GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its third fiscal quarter ended December 31,
2020.
Summary Financial Results Table (in thousands, except
per share amounts)
|
|
Three Months Ended |
Nine Months Ended |
|
|
Dec. 31,2020 |
Sept. 30,2020 |
Dec. 31,2019 |
Dec. 31,2020 |
Dec. 31,2019 |
|
Net revenues |
$6,763 |
$6,659 |
$10,049 |
$20,043 |
$34,808 |
|
Gross margin (%) |
47.3% |
46.7% |
60.2% |
46.7% |
59.9% |
|
Operating expenses |
$8,348 |
$8,265 |
$10,792 |
$25,358 |
$27,755 |
|
Operating loss |
$(5,151) |
$(5,153) |
$(4,743) |
$(15,999) |
$(6,895) |
|
Net loss |
$(5,216) |
$(5,231) |
$(4,620) |
$(16,523) |
$(6,513) |
|
Net loss per share, diluted |
$(0.22) |
$(0.22) |
$(0.20) |
$(0.70) |
$(0.28) |
Lee-Lean Shu, Chairman and Chief Executive Officer, commented,
“Business disruptions related to the COVID pandemic continued to
significantly impact our financial results during the third quarter
of fiscal year 2021. While we continue to deal with the sales
challenges caused by COVID pandemic, GSI’s launch of the Gemini APU
product is progressing forward in the first quarter of calendar
year 2021. Both of our cloud-based APU testing servers are up and
running in our Israel offices and at our headquarters in Sunnyvale,
California. These servers allow customers to remotely load their
databases onto the APU and test the device’s performance with their
proprietary data and applications. Next month we will release the
compiler stack for Python, a critical step for growing the APU
ecosystem, and anticipate following with C++ later this year. GSI
has built an exceptional software team, as evidenced by their work
in developing the algorithms that delivered a first-place win in
the Israeli government’s MAFAT Radar Challenge, which focused on
the classification of living, non-rigid objects detected by
doppler-pulse radar systems. We plan to finalize the higher
performance Gemini-I APU and Leda board and begin qualification in
the second quarter of this calendar year. Software enhancements
continue to improve the device’s performance, and we have
successfully doubled, in some cases, tripled the device’s response
time performance. For the next-generation APU, Gemini-II, we
anticipate finishing the design in the second half of calendar 2021
and taping out the mask set by year-end. Our ultimate goal in
calendar 2021 is to win designs from new customers for Gemini-I in
our top four search categories: military and defense, big data and
ecommerce, drug discovery, and facial recognition.”
"In addition to continued reduced demand for our SRAM products,
we continue to experience a longer sales cycle, especially for new
products, which typically require more time than selling
established products. Ideally, we conduct sales meetings in person
and spend the time educating customers on how our new product will
change their current practices. Given the restrictions in the COVID
environment, our new product sales process continues to take
longer. For our Radiation Hardened SRAM products, where we target
national assets and top-secret applications, sales communications
continue to be slow due to a lack of access to secured
communications facilities. While we anticipate orders for our
Radiation Tolerant SRAM products in imaging satellites and space
applications when funding is released, COVID restrictions cloud the
sales timeline for those products as well. We continue to make
progress with Gemini-I customers on several fronts as prospects
test our product offering, and we see more target market
opportunities. Commenting on the outlook for GSI’s fourth quarter
of fiscal 2021, Mr. Shu stated, “Current expectations for the
upcoming fourth quarter are net revenues in a range of $6.8 million
to $7.8 million, with gross margin of approximately 48% to
50%.”
Third Quarter Fiscal Year 2021 Summary
Financials
The Company reported a net loss of $(5.2 million), or $(0.22)
per diluted share, on net revenues of $6.8 million for the
third quarter of fiscal 2021, compared to a net loss of $(4.6
million), or $(0.20) per diluted share, on net revenues of
$10.0 million for the third quarter of fiscal 2020 and a net
loss of $(5.2 million), or $(0.22) per diluted share, on net
revenues of $6.7 million for the second quarter of fiscal
2021. Gross margin was 47.3% compared to 60.2% in the prior year
period and 46.7% in the preceding second quarter. The change in
gross margin was primarily due to changes in product mix sold in
the three periods.
In the third quarter of fiscal 2021, sales to Nokia were $2.8
million, or 42% of net revenues compared to $2.6 million, or 26.3%
of net revenues, in the same period a year ago and $3.4 million, or
51.7% of net revenues in the prior quarter. Military/defense sales
were 26.0% of third quarter shipments compared to 18.9% of
shipments in the comparable period a year ago and 26.9% of
shipments in the prior quarter. SigmaQuad sales were 62.0% of third
quarter shipments compared to 62.0% in the third quarter of fiscal
2020 and 65.4% in the prior quarter.
Total operating expenses in the third quarter of fiscal 2021
were $8.3 million, compared to $10.8 million in the third quarter
of fiscal 2020 and $8.3 million in the prior quarter. Research and
development expenses were $5.7 million, compared to $8.2 million in
the prior year period and $5.7 million in the prior quarter.
The increase in R&D expenses for the third quarter of fiscal
2020 reflected a charge of $2.7 million for purchased intellectual
property that is being incorporated into the next generation of our
Gemini™ chips. Selling, general and administrative expenses were
$2.6 million in the quarter ended December 31, 2020 compared to
$2.6 million in the prior year quarter, and $2.6 million in the
previous quarter.
Third quarter fiscal 2021 operating loss was $(5.2 million)
compared to $(4.7 million) in the prior year period and an
operating loss of $(5.2 million) in the prior quarter. Third
quarter fiscal 2021 net loss included interest and other income of
$25,000 and a tax provision of $90,000, compared to $207,000 in
interest and other income and a tax provision of $84,000 for the
same period a year ago. In the preceding second quarter, net loss
included interest and other expense, net of $(16,000) and a tax
provision of $62,000.
Total third quarter pre-tax stock-based compensation expense was
$693,000 compared to $629,000 in the comparable quarter a year ago
and $653,000 in the prior quarter.
At December 31, 2020, the Company had $52.3 million in cash,
cash equivalents and short-term investments and $10.1 million in
long-term investments, compared to $66.6 million in cash, cash
equivalents and short-term investments and $4.1 million in
long-term investments at March 31, 2020. Working capital was $54.4
million as of December 31, 2020 versus $70.9 million at March 31,
2020, with no debt. Stockholders’ equity as of December 31, 2020
was $78.5 million compared to $89.6 million as of the fiscal year
ended March 31, 2020.
Conference Call
GSI Technology will review its financial results for the quarter
ended December 31, 2020 and discuss its current business outlook
during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern)
today, January 28, 2021. To listen to the teleconference, please
call toll-free 1-866-248-8441 approximately 10 minutes prior to the
above start time and provide Conference ID 8632511. You may also
listen to the teleconference live via the Internet at
www.gsitechnology.com, where it will be archived.
About GSI Technology
Founded in 1995, GSI Technology, Inc. is a leading provider of
semiconductor memory solutions. The Company recently launched
radiation-hardened memory products for extreme environments and the
Gemini® APU, a memory-centric associative processing unit designed
to deliver performance advantages for diverse AI applications. The
Gemini APU's architecture features parallel data processing with
two million-bit processors per chip. The massive in-memory
processing reduces computation time from minutes to milliseconds,
even nanoseconds. Gemini excels at large (billion item) database
search applications, like facial recognition, drug discovery,
Elasticsearch, and object detection. Gemini’s scalable format,
small footprint and low power consumption, make it an ideal
solution for edge applications where rapid, accurate responses are
critical. 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 and fiscal
year-end closing process. Examples of risks that could affect our
current expectations regarding future 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; global public health crises
that reduce economic activity (including the ongoing COVID-19
global pandemic and the governmental and regulatory actions
relating thereto); 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; 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. Many of these risks are currently
amplified by and will continue to be amplified by, or in the future
may be amplified by, the COVID-19 global pandemic. 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.
Investor RelationsHayden IRKim RogersManaging
Director385-831-7337Kim@HaydenIR.com
Media Relations Finn Partners for GSI
TechnologyJulie Ortega510-697-5599 gsi@finnpartners.com
CompanyGSI Technology, Inc.Douglas M.
SchirleChief Financial Officer408-331-9802
| GSI
TECHNOLOGY, INC. |
| CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
| (in
thousands, except per share data) |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
| |
|
|
|
Dec.
31, |
Sept.
30, |
Dec.
31, |
|
Dec.
31, |
Dec.
31, |
| |
|
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
6,763 |
|
$ |
6,659 |
|
$ |
10,049 |
|
|
$ |
20,043 |
|
$ |
34,808 |
|
|
Cost of goods sold |
|
3,566 |
|
|
3,547 |
|
|
4,000 |
|
|
|
10,684 |
|
|
13,948 |
|
| |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
3,197 |
|
|
3,112 |
|
|
6,049 |
|
|
|
9,359 |
|
|
20,860 |
|
| |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Research & development |
|
5,736 |
|
|
5,659 |
|
|
8,208 |
|
|
|
17,220 |
|
|
19,636 |
|
| |
Selling, general and administrative |
|
2,612 |
|
|
2,606 |
|
|
2,584 |
|
|
|
8,138 |
|
|
8,119 |
|
| |
|
|
Total
operating expenses |
|
8,348 |
|
|
8,265 |
|
|
10,792 |
|
|
|
25,358 |
|
|
27,755 |
|
| |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(5,151 |
) |
|
(5,153 |
) |
|
(4,743 |
) |
|
|
(15,999 |
) |
|
(6,895 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
25 |
|
|
(16 |
) |
|
207 |
|
|
|
115 |
|
|
564 |
|
| |
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(5,126 |
) |
|
(5,169 |
) |
|
(4,536 |
) |
|
|
(15,884 |
) |
|
(6,331 |
) |
|
Provision for income taxes |
|
90 |
|
|
62 |
|
|
84 |
|
|
|
639 |
|
|
182 |
|
|
Net loss |
$ |
(5,216 |
) |
$ |
(5,231 |
) |
$ |
(4,620 |
) |
|
$ |
(16,523 |
) |
$ |
(6,513 |
) |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic |
$ |
(0.22 |
) |
$ |
(0.22 |
) |
$ |
(0.20 |
) |
|
$ |
(0.70 |
) |
$ |
(0.28 |
) |
|
Net loss per share, diluted |
$ |
(0.22 |
) |
$ |
(0.22 |
) |
$ |
(0.20 |
) |
|
$ |
(0.70 |
) |
$ |
(0.28 |
) |
| |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
|
computing per share amounts: |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Basic |
|
23,716 |
|
|
23,617 |
|
|
23,096 |
|
|
|
23,592 |
|
|
22,894 |
|
|
Diluted |
|
23,716 |
|
|
23,617 |
|
|
23,096 |
|
|
|
23,592 |
|
|
22,894 |
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Stock-based
compensation included in the Condensed Consolidated Statements of
Operations: |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
Three Months
Ended |
|
Nine Months
Ended |
| |
|
|
|
Dec.
31, |
Sept.
30, |
Dec.
31, |
|
Dec.
31, |
Dec.
31, |
| |
|
|
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
| |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
$ |
88 |
|
$ |
84 |
|
$ |
77 |
|
|
$ |
260 |
|
$ |
184 |
|
|
Research & development |
|
343 |
|
|
353 |
|
|
347 |
|
|
|
1,109 |
|
|
1,143 |
|
|
Selling, general and administrative |
|
262 |
|
|
216 |
|
|
205 |
|
|
|
732 |
|
|
595 |
|
| |
|
|
|
$ |
693 |
|
$ |
653 |
|
$ |
629 |
|
|
$ |
2,101 |
|
$ |
1,922 |
|
| |
|
|
|
|
|
|
|
|
|
| |
| GSI
TECHNOLOGY, INC. |
| CONDENSED
CONSOLIDATED BALANCE SHEETS |
| (in
thousands) |
|
(Unaudited) |
| |
|
|
|
| |
Dec. 31, 2020 |
March 31, 2020 |
|
Cash and cash equivalents |
$43,064 |
|
$51,506 |
|
Short-term investments |
|
9,196 |
|
|
15,061 |
| Accounts
receivable |
|
4,012 |
|
|
6,330 |
|
Inventory |
|
4,523 |
|
|
4,282 |
| Other
current assets |
|
1,979 |
|
|
1,934 |
| Net property
and equipment |
|
7,444 |
|
|
8,119 |
| Long-term
investments |
|
10,126 |
|
|
4,117 |
| Other
assets |
|
11,248 |
|
|
11,212 |
| Total
assets |
$91,592 |
|
$102,561 |
| |
|
|
|
| Current
liabilities |
$8,404 |
|
$8,260 |
| Long-term
liabilities |
|
4,709 |
|
|
4,660 |
|
Stockholders' equity |
|
78,479 |
|
|
89,641 |
| Total
liabilities and stockholders' equity |
$91,592 |
|
$102,561 |
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