GSI Technology, Inc. (Nasdaq: GSIT), a leading
provider of memory solutions for the networking, telecommunications
and military markets, and developer of the Associative Processing
Unit (APU), a highly parallel in-place computing
solution
, today reported financial results for its
second fiscal quarter ended September 30, 2018.
Summary Financial Table (in thousands, except per share
amounts)
|
Three Months Ended |
|
|
Six Months Ended |
Sept. 30, 2018 |
|
June 30, 2018 |
|
Sept. 30, 2017 |
|
|
Sept. 30, 2018 |
|
Sept. 30, 2017 |
Net revenues |
$ |
12,832 |
|
|
$ |
11,266 |
|
|
$ |
9,647 |
|
|
|
$ |
24,098 |
|
|
$ |
20,334 |
|
Gross margin (%) |
|
62.6 |
% |
|
|
51.4 |
% |
|
|
50.4 |
% |
|
|
|
57.3 |
% |
|
|
51.5 |
% |
Operating expenses |
$ |
8,425 |
|
|
$ |
7,447 |
|
|
$ |
6,652 |
|
|
|
$ |
15,872 |
|
|
$ |
13,875 |
|
Operating loss |
$ |
(394 |
) |
|
$ |
(1,659 |
) |
|
$ |
(1,794 |
) |
|
|
$ |
(2,053 |
) |
|
$ |
(3,323 |
) |
Net loss |
$ |
(351 |
) |
|
$ |
(1,646 |
) |
|
$ |
(1,740 |
) |
|
|
$ |
(1,997 |
) |
|
$ |
(3,252 |
) |
Net loss per share,
diluted |
$ |
(0.02 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.08 |
) |
|
|
$ |
(0.09 |
) |
|
$ |
(0.16 |
) |
“Net revenues and gross margin for the quarter exceeded our
guidance due to increased sales to our largest networking and
telecommunications customer and military customers, as well as a
partial shipment on a one-time order for a European university
supercomputer build-out. Gross margin improved in the quarter due
to lower inventory reserves and increased sales of higher margin
products,” stated Lee-Lean Shu, Chairman and Chief Executive
Officer. “Consistent with our strategic objective to expand our
markets and revenues, we are pursuing new relationships for our
patented in-place associative computing technology, or ‘APU’. The
recently announced collaboration with the Weizmann Institute is the
result of the expanded marketing scope of our APU team, as they
look to build relationships with target customers and institutions
that seek solutions for complex data and analytics applications
requiring high computational speeds with improved outcomes.”
“Looking ahead to the third quarter of fiscal 2019, we expect
that our SigmaQuad radiation hardened SRAM product will generate
modest revenue from sales of engineering samples,” continued Mr.
Shu. “The customer has requested that the verification process for
the prototypes use a more robust certification standard, which has
pushed out the balance of the prototype order into the first
calendar year quarter of 2019, and MIL-PRS-38535 Class V equivalent
product shipments into mid calendar year 2019.”
Commenting on the outlook for GSI’s third quarter fiscal year
2019 Mr. Shu stated, “Our current expectations for the upcoming
third quarter are net revenues in a range of $12.8 million to $13.8
million, with gross margin of approximately 62% to 64%.”
The Company reported a net loss of $(351,000), or $(0.02) per
diluted share, on net revenues of $12.8 million for the second
quarter of fiscal 2019, compared to a net loss of $(1.7 million),
or $(0.08) per diluted share, on net revenues of $9.6 million for
the second quarter of fiscal 2018 and a net loss of $(1.6 million),
or $(0.08) per diluted share, on net revenues of $11.3 million
for the first quarter of fiscal 2019, ended June 30, 2018.
Gross margin was 62.6% compared to 50.4% in the prior year period
and 51.4% in the first quarter.
In the second quarter of fiscal 2019, sales to Nokia were $6.0
million, or 46.6% of net revenues compared to $5.2 million, or
46.5% of net revenues, in the prior quarter and $2.8 million, or
29.0% of net revenues, in the same period a year ago.
Military/defense sales were 16.4% of shipments compared to 19.7% of
shipments in the prior quarter and 24.4% of shipments in the
comparable period a year ago. SigmaQuad sales were 66.4% of
shipments compared to 59.7% in the prior quarter and 39.4% in the
second quarter of fiscal 2018.
Total operating expenses in the second quarter of fiscal 2019
were $8.4 million, compared to $6.7 million in the second quarter
of fiscal 2018 and $7.4 million in the preceding first quarter.
Research and development expenses were $5.8 million, compared to
$4.2 million in the prior year period and $4.9 million in the
preceding quarter. Research and development expenses in the quarter
ended September 30, 2018 included an expense in the amount of
approximately $1.0 million related to a non-production mask set for
our initial APU product. Selling, general and administrative
expenses were $2.7 million compared to $2.5 million in the quarter
ended September 30, 2017, and $2.6 million in the preceding
quarter.
Second-quarter fiscal 2019 operating loss was $(0.4 million),
compared to $(1.7 million) in the prior quarter and $(1.8 million)
in the comparable period a year ago. Second-quarter fiscal 2019 net
loss included interest and other income of $145,000 and a tax
provision of $102,000, compared to $103,000 in interest and other
income and a tax provision of $49,000 in the comparable period a
year ago; in the preceding quarter, net loss included interest and
other income of $23,000 and a tax provision of $10,000.
Total second-quarter pre-tax stock-based compensation expense
was $552,000 compared to $542,000 in the prior quarter and $508,000
in the comparable quarter a year ago.
At September 30, 2018, the Company had $56.6 million in cash,
cash equivalents and short-term investments, $9.0 million in
long-term investments, $63.3 million in working capital, no debt,
and stockholders’ equity of $88.1 million.
Conference Call
GSI Technology will review its financial results for the quarter
ended September 30, 2018 and discuss its current business outlook
during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern)
today, October 25, 2018. To participate in the teleconference,
please call toll-free 1-888-204-4368 in the U.S. or 1-323-794-2423
for international approximately10 minutes prior to the above start
time and provide Conference ID 6919286. The call will also be
streamed live via the internet at www.gsitechnology.com, where it
will be archived under Events and Presentations.
About GSI Technology
Founded in 1995, GSI Technology, Inc. is a leading
provider of semiconductor memory solutions. GSI’s resources are
currently focused on bringing new products to market that leverage
existing core strengths, including radiation-hardened memory
products for extreme environments, and the APU designed to deliver
performance advantages for diverse artificial intelligence
applications. GSI Technology is headquartered
in Sunnyvale, California and has sales offices in
the Americas, Europe and Asia. For more
information, please visit www.gsitechnology.com.
Forward-Looking Statements
The statements contained in this press release that are not
purely historical are forward-looking statements within the meaning
of Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding GSI Technology’s expectations,
beliefs, intentions, or strategies regarding the future. All
forward-looking statements included in this press release are based
upon information available to GSI Technology as of the date hereof,
and GSI Technology assumes no obligation to update any such
forward-looking statements. Forward-looking statements involve a
variety of risks and uncertainties, which could cause actual
results to differ materially from those projected. These
risks include those associated with the normal quarterly closing
process. Examples of risks that could affect our current
expectations regarding third quarter revenues and gross margins
include those associated with fluctuations in GSI Technology’s
operating results; GSI Technology’s historical dependence on sales
to a limited number of customers and fluctuations in the mix of
customers and products in any period; the rapidly evolving markets
for GSI Technology’s products and uncertainty regarding the
development of these markets; the need to develop and introduce new
products to offset the historical decline in the average unit
selling price of GSI Technology’s products; the challenges of rapid
growth followed by periods of contraction; and intensive
competition; and delays or unanticipated costs that may be
encountered in the development of new products based on our
in-place associative computing technology and the establishment of
new markets and customer relationships for the sale of such
products. Further information regarding these and other risks
relating to GSI Technology’s business is contained in the Company’s
filings with the Securities and Exchange Commission, including
those factors discussed under the caption “Risk Factors” in such
filings.
Source: GSI Technology, Inc.
Hayden IR Kimberly Rogers385-831-7337
GSI Technology, Inc. Douglas M. Schirle Chief Financial Officer
408-331-9802
GSI TECHNOLOGY, INC. |
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
(in thousands, except per share
data) |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
Sept. 30, |
June 30, |
Sept. 30, |
|
Sept. 30, |
Sept. 30, |
|
2018 |
2018 |
2017 |
|
2018 |
2017 |
|
|
|
|
|
|
|
Net
revenues |
$ |
12,832 |
|
$ |
11,266 |
|
$ |
9,647 |
|
|
$ |
24,098 |
|
$ |
20,334 |
|
Cost of
goods sold |
|
4,801 |
|
|
5,478 |
|
|
4,789 |
|
|
|
10,279 |
|
|
9,872 |
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
8,031 |
|
|
5,788 |
|
|
4,858 |
|
|
|
13,819 |
|
|
10,462 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
& development |
|
5,752 |
|
|
4,850 |
|
|
4,160 |
|
|
|
10,602 |
|
|
8,495 |
|
|
Selling,
general and administrative |
|
2,673 |
|
|
2,597 |
|
|
2,492 |
|
|
|
5,270 |
|
|
5,290 |
|
|
|
|
Total operating
expenses |
|
8,425 |
|
|
7,447 |
|
|
6,652 |
|
|
|
15,872 |
|
|
13,785 |
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss) |
|
(394 |
) |
|
(1,659 |
) |
|
(1,794 |
) |
|
|
(2,053 |
) |
|
(3,323 |
) |
|
|
|
|
|
|
|
|
|
|
Interest
and other income (expense), net |
|
145 |
|
|
23 |
|
|
103 |
|
|
|
168 |
|
|
201 |
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes |
|
(249 |
) |
|
(1,636 |
) |
|
(1,691 |
) |
|
|
(1,885 |
) |
|
(3,122 |
) |
Provision
(benefit) for income taxes |
|
102 |
|
|
10 |
|
|
49 |
|
|
|
112 |
|
|
130 |
|
Net income
(loss) |
$ |
(351 |
) |
$ |
(1,646 |
) |
$ |
(1,740 |
) |
|
$ |
(1,997 |
) |
$ |
(3,252 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share, basic |
$ |
(0.02 |
) |
$ |
(0.08 |
) |
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
$ |
(0.16 |
) |
Net inocme
(loss) per share, diluted |
$ |
(0.02 |
) |
$ |
(0.08 |
) |
$ |
(0.08 |
) |
|
$ |
(0.09 |
) |
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
computing
per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
21,844 |
|
|
21,567 |
|
|
21,037 |
|
|
|
21,707 |
|
|
20,922 |
|
Diluted |
|
21,844 |
|
|
21,567 |
|
|
21,037 |
|
|
|
21,707 |
|
|
20,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation included in the Condensed Consolidated
Statements of Operations: |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
Sept. 30, |
June 30, |
Sept. 30, |
|
Sept. 30, |
Sept. 30, |
|
2018 |
2018 |
2017 |
|
2018 |
2017 |
|
|
|
|
|
|
|
Cost of
goods sold |
$ |
61 |
|
$ |
53 |
|
$ |
66 |
|
|
$ |
114 |
|
$ |
113 |
|
Research
& development |
|
321 |
|
|
323 |
|
|
284 |
|
|
|
644 |
|
|
551 |
|
Selling,
general and administrative |
|
170 |
|
|
166 |
|
|
158 |
|
|
|
336 |
|
|
322 |
|
|
|
|
|
$ |
552 |
|
$ |
542 |
|
$ |
508 |
|
|
$ |
1,094 |
|
$ |
986 |
|
|
|
|
|
|
|
|
GSI TECHNOLOGY, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Sept. 30, 2018 |
|
March 31, 2018 |
|
|
Cash and cash
equivalents |
|
$ |
37,890 |
|
$ |
40,241 |
|
|
Short-term
investments |
|
|
18,662 |
|
|
18,124 |
|
|
Accounts
receivable |
|
|
7,839 |
|
|
5,279 |
|
|
Inventory |
|
|
5,212 |
|
|
5,547 |
|
|
Other current
assets |
|
|
2,454 |
|
|
2,080 |
|
|
Net property and
equipment |
|
|
9,312 |
|
|
8,172 |
|
|
Long-term
investments |
|
|
8,960 |
|
|
7,923 |
|
|
Other assets |
|
|
12,017 |
|
|
12,174 |
|
|
Total assets |
|
$ |
102,346 |
|
$ |
99,540 |
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
$ |
8,782 |
|
$ |
7,404 |
|
|
Long-term
liabilities |
|
|
5,443 |
|
|
5,321 |
|
|
Stockholders'
equity |
|
|
88,121 |
|
|
86,815 |
|
|
Total liabilities and
stockholders' equity |
|
$ |
102,346 |
|
$ |
99,540 |
|
|
|
|
|
|
|
|
|
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