Exhibit 99.1
GSI Technology, Inc. Reports Second-Quarter Fiscal 2008 Results
SANTA CLARA, Calif.--(BUSINESS WIRE)--Nov. 1, 2007--GSI
Technology, Inc. (Nasdaq: GSIT) today announced financial results for
its second fiscal quarter ended September 30, 2007. For the quarter,
the company earned net income of $1.2 million, or $0.04 per diluted
share, on revenue of $12.7 million, compared to net income of $2.4
million, or $0.10 per diluted share, on revenue of $15.0 million in
the comparable period a year ago.
For the six months ended September 30, 2007, the company earned
$2.3 million, or $0.08 per diluted share, on revenue of $24.0 million,
compared to net income of $4.5 million, or $0.20 per diluted share, on
revenue of $29.0 million in the first six months of fiscal 2007.
Diluted earnings per share for the first six months of fiscal 2008
includes the impact of the company's issuance of 6,131,111 new shares
in its initial public offering that closed on April 3, 2007.
"Second-quarter revenue was in line with expectations, but gross
margins -- at 36.2% compared to 39.1% in the prior quarter and 39.5% a
year ago -- were lower than in the preceding quarter due almost
entirely to a shift in product mix that resulted in a lower overall
gross margin for the quarter," said Lee-Lean Shu, president and chief
executive officer. "We experienced no increase in costs."
"The inventory adjustments among our distributors that we cited in
the last two quarters did not materially affect revenues in the second
quarter," said Shu. "Similarly, direct and indirect sales to Cisco
Systems, our largest customer, rebounded during the quarter, to
$3.7 million from $3.0 million in first quarter. Our own inventory,
too, was down -- to $17.5 million at the end of the quarter, compared
to $24.2 million at March 31, 2007 and $21.1 million at June 30,
2007."
Operating margins of 10.9% compared to 9.7% in the prior quarter,
noted Shu, reflect R&D and selling, general and administrative
expenses that were slightly lower than in the first quarter.
Total stock-based compensation costs for the second quarter were
$374,000 compared to $387,000 in the first quarter of fiscal 2008 and
$112,000 a year ago.
At September 30, 2007, the company had $47.3 million in cash, cash
equivalents and short-term investments, $66.3 million in working
capital, and stockholders' equity of $71.9 million.
Regarding the outlook for the quarter ending December 31, 2007,
Mr. Shu said, "We currently expect third quarter net revenues to be in
the range of $12.6 million to $13.4 million, with gross margins
improving slightly from the second quarter. We expect net income to be
in the range of $1.3 million to $1.6 million. Shares outstanding for a
diluted earnings per share calculation will be approximately
29,000,000 shares. We also expect Cisco systems business to continue
to improve this quarter as well as increased shipments in our Sigma
Quad product line."
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
second quarter of its fiscal year ending March 31, 2008 and discuss
its current business outlook during a conference call for investors at
1:30 p.m. PT (4:30 p.m. ET) today, November 1, 2007. You may also
listen to the teleconference live via the Internet at
www.gsitechnology.com or www.earnings.com. 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. For those unable to attend, these Web sites will archive the
call.
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; 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 Ended Six Months Ended
---------------------------- -------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2007 2007 2006 2007 2006
--------- -------- --------- --------- ---------
Net Revenue $12,672 $11,305 $14,956 $23,977 $28,929
Cost of goods sold 8,084 6,886 9,047 14,970 17,442
--------- -------- --------- --------- ---------
Gross profit 4,588 4,419 5,909 9,007 11,487
--------- -------- --------- --------- ---------
Operating expenses:
Research &
development 1,087 1,132 1,157 2,219 2,444
Selling, general and
administrative 2,121 2,187 1,382 4,308 2,700
--------- -------- --------- --------- ---------
Total operating
expenses 3,208 3,319 2,539 6,527 5,144
--------- -------- --------- --------- ---------
Operating income 1,380 1,100 3,370 2,480 6,343
Interest and other
income, net 473 465 202 938 387
--------- -------- --------- --------- ---------
Income before income
taxes 1,853 1,565 3,572 3,418 6,730
Provision for income
taxes 604 511 1,185 1,115 2,233
--------- -------- --------- --------- ---------
Net income $1,249 $1,054 $2,387 $2,303 $4,497
========= ======== ========= ========= =========
Earnings per share,
basic $0.05 $0.04 $0.35 $0.08 $0.65
Earnings per share,
diluted $0.04 $0.04 $0.10 $0.08 $0.20
Weighted-average
shares used in
computing per share
amounts:
Basic 27,616 27,133 6,250 27,376 6,216
Diluted 28,673 28,790 22,954 28,785 22,841
Stock based compensation included in the Condensed Consolidated
Statement of Operations:
Three Months Ended Six Months Ended
---------------------------- -------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
2007 2007 2006 2007 2006
--------- -------- --------- --------- ---------
Cost of goods sold $70 $85 $19 $155 $41
Research &
development 122 128 48 250 96
Selling, general and
administrative 182 174 45 356 81
--------- -------- --------- --------- ---------
$374 $387 $112 $761 $218
========= ======== ========= ========= =========
GSI TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
Sept. 30, 2007 March 31, 2007
-------------- --------------
Cash and cash equivalents $8,194 $4,275
Short-term investments 39,093 4,000
Inventory 17,506 24,209
Other current assets 9,610 11,686
Net property and equipment 4,780 4,745
Other assets 1,066 995
------------- --------------
Total assets $80,249 $49,910
============= ==============
Current liabilities $8,086 $11,171
Long-term liabilities $306
Redeemable convertible preferred stock - 9,007
Stockholders' equity 71,857 29,732
------------- --------------
Total liabilities and stockholders'
equity $80,249 $49,910
============= ==============
CONTACT: GSI Technology, Inc.
Douglas M. Schirle
Chief Financial Officer
408-980-8388
or
Silverman Heller Associates
Philip Bourdillon/Gene Heller
310-208-2550