GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its first fiscal quarter ended June 30, 2020.
Summary Financial Results Table (in thousands, except
per share amounts)
|
|
Three Months
Ended |
|
|
|
June 30,2020 |
|
Mar. 31,2020 |
|
June 30,2019 |
|
|
Net
revenues |
$6,621 |
|
|
$8,535 |
|
|
$13,019 |
|
|
|
Gross margin (%) |
46.1 |
% |
|
52.5 |
% |
|
63.3 |
% |
|
|
Operating expenses |
$8,745 |
|
|
$8,390 |
|
|
$8,472 |
|
|
|
Operating loss |
$(5,695 |
) |
|
$(3,907 |
) |
|
$(229 |
) |
|
|
Net loss |
$(6,076 |
) |
|
$(3,824 |
) |
|
$(125 |
) |
|
|
Net loss per share, diluted |
$(0.26 |
) |
|
$(0.16 |
) |
|
$(0.01 |
) |
|
Lee-Lean Shu, Chairman and Chief Executive Officer, commented,
“The first quarter results were affected by business challenges
related to the COVID-19 restrictions globally. While these results
are disappointing, I remain very encouraged by the progress we are
making with the APU, which is key to our future growth. GSI has
developed a disruptive technology with the Gemini APU that will
allow businesses to keep pace with the need to analyze larger
datasets. Commercializing this technology remains the primary focus
of the Company. We have a roadmap for the APU, which includes
Gemini-I, the processor we are currently bringing to market, and a
second generation APU with expanded capabilities that will target
bigger markets. We also have a strong balance sheet that will allow
us to continue executing our product strategy.
“Industrywide, in-memory computing is gaining recognition as the
solution to the limitations of the Von Neuman model with its
separate compute and memory functions that constrain system
performance. Gemini-I delivers significant system performance
improvements, including lower latency and power consumption, for
search functions in massive datasets. Another unique feature is
Gemini's scalability. Installed on Leda-G, a PCIe board that plugs
into standard servers, the APU's design and software capabilities
allow linear scalability to manage 40 billion records and beyond by
combining multiple systems with multiple boards. Our AI team is
focused optimizing Gemini-I’s performance and developing software
tools to help accelerate customer implementation of our APU.
We are also improving the software offerings for Gemini to
increase speed and lower power consumption.
"We are making progress with Gemini-I customers on several
fronts, having shipped boards to early adopters, and anticipate
modest design wins and sales of Leda boards in 2020," continued Mr.
Shu.
Commenting on first quarter results and the outlook for GSI’s
second quarter of fiscal 2021, Mr. Shu stated, “The first quarter
results demonstrate the challenges we are facing during the
COVID-19 global pandemic, which has restricted the activities of
GSI’s sales force and distributors, reduced customer demand and
caused the postponement of investment in certain customer sectors.
These challenges are also impacting us as we enter new markets for
GSI and engage with target customers. Industry conferences and
on-site training workshops, which are typically used for building a
sales pipeline, are unavailable due to COVID-19 related
restrictions. We are adapting our sales strategies for the COVID-19
environment, where we cannot do face-to-face meetings and conduct
secure meetings with government and defense customers, but we are
still not operating at an optimal level. As a result, our current
expectations for the upcoming second quarter are net revenues in a
range of $6.0 million to $7.2 million, with gross margin of
approximately 41% to 43%.”
First Quarter Fiscal Year 2021 Summary
Financials
The Company reported a net loss of $(6.1 million), or $(0.26)
per diluted share, on net revenues of $6.6 million for the
first quarter of fiscal 2021, compared to a net loss of $(125,000),
or $(0.01) per diluted share, on net revenues of $13.0 million
for the first quarter of fiscal 2020 and a net loss of $(3.8)
million, or $(0.16) per diluted share, on net revenues of
$8.5 million in the fourth quarter of fiscal 2020. Gross
margin was 46.1% compared to 63.3% in the prior year period and
52.5% in the preceding fourth quarter. The changes in gross margin
were primarily due to changes in product mix sold in the three
periods.
In the first quarter of fiscal 2021, sales to Nokia were $1.8
million, or 26.9% of net revenues compared to $6.0 million, or
45.7% of net revenues, in the same period a year ago and $2.4
million, or 28.3% of net revenues in the prior quarter.
Military/defense sales were 30.1% of first quarter shipments
compared to 21.0% of shipments in the comparable period a year ago
and 30.9% of shipments in the prior quarter. SigmaQuad sales were
46.3% of first quarter shipments compared to 67.9% in the first
quarter of fiscal 2020 and 44.7% in the prior quarter.
Total operating expenses in the first quarter of fiscal 2021
were $8.7 million, compared to $8.5 million in the first quarter of
fiscal 2020 and $8.4 million in the prior quarter. Research and
development expenses were $5.8 million, compared to $5.6 million in
the prior year period and $5.6 million in the prior quarter.
Selling, general and administrative expenses were $2.9 million in
the quarter ended June 30, 2020 compared to $2.9 million in the
prior year quarter, and up from $2.8 million in the previous
quarter.
First quarter fiscal 2021 operating loss was $(5.7 million)
compared to $(229,000) in the prior year period and $(3.9 million)
in the prior quarter. First quarter fiscal 2021 net loss included
interest and other income of $106,000 and a tax provision of
$487,000, primarily resulting from the settlement of a tax audit in
Israel for fiscal years 2017 through 2019, compared to $147,000 in
interest and other income and a tax provision of $43,000 for the
same period a year ago. In the preceding fourth quarter, net loss
included interest and other income of $148,000 and a tax provision
of $65,000.
Total first quarter pre-tax stock-based compensation expense was
$755,000 compared to $651,000 in the comparable quarter a year ago
and $644,000 in the prior quarter.
At June 30, 2020, the Company had $64.6 million in cash, cash
equivalents and short-term investments and $4.9 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 $67.3
million as of June 30, 2020 versus $70.9 million at March 31, 2020,
with no debt. Stockholders’ equity as of June 30, 2020 was $86.7
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 June 30, 2020 and discuss its current business outlook during
a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern) today,
July 30, 2020. To listen to the teleconference, please call
toll-free 1-866-269-4260 in the U.S. or 1-856-344-9207 for
international approximately10 minutes before the above start time
and provide Conference ID 1772290. 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 Gemini-1™, 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; 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. 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 |
|
June
30, |
Mar.
31, |
June
30, |
|
2020 |
2020 |
2019 |
|
|
|
|
Net revenues |
$6,621 |
|
$8,535 |
|
$13,019 |
|
Cost of goods sold |
3,571 |
|
4,052 |
|
4,776 |
|
|
|
|
|
Gross profit |
3,050 |
|
4,483 |
|
8,243 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research & development |
5,825 |
|
5,587 |
|
5,595 |
|
Selling, general and administrative |
2,920 |
|
2,803 |
|
2,877 |
|
Total operating expenses |
8,745 |
|
8,390 |
|
8,472 |
|
|
|
|
|
Operating loss |
(5,695 |
) |
(3,907 |
) |
(229 |
) |
|
|
|
|
Interest and other income, net |
106 |
|
148 |
|
147 |
|
|
|
|
|
|
|
Loss before income taxes |
(5,589 |
) |
(3,759 |
) |
(82 |
) |
Provision for income taxes |
487 |
|
65 |
|
43 |
|
Net loss |
($6,076 |
) |
($3,824 |
) |
($125 |
) |
|
|
|
|
|
|
|
|
Net loss per share, basic |
($0.26 |
) |
($0.16 |
) |
($0.01 |
) |
Net loss per share, diluted |
($0.26 |
) |
($0.16 |
) |
($0.01 |
) |
|
|
|
|
Weighted-average shares used in computing per share amounts: |
|
|
|
|
|
|
|
Basic |
23,440 |
|
23,194 |
|
22,605 |
|
Diluted |
23,440 |
|
23,194 |
|
22,605 |
|
|
|
|
|
|
|
|
|
Stock-based compensation included in the Condensed Consolidated
Statements of Operations: |
|
|
|
|
|
Three Months
Ended |
|
June
30, |
Mar.
31, |
June
30, |
|
2020 |
2020 |
2019 |
|
|
|
|
Cost of goods sold |
$88 |
|
$73 |
|
$55 |
|
Research & development |
413 |
|
344 |
|
399 |
|
Selling, general and administrative |
254 |
|
227 |
|
197 |
|
|
$755 |
|
$644 |
|
$651 |
|
|
|
|
|
GSI
TECHNOLOGY, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in
thousands) |
(Unaudited) |
|
|
|
|
|
June 30, 2020 |
March 31, 2020 |
Cash and cash equivalents |
$50,970 |
|
$51,506 |
Short-term investments |
13,596 |
|
15,061 |
Accounts receivable |
3,838 |
|
6,330 |
Inventory |
4,703 |
|
4,282 |
Other current assets |
1,711 |
|
1,934 |
Net property and equipment |
7,870 |
|
8,119 |
Long-term investments |
4,863 |
|
4,117 |
Other assets |
11,004 |
|
11,212 |
Total assets |
$98,555 |
|
$102,561 |
|
|
|
|
Current liabilities |
$7,531 |
|
$8,260 |
Long-term liabilities |
4,340 |
|
4,660 |
Stockholders' equity |
86,684 |
|
89,641 |
Total liabilities and stockholders' equity |
$98,555 |
|
$102,561 |
|
|
|
|
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