GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its second fiscal quarter ended September 30,
2020.
Summary Financial Results Table (in thousands, except
per share amounts)
|
|
Three Months
Ended |
Six Months
Ended |
|
|
|
Sept. 30,2020 |
|
|
June 30,2020 |
|
|
Sept. 30,2019 |
|
|
Sept. 30,2020 |
|
|
|
Sept. 30,2019 |
|
Net revenues |
$6,659 |
|
$6,621 |
|
$11,740 |
|
$13,280 |
|
$24,759 |
|
Gross margin
(%) |
|
46.7% |
|
|
46.1% |
|
|
55.9% |
|
|
46.4% |
|
|
59.8% |
|
Operating
expenses |
$8,265 |
|
$8,745 |
|
$8,491 |
|
$17,010 |
|
$16,963 |
|
Operating
loss |
$(5,153) |
|
$(5,695) |
|
$(1,923) |
|
$(10,848) |
|
$(2,152) |
|
Net loss |
$(5,231) |
|
$(6,076) |
|
$(1,768) |
|
$(11,307) |
|
$(1,893) |
|
Net loss per
share, diluted |
$(0.22) |
|
$(0.26) |
|
$(0.08) |
|
$(0.48) |
|
$(0.08) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee-Lean Shu, Chairman and Chief Executive Officer, commented,
"Business disruptions related to COVID have significantly impacted
our financial results in the first half of fiscal year 2021. Nokia,
our largest customer, downgraded its outlook for full-year 2020 due
to declining demand as its customers delay their spending plans.
While we did see an increase in Nokia sales from the prior two
quarters, our sales to this customer remain below last year’s
levels. We continue to progress on multiple fronts with new
products, including Gemini-I, our in-memory processor for search.
First, our APU software team has developed a new algorithm, called
Neural Hash, to improve the speed of similarity search for a given
accuracy rate. We presented the algorithm on October 15, 2020 at
the 2020 BayLearn conference. Second, we have developed a code
generator for Gemini-I and will release a compiler stack in early
calendar 2021. These tools allow developers to write code in Python
for multiple applications using the Gemini-I solution and simplify
the process of testing and evaluation by prospective customers. The
compiler is a program that converts high level language into a
machine code so that it can be read and executed by the Gemini-I
chip. We plan to release a Python compiler in early calendar 2021.
Third, in the first quarter of calendar 2021, we expect to begin
testing the 600 MHz Gemini-I to finalize and prepare the product
for mass production. Finally, we have made progress towards
Gemini-II, the second product in our APU family, with a planned
launch in late 2022 with orders of magnitude performance-cost
improvement over Gemini I.”
"In addition to reduced demand, we are experiencing 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 is taking longer. For our Radiation Hardened SRAM products,
where we target national assets and top-secret applications, sales
communications have slowed 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. However, given the business challenges to educate
and train new customers, we now anticipate design wins and initial
sales of Gemini-I Leda boards in calendar 2021," continued Mr. Shu.
Commenting on the outlook for GSI's third quarter of fiscal 2021,
Mr. Shu stated, "current expectations for the upcoming third
quarter are net revenues in a range of $6.0 million to $7.2
million, with gross margin of approximately 41% to 43%.”
Second 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 $6.7 million for the
second quarter of fiscal 2021, compared to a net loss of $(1.8
million), or $(0.08) per diluted share, on net revenues of
$11.7 million for the second quarter of fiscal 2020 and 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.
Gross margin was 46.7% compared to 55.9% in the prior year period
and 46.1% in the preceding first quarter. The changes in gross
margin were primarily due to changes in product mix sold in the
three periods.
In the second quarter of fiscal 2021, sales to Nokia were $3.4
million, or 51.7% of net revenues compared to $5.3 million, or
45.2% of net revenues, in the same period a year ago and $1.8
million, or 26.9% of net revenues in the prior quarter.
Military/defense sales were 26.9% of second quarter shipments
compared to 23.4% of shipments in the comparable period a year ago
and 30.1% of shipments in the prior quarter. SigmaQuad sales were
65.4% of second quarter shipments compared to 63.5% in the second
quarter of fiscal 2020 and 46.3% in the prior quarter.
Total operating expenses in the second quarter of fiscal 2021
were $8.3 million, compared to $8.5 million in the second quarter
of fiscal 2020 and $8.7 million in the prior quarter. Research and
development expenses were $5.7 million, compared to $5.8 million in
the prior year period and $5.8 million in the prior quarter.
Selling, general and administrative expenses were $2.6 million in
the quarter ended September 30, 2020 compared to $2.7 million in
the prior year quarter, and down from $2.9 million in the previous
quarter.
Second quarter fiscal 2021 operating loss was $(5.2 million)
compared to $(1.9 million) in the prior year period and $(5.7
million) in the prior quarter. Second quarter fiscal 2021 net loss
included interest income and other expense, net of $(16,000) and a
tax provision of $62,000, compared to $210,000 in interest and
other income and a tax provision of $55,000 for the same period a
year ago. In the preceding first quarter, 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.
Total second quarter pre-tax stock-based compensation expense
was $653,000 compared to $642,000 in the comparable quarter a year
ago and $755,000 in the prior quarter.
At September 30, 2020, the Company had $56.1 million in cash,
cash equivalents and short-term investments and $8.7 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 $59.2
million as of September 30, 2020 versus $70.9 million at March 31,
2020, with no debt. Stockholders’ equity as of September 30, 2020
was $82.2 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 September 30, 2020 and discuss its current business outlook
during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern)
today, October 29, 2020. To listen to the teleconference, please
call toll-free 1-866-248-8441 in the U.S. or 1-856-344-9206 for
international approximately10 minutes before the above start time
and provide Conference ID 7837554. 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, 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; 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. SchirleChief Financial
Officer408-331-9802
Hayden IRKim RogersManaging
Director385-831-7337Kim@HaydenIR.com
Media Relations Finn Partners for GSI TechnologyJulie
Ortega510-697-5599 gsi@finnpartners.com
GSI
TECHNOLOGY, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in
thousands, except per share data) |
(Unaudited) |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
Sept.
30, |
June
30, |
Sept.
30, |
|
Sept.
30, |
Sept.
30, |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Net
revenues |
$ |
6,659 |
|
$ |
6,621 |
|
$ |
11,740 |
|
|
$ |
13,280 |
|
$ |
24,759 |
|
Cost of
goods sold |
|
3,547 |
|
|
3,571 |
|
|
5,172 |
|
|
|
7,118 |
|
|
9,948 |
|
|
|
|
|
|
|
|
Gross
profit |
|
3,112 |
|
|
3,050 |
|
|
6,568 |
|
|
|
6,162 |
|
|
14,811 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development |
|
5,659 |
|
|
5,825 |
|
|
5,833 |
|
|
|
11,484 |
|
|
11,428 |
|
Selling, general and administrative |
|
2,606 |
|
|
2,920 |
|
|
2,658 |
|
|
|
5,526 |
|
|
5,535 |
|
Total operating expenses |
|
8,265 |
|
|
8,745 |
|
|
8,491 |
|
|
|
17,010 |
|
|
16,963 |
|
|
|
|
|
|
|
|
Operating
loss |
|
(5,153 |
) |
|
(5,695 |
) |
|
(1,923 |
) |
|
|
(10,848 |
) |
|
(2,152 |
) |
|
|
|
|
|
|
|
Interest and
other income, net |
|
(16 |
) |
|
106 |
|
|
210 |
|
|
|
90 |
|
|
357 |
|
|
|
|
- |
|
|
|
|
|
Loss before
income taxes |
|
(5,169 |
) |
|
(5,589 |
) |
|
(1,713 |
) |
|
|
(10,758 |
) |
|
(1,795 |
) |
Provision
for income taxes |
|
62 |
|
|
487 |
|
|
55 |
|
|
|
549 |
|
|
98 |
|
Net
loss |
$ |
(5,231 |
) |
($ |
6,076 |
) |
$ |
(1,768 |
) |
|
$ |
(11,307 |
) |
$ |
(1,893 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
share, basic |
$ |
(0.22 |
) |
($ |
0.26 |
) |
$ |
(0.08 |
) |
|
$ |
(0.48 |
) |
$ |
(0.08 |
) |
Net loss per
share, diluted |
$ |
(0.22 |
) |
($ |
0.26 |
) |
$ |
(0.08 |
) |
|
$ |
(0.48 |
) |
$ |
(0.08 |
) |
|
|
|
|
|
|
|
Weighted-average shares used in |
|
|
|
|
|
|
computing per share amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
23,617 |
|
|
23,440 |
|
|
22,975 |
|
|
|
23,529 |
|
|
22,791 |
|
Diluted |
|
23,617 |
|
|
23,440 |
|
|
22,975 |
|
|
|
23,529 |
|
|
22,791 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation included in the Condensed Consolidated Statements of
Operations: |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Six Months
Ended |
|
Sept.
30, |
June
30, |
Sept.
30, |
|
Sept.
30, |
Sept.
30, |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
Cost of
goods sold |
$ |
84 |
|
$ |
88 |
|
$ |
52 |
|
|
$ |
172 |
|
$ |
107 |
|
Research
& development |
|
353 |
|
|
413 |
|
|
397 |
|
|
|
766 |
|
|
796 |
|
Selling,
general and administrative |
|
216 |
|
|
254 |
|
|
193 |
|
|
|
470 |
|
|
390 |
|
|
$ |
653 |
|
$ |
755 |
|
$ |
642 |
|
|
$ |
1,408 |
|
$ |
1,293 |
|
|
|
|
|
|
|
|
GSI
TECHNOLOGY, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(in
thousands) |
(Unaudited) |
|
|
|
|
|
|
|
Sept. 30, 2020 |
|
|
March 31, 2020 |
|
Cash and cash equivalents |
$ |
44,022 |
|
$ |
51,506 |
|
Short-term
investments |
|
12,067 |
|
|
15,061 |
|
Accounts
receivable |
|
4,282 |
|
|
6,330 |
|
Inventory |
|
4,273 |
|
|
4,282 |
|
Other
current assets |
|
1,655 |
|
|
1,934 |
|
Net property
and equipment |
|
7,632 |
|
|
8,119 |
|
Long-term
investments |
|
8,655 |
|
|
4,117 |
|
Other
assets |
|
11,454 |
|
|
11,212 |
|
Total
assets |
$ |
94,040 |
|
$ |
102,561 |
|
|
|
|
|
|
Current
liabilities |
$ |
7,073 |
|
$ |
8,260 |
|
Long-term
liabilities |
|
4,744 |
|
|
4,660 |
|
Stockholders' equity |
|
82,223 |
|
|
89,641 |
|
Total
liabilities and stockholders' equity |
$ |
94,040 |
|
$ |
102,561 |
|
|
|
|
|
|
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