IRVINE, Calif., Aug. 11, 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 second quarter ended
June 27, 2015.
Revenues for the three months ended June
27, 2015, were $1.4 million,
compared to revenues of $4.9 million
for the second quarter ended June 28,
2014. Gross profit for the three months ended June 27, 2015, was $0.1
million compared to a gross profit of $1.0 million, for the second quarter ended
June 28, 2014.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) was a loss of ($4.9)
million for the second quarter ended June 27, 2015, compared to an adjusted EBITDA
loss of ($2.3) million for the prior
year period.
Net loss for the second quarter ended June 27, 2015, was ($4.4)
million, or ($0.09) loss per
share, compared to a net loss in the prior year period of
($3.5) million, or ($0.08) loss per share. These results
include stock-based compensation expense of $0.4 million for the second quarter of 2015 and
$0.5 million for the second quarter
of 2014.
As of June 27, 2015, cash and cash
equivalents and restricted cash were $18.1
million, total assets were $21.9
million, working capital was $9.5
million, total debt, net of debt discounts, was $8.6 million, and stockholders' equity was
$5.4 million.
C.K. Hong, Netlist's Chief
Executive Officer, stated, "Our second quarter financial results
reflect the ongoing transition to our next generation hybrid memory
technologies and the litigation expense to protect over a decade of
investment in our seminal intellectual property. During the second
quarter we introduced the EXPRESSvault3 (EV3) PCIe hybrid product
line and garnered significant interest, with a growing number of
customers now in the early stages of qualification. We continue to
make progress in the development of HyperVault which is on track to
achieve major milestones later in the year."
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, August 11, 2015 at 5:00
p.m. Eastern Time to review the company's results for the
second quarter ended June 27,
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 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)
|
|
|
|
|
|
|
|
|
|
June 27,
|
December 27,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
16,524
|
|
$
|
11,040
|
Restricted
cash
|
|
|
1,600
|
|
|
700
|
Accounts receivable,
net
|
|
|
665
|
|
|
1,091
|
Inventories
|
|
|
1,948
|
|
|
1,880
|
Prepaid expenses and
other current assets
|
|
|
855
|
|
|
988
|
Total current
assets
|
|
|
21,592
|
|
|
15,699
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
196
|
|
|
393
|
Other
assets
|
|
|
77
|
|
|
150
|
Total
assets
|
|
$
|
21,865
|
|
$
|
16,242
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
6,237
|
|
$
|
3,957
|
Accrued payroll and
related liabilities
|
|
|
667
|
|
|
710
|
Accrued expenses and
other current liabilities
|
|
|
392
|
|
|
420
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
Current portion of
long-term debt, net of debt discount
|
|
|
4,260
|
|
|
2,205
|
Total current
liabilities
|
|
|
12,056
|
|
|
7,792
|
Long-term debt, net
of current portion and debt discount
|
|
|
4,387
|
|
|
3,632
|
Long-term warranty
liability
|
|
|
46
|
|
|
99
|
Total
liabilities
|
|
|
16,489
|
|
|
11,523
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
Common
stock
|
|
|
50
|
|
|
41
|
Additional paid-in
capital
|
|
|
129,007
|
|
|
117,546
|
Accumulated
deficit
|
|
|
(123,681)
|
|
|
(112,868)
|
Total stockholders'
equity
|
|
|
5,376
|
|
|
4,719
|
Total liabilities and
stockholders' equity
|
|
$
|
21,865
|
|
$
|
16,242
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Six Months
Ended
|
|
|
June 27,
|
|
June 28,
|
|
|
June 27,
|
|
|
June 28,
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,429
|
|
$
|
4,887
|
|
$
|
3,543
|
|
$
|
11,888
|
Cost of
sales(1)
|
|
|
1,324
|
|
|
3,908
|
|
|
2,739
|
|
|
8,924
|
Gross
profit
|
|
|
105
|
|
|
979
|
|
|
804
|
|
|
2,964
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
|
1,536
|
|
|
1,233
|
|
|
2,920
|
|
|
2,111
|
Intellectual property
legal fees
|
|
|
2,238
|
|
|
1,069
|
|
|
5,780
|
|
|
2,166
|
Selling, general and
administrative(1)
|
|
|
1,744
|
|
|
1,781
|
|
|
3,503
|
|
|
3,403
|
Total operating
expenses
|
|
|
5,518
|
|
|
4,083
|
|
|
12,203
|
|
|
7,680
|
Operating
loss
|
|
|
(5,413)
|
|
|
(3,104)
|
|
|
(11,399)
|
|
|
(4,716)
|
Other income
(expense), net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(489)
|
|
|
(393)
|
|
|
(969)
|
|
|
(788)
|
Other income
(expense), net
|
|
|
1,548
|
|
|
6
|
|
|
1,556
|
|
|
(5)
|
Total other income
(expense), net
|
|
|
1,059
|
|
|
(387)
|
|
|
587
|
|
|
(793)
|
Loss before provision
for income tax
|
|
|
(4,354)
|
|
|
(3,491)
|
|
|
(10,812)
|
|
|
(5,509)
|
Provision for income
taxes
|
|
|
-
|
|
|
2
|
|
|
1
|
|
|
2
|
Net loss
|
|
$
|
(4,354)
|
|
$
|
(3,493)
|
|
$
|
(10,813)
|
|
$
|
(5,511)
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.09)
|
|
$
|
(0.08)
|
|
$
|
(0.23)
|
|
$
|
(0.14)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,354
|
|
|
41,472
|
|
|
47,530
|
|
|
39,134
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
|
12
|
|
$
|
14
|
|
$
|
26
|
|
$
|
29
|
Research and
development
|
|
|
148
|
|
|
181
|
|
|
338
|
|
|
369
|
Selling, general and
administrative
|
|
|
248
|
|
|
320
|
|
|
555
|
|
|
648
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June 27,
|
|
June 28,
|
|
June 27,
|
|
June 28,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(4,354)
|
|
$
|
(3,493)
|
|
$
|
(10,813)
|
|
$
|
(5,511)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
489
|
|
|
393
|
|
|
969
|
|
|
788
|
Provision for income
taxes
|
|
|
-
|
|
|
2
|
|
|
1
|
|
|
2
|
Depreciation and
amortization
|
|
|
134
|
|
|
253
|
|
|
282
|
|
|
535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(3,731)
|
|
|
(2,845)
|
|
|
(9,561)
|
|
|
(4,186)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
408
|
|
|
515
|
|
|
919
|
|
|
1,046
|
Other expense (
income), net
|
|
|
(1,547)
|
|
|
(6)
|
|
|
(1,556)
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(4,870)
|
|
$
|
(2,336)
|
|
$
|
(10,198)
|
|
$
|
(3,135)
|
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To view the original version on PR Newswire,
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SOURCE Netlist, Inc.