GSI Technology, Inc (GSIT) swung to a net profit for the quarter ended Dec. 31, 2016. The company has made a net profit of $0.35 million, or $ 0.02 a share in the quarter, against a net loss of $0.82 million, or $0.04 a share in the last year period. Revenue during the quarter dropped 11.12 percent to $11.48 million from $12.92 million in the previous year period. Gross margin for the quarter expanded 713 basis points over the previous year period to 56.56 percent. Operating margin for the quarter period stood at positive 2.04 percent as compared to a negative 12.07 percent for the previous year period.
Operating income for the quarter was $0.23 million, compared with an operating loss of $1.56 million in the previous year period.
Lee-Lean Shu, chairman and chief executive officer, noted, "Our net revenues came in below the range of guidance that we had provided earlier in the third quarter. During the third quarter we continued to see slowness in our primary telecommunications and networking markets and continued weak sales in Asia. Third quarter revenues were also impacted by an inventory correction at our largest customer. These factors have continued to affect sales in the fourth quarter and we expect that fourth quarter revenues will once again be down sequentially. However, based on awards of business, orders received to date or orders expected, we currently expect a substantial rebound in revenues during the first quarter ending June 30, 2017. Despite the decline in revenues, we were profitable for the third consecutive quarter at both the operating income and net income levels. As in recent previous quarters, we also continued to see improvement in our gross margin which came in at 56.6%, driven by a continuing very favorable mix of higher margin products. We remain focused on expanding our market position in the high speed SRAM and low-latency DRAM segments, including our extremely high performance SigmaQuad radiation-hardened SRAM products targeted at aerospace and defense applications, which we expect to introduce in second half of calendar 2017. We continue to devote substantial development resources toward the creation of a new category of products based on our patented in-place associative computing technology. These products will utilize massive parallel data processing capability to greatly improve computation, search and response time for use in a variety of 'big data' applications."
For the fourth-quarter 2017, GSI Technology, Inc expects revenue to be in the range of $10 million to $10.80 million.
Working capital declines
GSI Technology, Inc has witnessed a decline in the working capital over the last year. It stood at $55.75 million as at Dec. 31, 2016, down 7.66 percent or $4.63 million from $60.38 million on Dec. 31, 2015. Current ratio was at 6.20 as on Dec. 31, 2016, down from 8.07 on Dec. 31, 2015. Days sales outstanding were almost stable at 53 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 85 days for the quarter compared with 113 days for the previous year period.
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