GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its third fiscal quarter ended December 31,
2022.
Summary Financial Results Table (in thousands, except
per share amounts)
|
Three Months Ended |
Nine Months Ended |
|
Dec. 31, 2022 |
Sept. 30, 2022 |
Dec. 31, 2021 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Net revenues |
$ |
6,447 |
|
$ |
8,953 |
|
$ |
8,065 |
|
$ |
24,309 |
|
$ |
24,653 |
|
Gross margin (%) |
|
57.5 |
% |
|
62.6 |
% |
|
55.3 |
% |
|
60.4 |
% |
|
54.4 |
% |
Operating expenses |
$ |
8,495 |
|
$ |
8,807 |
|
$ |
8,994 |
|
$ |
26,609 |
|
$ |
26,831 |
|
Operating loss |
$ |
(4,789 |
) |
$ |
(3,205 |
) |
$ |
(4,532 |
) |
$ |
(11,936 |
) |
$ |
(13,410 |
) |
Net loss |
$ |
(4,812 |
) |
$ |
(3,228 |
) |
$ |
(4,581 |
) |
$ |
(12,016 |
) |
$ |
(13,357 |
) |
Net loss per share,
diluted |
$ |
(0.20 |
) |
$ |
(0.13 |
) |
$ |
(0.19 |
) |
$ |
(0.49 |
) |
$ |
(0.55 |
) |
Lee-Lean Shu, Chairman and Chief Executive Officer, commented,
“Third quarter revenue of $6.4 million was within guidance, but at
the lower end. Revenue growth was impacted this quarter by the
uncertain outlook for the global economy. Despite this, we continue
to see demand for our SRAM products and interest in our Radiation
Hardened and Radiation Tolerant products. While customer order
patterns are variable right now, these fluctuations are related to
economic and external factors, not changes in the market
requirements for our products. Despite the lower revenue in the
quarter compared to the prior quarter, increased sales of
higher-margin products resulted in gross margin of 57.5%, exceeding
the high end of our guidance range. While research and development
costs declined sequentially, we saw an increase in selling, general
and administrative expenses primarily related to differences in the
level of quarterly adjustments to contingent consideration and
severance expenses related to recent layoffs."
Mr. Shu continued, “We want to assure our investors that we
remain fully committed to delivering a high-quality APU solution to
the market. To ensure success and align our resources with the
Company's goals, we announced the implementation of several
cost-reduction initiatives at the end of November 2022. We are on
track to achieve $7 million in savings on an annualized basis
through strategic cost-reductions. These measures aim to right-size
our operations and target spending to increase our operational
efficiency, enabling us to focus our resources on advancing our
proprietary APU technology."
Commenting on the outlook for GSI’s fourth quarter of fiscal
2023, Mr. Shu stated, “current expectations for the upcoming fiscal
fourth quarter are net revenues in a range of $5.0 million to $5.6
million, with gross margin of approximately 49% to 51%.
Third Quarter Fiscal Year 2023 Summary
Financials
The Company reported a net loss of ($4.8 million), or ($0.20)
per diluted share, on net revenues of $6.4 million for the third
quarter of fiscal 2023, compared to 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 and a net loss of ($3.2 million),
or ($0.13) per diluted share, on net revenues of $9.0 million for
the second quarter of fiscal 2023. Gross margin was 57.5% compared
to 55.3% in the prior year period and 62.6% in the preceding second
quarter. The changes in gross margin were primarily due to changes
in product mix sold in the three periods.
In the third quarter of fiscal 2023, sales to Nokia were $1.3
million, or 20.0% of net revenues compared to $1.9 million, or
24.0% of net revenues, in the same period a year ago and $1.2
million, or 13.6% of net revenues in the prior quarter.
Military/defense sales were 26.2% of third quarter shipments
compared to 27.1% of shipments in the comparable period a year ago
and 22.4% of shipments in the prior quarter. SigmaQuad sales were
45.2% of third quarter shipments compared to 40.5% in the third
quarter of fiscal 2022 and 58.1% in the prior quarter.
Total operating expenses in the third quarter of fiscal 2023
were $8.5 million, compared to $9.0 million in the third quarter of
fiscal 2022 and $8.8 million in the prior quarter. Research and
development expenses were $5.5 million, compared to $6.2 million in
the prior year period and $6.4 million in the prior quarter.
Selling, general and administrative expenses were $3.0 million in
the quarter ended December 31, 2022 compared to $2.8 million in the
prior year quarter and $2.4 million in the previous
quarter.
Third quarter fiscal 2023 operating loss was ($4.8 million)
compared to ($4.6 million) in the prior year period and an
operating loss of ($3.2 million) in the prior quarter. Third
quarter fiscal 2023 net loss included net interest and other income
of $61,000 and a tax provision of $84,000, compared to $15,000 in
net interest and other income and a tax provision of $64,000 for
the same period a year ago. In the preceding second quarter, net
loss included net interest and other income of $14,000 and a tax
provision of $37,000.
Total third quarter pre-tax stock-based compensation expense was
$654,000 compared to $740,000 in the comparable quarter a year ago
and $661,000 in the prior quarter.
At December 31, 2022, the Company had $35.2 million in cash,
cash equivalents, and short-term investments and $0 in long-term
investments, compared to $44.0 million in cash, cash equivalents
and short-term investments and $3.3 million in long-term
investments at March 31, 2022. Working capital was $39.2 million as
of December 31, 2022 versus $45.8 million at March 31, 2022, with
no debt. Stockholders’ equity as of December 31, 2022 was $54.8
million compared to $64.5 million as of the fiscal year ended March
31, 2022.
Conference Call
GSI Technology will announce financial results for its third
fiscal quarter ended December 31, 2022 after the market
close on Thursday, January 26, 2023. Management will also
conduct a conference call to review the Company's third quarter
financial results and its current outlook for the fourth quarter of
fiscal 2023 at 1:30 p.m. Pacific time (4:30
p.m. Eastern Time) on that same day.
To participate in the call, please dial 1-877-407-3982 in the
U.S. or 1-201-493-6780 for international approximately 10 minutes
prior to the above start time and provide Conference ID 13735485.
The call will also be streamed live via the internet at
www.gsitechnology.com.
A replay will be available from January 26, 2023 at 7:30 p.m.
Eastern Time through February 2, 2023 at 11:59 p.m. Eastern Time by
dialing toll free for the U.S. 1-844-512-2921 or international
1-412-317-6671 and entering pin number 13735485. A webcast of the
call will be archived on the Company’s investor relations website
under the Events and Presentations tab.
About GSI Technology
Founded in 1995, GSI Technology, Inc. is a leading provider of
semiconductor memory solutions. GSI's resources are focused on
bringing new products to market that leverage existing core
strengths, including radiation-hardened memory products for extreme
environments and Gemini-I, the associative processing unit 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 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; 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 and partner
relationships for the sale of such products; GSI Technology’s
ability to successfully implement its cost- reduction initiatives;
the impact of GSI Technology’s cost-reduction initiatives on its
business and operations, including any possible disruption of GSI
Technology’s business, and the failure to realize the anticipated
benefits of its cost-reduction initiatives; and delays or
unexpected challenges related to the establishment of customer
relationships and orders for GSI Technology’s radiation-hardened
and tolerant SRAM 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.
GSI Technology, Inc.Douglas M. SchirleChief
Financial Officer408-331-9802
Hayden IRKim RogersManaging
Director385-831-7337Kim@HaydenIR.com
Media RelationsFinn Partners for GSI
TechnologyRicca Silverio(415) 348-2724gsi@finnpartners.com
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, |
|
|
|
|
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
$ |
6,447 |
|
$ |
8,953 |
|
$ |
8,065 |
|
|
$ |
24,309 |
|
$ |
24,653 |
|
|
Cost of goods sold |
|
2,741 |
|
|
3,351 |
|
|
3,603 |
|
|
|
9,636 |
|
|
11,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
3,706 |
|
|
5,602 |
|
|
4,462 |
|
|
|
14,673 |
|
|
13,421 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development |
|
5,529 |
|
|
6,395 |
|
|
6,152 |
|
|
|
18,543 |
|
|
18,162 |
|
|
|
Selling, general and administrative |
|
2,966 |
|
|
2,412 |
|
|
2,842 |
|
|
|
8,066 |
|
|
8,669 |
|
|
|
|
|
Total
operating expenses |
|
8,495 |
|
|
8,807 |
|
|
8,994 |
|
|
|
26,609 |
|
|
26,831 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(4,789 |
) |
|
(3,205 |
) |
|
(4,532 |
) |
|
|
(11,936 |
) |
|
(13,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
61 |
|
|
14 |
|
|
15 |
|
|
|
101 |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(4,728 |
) |
|
(3,191 |
) |
|
(4,517 |
) |
|
|
(11,835 |
) |
|
(13,423 |
) |
|
Provision for income taxes |
|
84 |
|
|
37 |
|
|
64 |
|
|
|
181 |
|
|
(66 |
) |
|
Net loss |
|
|
$ |
(4,812 |
) |
$ |
(3,228 |
) |
$ |
(4,581 |
) |
|
$ |
(12,016 |
) |
$ |
(13,357 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic |
$ |
(0.20 |
) |
$ |
(0.13 |
) |
$ |
(0.19 |
) |
|
$ |
(0.49 |
) |
$ |
(0.55 |
) |
|
Net loss per share, diluted |
$ |
(0.20 |
) |
$ |
(0.13 |
) |
$ |
(0.19 |
) |
|
$ |
(0.49 |
) |
$ |
(0.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
|
computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
24,621 |
|
|
24,554 |
|
|
24,406 |
|
|
|
24,566 |
|
|
24,244 |
|
|
Diluted |
|
|
|
24,621 |
|
|
24,554 |
|
|
24,406 |
|
|
|
24,566 |
|
|
24,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
|
|
|
2022 |
|
|
2022 |
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
$ |
54 |
|
$ |
49 |
|
$ |
58 |
|
|
$ |
163 |
|
$ |
192 |
|
|
Research & development |
|
328 |
|
|
390 |
|
|
416 |
|
|
|
1,069 |
|
|
1,304 |
|
|
Selling, general and administrative |
|
272 |
|
|
222 |
|
|
266 |
|
|
|
721 |
|
|
783 |
|
|
|
|
|
|
$ |
654 |
|
$ |
661 |
|
$ |
740 |
|
|
$ |
1,953 |
|
$ |
2,279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
GSI
TECHNOLOGY, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dec. 31, 2022 |
March 31, 2022 |
|
Cash and cash equivalents |
|
|
$ |
31,870 |
|
$ |
36,971 |
|
|
Short-term investments |
|
|
|
3,331 |
|
|
6,992 |
|
|
Accounts receivable |
|
|
|
3,644 |
|
|
4,518 |
|
|
Inventory |
|
|
|
|
6,199 |
|
|
4,655 |
|
|
Other current assets |
|
|
|
1,318 |
|
|
1,555 |
|
|
Net property and equipment |
|
|
|
6,995 |
|
|
7,359 |
|
|
Long-term investments |
|
|
|
0 |
|
|
3,345 |
|
|
Other assets |
|
|
|
|
10,791 |
|
|
11,027 |
|
|
Total assets |
|
|
|
$ |
64,148 |
|
$ |
76,422 |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
$ |
7,144 |
|
$ |
8,861 |
|
|
Long-term liabilities |
|
|
|
2,204 |
|
|
3,110 |
|
|
Stockholders' equity |
|
|
|
54,800 |
|
|
64,451 |
|
|
Total liabilities and stockholders' equity |
|
$ |
64,148 |
|
$ |
76,422 |
|
|
|
|
|
|
|
|
|
|
|
|
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