GSI Technology, Inc. (NASDAQ:GSIT) today reported
preliminary financial results for its fourth fiscal quarter and
fiscal year ended March 31, 2019.
|
Three Months
Ended |
|
Twelve
Months Ended |
Mar. 31,
2019 |
Dec. 31,
2018 |
Mar. 31,
2018 |
|
Mar. 31,
2019 |
Mar. 31,
2018 |
Net revenues |
$ |
12,686 |
|
$ |
14,702 |
|
$ |
11,191 |
|
|
$ |
51,486 |
|
$ |
42,643 |
|
Gross margin (%) |
|
61.3 |
% |
|
68.3 |
% |
|
56.2 |
% |
|
|
61.4 |
% |
|
52.6 |
% |
Operating expenses |
$ |
8,135 |
|
$ |
7,803 |
|
$ |
6,400 |
|
|
$ |
31,810 |
|
$ |
26,897 |
|
Operating income (loss) |
$ |
(365 |
) |
$ |
2,236 |
|
$ |
(111 |
) |
|
$ |
(182 |
) |
$ |
(4,471 |
) |
Net income (loss) |
$ |
(102 |
) |
$ |
2,262 |
|
$ |
265 |
|
|
$ |
163 |
|
$ |
(4,515 |
) |
Net income (loss) per share, diluted |
$ |
0.00 |
|
$ |
0.10 |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
(0.21 |
) |
Lee-Lean Shu, Chairman and Chief Executive Officer, stated “GSI
had a strong year. We grew revenues 21% and expanded gross margins
by 880 basis points, offsetting the increase in research and
development expenses as we worked on bringing our new products to
market and evolving our business. As a result, we narrowed our
operating loss significantly, and finished the year with positive
net income and cash flow from operations of $3.0 million. Our
capital allocation strategy is to fund the commercialization of the
APU, our in-place associative computing technology for artificial
intelligence applications. Our APU utilizes a unique patented
architecture that greatly improves computation, search and response
time, while reducing power consumption as compared to current AI
processors. The APU is designed to be optimal for similarity search
applications in ecommerce, facial recognition and drug discovery or
cheminformatics. I’m very excited about the results from our first
silicon APU devices. Earlier this year, in a similarity search demo
of an APU board for an alpha customer, we demonstrated measurably
improved outcomes. The computation rates in the demo were
accelerated from minutes to seconds in this customer’s application.
We anticipate that with the final silicon we can further accelerate
the computation rate to milliseconds. Our next APU milestone will
be receiving our second silicon devices for testing and building
demo boards, which we expect to happen later this summer. At that
time, we will determine if we have a device that we can offer for
general demos later this calendar year.”
Commenting on the outlook for GSI’s first quarter of fiscal
2020, Mr. Shu stated, “Our current expectations for the upcoming
quarter are net revenues in a range of $12.3 million to $13.3
million, with gross margin of approximately 62% to 64%.
Additionally, we have successfully passed the radiation testing of
our SigmaQuad radiation-hardened products and are now starting the
qualification process. We expect to have product available for
shipment by the end of calendar 2019.”
For the fiscal year ended March 31, 2019, the Company reported
net income of $163,000 or $0.01 per diluted share, on net revenues
of $51.5 million, compared to a net loss of $(4.5) million, or
$(0.21) per diluted share, on net revenues of $42.6 million in the
fiscal year ended March 31, 2018. Gross margin was 61.4% compared
to 52.6% in the prior year.
Total operating expenses were $31.8 million in fiscal 2019, an
increase of 18.3% from $26.9 million in fiscal 2018. Research and
development expenses were $21.4 million, compared to $17.0 million
in the prior fiscal year, and selling, general and administrative
expenses were $10.5 million, compared to $9.9 million in fiscal
2018. The increase in research and development expenses was
primarily due to the development of the Company’s APU, its AI
processor, including an expense of approximately $1.0 million
related to a non-production mask set for the initial APU processor
incurred in the second fiscal quarter ended September 30, 2018.
Fiscal 2019 operating loss narrowed to $(182,000) compared to an
operating loss of $(4.5) million in the prior year. The improvement
in the operating loss is primarily due to the increase in revenue
and gross profit, offset by higher research and development
expenses. Fiscal 2019 net income included interest and other income
of $450,000 and a tax provision of $105,000, compared to $409,000
in interest and other income and a tax provision of $453,000 a year
ago.
For the fourth quarter of fiscal 2019, the Company reported a
net loss of $(102,000), or $(0.00) per diluted share, on net
revenues of $12.7 million, compared to net income of $265,000,
or $0.01 per diluted share, on net revenues of $11.2 million
in the fourth quarter of fiscal 2018, and net income of $2.3
million, or $0.10 per diluted share, on net revenues of
$14.7 million in the third quarter of fiscal 2019, ended
December 31, 2018. Gross margin was 61.2% compared to 56.2%
in the prior year period and 68.3% in the preceding third
quarter.
Sales to Nokia were $5.2 million, or 41.1% of net revenues,
during the fourth quarter of fiscal 2019, compared to $4.1 million,
or 36.7% of net revenues, in the same period a year ago and $6.6
million, or 45.2% of net revenues, in the prior quarter.
Military/defense sales were 22.1% of fourth quarter fiscal 2019
shipments compared to 29.5% in the comparable period a year ago and
16.7% in the prior quarter. SigmaQuad sales were 57.4% of
fourth quarter fiscal 2019 shipments compared to 45.0% in the
fourth quarter of fiscal 2018 and 69.7% in the preceding third
quarter.
Total operating expenses in the fourth quarter of fiscal 2019
were $8.1 million, compared to $6.4 million in the fourth quarter
of fiscal 2018 and $7.8 million in the preceding third
quarter. Research and development expenses were $5.6 million
in the fourth quarter of fiscal 2019, compared to $4.3 million in
the prior year period and $5.2 million in the preceding third
quarter. Selling, general and administrative expenses were $2.6
million compared to $2.1 million in the quarter ended March 31,
2018, and flat sequentially from $2.6 million in the preceding
quarter.
Fourth quarter fiscal 2019 operating loss was $(365,000)
compared to an operating loss of $(111,000) a year ago and
operating income of $2.2 million in the prior quarter. The
fourth quarter fiscal 2019 net loss included interest and other
income of $186,000 and a tax benefit of $77,000, compared to
$109,000 in interest and other income and a tax benefit of $267,000
a year ago. In the preceding quarter, net income included interest
and other income of $96,000 and a tax provision of $70,000.
Total fourth quarter fiscal 2019 pre-tax stock-based
compensation expense was $580,000, compared to $549,000 in the
comparable quarter a year ago and $592,000 in the prior
quarter.
At March 31, 2019, the Company had $61.8 million in cash, cash
equivalents and short-term investments and $9.0 million in
long-term investments, compared to $58.4 million in cash, cash
equivalents and short-term investments and $7.9 million in
long-term investments at March 31, 2018.
Conference Call
GSI Technology will review its financial results for the quarter
ended March 31, 2019 and discuss its current business outlook
during a conference call at 1:30 p.m. Pacific (4:30
p.m. Eastern) today, May 2, 2019. To listen to the
teleconference, please call toll-free 1-800-263-0877 approximately
10 minutes prior to the above start time and provide Conference ID
5793803. 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. 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 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;
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. GSI Technology, Inc. Douglas M. Schirle Chief Financial
Officer 408-331-9802 |
Hayden IR Kim RogersManaging Director
385-831-7337Kim@HaydenIR.com
GSI TECHNOLOGY, INC. |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(in thousands, except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
March 31, |
Dec. 31, |
March 31, |
|
March 31, |
March 31, |
|
|
|
2019 |
|
|
2018 |
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net
revenues |
|
$ |
12,686 |
|
$ |
14,702 |
$ |
11,191 |
|
|
$ |
51,486 |
|
$ |
42,643 |
|
|
Cost of
goods sold |
|
4,916 |
|
|
4,663 |
|
4,902 |
|
|
|
19,858 |
|
|
20,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
|
7,770 |
|
|
10,039 |
|
6,289 |
|
|
|
31,628 |
|
|
22,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research
& development |
|
5,582 |
|
|
5,171 |
|
4,272 |
|
|
|
21,355 |
|
|
16,998 |
|
|
|
Selling,
general and administrative |
|
2,553 |
|
|
2,632 |
|
2,128 |
|
|
|
10,455 |
|
|
9,899 |
|
|
|
|
|
Total operating
expenses |
|
8,135 |
|
|
7,803 |
|
6,400 |
|
|
|
31,810 |
|
|
26,897 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(365 |
) |
|
2,236 |
|
(111 |
) |
|
|
(182 |
) |
|
(4,471 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest
and other income (expense), net |
|
186 |
|
|
96 |
|
109 |
|
|
|
450 |
|
|
409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before
income taxes |
|
(179 |
) |
|
2,332 |
|
(2 |
) |
|
|
268 |
|
|
(4,062 |
) |
|
Provision
(benefit) for income taxes |
|
(77 |
) |
|
70 |
|
(267 |
) |
|
|
105 |
|
|
453 |
|
|
Net income
(loss) |
$ |
(102 |
) |
$ |
2,262 |
$ |
265 |
|
|
$ |
163 |
|
$ |
(4,515 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per share, basic |
$ |
- |
|
$ |
0.10 |
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
(0.21 |
) |
|
Net income
(loss) per share, diluted |
$ |
- |
|
$ |
0.10 |
$ |
0.01 |
|
|
$ |
0.01 |
|
$ |
(0.21 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
|
computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
22,169 |
|
|
21,979 |
|
21,334 |
|
|
|
21,889 |
|
|
21,085 |
|
|
Diluted |
|
|
22,169 |
|
|
22,769 |
|
23,476 |
|
|
|
23,349 |
|
|
21,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation included in the Condensed Consolidated
Statements of Operations: |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
March 31, |
Dec. 31, |
March 31, |
|
March 31, |
March 31, |
|
|
|
2019 |
|
|
2018 |
|
2018 |
|
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Cost of
goods sold |
$ |
49 |
|
$ |
71 |
$ |
73 |
|
|
$ |
234 |
|
$ |
259 |
|
|
Research
& development |
|
335 |
|
|
330 |
|
298 |
|
|
|
1,310 |
|
|
1,141 |
|
|
Selling,
general and administrative |
|
196 |
|
|
191 |
|
178 |
|
|
|
722 |
|
|
670 |
|
|
|
|
|
|
$ |
580 |
|
$ |
592 |
$ |
549 |
|
|
$ |
2,266 |
|
$ |
2,070 |
|
|
|
|
|
|
|
|
|
|
GSI TECHNOLOGY, INC. |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2019 |
|
March 31, 2018 |
|
|
Cash and
cash equivalents |
|
|
$ |
42,495 |
|
$ |
40,241 |
|
|
Short-term
investments |
|
|
|
19,346 |
|
|
18,124 |
|
|
Accounts
receivable |
|
|
|
|
7,339 |
|
|
5,279 |
|
|
Inventory |
|
|
|
|
|
5,685 |
|
|
5,547 |
|
|
Other
current assets |
|
|
|
|
2,500 |
|
|
2,080 |
|
|
Net
property and equipment |
|
|
|
9,001 |
|
|
8,172 |
|
|
Long-term
investments |
|
|
|
8,997 |
|
|
7,923 |
|
|
Other
assets |
|
|
|
|
10,860 |
|
|
12,174 |
|
|
Total
assets |
|
|
|
$ |
106,223 |
|
$ |
99,540 |
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
$ |
8,733 |
|
$ |
7,404 |
|
|
Long-term
liabilities |
|
|
|
|
4,335 |
|
|
5,321 |
|
|
Stockholders' equity |
|
|
|
|
93,155 |
|
|
86,815 |
|
|
Total
liabilities and stockholders' equity |
|
$ |
106,223 |
|
$ |
99,540 |
|
|
|
|
|
|
|
|
|
|
|
|
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