IRVINE, Calif., May 12, 2015 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST), a leading provider of high performance memory
solutions for the cloud computing and storage markets, today
reported financial results for the first quarter ended March 28, 2015.
Revenues for the three months ended March
28, 2015, were $2.1 million,
compared to revenues of $7.0 million
for the first quarter ended March 29,
2014. Gross profit for the three months ended March 28, 2015, was $0.7
million compared to a gross profit of $2.0 million, for the first quarter ended
March 29, 2014.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) was a loss of ($5.3)
million for the first quarter ended March 28, 2015, compared to an adjusted EBITDA
loss of ($0.8) million for the prior
year period.
Net loss for the first quarter ended March 28, 2015, was ($6.5)
million, or ($0.14) loss per
share, compared to a net loss in the prior year period of
($2.0) million, or ($0.05) loss per share. These results
include stock-based compensation expense of $0.5 million for the first quarters of 2015 and
2014.
As of March 28, 2015, cash and
cash equivalents and restricted cash were $21.2 million, total assets were $25.5 million, working capital was $14.2 million, total debt, net of debt discounts,
was $9.5 million, and stockholders'
equity was $9.3 million.
C.K. Hong, Netlist's Chief
Executive Officer, stated, "First quarter results reflect ongoing
investments in R&D for HyperVault and the transition of our
base products business to next generation technology, as well as
legal expenses associated with current litigation. Notably, there
were several positive developments during the quarter that will
help to position the Company for profitable growth. Since its
recent announcement, the EXPRESSvault3 (EV3) product line which
accelerates Big Data applications has garnered significant interest
from major customers. We anticipate this interest will be converted
into commercial shipments in the second half of the year. We signed
a Letter of Intent with a strategic partner, LG Electronics, to
apply technology underlying HyperVault into an exciting new
application – smart phones. Finally, we are attracting interest
from potential strategic parties who recognize the value of
Netlist's technology and intellectual property. We expect to
see the benefits of these developments in the months and quarters
ahead."
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, May 12, 2015 at 5:00 p.m.
Eastern Time to review the company's results for the first
quarter ended March 28, 2015.
The dial-in number for the call is 1-412-858-4600. 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 (Earnings Before Interest, Taxes, Depreciation and
Amortization), may be considered 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 net interest expense, provisions for
income taxes, depreciation, amortization, stock-based compensation
and net other expense that would normally be included in the
most directly comparable measures calculated and presented in
accordance with Generally Accepted Accounting Principles ("GAAP").
Netlist's management uses these non-GAAP financial measures along
with the most directly comparable GAAP financial measures 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 compliance with GAAP, and non-financial measures as
reported by Netlist may not be comparable to similarly titled
amounts reported by other companies.
Adjusted EBITDA loss is a non-GAAP measure in which the net
interest expense, provision for income taxes, depreciation,
amortization, stock-based compensation and net other expense are
added back to the GAAP basis loss. The non-GAAP measures are
described above and are reconciled to the corresponding GAAP
measure in the condensed consolidated financial statements portion
of this release under the heading "Unaudited Schedule Reconciling
GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA."
About Netlist:
Netlist, Inc. designs and manufactures high-performance,
logic-based memory subsystems for server and storage applications
for cloud computing. Netlist's flagship products include NVvault®
and EXPRESSvault™, a family of hybrid memory products that
significantly accelerate system performance and provide mission
critical fault tolerance, as well as HyperVault, its next
generation hybrid memory solution which is under development and
greatly expands the performance and capacity of DRAM channel
storage. The Company's product offering also includes HyperCloud®,
a patented memory technology that breaks traditional performance
barriers, and a broad portfolio of industrial Flash and specialty
memory subsystems including VLP (very low profile) DIMMs and
Planar-X RDIMMs. Netlist has steadily invested in and grown its
worldwide IP portfolio, which now includes 88 issued and pending
patents in the areas of high performance memory and hybrid memory
technologies.
Netlist develops technology solutions for customer applications
in which high-speed, high-capacity, small form factor and efficient
heat dissipation are key requirements for system memory. These
customers include OEMs and hyperscale datacenter operators that
design and build servers, storage systems and high-performance
computing clusters, engineering workstations and telecommunications
equipment. Founded in 2000, Netlist is headquartered in
Irvine, CA with manufacturing
facilities in Suzhou, People's Republic
of China. Learn more at www.netlist.com.
Safe Harbor Statement:
This news release contains forward-looking statements regarding
future events and the future performance of Netlist. These
forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those expected
or projected. These risks and uncertainties include, but are not
limited to, risks associated with the launch and commercial success
of our products, programs and technologies; the success of product
partnerships; continuing development, qualification and volume
production of Hypervault™, EXPRESSvault™, NVvault®,
HyperCloud® and VLP Planar-X RDIMM; the timing and
magnitude of the decrease in sales to our key customer; our ability
to leverage our NVvault® and EXPRESSvault™ technology in a more
diverse customer base; the rapidly-changing nature of technology;
risks associated with intellectual property, including risks
associated with the inherent uncertainty of the litigation process,
and we can provide no assurance that our efforts to mitigate the
effects of the jury verdict will be successful, 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 by the United States
Patent and Trademark office; volatility in the pricing of DRAM ICs
and NAND; changes in and uncertainty of customer acceptance of, and
demand for, our existing products and products under development,
including uncertainty of and/or delays in product orders and
product qualifications; delays in the Company's and its customers'
product releases and development; introductions of new products by
competitors; changes in end-user demand for technology solutions;
the Company's ability to attract and retain skilled personnel; the
Company's reliance on suppliers of critical components and vendors
in the supply chain; fluctuations in the market price of critical
components; evolving industry standards; and the political and
regulatory environment in the People's
Republic of China. Other risks and uncertainties are
described in the Company's annual report on Form 10-K filed on
March 27, 2015, and subsequent
filings with the U.S. Securities and Exchange Commission made by
the Company from time to time. Except as required by law, Netlist
undertakes 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.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
|
|
|
|
|
|
|
|
|
|
March 28,
|
|
December
27,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,558
|
|
$
|
11,040
|
|
Restricted
cash
|
|
|
1,600
|
|
|
700
|
|
Accounts receivable,
net
|
|
|
877
|
|
|
1,091
|
|
Inventories
|
|
|
1,821
|
|
|
1,880
|
|
Prepaid expenses and
other current assets
|
|
|
1,227
|
|
|
988
|
|
Total current
assets
|
|
|
25,083
|
|
|
15,699
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
284
|
|
|
393
|
|
Other
assets
|
|
|
143
|
|
|
150
|
|
Total
assets
|
|
$
|
25,510
|
|
$
|
16,242
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
4,846
|
|
$
|
3,957
|
|
Accrued payroll and
related liabilities
|
|
|
801
|
|
|
710
|
|
Accrued expenses and
other current liabilities
|
|
|
446
|
|
|
420
|
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
|
Current portion of
long-term debt
|
|
|
4,261
|
|
|
2,205
|
|
Total current
liabilities
|
|
|
10,854
|
|
|
7,792
|
|
Long-term debt, net
of current portion and debt discount
|
|
|
5,275
|
|
|
3,632
|
|
Other
liabilities
|
|
|
47
|
|
|
99
|
|
Total
liabilities
|
|
|
16,176
|
|
|
11,523
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
50
|
|
|
41
|
|
Additional paid-in
capital
|
|
|
128,610
|
|
|
117,546
|
|
Accumulated
deficit
|
|
|
(119,326)
|
|
|
(112,868)
|
|
Total stockholders'
equity
|
|
|
9,334
|
|
|
4,719
|
|
Total liabilities and
stockholders' equity
|
|
$
|
25,510
|
|
$
|
16,242
|
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 28,
|
|
March 29,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
2,114
|
|
$
|
7,001
|
Cost of
sales(1)
|
|
|
1,415
|
|
|
5,016
|
Gross profit
(loss)
|
|
|
699
|
|
|
1,985
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development(1)
|
|
|
1,384
|
|
|
878
|
Intellectual property
legal fees
|
|
|
3,542
|
|
|
1,097
|
Selling, general and
administrative(1)
|
|
|
1,759
|
|
|
1,622
|
Total operating
expenses
|
|
|
6,685
|
|
|
3,597
|
Operating
loss
|
|
|
(5,986)
|
|
|
(1,612)
|
Other expense
(net):
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(480)
|
|
|
(395)
|
Other income
(expense), net
|
|
|
9
|
|
|
(11)
|
Total other expense,
net
|
|
|
(471)
|
|
|
(406)
|
Loss before provision
for income taxes
|
|
|
(6,457)
|
|
|
(2,018)
|
Provision for income
tax
|
|
|
1
|
|
|
-
|
Net loss
|
|
$
|
(6,458)
|
|
$
|
(2,018)
|
Net loss per common
share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.14)
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
44,708
|
|
|
36,881
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
|
14
|
|
$
|
15
|
Research and
development
|
|
|
190
|
|
|
188
|
Selling, general and
administrative
|
|
|
307
|
|
|
328
|
Netlist, Inc.
|
Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 28,
|
|
March 29,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(6,458)
|
|
$
|
(2,018)
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
480
|
|
|
395
|
|
Provision for income
taxes
|
|
|
1
|
|
|
-
|
|
Depreciation and
amortization
|
|
|
148
|
|
|
282
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(5,829)
|
|
|
(1,341)
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
511
|
|
|
531
|
|
Other (income)
expense, net
|
|
|
(9)
|
|
|
11
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(5,327)
|
|
$
|
(799)
|
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SOURCE Netlist, Inc.