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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported): May 24, 2007
GSI Technology, Inc.
(Exact name of registrant as specified in its charter)
Delaware 000-33387 77-0398779
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation) Identification No.)
2360 Owen Street
Santa Clara, California 95054
(Address of principal executive offices)
Registrant's telephone number, including area code:
(408) 980-8388
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:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition.
On May 24, 2007, GSI Technology, Inc. (the "Company") issued a press release
reporting financial results for its fourth fiscal quarter and fiscal year ended
March 31, 2007. A copy of this press release is attached hereto as Exhibit 99.1.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is
being furnished and shall not be incorporated by reference into any filing of
the Company, whether made before or after the date hereof, regardless of any
general incorporation language in such filing, unless expressly incorporated by
specific reference to such filing. Furthermore, the information in this Item
2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liabilities of that Section or Sections 11 and
12(a)(2) of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
- --------------- ---------------------------------------------------------------
99.1 Press release issued by GSI Technology, Inc. dated May 24, 2007
SIGNATURES
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.
Date: May 24, 2007
GSI Technology, Inc.
By: /s/ Douglas M. Schirle
---------------------------------
Douglas M. Schirle
Chief Financial Officer
Exhibit Index
Exhibit No. Description
- --------------- ---------------------------------------------------------------
99.1 Press release issued by GSI Technology, Inc. dated May 24, 2007
EXHIBIT 99.1
GSI Technology, Inc. Announces Fourth-Quarter and Fiscal-Year 2007 Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--May 24, 2007--GSI
Technology, Inc. (Nasdaq:GSIT) today announced its financial results
for the fourth quarter and fiscal year ended March 31, 2007. For the
fiscal year, the Company earned net income of $7.4 million, or $0.32
per diluted share, on revenues of $58.2 million, compared to net
income of $4.2 million, or $0.19 per diluted share, on revenues of
$43.1 million in the fiscal year ended March 31, 2006.
According to Lee-Lean Shu, president and chief executive officer,
the 35% year-over-year increase in net revenues reflects a 12%
increase in unit sales -- particularly of 18- and 36-megabit Very Fast
SRAM products -- as a result of increased demand from the company's
networking and telecommunications OEMs. Also positively affecting net
revenues was a 17% increase in the average selling price of the
company's products due to a shift in product mix to a larger
percentage of higher-price, higher-density products. Mr. Shu credited
much of the increase in OEM demand to a general improvement in the
business environment and an increase in capital expenditures for
networking and telecommunications equipment.
The shift in product mix -- as well as various cost reduction
measures, including the negotiation of price reductions for the
purchase of wafers and for assembly and test services provided by the
company's suppliers -- led to an improvement in gross margin, to 38.0%
in 2007 from 32.3% in 2006.
"A highlight of the year was the launch of our initial public
offering, completed just a few days after the close of fiscal 2007,"
said Mr. Shu. "In addition to providing liquidity for our longstanding
investors, some of whom have been with us for many years, it has
provided us with additional working capital to fund our anticipated
growth. We are pleased to report significant top- and bottom-line
improvement in fiscal 2007 results, and while the longer-term outlook
is never as clear as one would like, we expect that fiscal 2008 will
be another excellent year for the company."
In the quarter ended March 31, 2007, the company earned net income
of $1.4 million, or $0.06 per diluted share, on revenues of
$14.0 million, compared to net income of $1.3 million, or $0.06 per
diluted share, on revenues of $10.4 million in the comparable period a
year ago. Mr. Shu noted that a 9% sequential decline in net revenues
- -- to $14.0 million from $15.3 million in the third quarter of fiscal
2007 -- was primarily due to Cisco Systems' implementation of a "lean
manufacturing" program under which it is reducing the levels of
inventory carried by it and by its contract manufacturers; during the
transition, Cisco Systems' contract manufacturers have reduced their
purchases of the company's products as they draw down existing
inventories. Cisco Systems is the company's largest customer,
accounting for approximately 30% of the company's net revenues in
fiscal 2007.
Fourth-quarter gross margin was 36.8% compared to 38.5% in the
comparable period a year ago. Operating margin was 15.6% compared to
15.3% a year ago, despite a $543,000 increase in selling, general and
administrative expenses attributable primarily to increased
commissions paid to manufacturers' representatives as well as
increases in stock-based compensation expense and legal and accounting
expenses.
At March 31, 2007, the company had $8.3 million in cash, cash
equivalents and short-term investments, $33.0 million in working
capital, and shareholders' equity of $38.7 million. On April 3, 2007,
the company completed the initial public offering of its common stock,
from which it received net proceeds of approximately $30.2 million.
Commenting on the outlook for the quarter ending June 30, 2007,
Mr. Shu noted that Cisco Systems' transition to its lean manufacturing
program is expected to continue to impact the Company's revenues
during the first quarter and that GSI's first-quarter revenues are
currently expected to be in the range of $12.5 million to
$13.5 million. Gross margin is expected to remain essentially
unchanged from the prior quarter. Net income is expected to be in the
range of $1.2 million to $1.4 million, or approximately $0.04 to $0.05
per diluted share. Weighted average shares used in computing diluted
earnings per share for the first quarter are estimated to be
approximately 29,000,000 shares and will include the 6,131,111 shares
issued in our initial public offering which closed on April 3, 2007.
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 Santa Clara, California, GSI Technology is ISO 9001
certified and has worldwide factory and sales locations. For more
information, please visit www.gsitechnology.com.
Conference Call
GSI Technology plans to review its financial results for the
fourth quarter and fiscal year ended March 31, 2007 and discuss its
current business outlook during a conference call for investors at
4:30 p.m. EDT (1:30 p.m. PDT) today, May 24, 2007. You may also listen
to the teleconference live via the Internet at www.gsitechnology.com
or www.earnings.com. For those unable to attend, these web sites will
host an archive of the call. To listen to the teleconference, please
call toll-free 877-717-3046 (or 706-634-6364 for international
callers) approximately 10 minutes prior to the start time.
Participating in the call will be Lee-Lean Shu, GSI Technology's
President and Chief Executive Officer, and Douglas M. Schirle, GSI
Technology's Chief Financial Officer.
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 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; and intensive
competition. 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.
GSI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
Three Months Twelve Months
Ended Ended
March 31, March 31,
2007 2006 2007 2006
---------------- ----------------
Net Revenue $13,979 $10,404 $58,159 $43,141
Cost of goods sold 8,829 6,403 36,042 29,229
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Gross profit 5,150 4,001 22,117 13,912
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Operating expenses:
Research & development 1,195 1,183 4,951 5,377
Selling, general and administrative 1,768 1,225 6,209 4,797
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Total operating expenses 2,963 2,408 11,160 10,174
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Operating income 2,187 1,593 10,957 3,738
Interest and other income net 187 286 728 682
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Income before income taxes 2,374 1,879 11,685 4,420
Provision for income taxes 958 572 4,251 171
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Net income $1,416 $1,307 $7,434 $4,249
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Earnings per share, basic $0.18 $0.18 $1.03 $0.54
Earnings per share, diluted $0.06 $0.06 $0.32 $0.19
Weighted-average shares used in
computing per share amounts:
Basic 6,636 6,164 6,336 6,148
Diluted 23,066 22,630 22,838 22,586
Stock based compensation included in the Consolidated Statement of
Operations:
Three Months Twelve Months
Ended Ended
March 31, March 31,
2007 2006 2007 2006
---------------- ----------------
Cost of goods sold $73 $3 $227 $13
Research & development 144 18 515 70
Selling, general and administrative 189 3 474 12
---------------- ----------------
$406 $24 $1,216 $95
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GSI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
March 31, March 31,
2007 2006
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Cash and cash equivalents $4,275 $11,505
Short-term investments 4,000 4,000
Inventory 24,209 12,600
Other current assets 11,686 7,927
Net property and equipment 4,745 2,206
Other assets 995 1,306
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Total assets $49,910 $39,544
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Current liabilities $11,171 $9,579
Redeemable convertible preferred stock - 9,007
Stockholders' equity 38,739 20,958
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Total liabilities and stockholders' equity $49,910 $39,544
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CONTACT: GSI Technology, Inc.
Douglas M. Schirle, Chief Financial Officer
408-980-8388
or
Silverman Heller Associates
Philip Bourdillon/Gene Heller
310-208-2550