Welcome!

News Feed Item

GSI Technology, Inc. Reports Fourth-Quarter Fiscal 2014 Results

SUNNYVALE, CA -- (Marketwired) -- 05/01/14 -- GSI Technology, Inc. (NASDAQ: GSIT) today reported financial results for its fourth fiscal quarter and fiscal year ended March 31, 2014.

For the year, the Company reported a net loss of $(6.2) million, or $(0.23) per diluted share, on net revenues of $58.6 million, compared to net income of $3.8 million, or $0.14 per diluted share, on net revenues of $66.0 million in the fiscal year ended March 31, 2013. Gross margin was 44.6% compared to 43.3% in the prior year.

Research and development expense was $13.1 million, compared to $11.5 million in the fiscal year ended March 31, 2013, and selling, general and administrative expense, which included litigation-related expenses, was up substantially to $18.8 million compared to $13.7 million in 2013. Total operating expense increased by $6.7 million, to $31.9 million from $25.2 million in fiscal 2013.

Litigation-related expenses in fiscal 2014 were $8.7 million, up from $3.0 million in fiscal 2013. The litigation-related expenses again were primarily associated with pending patent infringement and antitrust litigation involving Cypress Semiconductor. Both lawsuits are currently in the discovery phase.

The Company reported a net loss of $(5.4 million), or $(0.20) per diluted share, on net revenues of $12.8 million for the fourth quarter of fiscal 2014, compared to net income of $950,000, or $0.03 per diluted share, on net revenues of $15.7 million in the quarter ended March 31, 2013 and a net loss of $(734,000), or $(0.03) per diluted share, on net revenues of $13.8 million for the preceding third quarter. Gross margin was 45.7% compared to 46.3% in the prior year period and 39.0% in the preceding third quarter.

Total operating expenses in the fourth quarter of fiscal 2014 were $9.5 million, up from $6.8 million in the fourth quarter of fiscal 2013 and up from $7.3 million in the preceding third quarter. Research and development expenses were $4.4 million, up from $2.9 million in the prior year period and up from $2.8 million in the preceding quarter. Selling, general and administrative expenses, which include litigation-related expenses, were up substantially year-over-year to $5.1 million compared to $3.9 million in the quarter ended March 31, 2013, and up sequentially from $4.5 million in the preceding quarter.

Litigation-related expenses in the fourth fiscal quarter were $2.6 million, up from $2.1 million in the previous quarter and up from $1.2 million in the same period a year ago.

Lee-Lean Shu, Chairman and Chief Executive Officer, noted "Our net revenues came in within the range that we had projected early in the fourth quarter and reflected continued slowness in the telecommunications and networking markets and, in particular, continued weak sales in Asia. However, fourth quarter gross margin was very strong at 45.7%, well above our operating model and up sequentially from the previous quarter, due to a favorable mix of higher margin products. As expected, we incurred substantial litigation-related expenses during the quarter, accounting for approximately half of our net loss for the quarter, as the discovery phase of the pending patent infringement litigation and our antitrust lawsuit against Cypress continued. We also incurred substantial research and development expenses during the quarter related to two pre-production mask sets."

Fourth-quarter direct and indirect sales to Cisco Systems were $2.2 million, or 17.1% of net revenues, compared to $2.5 million, or 18.4% of net revenues, in the prior quarter, and $3.9 million, or 24.8% of net revenues, in the same period a year ago. Sales to Alcatel-Lucent were $2.5 million, or 19.7% of net revenues, during the quarter, compared $2.3 million, or 16.5% of net revenues, in the prior quarter. Military/defense sales were 16.0% of shipments compared to 14.2% of shipments in the prior quarter and 12.7% of shipments in the comparable period a year ago. SigmaQuad sales were 45.1% of shipments compared to 39.8% in the prior quarter and 38.9% in the fourth quarter of fiscal 2013.

Fourth-quarter fiscal 2014 operating loss was $(3.6 million), compared to an operating loss of $(1.9 million) in the prior quarter and operating income of $439,000 a year ago. The fourth-quarter 2014 net loss included a tax provision of $1.9 million, reflecting a full valuation allowance of $3.1 million for the Company's deferred tax assets. The tax provision in the fourth quarter compared to tax benefits of $423,000 in the fourth quarter of the prior year and $1.1 million in the preceding third quarter, resulting is a negative quarter-to-quarter impact of $3.0 million on our bottom line. The fourth quarter net loss also included interest and other income of $80,000, compared to $88,000 a year ago and $62,000 in the preceding quarter.

Total fourth-quarter pre-tax stock-based compensation expense was $584,000 compared to $516,000 in the prior quarter and $589,000 in the comparable quarter a year ago.

At March 31, 2014, the Company had $80.9 million in cash, cash equivalents and short-term investments, $28.8 million in long-term investments, $90.7 million in working capital, no debt, and stockholders' equity of $128.4 million.

Stock Repurchase Program

Our Board of Directors has authorized us to repurchase, at management's discretion, shares of our common stock. Under the repurchase program, we may repurchase shares from time to time on the open market or in private transactions. The specific timing and amount of the repurchases will be dependent on market conditions, securities law limitations and other factors. The repurchase program may be suspended or terminated at any time without prior notice. During the quarter ended March 31, 2014, we repurchased 52,050 shares at an average cost of $6.61 per share for a total cost of $344,000. Through March 31, 2014, the Company had repurchased 4,066,757 shares at an average cost of $4.18 per share for a total cost of $17.0 million. As of March 31, 2014, management had the authority to repurchase additional shares having a dollar value of up to approximately $13.0 million.

Outlook for Fourth Quarter of Fiscal 2014

We currently expect net revenues in the fourth quarter of fiscal 2014 to be in the range of $13.0 million to $14.0 million, with gross margin of approximately 40% to 42%.

Conference Call

GSI Technology will review its financial results for the quarter ended March 31, 2014,and discuss its current business outlook during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern) today, May 1, 2014. To listen to the teleconference, please call toll-free 888-430-8694 approximately 10 minutes prior to the start time and provide conference ID 8523631. 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 high-performance static random access memory, or SRAM, products primarily incorporated in networking and telecommunications equipment. Headquartered in Sunnyvale, California, GSI Technology is ISO 9001 certified and has worldwide factory and sales locations. 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 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; intensive competition; the patent infringement litigation currently pending against the Company; and the substantial litigation-related expenses associated with the defense of that litigation and the prosecution of other litigation in which the Company is involved, which fluctuate significantly from quarter to quarter. 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.

(financial tables follow)


                            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,
                           2014      2013       2013       2014       2013
                        ---------  --------  ---------  ---------  ---------

Net revenues            $  12,847  $ 13,778  $  15,707  $  58,579  $  66,014
Cost of goods sold          6,973     8,410      8,432     32,469     37,426
                        ---------  --------  ---------  ---------  ---------

Gross profit                5,874     5,368      7,275     26,110     28,588
                        ---------  --------  ---------  ---------  ---------

Operating expenses:

  Research &
   development              4,382     2,780      2,904     13,110     11,472
  Selling, general and
   administrative           5,104     4,490      3,932     18,814     13,696
                        ---------  --------  ---------  ---------  ---------
    Total operating
     expenses               9,486     7,270      6,836     31,924     25,168
                        ---------  --------  ---------  ---------  ---------

Operating income (loss)    (3,612)   (1,902)       439     (5,814)     3,420

Interest and other
 income, net                   80        62         88        338        464
                        ---------  --------  ---------  ---------  ---------

Income (loss) before
 income taxes              (3,532)   (1,840)       527     (5,476)     3,884
Provision (benefit) for
 income taxes               1,868    (1,106)      (423)       713         38
                        ---------  --------  ---------  ---------  ---------
Net income (loss)       $  (5,400) $   (734) $     950  $  (6,189) $   3,846
                        =========  ========  =========  =========  =========


Net income (loss) per
 share, basic           $   (0.20) $  (0.03) $    0.04  $   (0.23) $    0.14
Net income (loss) per
 share, diluted         $   (0.20) $  (0.03) $    0.03  $   (0.23) $    0.14

Weighted-average shares
 used in computing per
 share amounts:

Basic                      27,535    27,667     27,039     27,505     27,124
Diluted                    27,535    27,667     28,553     27,505     28,077


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,
                           2014      2013       2013       2014       2013
                        ---------  --------  ---------  ---------  ---------

Cost of goods sold      $     103  $     86  $      93  $     386  $     338
Research & development        244       235        279        970      1,140
Selling, general and
 administrative               237       195        217        872        800
                        ---------  --------  ---------  ---------  ---------
                        $     584  $    516  $     589  $   2,228  $   2,278
                        =========  ========  =========  =========  =========


Litigation related expenses included in the Condensed Consolidated
Statements of Operations:

                              Three Months Ended         Twelve Months Ended
                        ------------------------------  --------------------
                        March 31,  Dec. 31,  March 31,  March 31,  March 31,
                           2014      2013       2013       2014       2013
                        ---------  --------  ---------  ---------  ---------

Selling, general and
 administrative         $   2,618  $  2,056  $   1,202  $   8,664  $   3,041



                            GSI TECHNOLOGY, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (in thousands)
                                 (Unaudited)

                                                      March 31,   March 31,
                                                         2014        2013
                                                     ----------- -----------
Cash and cash equivalents                            $    41,520 $    41,120
Short-term investments                                    39,412      26,139
Accounts receivable                                        8,238      10,241
Inventory                                                  8,185      13,809
Other current assets                                       5,152       6,169
Net property and equipment                                 9,683      10,774
Long-term investments                                     28,819      35,495
Other assets                                                 668       2,098
                                                     ----------- -----------
Total assets                                         $   141,677 $   145,845
                                                     =========== ===========

Current liabilities                                  $    11,837 $    10,859
Long-term liabilities                                      1,462       2,803
Stockholders' equity                                     128,378     132,183
                                                     ----------- -----------
Total liabilities and stockholders' equity           $   141,677 $   145,845
                                                     =========== ===========

GSI Technology, Inc.
Douglas M. Schirle
Chief Financial Officer
408-331-9802

Hayden IR
David Fore or Brett Maas
206-395-2711

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The WebRTC Summit New York, to be held June 6-8, 2017, at the Javits Center in New York City, NY, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 20th International Cloud Expo and @ThingsExpo. WebRTC is the future of browser-to-browser communications, and continues to make inroads into the traditional, difficult, plug-in web co...
For basic one-to-one voice or video calling solutions, WebRTC has proven to be a very powerful technology. Although WebRTC’s core functionality is to provide secure, real-time p2p media streaming, leveraging native platform features and server-side components brings up new communication capabilities for web and native mobile applications, allowing for advanced multi-user use cases such as video broadcasting, conferencing, and media recording.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that Enzu will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enzu’s mission is to be the leading provider of enterprise cloud solutions worldwide. Enzu enables online businesses to use its IT infrastructure to their competitive ad...
"Plutora provides release and testing environment capabilities to the enterprise," explained Dalibor Siroky, Director and Co-founder of Plutora, in this SYS-CON.tv interview at @DevOpsSummit, held June 9-11, 2015, at the Javits Center in New York City.
DevOps tends to focus on the relationship between Dev and Ops, putting an emphasis on the ops and application infrastructure. But that’s changing with microservices architectures. In her session at DevOps Summit, Lori MacVittie, Evangelist for F5 Networks, will focus on how microservices are changing the underlying architectures needed to scale, secure and deliver applications based on highly distributed (micro) services and why that means an expansion into “the network” for DevOps.
"We are an all-flash array storage provider but our focus has been on VM-aware storage specifically for virtualized applications," stated Dhiraj Sehgal of Tintri in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Choosing the right cloud for your workloads is a balancing act that can cost your organization time, money and aggravation - unless you get it right the first time. Economics, speed, performance, accessibility, administrative needs and security all play a vital role in dictating your approach to the cloud. Without knowing the right questions to ask, you could wind up paying for capacity you'll never need or underestimating the resources required to run your applications.
Web Real-Time Communication APIs have quickly revolutionized what browsers are capable of. In addition to video and audio streams, we can now bi-directionally send arbitrary data over WebRTC's PeerConnection Data Channels. With the advent of Progressive Web Apps and new hardware APIs such as WebBluetooh and WebUSB, we can finally enable users to stitch together the Internet of Things directly from their browsers while communicating privately and securely in a decentralized way.
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
Adding public cloud resources to an existing application can be a daunting process. The tools that you currently use to manage the software and hardware outside the cloud aren’t always the best tools to efficiently grow into the cloud. All of the major configuration management tools have cloud orchestration plugins that can be leveraged, but there are also cloud-native tools that can dramatically improve the efficiency of managing your application lifecycle. In his session at 18th Cloud Expo, ...
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now ...