UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM 8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the |
Date of Report: January 30, 2014
(Date of earliest event reported)
GSI Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation)
000-33387
(Commission File Number)
77-0398779
(IRS Employer
Identification Number)
1213 Elko Drive, Sunnyvale, California
(Address of principal executive offices)
94089
(Zip Code)
(408) 331-8800
(Registrant's telephone number, including area code)
Not Applicable
(Former Name or Former Address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
- o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
- o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
- o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
- o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Item 2.02. Results of Operations and Financial Condition On January 30, 2014, GSI Technology, Inc. (the "Company") issued a press release reporting financial results for its third fiscal quarter ended December 31, 2013. A copy of this press release is attached hereto as Exhibit 99.1.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Dated: January 30, 2014 |
GSI TECHNOLOGY, INC.
By: /s/ Douglas M. Schirle |
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| Exhibit No. | Description |
| 99.1 | Press Release of GSI Technology, Inc. dated January 30, 2014 |
SUNNYVALE, CA -- (Marketwired - January 30, 2014) - GSI Technology, Inc. (NASDAQ: GSIT) today reported financial results for its third fiscal quarter and nine months ended December 31, 2013.
The Company reported a net loss of $(210,000), or $(0.01) per diluted share, on net revenues of $13.8 million for the third quarter of fiscal 2014, compared to net income of $844,000, or $0.03 per diluted share, on net revenues of $17.5 million in the quarter ended December 31, 2012 and net income of $386,000, or $0.01 per diluted share, on net revenues of $15.5 million in the preceding second quarter. Gross margin was 44.2% compared to 41.9% in the prior year period and 47.6% in the preceding second quarter.
Total operating expenses in the third quarter of fiscal 2014 were $7.5 million, up from $6.7 million in the third quarter of fiscal 2013 and down from $7.2 million in the preceding second quarter. Research and development expenses were relatively unchanged at $2.9 million, compared to $2.9 million in the prior year period and $3.0 million in the preceding quarter, but selling, general and administrative expenses, which include litigation-related expenses, were up substantially year-over-year to $4.6 million compared to $3.9 million in the quarter ended December 31, 2012, and up sequentially from $4.2 million in the preceding quarter.
Litigation-related expenses in the third fiscal quarter were $2.1 million, up from $1.7 million in the previous quarter and up from $1.1 million in the same period a year ago. 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.
Lee-Lean Shu, Chairman and Chief Executive Officer, noted, "Our net revenues came in slightly below the range we had projected earlier in the third quarter primarily due to continued slowness in the telecommunications and networking market. However, third quarter gross margin was strong at 44.2%, above our operating model, due to a favorable mix of higher margin products. As expected, we continued to incur substantial litigation-related expenses during the quarter, resulting in a net loss for the quarter, as the discovery phase of our antitrust lawsuit against Cypress intensified."
Third-quarter direct and indirect sales to Cisco Systems were $2.5 million, or 18.4% of net revenues, compared to $3.4 million, or 22.2% of net revenues, in the prior quarter, and $6.5 million, or 37.0% of net revenues, in the same period a year ago. Sales to Alcatel-Lucent were $2.3 million, or 16.5% of net revenues, during the quarter, compared $3.2 million, or 20.4% of net revenues, in the prior quarter. Military/defense sales were 14.2% of shipments compared to 12.3% of shipments in the prior quarter and 11.0% of shipments in the comparable period a year ago. SigmaQuad sales were 39.8% of shipments compared to 42.3% in the prior quarter and 33.7% in the third quarter of fiscal 2013.
Third-quarter fiscal 2014 operating loss was $(1.4 million), compared to operating income of $241,000 in the prior quarter and operating income of $595,000 a year ago. Third-quarter 2014 net loss included interest and other income of $62,000 and a tax benefit of $1.1 million, compared to $109,000 in interest and other income and a tax benefit of $140,000 a year ago; in the preceding quarter, net income included interest and other income of $85,000 and a tax benefit of $60,000.
Total third-quarter pre-tax stock-based compensation expense was $516,000 compared to $563,000 in the prior quarter and $565,000 in the comparable quarter a year ago.
At December 31, 2013, the Company had $74.8 million in cash, cash equivalents and short-term investments, $34.2 million in long-term investments, $89.7 million in working capital, no debt, and stockholders' equity of $134.0 million.
Stock Repurchase Program
Our Board of Directors has authorized us to repurchase, at management's discretion, shares of our common stock. On August 20, 2013, the Board increased the dollar value of shares that may be repurchased by $10 million. 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 December 31, 2013, we repurchased 383,477 shares at an average cost of $6.61 per share for a total cost of $2.5 million. To date, the Company has repurchased 4,014,707 shares at an average cost of $4.15 per share for a total cost of $16.6 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 $12.5 million to $13.5 million, with gross margin of approximately 38% to 40%.
Conference Call
GSI Technology will review its financial results for the quarter ended December 31, 2013, and discuss its current business outlook during a conference call at 1:30 p.m. Pacific (4:30 p.m. Eastern) today, January 30, 2014. To listen to the teleconference, please call toll-free 888-510-1786 approximately 10 minutes prior to the start time and provide conference ID 3587112. 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 Nine Months Ended
------------------------------- ---------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2013 2013 2012 2013 2012
--------- --------- --------- --------- ----------
Net revenues $ 13,778 $ 15,542 $ 17,514 $ 45,732 $ 50,307
Cost of goods sold 7,685 8,140 10,170 24,771 28,994
--------- --------- --------- --------- ----------
Gross profit 6,093 7,402 7,344 20,961 21,313
--------- --------- --------- --------- ----------
Operating expenses:
Research &
development 2,893 2,951 2,858 8,841 8,568
Selling, general and
administrative 4,578 4,210 3,891 13,798 9,764
--------- --------- --------- --------- ----------
Total operating
expenses 7,471 7,161 6,749 22,639 18,332
--------- --------- --------- --------- ----------
Operating income
(loss) (1,378) 241 595 (1,678) 2,981
Interest and other
income, net 62 85 109 258 376
--------- --------- --------- --------- ----------
Income (loss) before
income taxes (1,316) 326 704 (1,420) 3,357
Provision (benefit)
for income taxes (1,106) (60) (140) (1,155) 461
--------- --------- --------- --------- ----------
Net income (loss) $ (210) $ 386 $ 844 $ (265) $ 2,896
========= ========= ========= ========= ==========
Net income (loss) per
share, basic $ (0.01) $ 0.01 $ 0.03 $ (0.01) $ 0.11
Net income (loss) per
share, diluted $ (0.01) $ 0.01 $ 0.03 $ (0.01) $ 0.10
Weighted-average
shares used in
computing per share
amounts:
Basic 27,667 27,631 26,963 27,495 27,152
Diluted 27,667 28,975 27,987 27,495 27,957
Stock-based compensation included in the Condensed Consolidated Statements
of Operations:
Three Months Ended Nine Months Ended
------------------------------- ---------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2013 2013 2012 2013 2012
--------- --------- --------- --------- ----------
Cost of goods sold $ 86 $ 102 $ 68 $ 282 $ 245
Research & development 235 232 287 726 861
Selling, general and
administrative 195 229 210 636 582
--------- --------- --------- --------- ----------
$ 516 $ 563 $ 565 $ 1,644 $ 1,688
========= ========= ========= ========= ==========
Litigation related expenses included in the Condensed
Consolidated Statements of Operations:
Three Months Ended Nine Months Ended
------------------------------- ---------------------
Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31,
2013 2013 2012 2013 2012
--------- --------- --------- --------- ----------
Selling, general and
administrative $ 2,056 $ 1,727 $ 1,061 $ 6,047 $ 1,839
GSI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
December 31, March 31,
2013 2013
------------- -------------
Cash and cash equivalents $ 42,040 $ 41,120
Short-term investments 32,779 26,139
Accounts receivable 9,054 10,241
Inventory 9,990 13,809
Other current assets 5,429 6,169
Net property and equipment 9,625 10,774
Long-term investments 34,199 35,495
Other assets 2,386 2,098
------------- -------------
Total assets $ 145,502 $ 145,845
============= =============
Current liabilities $ 9,610 $ 10,859
Long-term liabilities 1,908 2,803
Stockholders' equity 133,984 132,183
------------- -------------
Total liabilities and stockholders' equity $ 145,502 $ 145,845
============= =============
Contact: GSI Technology, Inc. Douglas M. Schirle Chief Financial Officer 408-331-9802 David Fore or Brett Maas Hayden IR 206-395-2711