GSIT - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to GSI Technology's First Quarter Fiscal 2019 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Before we begin today’s call, the Company has requested that I read the following safe harbor statement. that this and may GSI those the involve and in regarding forward-looking Technology anticipated. discussed results risks events actual future future uncertainties matters conference materially include call statements that to The differ cause from could performance of the These with are XX-K uncertainties Commission. Exchange and in the and risks Form company’s described filed Securities

Officer. and Chief President him President like over ahead, Chief Schirle, Financial I’d GSI call Shu. XX, Sales. Additionally, and is Executive being call is I to Vice this With Lasserre, XXXX, the the Mr. are that at conference the Company’s have conference go the been you to asked Douglas Didier Technology. request Shu, turn now Lee-Lean of Officer; today, today to July Hosting advise Chairman, Please of recorded sir.

Lee-Lean Shu

our of Good first Doug the afternoon, contribution announce additional calendar market were XXXX, SigmaQuad above details to joining everyone, results will in revenue for earning (inaudible) for track with of XXXX. last will for the In his segments. call Net financial radiation-hardened from revenue provide begin range product our development which up you provided and I'm on million, sequentially, quarter year-over-year. high we and us pleased today. but meeting -- quarter thank guidance marketing products, quarter efforts $XX.X We anticipate remain fiscal on last and results. in fourth comments. our on newest our performance XXXX our shipping the

APU, associative in will multi-year announce to Radiation-hardened severe is RadHard, and design special or orbit in atmosphere aerospace of required. SRAM or type partner high packaging in-place processing be very or of our to conditions, horizon. Taiwan. applications time product patented Rad-tolerant used This and slightly Also, applications. applications, (inaudible) are high temperature, will in SigmaQuad is satellites defense excited and computing rad-tolerant, of lower we long application radiation-tolerant, extreme where radiation-hardened, the delivery shorter-duration require be less applications. our with technology, a ceramic will and foundry used chip initial Our

our expect XXXX. years later in We calendar caps commercializing APU have calendar almost This in our the XXXX providing Israeli investment anticipate AI round Depending event we of sample before dedicated efforts from initial to and product X samples to teams. and of first plan the did, begin chip silicon calendar target work our and silicon, Sunnyvale on to the we of year-end. dividing customers

have APU XXXX. in to is plan market-ready both a calendar Our

our massive data We and computation, vision have We including a for parallel unique convolutional neural improves in big remain processing security. cyber critical search and architecture and that response machine advantage computer APU time networks, business applications, with our we our and learning deep that data base, beyond. will our objective which primary will customer to fiscal and confident broaden we APU, (inaudible) our XXXX SRAM commercializing improve of market revenue RadHard increase and new to in bringing anticipate profitability

Douglas Schirle

vendor prior fourth compared first to on Gross XX.X% the $X.X million, of share, $XX.X in net net diluted We year revenues million and of per on unique longer line, quarter, when of negatively $X.XX the net gross margins reported the a was share, an for or XXXX. liability. an product stockpiled product net and net in of met and supporting preceding per in no of compared not $X.XX Unfortunately, or current million was resulting have product diluted have the loss were $XX.X XX.X% fourth forecasted inventory impacted in on quarter. of This still particular comfortable reserves other $XX.X situation income margin assembly are increase period as with of fiscal $X.XX $XXX,XXX, product, sales our lines this for first this value by revenues have of fiscal we quarter per to product net on the previous in with sales. of inventory XXXX of from quarter million, a not or XXXX in XX.X% In million quarter for is revenues the which we $X.X share, write-down forecast. the stockpiled a excess loss diluted the fiscal we

in the ago. operating $X.X of fiscal $XXX,XXX R&D first of million and quarter. in loss period million year $X.X expenses June $X.X million was prior expenses $X.X pretax in the an expenses compared as ended operating a XX, the a capital operating the sales the were to Total XX% quarter. quarter XX.X% the in XXXX, $XXX,XXX million Our comparable revenues, compared of fourth quarter and in in the slightly loss $X.X quarter In same fiscal in quarter to and Research due $X.X or net shipments and in and prior year expenses of the sales million equivalents million investments, $X.X APU first million quarter the year the to with prior the XX.X% were to $X.X or in XXXX million, and XX.X% in investments compared the of quarter preceding million ended quarter revenues, the quarter. general and quarter period cash $XXX,XXX XXXX. and higher $X.X of were development shipments to Nokia were preceding sequentially of At and cash, $XX.X prior of related working XX.X% we million, of to administrative XX, $X.X XX.X% Selling, comparable were compared $X.X million debt. quarter XXXX, XXXX first Military/defense $XX.X ago. the short-term XX.X% million fiscal compared finalizing long-term of the million loss compared quarter in prior revenues, net in Total fiscal in ago. fiscal were had quarter design and the to net no year the quarter in a first prior shipments XX.X% year was million, XXXX, in $X.X the $XXX,XXX preceding in $X.X XXXX, compared XX.X% of and in SigmaQuad to quarter to quarter million the prior XXXX $X.X year of million June to XX, from operating first a expected. expense quarter were up the of to June million of in in shipments in first compensation ago. $XX.X compared sales primarily and stock-based or an period

$XX.X fiscal million. $XX.X be to to net Looking expect XXXX, currently forward in quarter the to revenues we of range second of the million

to include gross XX% second quarter. APU $X.X We Operating initial XXXX expenses of to XX% our quarter in we're to for and approximately will fiscal second expected the in product. expenses Operator, million related mask approximately margin are questions. be the expect of ready

Operator

Hennig. Instructions] first Caramanidis with [Operator M. Carl we'll Kurt to go And

Kurt Caramanidis

tape-out. Congratulations, getting the That's accomplishment a big guys.

So add that's put pretty you can news. can that? Or is chips something you're you. as going to that on in? be looking Or this little exciting solo is you How where -- Question other developing? you with Are a that your color companies? for a at utilized that

Didier Lasserre

existing currently used lots to So components can can I space. different as well. application, it are It on of it -- and ways. as chips the out yes, used CPUs that depending also can it be a complement market on there can be used and GPU in replacement for be the mean,

at in needed, had, offer offering initial If a will be if the we'll you look we'll the cards. we see card. parts offerings be that we And individually interest but initial

PCIe initial, chip and and the a have first the of on on DRAM we'll we'll little memory some On and as well card, -- with there X and APUs controller a a bit have there. a system

these or individually. can there, they can and the So either the depending cards parts take take on customer application you the

Kurt Caramanidis

Any And RadHard, is color great. Is consistency? thought how indications Okay, for And it quarter still Are rad-tolerant, of also, getting as then looking that does order rad-hard? on next the some with that? a ago? interest any then year same you you better?

Didier Lasserre

the we'll of first with part your So question. start

December originally could running. up the to into by There's getting the means we've of And just don't of about. to the and quarter order, be January whether of in end It's we it chance So they'll it the talked fall it will but still have part bigger was than it's close December not. be be going take with to part yet, Initially, was the the There's and which on or February, chance may requirement team looks program, be forecasted into be together to going here be tight. falls has certainly, be a now, it or parts not and quarter clear. be internally. December their January, what able February. it getting quarter. December. a will they're to we March the this and going customer dealing in we're Right for funding that March The had If the quarter

the program, as announced term long far the just is new. it quarter so or As ago. a We've the on rad-tolerant

this didn't orders certainly So it anticipate we year, demand year. but there next being we any for anticipate

and follow-ons. mentioned, for end as then or some be sure year are this program I rad-hard, either beginning that the As there next identified as far have do we of will of one year this

rad-tolerant. rad-tolerant the in we first certainly I'm growth So shipments rad-hard to next and our in year our and then the in the in sorry, anticipate have growth first -- shipment

Kurt Caramanidis

Okay, great.

to thought take the would Just buyback to APU reinstituting the that to market or a starting develop. strongly if rad-hard. open do use a close anyway giving all here, price be capital. look my if thought, the And you've to come of anywhere things that's attractive together got it's isn't consider the any buyback now That and is very I would the current

Douglas Schirle

we'll higher that still be are of that consider We spent. the agree $X.X are previously we value -- that or can we million Yes, about the is approved today. board where And has we than that. have company considering the

Kurt Caramanidis

you X -- And about chip it is that still are that right? definitely. the back? Yes, then get Is you weeks

Didier Lasserre

see will longer still than it. we X and need a we little weeks before to assemble the It be wafers then

closer going our we it's assembled parts XX have say, in weeks be would I So XX before to to hands.

Kurt Caramanidis

Okay.

call? maybe So conference next

Didier Lasserre

that It will time be about right exactly.

Operator

Cowen. Jeff with Bernstein to next go We'll

Jeff Bernstein

just off. comfortable nice Or a us right of an for you. One, Nokia? the a I bit a give run kind you're some of of at inventory into rate work in there? think, for there rebound Nokia, a insight we going what's Are Just that been little couple then with now and on had maybe accumulation questions

Didier Lasserre

the had little extra. back we've bounce a and So

that was a running back quarters So inventory few that's through some were that been as you they there mentioned, time has gone -- some done.

In quarter rate. of kind was fact, that last run

is going has received Nokia to next due to think I sections. normal little This do the And that than of some business be a to part and that ZTE rate. has quarter the run additional quarter higher with of

Jeff Bernstein

you. Got

down was you mil/defense And pretty actually of Okay. where really that sequentially little a the just talk strong. bit about was just Can bit? SigmaQuad good, a curious little kind through but mix the us

Didier Lasserre

buy quarter It's -- the last-time dye in military March had sector old (inaudible). on an the a

military is to qualification, the went back difficult so Some for of last-time applications dye do them buy. they and did a new

quarter was last was that. March bit So say, inflate bit -- let's a sorry, last the on quarter -- inflated quarter a

you long-term -- was not any So long-term quarter see for be -- segment that for of market is times, that's at us. I it quarter. past quarter-over-quarter it's past indication this we've the healthy past, lumpy an why experienced down in but It still which softness. can certainly, is

Jeff Bernstein

And the APU. Got just you. on Great.

with line really this kind width a from we be straightforward edge any thing, kind something should So little design and silicon, bleeding bit get a of in right, of of is logic right? of back not happens. this fairly working unusual technology unless what that So chip memory terms it's standpoint,

Lee-Lean Shu

Yes.

implementation, the I if the I to think and is -- and think this mean, can design the the give of kind in expecting first I fairly think normal of very new, chip working But of are fairly we internally, normally, we that's I we need a -- first kind design we the I get due. the first silicon. are up is magnitude. concept-wise, mean, think, I ideal,

Douglas Schirle

frame. our and play with So go during we design have we of can out. potentially we show that couple expecting months time so customers. or it exhaustive They hoping couple found how and the that works that -- But fixed something they an we'll see of that are a actually are through bugs of we did reviewing

So reasonable hopefully, we wiggles with. chance having that that and we work can of something a have

Lee-Lean Shu

coming Yes, maybe just back.

the not terms technology. as processing In I super it's technology, yes, of say, think edge leading you

processing So comfortable it's work need the pretty from on design. technology view, of point for we to the but us still

Jeff Bernstein

going that's sounds Okay. development about then software equally And talk important? like just ecosphere to because the be it

Didier Lasserre

Israel in been. team We've It's has what That's to XX team. built up Yes. the up the now?

Douglas Schirle

XX.

Didier Lasserre

\XX.

that's the They're over support to working they're and and on. XX different markets. the algorithms on there and So required libraries applications the folks Israel, what in

in hardware So The United was that's the full in their dedication. here States XXX% design done California.

Operator

to [Operator Instructions] with We'll go B. Aman FBR. next Riley Gulani

Aman Gulani

can Is the Nokia sales SigmaQuad-III? one, us fit how the buying provide? data the first into you remind products SigmaQuad The you besides Nokia sales additional

Didier Lasserre

They And the the But the magnitude by are. and of quantity-wise and far if But you volume itself that's us of percentage look products revenue. is revenues, majority the largest partner-wise. certainly a it buy at they the the from of SQ-III. from

Aman Gulani

Got it.

are in any address on calendar assessment 'XX? changes how the there TAM? Okay. your And it you And regarding to quickly the APU, can

Didier Lasserre

going where that had of is well markets starting manufacturing. and to should we're e-commerce. we're and our inroads, some [indiscernible] collaboration having be lend spending for translates So we're lot search, a I initially applications, visual in drug we've on the into some say, advantage, Recently, the visual also efforts that's and pharmaceutical with or That's to industry search. the

So that the area that's the research similar kind we another have. advantage of search that and uses

So areas in that XXXX. we'll be X those focusing are initially

Operator

Swift to Sutter Brian We'll Securities. with go next

Brian Swift

part when is of answered, silicon. was expect you to XX that is first your The weeks XX have to question my first

anticipate know before I need of you elaborate be, would you your with customers? do on tape-out position or amount a key What sample part time second amount be testing to of some whether had you can The this you your you'll test version. time it in of some for

Lee-Lean Shu

Yes.

first the think at seeing to before is it hard really point silicon, speculate. this I

I think about on first evaluate silicon it. wait and have and then the really to year we comment a

Didier Lasserre

will alone the question guess, first evaluate I take to us silicon...

Douglas Schirle

good working. how determine it's To

Lee-Lean Shu

and production expectation a product can Well, for I the would the mean looking some at may doesn't depends But loop the with have it. is reasonable you probably along be it start -- customer and say, people work at probably but bugs, play can them. -- can programming it probably least bug X months even can And it for on on volume. start though probably people

Operator

no with remarks. additional questions I'd And further management turn queue, call Instructions] or the any to [Operator closing in like back for to

Lee-Lean Shu

We again results. report for our forward XXXX we with to quarter you look Thank all joining speaking when second you us. fiscal

Operator

Ladies today's you call. and conclude your for thank participation. does gentlemen, this conference We

You may disconnect. now

GSI Technology (GSIT) 26 Jul 182019 Q1 Earnings call transcript