact, particularly in China as a result of this.

托爾，這是吉姆。您說電視是第一大領域是正確的，因為當然，電視製造的主要部分是在中國完成的，而且，正如您所知，我們確實向所有主要電視製造商銷售大量產品。中國人也大量進入中國。所以我們確實預計那裡會出現一些供應鏈情況。客戶表示，目前他們維持他們的預測。正如我們所提到的，他們將計劃趕上第二季的任何生產。儘管如此，我們還是降低了第一季的預測，因為我們確實相信這會對銷售產生一些影響，尤其是在中國。

Sounds good. So I mean does that mean Q2 is going to be -- I mean, the sequential growth there is going to be above what you typically see? Or is it still too early to make that call?

聽起來不錯。所以我的意思是，這是否意味著第二季的連續成長將高於您通常看到的水平？或者現在做出這個決定還為時過早嗎？

I think it's too early to make that call. But if they do get the situation under control quickly, we would hope to see a more robust Q2, but it's really too early for us to make that call.

我認為現在做出這個決定還為時過早。但如果他們確實迅速控制了局勢，我們希望看到第二季度更加強勁，但現在做出這個決定還為時過早。

Very good. Just last question for Sterling. Sterling, you talked about continuous progress on the smartphone side. And obviously, the 5G upgrade cycle is starting to happen. Should we assume that O2Micro starts to get some material smartphone revenue here at some point in 2020? Or is this more of a 2021 contribution?

非常好。這是斯特林的最後一個問題。斯特林，您談到了智慧型手機方面的持續進步。顯然，5G 升級週期已經開始出現。我們是否應該假設 O2Micro 在 2020 年的某個時候開始在智慧型手機領域獲得一些實質收入？還是這更多的是 2021 年的貢獻？

That is a mix for the really the high-end 5G, that will be 2021. And then the mix with some of the current 4G, high-performance phone and that will be realized as some revenue for the second half of this year.

這是 2021 年真正高階 5G 的組合。然後與當前的一些 4G、高效能手機相結合，這將在今年下半年實現一些收入。

(Operator Instructions) The next question will come from Lisa Thompson with Zacks Investment Research.

（操作員說明）下一個問題將來自 Zacks Investment Research 的 Lisa Thompson。

Great to see this. When was the last time you had a profitable quarter? I couldn't find it. Back in...

很高興看到這個。您上一次獲利的季度是什麼時候？我找不到它。早在...

That's probably 2018, yes.

那可能是 2018 年，是的。

2018? Oh right, it's the onetime. Okay. So looking at Q4, I know you had the onetime license revenue in there, would you have reached breakeven without that? I know you won't tell us how much it was.

2018？哦，對了，這是一次。好的。因此，看看第四季度，我知道您那裡有一次性授權收入，如果沒有的話，您會達到損益兩平嗎？我知道你不會告訴我們多少錢。

We are close to the cash breakeven. Yes, we don't let.

我們已經接近現金收支平衡。是的，我們不讓。

And you usually tell us what your revenue breakeven numbers are and cash breakevens? Did I miss that? Or is it...

您通常會告訴我們您的營收損益平衡數字和現金損益平衡數字是多少？我錯過了嗎？或者說是…

It's $16 million to $18 million.

售價 1600 萬至 1800 萬美元。

For cash breakeven or profit breakeven?

為了現金收支平衡還是獲利收支平衡？

For cash breakeven, yes.

對於現金收支平衡來說，是的。

Okay. Sounds good. So could you elaborate a little bit about what happened with Feit as far as what products they're going to be distributing for you or using you for?

好的。聽起來不錯。那麼您能否詳細說明一下 Feit 發生的事情以及他們將為您分發或使用您的哪些產品？

All what we can say there, Lisa, is it will be Free Dimming-based product. That does not prohibit some from using other products, but this involves the Free Dimming.

麗莎，我們只能說這將是基於免費調光的產品。這並不禁止某些人使用其他產品，但這涉及自由調光。

Okay. And has that -- where are they on that? Like are they just evaluating? Or do they have products in stores already? Where are we?

好的。他們在哪裡？他們只是在評估嗎？或者他們的商店裡已經有產品了嗎？我們在哪裡？

They have Free Dimming product in the market already.

他們已經在市場上推出了免費調光產品。

Okay. And then you said you added a major Japanese customer in lighting? For what products?

好的。然後你說你增加了一個日本照明大客戶？用於什麼產品？

Not added. We actually have been working with this customer for some time. So we added a new product for them that is specific to their specification requirements for an additional application with them. So this will expand our general lighting business with them.

未添加。事實上，我們已經與該客戶合作了一段時間。因此，我們為他們添加了一款新產品，該產品專門針對他們的附加應用程式的規格要求。因此，這將擴大我們與他們的通用照明業務。

And there are no further questions in the queue. I'd like to turn the call back over to Dan for closing remarks.

並且隊列中沒有其他問題。我想將電話轉回給丹，讓其結束語。

Thank you. Thank you all for your time and attention this morning. Please feel free to contact me at (408) 987-5920, extension 8888 or at ir@o2micro.com with any follow-up questions. Everyone, have a great day, and thank you again for your time and attention. Goodbye.

謝謝。感謝大家今天早上的時間和關注。如有任何後續問題，請隨時致電 (408) 987-5920、分機號 8888 或發送電子郵件至 ir@o2micro.com 與我聯繫。祝大家有美好的一天，再次感謝您的時間和關注。再見。

Thank you, ladies and gentlemen. This concludes today's event. You may now disconnect your lines.

謝謝你們，女士們、先生們。今天的活動到此結束。現在您可以斷開線路。