IRVINE, Calif., Nov. 10, 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 third quarter ended September 26, 2015.
Revenues for the three months ended September 26, 2015, were $1.6 million, compared to revenues of
$4.8 million for the third quarter
ended September 27, 2014. Gross
profit for the three months ended September
26, 2015, was $24,000 compared
to a gross profit of $1.1 million,
for the third quarter ended September
27, 2014.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) was a loss of ($3.6)
million for the third quarter ended September 26, 2015, compared to an adjusted
EBITDA loss of ($3.0) million for the
prior year period.
Net loss for the third quarter ended September 26, 2015, was ($5.4) million, or ($0.11) loss per share, compared to a net loss in
the prior year period of ($4.1)
million, or ($0.10) loss per
share. These results include stock-based compensation expense
of $0.4 million for the third quarter
of 2015 and $0.5 million for the
third quarter of 2014.
As of September 26, 2015, cash and
cash equivalents and restricted cash were $13.3 million, total assets were $16.6 million, working capital was $0.1 million, total debt, net of debt discounts,
was $7.6 million, and stockholders'
equity was $0.4 million.
"The third quarter results reflect the current transition phase
of our business and the significant R&D investments being made
in our new hybrid memory technologies," said C.K. Hong, Netlist's Chief Executive Officer.
"We are making solid progress in the development of HyperVault, and
are engaged in active strategic discussions to bring this
groundbreaking technology to market. In addition, we are
positioning the Company for an upturn in the business in 2016 with
key hires in engineering, sales and marketing, particularly in
response to strong customer interest in the EXPRESSvault (EV3)
product line."
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, November 10, 2015 at 5:00
p.m. Eastern Time to review the company's results for the
third quarter ended September 26,
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 and
amortization, stock-based compensation and net other (income)
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 creates solutions that
accelerate turning data into information. We design and manufacture
controller and software-based memory solutions for our OEM and
Hyperscale customers in the server and storage markets. Flagship
products NVvault® and EXPRESSvault™ accelerate system performance
and provide mission critical fault tolerance. HyperVault®,
Netlist's next-generation technology, expands the performance and
capacity of memory channel storage. The company holds a portfolio
of patents, many seminal, in the area of hybrid memory, rank
multiplication and load-reduction, among others. Founded in 2000,
Netlist is headquartered in Irvine,
CA with manufacturing and operation facilities in Suzhou,
People's Republic of China. To
learn more, please visit 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; our limited capital resources; 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; 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; 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)
|
|
|
|
September 26,
|
|
December 27,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
12,647
|
|
$
|
11,040
|
|
Restricted
cash
|
|
|
700
|
|
|
700
|
|
Accounts receivable,
net
|
|
|
457
|
|
|
1,091
|
|
Inventories
|
|
|
1,841
|
|
|
1,880
|
|
Prepaid expenses and
other current assets
|
|
|
692
|
|
|
988
|
|
Total current
assets
|
|
|
16,337
|
|
|
15,699
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
218
|
|
|
393
|
|
Other
assets
|
|
|
64
|
|
|
150
|
|
Total
assets
|
|
$
|
16,619
|
|
$
|
16,242
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
6,902
|
|
$
|
3,957
|
|
Accrued payroll and
related liabilities
|
|
|
753
|
|
|
710
|
|
Accrued expenses and
other current liabilities
|
|
|
468
|
|
|
420
|
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
|
Current portion of
long-term debt, net of debt discount
|
|
|
7,569
|
|
|
2,205
|
|
Total current
liabilities
|
|
|
16,192
|
|
|
7,792
|
|
Long-term debt, net
of current portion and debt discount
|
|
|
-
|
|
|
3,632
|
|
Long-term warranty
liability
|
|
|
47
|
|
|
99
|
|
Total
liabilities
|
|
|
16,239
|
|
|
11,523
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
50
|
|
|
41
|
|
Additional paid-in
capital
|
|
|
129,381
|
|
|
117,546
|
|
Accumulated
deficit
|
|
|
(129,051)
|
|
|
(112,868)
|
|
Total stockholders'
equity
|
|
|
380
|
|
|
4,719
|
|
Total liabilities and
stockholders' equity
|
|
$
|
16,619
|
|
$
|
16,242
|
|
|
|
|
|
|
|
|
|
Netlist, Inc. and
Subsidiaries
|
|
Unaudited
Condensed Consolidated Statements of Operations
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September 26,
|
|
September 27,
|
|
September 26,
|
|
September 27,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
1,617
|
|
$
|
4,791
|
|
5,160
|
|
$
|
16,679
|
|
Cost of
sales(1)
|
|
|
1,593
|
|
|
3,678
|
|
4,332
|
|
|
12,602
|
|
Gross
profit
|
|
|
24
|
|
|
1,113
|
|
828
|
|
|
4,077
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
|
1,449
|
|
|
1,445
|
|
4,369
|
|
|
3,555
|
|
Intellectual property
legal fees
|
|
|
899
|
|
|
1,552
|
|
6,679
|
|
|
3,719
|
|
Selling, general and
administrative(1)
|
|
|
1,710
|
|
|
1,782
|
|
5,213
|
|
|
5,185
|
|
Total operating
expenses
|
|
|
4,058
|
|
|
4,779
|
|
16,261
|
|
|
12,459
|
|
Operating
loss
|
|
|
(4,034)
|
|
|
(3,666)
|
|
(15,433)
|
|
|
(8,382)
|
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(447)
|
|
|
(393)
|
|
(1,416)
|
|
|
(1,181)
|
|
Other income
(expense), net
|
|
|
(889)
|
|
|
-
|
|
667
|
|
|
(5)
|
|
Total other expense,
net
|
|
|
(1,336)
|
|
|
(393)
|
|
(749)
|
|
|
(1,186)
|
|
Loss before provision
for income tax
|
|
|
(5,370)
|
|
|
(4,059)
|
|
(16,182)
|
|
|
(9,568)
|
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
1
|
|
|
2
|
|
Net loss
|
|
$
|
(5,370)
|
|
$
|
(4,059)
|
|
(16,183)
|
|
$
|
(9,570)
|
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.11)
|
|
$
|
(0.10)
|
|
(0.33)
|
|
$
|
(0.24)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,354
|
|
|
41,472
|
|
48,471
|
|
|
39,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include
stock-based compensation as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
|
11
|
|
$
|
13
|
|
37
|
|
$
|
42
|
|
Research and
development
|
|
|
123
|
|
|
179
|
|
461
|
|
|
548
|
|
Selling, general and
administrative
|
|
|
240
|
|
|
313
|
|
795
|
|
|
961
|
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September 26,
|
|
September 27,
|
|
September 26,
|
|
September 27,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(5,370)
|
|
$
|
(4,059)
|
|
$
|
(16,183)
|
|
$
|
(9,570)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
447
|
|
|
393
|
|
|
1,416
|
|
|
1,181
|
|
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
2
|
|
|
Depreciation and
amortization
|
|
|
30
|
|
|
187
|
|
|
312
|
|
|
722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(4,893)
|
|
|
(3,479)
|
|
|
(14,454)
|
|
|
(7,665)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
374
|
|
|
505
|
|
|
1,293
|
|
|
1,551
|
|
|
Other expense
(income), net
|
|
|
889
|
|
|
-
|
|
|
(667)
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(3,630)
|
|
$
|
(2,974)
|
|
$
|
(13,828)
|
|
$
|
(6,109)
|
|
|
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To view the original version on PR Newswire,
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SOURCE Netlist, Inc.