GSI Technology, Inc. (NASDAQ: GSIT) today reported
financial results for its second fiscal quarter ended September 30,
2024.
Summary Financial Results Table (in thousands, except
per share amounts)
|
Three Months Ended |
Six Months Ended |
|
Sept. 30, 2024 |
June 30, 2024 |
Sept. 30, 2023 |
Sept. 30, 2024 |
Sept. 30, 2023 |
Net revenues |
$ |
4,550 |
|
|
$ |
4,671 |
|
|
$ |
5,708 |
|
|
$ |
9,221 |
|
|
$ |
11,295 |
|
Gross margin (%) |
|
38.6 |
% |
|
|
46.3 |
% |
|
|
54.7 |
% |
|
|
42.5 |
% |
|
|
54.8 |
% |
Operating expenses |
$ |
7,341 |
|
|
$ |
1,081 |
|
|
$ |
7,214 |
|
|
$ |
8,422 |
|
|
$ |
15,422 |
|
Operating income (loss) |
$ |
(5,584 |
) |
|
$ |
1,080 |
|
|
$ |
(4,093 |
) |
|
$ |
(4,504 |
) |
|
$ |
(9,232 |
) |
Net income (loss) |
$ |
(5,458 |
) |
|
$ |
1,078 |
|
|
$ |
(4,055 |
) |
|
$ |
(4,380 |
) |
|
$ |
(9,165 |
) |
Net income (loss) per share,
diluted |
$ |
(0.21 |
) |
|
$ |
0.04 |
|
|
$ |
(0.16 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.37 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lee-Lean Shu, Chairman and Chief Executive Officer, stated, “We
are seeing early indications of a turnaround in our SRAM business.
Existing customers are depleting their channel inventory, and we
anticipate they will resume ordering in the upcoming quarters.
Furthermore, we expect a significant increase in orders from an
existing customer over the next 12 months. This opportunity for
additional orders involves collaborating on a cutting-edge product
for a leading AI chip developer, which is expected to drive
consistent demand for this customer's equipment and our SRAM chips
going forward.”
Mr. Shu continued, “Looking at our financial results for the
second quarter of fiscal 2025, we reported revenue of $4.6 million,
which aligns with the midpoint of our guidance. Our gross margin
was affected by product mix and severance costs associated with
workforce reductions. In the second quarter, we implemented
strategic cost-cutting measures expected to yield annual savings of
$3.5 million. These initiatives include workforce reductions across
all departments and enhanced operational efficiencies. As a result,
we anticipate a significant decrease in cash burn, which, when
combined with an improved revenue outlook, is expected to extend
our financial runway.”
Mr. Shu concluded, “We are on track to meet our deadlines for
the Gemini-II benchmarking project and remain committed to
fulfilling our SBIR contract with the U.S. Air Force Labs by
December 31, 2024, followed by the delivery of the software
algorithm in the first quarter of calendar 2025.”
Commenting on the outlook for GSI's third quarter of fiscal
2025, Mr. Shu stated, "Our current expectations for the upcoming
third quarter are net revenues in a range of $4.7 million to $5.5
million, with gross margin of approximately 50% to 52%."
Second Quarter Fiscal Year 2025 Summary
Financials
The Company reported net revenues of $4.6 million for the second
quarter of fiscal 2025, compared to $5.7 million for the second
quarter of fiscal 2024 and $4.7 million for the first quarter of
fiscal 2025. Gross margin was 38.6% in the second quarter of fiscal
2025 compared to 54.7% in the second quarter of fiscal 2024 and
46.3% in the preceding first quarter of fiscal 2025. The decrease
in gross margin in the second quarter of 2025 was primarily due to
a shift in product mix and severance costs associated with
manufacturing workforce reductions.
In the second quarter of fiscal 2025, sales to Nokia were
$812,000, or 17.8% of net revenues, compared to $1.2 million, or
20.3% of net revenues, in the same period a year ago and $998,000,
or 21.4% of net revenues, in the prior quarter. Military/defense
sales were 40.2% of second quarter shipments compared to 34.8% of
shipments in the comparable period a year ago and 31.9% of
shipments in the prior quarter. SigmaQuad sales were 38.6% of
second quarter shipments compared to 55.8% in the second quarter of
fiscal 2024 and 36.3% in the prior quarter.
Total operating expenses in the second quarter of fiscal 2025
were $7.3 million, compared to $7.2 million in the second quarter
of fiscal 2024 and $1.1 million in the prior quarter. Prior quarter
operating expenses included a gain of $5.7 million related to the
sale and leaseback of the Company’s headquarters. Research and
development expenses were $4.8 million, compared to $4.7 million in
the prior-year period and $4.2 million in the prior quarter.
Selling, general and administrative expenses were $2.6 million in
the quarter ended September 30, 2024, compared to $2.5 million in
the prior-year quarter and $2.6 million in the previous
quarter.
Second quarter fiscal 2025 operating loss was $(5.6) million
compared to an operating loss of $(4.1) million in the prior-year
period and operating income of $1.1 million in the prior quarter.
Second quarter fiscal 2025 net income included interest and other
income of $149,000 and a tax provision of $23,000, compared to
$71,000 in interest and other income and a tax provision of $33,000
for the same period a year ago. In the preceding first quarter, net
loss included interest and other income of $55,000 and a tax
provision of $57,000.
Net loss in the second quarter of fiscal 2025 was $(5.5)
million, or $(0.21) per diluted share, compared to a net loss of
$(4.1) million, or $(0.16) per diluted share, for the second
quarter of fiscal 2024 and net income of $1.1 million, or $0.04 per
diluted share, inclusive a one-time gain of $5.7 million on the
sale and leaseback transaction related to the sale of the Company’s
headquarters, for the first quarter of fiscal 2025.
Total second quarter pre-tax stock-based compensation expense
was $663,000 compared to $676,000 in the comparable quarter a year
ago and $658,000 in the prior quarter.
At September 30, 2024, the Company had $18.4 million in cash and
cash equivalents, compared to $14.4 million at March 31, 2024.
Working capital was $21.1 million as of September 30, 2024 versus
$19.1 million at March 31, 2024. Stockholders’ equity as of
September 30, 2024 was $33.3 million, compared to $36.0 million as
of the fiscal year ended March 31, 2024.
Conference Call
Management will conduct a conference call to review the
Company's financial results for the second quarter of fiscal year
2025 and its current outlook for the third quarter of fiscal 2025
at 1:30 p.m. Pacific time (4:30 p.m. Eastern Time)
today.
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 13749240.
The call will also be streamed live via the internet at
www.gsitechnology.com.
A replay will be available from October 24, 2024, at 7:30 p.m.
Eastern Time through October 31, 2024, 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 13749240. 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; 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 workforce reductions; the
impact of GSI Technology’s workforce reductions on its business and
operations and the failure to realize the anticipated benefits of
its workforce reductions; 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, economic and
geopolitical conditions, such as changing interest rates, worldwide
inflationary pressures, military conflicts and declines in the
global economic environment. 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.
Contacts:
Investor Relations:
Hayden IRKim Rogers385-831-7337kim@haydenir.com
Media Relations:
Finn Partners for GSI TechnologyRicca
Silverio415-348-2724gsi@finnpartners.com
Company:
GSI 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 |
|
Six Months Ended |
|
|
|
|
Sept. 30, |
June 30, |
Sept. 30, |
|
Sept. 30, |
Sept. 30, |
|
|
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
|
|
Net revenues |
$4,550 |
|
|
$4,671 |
|
|
$5,708 |
|
|
$9,221 |
|
|
$11,295 |
|
Cost of goods sold |
|
2,793 |
|
|
|
2,510 |
|
|
|
2,587 |
|
|
|
5,303 |
|
|
|
5,105 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,757 |
|
|
|
2,161 |
|
|
|
3,121 |
|
|
|
3,918 |
|
|
|
6,190 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research & development |
|
4,788 |
|
|
|
4,214 |
|
|
|
4,691 |
|
|
|
9,002 |
|
|
|
9,895 |
|
|
Selling, general and administrative |
|
2,553 |
|
|
|
2,604 |
|
|
|
2,523 |
|
|
|
5,157 |
|
|
|
5,527 |
|
|
Gain from sale and leaseback transaction |
|
- |
|
|
|
(5,737 |
) |
|
|
- |
|
|
|
(5,737 |
) |
|
|
- |
|
|
|
|
Total operating expenses |
|
7,341 |
|
|
|
1,081 |
|
|
|
7,214 |
|
|
|
8,422 |
|
|
|
15,422 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
(5,584 |
) |
|
|
1,080 |
|
|
|
(4,093 |
) |
|
|
(4,504 |
) |
|
|
(9,232 |
) |
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
149 |
|
|
|
55 |
|
|
|
71 |
|
|
|
204 |
|
|
|
151 |
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes |
|
(5,435 |
) |
|
|
1,135 |
|
|
|
(4,022 |
) |
|
|
(4,300 |
) |
|
|
(9,081 |
) |
Provision for income taxes |
|
23 |
|
|
|
57 |
|
|
|
33 |
|
|
|
80 |
|
|
|
84 |
|
Net income (loss) |
($5,458 |
) |
|
$1,078 |
|
|
($4,055 |
) |
|
($4,380 |
) |
|
($9,165 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share, basic |
($0.21 |
) |
|
$0.04 |
|
|
($0.16 |
) |
|
($0.17 |
) |
|
($0.37 |
) |
Net income (loss) per share, diluted |
($0.21 |
) |
|
$0.04 |
|
|
($0.16 |
) |
|
($0.17 |
) |
|
($0.37 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing per share
amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
25,467 |
|
|
|
25,374 |
|
|
|
25,161 |
|
|
|
25,421 |
|
|
|
25,014 |
|
Diluted |
|
|
|
25,467 |
|
|
|
25,686 |
|
|
|
25,161 |
|
|
|
25,421 |
|
|
|
25,014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
|
|
2024 |
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
$51 |
|
|
$56 |
|
|
$57 |
|
|
$107 |
|
|
$124 |
|
Research & development |
|
336 |
|
|
|
290 |
|
|
|
369 |
|
|
626 |
|
|
|
755 |
|
Selling, general and administrative |
|
276 |
|
|
|
312 |
|
|
|
250 |
|
|
588 |
|
|
|
617 |
|
|
|
|
|
$663 |
|
|
$658 |
|
|
$676 |
|
|
$1,321 |
|
|
$1,496 |
|
|
|
|
|
|
|
|
|
|
|
GSI TECHNOLOGY, INC. |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Sept. 30, 2024 |
March 31, 2024 |
Cash and cash equivalents |
|
$18,356 |
|
$14,429 |
|
Accounts receivable |
|
|
2,411 |
|
|
3,118 |
|
Inventory |
|
|
4,127 |
|
|
4,977 |
|
Other current assets |
|
|
1,724 |
|
|
1,954 |
|
Assets held for sale |
|
|
- |
|
|
5,629 |
|
Net property and equipment |
|
|
980 |
|
|
1,148 |
|
Operating lease right-of-use assets |
|
|
10,166 |
|
|
1,553 |
|
Other assets |
|
|
9,630 |
|
|
9,656 |
|
Total assets |
|
$47,394 |
|
$42,464 |
|
|
|
|
|
|
|
|
Current liabilities |
|
$5,488 |
|
$5,365 |
|
Long-term liabilities |
|
|
8,622 |
|
|
1,129 |
|
Stockholders' equity |
|
|
33,284 |
|
|
35,970 |
|
Total liabilities and stockholders' equity |
|
$47,394 |
|
$42,464 |
|
|
|
|
|
|
|
|
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