IRVINE, Calif., Nov. 14, 2016 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST) today reported financial results for the third
quarter ended October 1,
2016.
Revenues for the quarter ended October 1,
2016, were $2.6 million, up
60% from revenues of $1.6 million for
the quarter ended September 26,
2015. Gross profit for the quarter ended October 1, 2016, was $9,000, or 0.3% of revenues compared to a gross
profit of $24,000, or 1.5% of
revenues for the quarter ended September
26, 2015.
Net loss for the quarter ended October 1,
2016, was ($4.4) million, or
($0.08) loss per share, compared to a
net loss in the prior year period of ($5.4)
million, or ($0.11) loss per
share. These results include stock-based compensation expense
of $0.3 million for the third quarter
of 2016 and $0.4 million for the
prior year period.
"During the third quarter we made significant progress in the
execution of our strategic initiatives," said C.K. Hong, Chief Executive Officer of Netlist.
"In August we introduced our HybriDIMM™ storage class memory
solution and remain on track to bring this innovative product to
market next year. In September we filed a complaint in the
U.S. International Trade Commission against SK hynix for
infringement of six of our patents covering billions of dollars of
their high performance memory. In addition, we achieved year over
year product revenue growth from a new base of OEM and data center
customers. We believe that our actions in the quarter have
set the stage for growth and diversification as we enter 2017."
As of October 1, 2016, cash and
cash equivalents and restricted cash were $16.5 million, total assets were $23.2 million, working capital was $16.4 million, total debt, net of debt discounts,
was $14.3 million, and stockholders'
equity was $3.0 million.
EBITDA and adjusted EBITDA are non-GAAP financial measures.
These non-GAAP financial measures are described below under the
heading "Note Regarding Use of Non-GAAP Financial Measures" and are
reconciled to the most directly comparable GAAP financial measure
net income (loss) below under the heading "Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA."
Adjusted EBITDA was ($3.8) million
for the quarter ended October 1,
2016, compared to adjusted EBITDA of ($3.6) million for the prior year period.
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, November 14, 2016 at 5:00
p.m. Eastern Time to review the company's results for the
third quarter ended October 1,
2016. The dial-in number for the call is
1-412-317-5443. The live webcast and archived replay of the
call can be accessed in the Investors section of Netlist's website
at www.netlist.com.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information set forth herein, including EBITDA and
adjusted EBITDA, are non-GAAP financial measures. Netlist believes
this information is useful to investors because it provides a basis
for measuring Netlist's available capital resources, the operating
performance of Netlist's business and Netlist's cash flow,
excluding certain non-cash income or expense items that are not
directly attributable to its core operating results. Netlist
defines EBITDA as net income (loss) calculated in accordance with
accounting principles generally accepted in the United States of America ("GAAP"), plus
interest expense, net, plus provisions for income taxes, plus
depreciation and plus amortization, and Netlist defines adjusted
EBITDA as EBITDA plus stock-based compensation expense and plus
(minus) other expense (income), net. Netlist expects to continue to
incur expenses similar to the non-cash items added to or subtracted
from net income (loss) to calculate EBITDA and adjusted EBITDA;
accordingly, the exclusion of these items in the presentation of
these non-GAAP financial measures should not be construed as an
inference that these items are unusual, infrequent or
non-recurring. Netlist's management uses these non-GAAP
financial measures along with the most directly comparable GAAP
financial measure net income (loss) in evaluating Netlist's
operating performance, capital resources and cash flow. Non-GAAP
financial measures should not be considered in isolation from, or
as a substitute for, financial information presented in conformity
with GAAP, and non-GAAP financial measures as reported by Netlist
may not be comparable to similarly titled amounts reported by other
companies.
About Netlist, Inc.
Netlist creates solutions that
accelerate turning raw data into business insight. The company
produces next generation persistent memory solutions that enable
businesses to transact quicker, gain insight faster and reduce
datacenter cost. Flagship products NVvault® and EXPRESSvault®
accelerate system performance and provide mission critical fault
tolerance. HybriDIMM™, Netlist's next-generation Storage
Class Memory, lowers cost and improves performance of big data
analytics and in-memory computing. The company holds a portfolio of
patents, many seminal, in the area of hybrid memory, storage class
memory, rank multiplication and load-reduction, among others.
Netlist is part of the Russell Microcap® Index. To learn
more, visit www.netlist.com.
Safe Harbor Statement:
This news release contains
forward-looking statements covered by the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements other than historical
facts that often address future events or the future performance of
Netlist. A forward‑looking statement is neither a prediction nor a
guarantee of future events or circumstances and is based on
currently available market, operating, financial and competitive
information and assumptions. Forward-looking statements involve
known and unknown risks and uncertainties that could cause actual
results to differ materially from those expected or projected,
including, among others, changes in and uncertainty of customer
acceptance of and demand for our existing products and technologies
and our products under development; risks associated with the
concentration of product sales among a limited number of customers;
the success of product, licensing and joint development
partnerships; continuing development, qualification and volume
production of HybriDIMM™, EXPRESSvault™, and NVvault®; the
timing and magnitude of the continued decrease in our sales; our
ability to leverage our NVvault® and EXPRESSvault™ technology in a
more diverse customer base; our need to raise additional capital
and our ability to obtain financing as and when necessary; the
rapidly-changing nature of technology in our industry; risks
associated with intellectual property, including patent
infringement litigation against us as well as the costs and
unpredictability of litigation over infringement of our
intellectual property and the possibility of our patents being
reexamined or reviewed by the United States Patent and Trademark
Office and the Patent Trial and Appeal Board; volatility in the
pricing of components of our products; uncertainty of and/or delays
in product orders and product qualifications; delays in our and our
customers' product releases and development; introductions of new
products by competitors; changes in end-user demand for technology
solutions; our ability to attract and retain skilled personnel; our
reliance on suppliers of critical components and vendors in the
supply chain; evolving industry standards; the political and
regulatory environment in the People's
Republic of China; and general economic and market
conditions. Other risks and uncertainties are described in our
annual report on Form 10-K filed on March 4,
2016, and subsequent filings with the U.S. Securities and
Exchange Commission we make from time to time, including our
quarterly reports on Form 10-Q. Except as required by law, we
undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
(Tables Follow)
For more information,
please contact:
|
|
|
|
Brainerd
Communicators, Inc.
|
Netlist,
Inc.
|
Mike Smargiassi or
Jenny Perales
|
Gail M.
Sasaki
|
NLST@braincomm.com
|
Chief Financial
Officer
|
(212)
986-6667
|
(949)
435-0025
|
Netlist,
Inc.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
|
(audited)
|
|
|
|
October
1,
|
|
|
January 2,
|
|
|
|
2016
|
|
|
2016
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
15,394
|
|
$
|
19,684
|
Restricted
cash
|
|
|
1,100
|
|
|
400
|
Accounts receivable,
net
|
|
|
1,119
|
|
|
716
|
Inventories
|
|
|
2,992
|
|
|
1,658
|
Prepaid expenses and
other current assets
|
|
|
1,834
|
|
|
1,739
|
Total current assets
|
|
|
22,439
|
|
|
24,197
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
694
|
|
|
408
|
Other
assets
|
|
|
73
|
|
|
61
|
Total assets
|
|
$
|
23,206
|
|
$
|
24,666
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
4,201
|
|
$
|
3,299
|
Accrued payroll and
related liabilities
|
|
|
894
|
|
|
1,243
|
Accrued expenses and
other current liabilities
|
|
|
293
|
|
|
340
|
Deferred
revenue
|
|
|
-
|
|
|
6,857
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
Notes payable and
capital lease obligation, current
|
|
|
183
|
|
|
13
|
Total current liabilities
|
|
|
6,071
|
|
|
12,252
|
Convertible
promissory note, net of debt discount, and accrued
interest
|
|
|
14,112
|
|
|
13,699
|
Capital lease
obligation, long term
|
|
|
23
|
|
|
-
|
Long-term warranty
liability
|
|
|
27
|
|
|
49
|
Total liabilities
|
|
|
20,233
|
|
|
26,000
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
(deficit):
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
Common
stock
|
|
|
61
|
|
|
50
|
Additional paid-in
capital
|
|
|
143,615
|
|
|
132,011
|
Accumulated
deficit
|
|
|
(140,703)
|
|
|
(133,395)
|
Total stockholders' equity (deficit)
|
|
|
2,973
|
|
|
(1,334)
|
Total liabilities and stockholders' equity (deficit)
|
|
$
|
23,206
|
|
$
|
24,666
|
Netlist,
Inc
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
October
1,
|
|
September 26,
|
|
October
1,
|
|
September 26,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
2,589
|
|
$
1,617
|
|
$
7,260
|
|
$
5,160
|
Non-recurring
engineering revenues
|
|
-
|
|
-
|
|
6,857
|
|
-
|
Total net
revenues
|
|
2,589
|
|
1,617
|
|
14,117
|
|
5,160
|
Cost of
sales(1)
|
|
2,580
|
|
1,593
|
|
6,996
|
|
4,332
|
Gross
profit
|
|
9
|
|
24
|
|
7,121
|
|
828
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
1,463
|
|
1,449
|
|
4,940
|
|
4,369
|
Intellectual property
legal fees
|
|
409
|
|
899
|
|
2,255
|
|
6,679
|
Selling, general and
administrative(1)
|
|
2,398
|
|
1,710
|
|
6,822
|
|
5,213
|
Total operating expenses
|
|
4,270
|
|
4,058
|
|
14,017
|
|
16,261
|
Operating
loss
|
|
(4,261)
|
|
(4,034)
|
|
(6,896)
|
|
(15,433)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(159)
|
|
(447)
|
|
(428)
|
|
(1,416)
|
Other income
(expense), net
|
|
19
|
|
(889)
|
|
17
|
|
667
|
Total other expense, net
|
|
(140)
|
|
(1,336)
|
|
(411)
|
|
(749)
|
Loss before provision
for income taxes
|
|
(4,401)
|
|
(5,370)
|
|
(7,307)
|
|
(16,182)
|
Provision for
income taxes
|
|
-
|
|
-
|
|
1
|
|
1
|
Net loss
|
|
$
(4,401)
|
|
$ (5,370)
|
|
$
(7,308)
|
|
$ (16,183)
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.08)
|
|
$
(0.11)
|
|
$
(0.14)
|
|
$
(0.33)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
52,454
|
|
50,354
|
|
51,301
|
|
48,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
14
|
|
$
11
|
|
$
42
|
|
$
37
|
Research and
development
|
|
73
|
|
123
|
|
263
|
|
461
|
Selling, general and
administrative
|
|
246
|
|
240
|
|
789
|
|
795
|
Total stock-based
compensation expense
|
|
$
333
|
|
$
374
|
|
$
1,094
|
|
$
1,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
October
1,
|
|
|
September 26,
|
|
|
October
1,
|
|
|
September 26,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(4,401)
|
|
$
|
(5,370)
|
|
$
|
(7,308)
|
|
$
|
(16,183)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
159
|
|
|
447
|
|
|
428
|
|
|
1,416
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
1
|
Depreciation and
amortization
|
|
|
84
|
|
|
30
|
|
|
210
|
|
|
312
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(4,158)
|
|
|
(4,893)
|
|
|
(6,669)
|
|
|
(14,454)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
333
|
|
|
374
|
|
|
1,094
|
|
|
1,293
|
Other expense
(income), net
|
|
|
(19)
|
|
|
889
|
|
|
(17)
|
|
|
(667)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(3,844)
|
|
$
|
(3,630)
|
|
$
|
(5,592)
|
|
$
|
(13,828)
|
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SOURCE Netlist, Inc.