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GSI Technology Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: June 4, 2012 06:21PM
GSI Technology (GSIT) filed Annual Report for the period ended 2012-03-31. Gsi Technology has a market cap of $118.1 million; its shares were traded at around $4.29 with a P/E ratio of 18.4 and P/S ratio of 1.4. Gsi Technology had an annual average earning growth of 15.8% over the past 5 years.
Highlight of Business Operations:Net Revenues. Net revenues decreased by 15.6% from $97.8 million in fiscal 2011 to $82.5 million in fiscal 2012 largely as a result of excess inventories accumulated by our customers in fiscal 2011 and drawn down in fiscal 2012. Direct and indirect sales to Cisco Systems, our largest customer, decreased by $2.8 million from $36.2 million in fiscal 2011 to $33.4 million in fiscal 2012. Net revenues in fiscal 2012 included $20.7 million from the sale to Cisco of products acquired in our August 28, 2009 acquisition of the Sony SRAM memory device product line, compared to $14.6 million in fiscal 2011. Shipments of our SigmaQuad product line accounted for 34.5% of total shipments in fiscal 2012 compared to 31.7% of total shipments in fiscal 2011. We believe net revenues in the third and fourth quarters of fiscal 2012 were negatively impacted by uncertainty regarding the outcome of our pending patent litigation with Cypress Semiconductor and that this uncertainty will continue to affect our revenues over the next several quarters.
Net Revenues. Net revenues increased by 44.7% from $67.6 million in fiscal 2010 to $97.8 in fiscal 2011. Direct and indirect sales to Cisco Systems, our largest customer, increased by $12.7 million from $23.5 million in fiscal 2010 to $36.2 million in fiscal 2011. Net revenues in fiscal 2011 included $14.6 million from the sale to Cisco of products acquired in our August 28, 2009 acquisition of the Sony SRAM memory device product line, compared to $5.4 million in fiscal 2010. In addition to the increase in sales to Cisco Systems, net revenues benefited from the continued acceptance of our SigmaQuad product line which resulted in a 103.3% increase in SigmaQuad shipments in fiscal 2011 compared to fiscal 2010, accounting for 31.7% of our total shipments in fiscal 2011.
Cost of Revenues. Cost of revenues increased by 38.3% from $38.3 million in fiscal 2010 to $53.0 million in fiscal 2011. This increase was primarily due to the increase in net revenues. Fiscal 2011 and 2010 cost of revenues included approximately $252,000 and $352,000, respectively, related to masks valued at approximately $604,000 that were acquired in the Sony acquisition and are being amortized over four quarters. Cost of revenues included stock-based compensation expense of $300,000 and $291,000, respectively, in fiscal 2011 and fiscal 2010.
Selling, General and Administrative Expenses. Selling, general and administrative expenses increased 12.5% from $9.5 million in fiscal 2010 to $10.7 million in fiscal 2011. This increase was primarily related to increases of $710,000 in independent sales representative commissions, $521,000 in payroll related expenses and a smaller increase in facility related expenses, partially offset by a decrease in outside consulting expenses. Selling, general and administrative expenses in fiscal 2010 included $533,000 in legal and accounting fees and changes to the fair value of the contingent consideration related to the Sony acquisition, compared to $64,000 in such acquisition related expenses in fiscal 2011. Stock-based compensation expense of $578,000 and $502,000 were included in selling, general and administrative expenses in fiscal 2011 and fiscal 2010, respectively.
Net cash provided by operating activities was $17.0 million for fiscal 2012 compared to $13.3 million for fiscal 2011 and $13.7 million for fiscal 2010. The primary sources of cash in fiscal 2012 were net income of $6.8 million and decreases in accounts receivable of $4.5 million and inventory of $4.0 million, partially offset by an increase in prepaid expenses and other assets of $2.6 million and a decrease in deferred revenue of $2.6 million. The decrease in accounts receivable was due to the lower level of shipments in the fourth quarter of fiscal 2012 compared to the fourth quarter of fiscal 2011. The primary sources of cash in fiscal 2011 were net income of $18.9 million, depreciation and amortization of $2.8 million and lesser increases in accrued expenses and other liabilities and deferred revenue, partially offset by an increase in inventory of $7.1 million and an increase in accounts receivable of $5.8 million. Deferred revenue increased as a result of our distributors increasing the levels of inventory in their possession to better enable them to respond to their customers' requirements. The increase in accounts receivable was a result of the the timing of shipments in the quarter ended March 31, 2011 compared to the quarter ended March 31, 2010. Inventory levels increased as a result of a planned inventory build-up to enable us to better respond to current and forecasted customer requirements. The primary uses of cash in fiscal 2010 were increases of $3.6 million in accounts receivable, $1.1 million in inventory and $1.0 million in prepaid expenses and other assets. The increase in accounts receivable reflects the higher level of net revenues in the fourth quarter of fiscal 2010 compared to the fourth quarter of fiscal 2009. These uses of cash were primarily offset by increases of $3.4 million in accounts payable and $2.0 million in accrued expenses and other liabilities. The increase in accounts payable reflects higher levels of wafer purchases and manufacturing related expenses as we built inventory levels in response to increased levels of shipments.
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