GSI Technology, Inc. (Nasdaq: GSIT) reported net income of $920,000, or $0.03 per diluted share, on net revenues of $16.8 million for its first fiscal quarter ended June 30, 2012, compared to net income of $3.3 million, or $0.11 per diluted share, on net revenues of $23.0 million in the comparable period a year ago. In the prior quarter ended March 31, 2012, the Company earned $829,000, or $0.03 per diluted share, on net revenues of $18.7 million.
“Although we had forecasted flat to somewhat lower revenues for the first quarter, net revenues were slightly lower than anticipated, due primarily to softness in orders from our top three customers, each of whom does significant business in Europe, where the ongoing economic turmoil has adversely affected capital expenditures for network equipment manufactured by our customers,” noted Lee-Lean Shu, Chairman and Chief Executive Officer. “As in the previous quarter, we believe that our revenues also were negatively affected by uncertainty regarding our pending patent litigation with Cypress Semiconductor Corp.
“Gross margin was 40.3% compared to 44.2% a year ago and 46.2% in the prior quarter, principally as a result of a shift in our product mix and, to a lesser extent, the impact of reduced revenue on our fixed manufacturing costs. First quarter gross margin was lower than we had expected. The unusually high fourth-quarter 2012 gross margin also was outside our target range, and this sharp quarter-to-quarter fluctuation points to the considerable effect of product mix on our gross margins, as well as the challenge of accurately predicting product mix and gross margin on a quarter-to-quarter basis.”
First-quarter operating income was $880,000, or 5.2% of net revenues, compared to $4.1 million, or 18.0% of net revenues, a year ago. In the prior quarter, in which litigation-related expenses were a record $3.7 million, the Company reported a loss from operations of $83,000.