GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its third fiscal quarter ended December 31,
2021.
Summary Financial Results Table (in thousands, except
per share amounts)
|
Three Months Ended |
Nine Months Ended |
|
Dec. 31, 2021 |
Sept. 30, 2021 |
Dec. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Net revenues |
$ |
8,065 |
|
$ |
7,797 |
|
$ |
6,763 |
|
$ |
24,653 |
|
$ |
20,043 |
|
Gross margin (%) |
|
55.3 |
% |
|
53.6 |
% |
|
47.3 |
% |
|
54.4 |
% |
|
46.7 |
% |
Operating expenses |
$ |
8,994 |
|
$ |
8,694 |
|
$ |
8,348 |
|
$ |
26,831 |
|
$ |
25,358 |
|
Operating loss |
$ |
(4,532 |
) |
$ |
(4,517 |
) |
$ |
(5,151 |
) |
$ |
(13,410 |
) |
$ |
(15,999 |
) |
Net loss |
$ |
(4,581 |
) |
$ |
(4,567 |
) |
$ |
(5,216 |
) |
$ |
(13,357 |
) |
$ |
(16,523 |
) |
Net loss per share,
diluted |
$ |
(0.19 |
) |
$ |
(0.19 |
) |
$ |
(0.22 |
) |
$ |
(0.55 |
) |
$ |
(0.70 |
) |
Lee-Lean Shu, Chairman and Chief Executive Officer, commented,
“Our third quarter revenue grew 19% year-over-year due to increased
orders from our SRAM customer base, including network and telecom,
military and defense, as well as automotive, medical and test and
measurement sectors. The increase in orders from other customers
offset the lower orders from Nokia in the quarter. Gross margin
improved by 800 basis points year-over-year, reflecting our ability
to manage our near-term supply chain challenges and increased
costs. In the third quarter, we continued to advance the
documentation for our compiler stack and expand our software
libraries and algorithms for various APU applications.
"At the end of calendar 2021, we announced that GSI was among
the leaders in the Billion-Scale Approximate Nearest Neighbor
Search (ANNS) Challenge held by NeurIPS for their 2021 conference,”
continued Shu. “We were gratified to see that our APU technology
and software performed on-par with the industry leaders, who have a
broader set of resources from which to draw upon than we do. These
contests are important tools for raising GSI’s profile,
highlighting our capabilities, and increasing awareness of the APU
technology. Our first-place win in the MAFAT challenge last year
resulted in our introduction to IAI/Elta, who engaged with GSI to
develop a SAR image processing acceleration system using the APU
and our software.”
Mr. Shu continued, “The GSI team continues to build the sales
pipeline and our Proof of Concept (POC) activity for the APU is
increasing. In addition to the IAI/Elta SAR imaging project, we are
in discussions with several organizations to engage in POCs for a
variety of search application use-cases. Examples of on-going or
expected engagements include indexing medical images and text,
encrypted communications, and natural language processing (NLP). A
prime contractor is interested in testing a board for military and
defense applications, and we have a government agency considering
the APU for object detection and facial recognition. We anticipate
that some of these POCs would move to design-wins and then
eventually to production.”
As part of GSI developing its strategy for the artificial
intelligence (AI) and high-performance computing (HPC) markets, we
will be releasing an APU Compiler Stack in February 2022. With this
release, GSI will deliver an environment for software and AI
developers to write full HPC applications using the C language with
function calls to GSI’s rich vector math library (GVML),
for our Leda-E and Leda-S PCIe cards. The release will include
example applications and training materials. Customers wanting to
differentiate further with their own algorithms can edit our
collection of hundreds of vector library functions, or develop
their own vector library functions in Python using our low
level Belex stack product.
To help build our APU sales pipeline, GSI will introduce a
series of training seminars to support the customization of our
APIs for specific applications. The APU technology is available in
a variety of formats, including a full-size PCIe board for
enterprise and edge server applications to provide tens of millions
of vector search capacity per card that is scalable for linear
capacity increases. The technology is also available in a E1.L form
factor in a stand-alone product, and a very high-density 1U server
configuration containing 16 cards and an unprecedented enterprise
capacity for mobile, edge, and space-sensitive and power critical
applications. The hardware capability can also function as a
cloud-based Accelerator-as-a-Service, including OpenSearch function
enhancement.
“Achieving the APU Compiler Stack milestone should accelerate
customer adoption of our ground-breaking technology that can both
offer enterprise AI capacity and bring that capability to
stand-alone servers at the edge,” stated Mr. Shu. “The GSI team has
been busy creating low-level coded APIs for search workloads such
as image indexing, object recognition, natural language processing,
and HPC workloads such as real-time SAR, ATR, and signal
classification. We can support service acceleration such as NoSQL,
OpenSearch ANN, and multi-modal searches. The APU environment is a
powerful tool for researchers and developers that promises to
significantly expand the market application of our non-Von-Neumann
processor.”
Commenting on the outlook for GSI’s fourth quarter of fiscal
2022, Mr. Shu stated, “The impact of the supply chain constraints
is having an impact on our ability to fulfill all of our orders.
While there has been some improvement, the situation remains fluid,
and we do not expect significant relief from these constraints
before the end of calendar year 2022. Given these constraints,
current expectations for the upcoming fiscal fourth quarter are net
revenues in a range of $7.5 million to $8.5 million, with gross
margin of approximately 54% to 56%.
Third Quarter Fiscal Year 2022 Summary
Financials
The Company reported a net loss of $(4.6 million), or $(0.19)
per diluted share, on net revenues of $8.1 million for the
third quarter of fiscal 2022, compared to 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 and a net
loss of $(4.6 million), or $(0.19) per diluted share, on net
revenues of $7.8 million for the second quarter of fiscal
2022. Gross margin was 55.3% compared to 47.3% in the prior year
period and 53.6% 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 2022, sales to Nokia were $1.9
million, or 24.0% of net revenues compared to $2.8 million, or
42.0% of net revenues, in the same period a year ago and $1.9
million, or 23.8% of net revenues in the prior quarter.
Military/defense sales were 27.1% of third quarter shipments
compared to 26.0% of shipments in the comparable period a year ago
and 27.4% of shipments in the prior quarter. SigmaQuad sales were
40.5% of third quarter shipments compared to 62.0% in the third
quarter of fiscal 2021 and 52.4% in the prior quarter.
Total operating expenses in the third quarter of fiscal 2022
were $9.0 million, compared to $8.3 million in the third quarter of
fiscal 2021 and $8.7 million in the prior quarter. Research and
development expenses were $6.2 million, compared to $5.7 million in
the prior year period and $5.9 million in the prior quarter.
Selling, general and administrative expenses were $2.8 million in
the quarter ended December 31, 2021 compared to $2.6 million in the
prior year quarter and $2.8 million in the previous quarter.
Third quarter fiscal 2022 operating loss was $(4.5 million)
compared to $(5.2 million) in the prior year period and an
operating loss of $(4.5 million) in the prior quarter. Third
quarter fiscal 2022 net loss included net interest and other income
of $15,000 and a tax provision of $64,000, compared to $25,000 in
net interest and other income and a tax provision of $90,000 for
the same period a year ago. In the preceding second quarter, net
loss included net interest and other expense of $(8,000) and a tax
provision of $42,000.
Total third quarter pre-tax stock-based compensation expense was
$740,000 compared to $693,000 in the comparable quarter a year ago
and $716,000 in the prior quarter.
At December 31, 2021, the Company had $48.1 million in cash,
cash equivalents, and short-term investments and $3.4 million in
long-term investments, compared to $54.0 million in cash, cash
equivalents, and short-term investments and $5.8 million in
long-term investments at March 31, 2021. Working capital was $49.9
million as of December 31, 2021 versus $56.0 million at March 31,
2021, with no debt. Stockholders’ equity as of December 31, 2021
was $66.8 million compared to $75.6 million as of the fiscal year
ended March 31, 2021.
Conference Call
GSI Technology will review its financial results for the quarter
ended December 31, 2021 and discuss its current business outlook
during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern)
today, January 27, 2022. To listen to the teleconference, please
call toll-free 1-877-407-3982 approximately 10 minutes prior to the
above start time and provide Conference ID 13726310. 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 in
space and the Gemini ® Associative Processing Unit (APU), a
memory-centric design that delivers significant performance
advantages for diverse AI applications. The Gemini APU architecture
removes the I/O bottleneck between the processors and memory arrays
by performing massive parallel search directly in the memory array
where data is stored. The novel architecture delivers
performance-over-power ratio improvements compared to CPU, GPU, and
DRAM for applications like image detection, speech recognition,
e-commerce recommendation systems, and more. Gemini is an ideal
solution for edge applications with a scalable format, small
footprint, and low power consumption 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
TechnologyRicca Silverio(415) 348-2724gsi@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, |
|
|
|
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
8,065 |
|
$ |
7,797 |
|
$ |
6,763 |
|
|
$ |
24,653 |
|
$ |
20,043 |
|
|
Cost of goods sold |
|
3,603 |
|
|
3,620 |
|
|
3,566 |
|
|
|
11,232 |
|
|
10,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
4,462 |
|
|
4,177 |
|
|
3,197 |
|
|
|
13,421 |
|
|
9,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development |
|
6,152 |
|
|
5,907 |
|
|
5,736 |
|
|
|
18,162 |
|
|
17,220 |
|
|
|
Selling, general and administrative |
|
2,842 |
|
|
2,787 |
|
|
2,612 |
|
|
|
8,669 |
|
|
8,138 |
|
|
|
|
|
Total
operating expenses |
|
8,994 |
|
|
8,694 |
|
|
8,348 |
|
|
|
26,831 |
|
|
25,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(4,532 |
) |
|
(4,517 |
) |
|
(5,151 |
) |
|
|
(13,410 |
) |
|
(15,999 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
15 |
|
|
(8 |
) |
|
25 |
|
|
|
(13 |
) |
|
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(4,517 |
) |
|
(4,525 |
) |
|
(5,126 |
) |
|
|
(13,423 |
) |
|
(15,884 |
) |
|
Provision (benefit) for income taxes |
|
64 |
|
|
42 |
|
|
90 |
|
|
|
(66 |
) |
|
639 |
|
|
Net loss |
|
|
$ |
(4,581 |
) |
$ |
(4,567 |
) |
$ |
(5,216 |
) |
|
$ |
(13,357 |
) |
$ |
(16,523 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic |
$ |
(0.19 |
) |
$ |
(0.19 |
) |
$ |
(0.22 |
) |
|
$ |
(0.55 |
) |
$ |
(0.70 |
) |
|
Net loss per share, diluted |
$ |
(0.19 |
) |
$ |
(0.19 |
) |
$ |
(0.22 |
) |
|
$ |
(0.55 |
) |
$ |
(0.70 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
|
computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
24,406 |
|
|
24,229 |
|
|
23,716 |
|
|
|
24,244 |
|
|
23,592 |
|
|
Diluted |
|
|
|
24,406 |
|
|
24,229 |
|
|
23,716 |
|
|
|
24,244 |
|
|
23,592 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
|
|
|
2021 |
|
|
2021 |
|
|
2020 |
|
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
$ |
58 |
|
$ |
64 |
|
$ |
88 |
|
|
$ |
192 |
|
$ |
260 |
|
|
Research & development |
|
416 |
|
|
418 |
|
|
343 |
|
|
|
1,304 |
|
|
1,109 |
|
|
Selling, general and administrative |
|
266 |
|
|
234 |
|
|
262 |
|
|
|
783 |
|
|
732 |
|
|
|
|
|
|
$ |
740 |
|
$ |
716 |
|
$ |
693 |
|
|
$ |
2,279 |
|
$ |
2,101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI
TECHNOLOGY, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31, 2021 |
|
March 31, 2021 |
|
|
Cash and cash equivalents |
|
|
$36,325 |
|
$44,234 |
|
|
Short-term investments |
|
|
|
11,773 |
|
|
9,717 |
|
|
Accounts receivable |
|
|
|
3,048 |
|
|
3,665 |
|
|
Inventory |
|
|
|
|
4,736 |
|
|
4,343 |
|
|
Other current assets |
|
|
|
2,351 |
|
|
1,487 |
|
|
Net property and equipment |
|
|
|
7,312 |
|
|
7,328 |
|
|
Long-term investments |
|
|
|
3,396 |
|
|
5,792 |
|
|
Other assets |
|
|
|
|
10,760 |
|
|
11,046 |
|
|
Total assets |
|
|
|
$79,701 |
|
$87,612 |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
$8,336 |
|
$7,462 |
|
|
Long-term liabilities |
|
|
|
4,558 |
|
|
4,558 |
|
|
Stockholders' equity |
|
|
|
66,807 |
|
|
75,592 |
|
|
Total liabilities and stockholders' equity |
|
$79,701 |
|
$87,612 |
|
|
|
|
|
|
|
|
|
|
|
|
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