IRVINE, Calif., Nov. 1, 2017 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST) today reported financial results for the third
quarter ended September 30, 2017.
Revenues for the third quarter ended September 30, 2017, were $9.0 million, compared to revenues of
$2.6 million for the quarter ended
October 1, 2016, an increase of
248%. Gross profit for the quarter ended September 30, 2017, was $0.7 million, or 8.0% of revenues, compared to a
gross profit of $9,000, or 0.3% of
revenues, for the quarter ended October 1,
2016.
Net loss for the third quarter ended September 30, 2017, was ($3.1) million, or ($0.05) loss per share, compared to a net loss in
the prior year period of ($4.4)
million, or ($0.08) loss per
share. These results include stock-based compensation expense
of $0.3 million for both quarters
ended September 30, 2017 and
October 1, 2016.
As of September 30, 2017, cash and
cash equivalents and restricted cash were $11.0 million, total assets were $20.7 million, working capital was $8.8 million, total debt, net of debt discount
and accrued interest, was $17.2
million, and stockholders' deficit was ($5.3) million.
"During the third quarter we received net proceeds
of $4.4 million from a registered direct offering, reduced
cash burn to $1.3 million, and
increased net product revenues by 248% versus the prior-year
period," said C.K. Hong, Netlist's
Chief Executive Officer. "Yesterday we filed our second
complaint against S.K. hynix at the International Trade Commission,
targeting billions of dollars of unlicensed S.K. hynix server
memory products. We also shipped our first HybriDIMM™ evaluation
units to select customers and are in the process of actively
pursuing the next phase of HybriDIMM's commercialization with a
number of parties, including Samsung."
Adjusted EBITDA (loss) was ($2.6)
million for the quarter ended September 30, 2017, compared to adjusted EBITDA
(loss) of ($3.8) million for the
prior year period. 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 loss below under the heading "Unaudited
Schedule Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA."
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, November 1, 2017 at 4:30
p.m. Eastern Time to review Netlist's results for the third
quarter ended September 30,
2017. The dial-in number for the call is
1-412-317-5443. The live webcast and archived replay of the
call can be accessed for 90 days in the Investors section of
Netlist's website at www.netlist.com.
Note Regarding Use of Non-GAAP Financial Measures
Certain of the information in this press release, 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 the operating performance of
Netlist's business excluding certain items that it believes are not
attributable to or reflective of its core operating results.
Netlist defines EBITDA as net loss calculated and presented in
conformity with accounting principles generally accepted in
the United States of America
("GAAP"), plus interest expense, net, plus provisions for income
taxes, and plus depreciation and 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 line items added to or
subtracted from net 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 loss in evaluating Netlist's operating performance.
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
Netlist is a leading provider of
high-performance modular memory subsystems serving customers in
diverse industries that require superior memory performance to
empower critical business decisions. Flagship products NVvault® and
EXPRESSvault® enable customers to accelerate data running through
their servers and storage and reliably protect enterprise-level
cache, metadata and log data by providing near instantaneous
recovery in the event of a system failure or power outage.
HybriDIMM™, Netlist's next-generation storage class memory product,
addresses the growing need for real-time analytics in Big Data
applications and in-memory databases. Netlist holds a portfolio of
patents, many seminal, in the areas of hybrid memory, storage class
memory, rank multiplication and load reduction. 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 within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are statements other than historical facts and often
address future events or Netlist's future performance.
Forward-looking statements contained in this news release include
statements about trends in Netlist's performance; Netlist's efforts
to protect and enforce its patent portfolio; Netlist's pending
legal proceedings; customer interest in and market acceptance of
Netlist's products; and Netlist's ability to execute its strategic
initiatives. All forward-looking statements reflect management's
present expectations regarding future events and are subject to
known and unknown risks, uncertainties and other factors that could
cause actual results to differ materially from those expressed in
or implied by any forward-looking statements. These risks,
uncertainties and other factors include, among others: risks
associated with Netlist's product sales, including the market and
demand for products sold or resold by Netlist and its ability to
successfully develop, launch and stimulate customer demand for new
products that are attractive to the market; risks associated with
patent infringement litigation initiated by Netlist, such as its
ongoing proceedings against SK hynix Inc., or by others against
Netlist, as well as the costs and unpredictability of any such
litigation; risks related to Netlist's plans for its intellectual
property, including its strategies for monetizing, licensing,
expanding and defending its patent portfolio; the success of
product, joint development and licensing partnerships, including
its relationship with Samsung Electronics Co., Ltd.; the
competitive landscape of Netlist's industry; and general economic,
political and market conditions. These and other risks and
uncertainties are described in Netlist's annual report on Form 10-K
for its most recently completed fiscal year and the other filings
it makes with the U.S. Securities and Exchange Commission from time
to time, including its subsequently filed quarterly and current
reports. Given these risks, uncertainties and other important
factors, undue reliance should not be placed on any forward-looking
statements. Forward-looking statements represent Netlist's
estimates and assumptions only as of the date made, and except as
required by law, Netlist undertakes no obligation to revise or
update any forward-looking statements for any reason.
(Tables Follow)
For more information,
please contact:
|
|
|
Brainerd
Communicators, Inc.
|
Netlist,
Inc.
|
Mike
Smargiassi
|
Gail M.
Sasaki
|
NLST@braincomm.com
|
Chief Financial
Officer
|
(212)
739-6729
|
(949)
435-0025
|
Netlist, Inc. and
Subsidiaries
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
8,583
|
|
$
|
9,476
|
|
Restricted
cash
|
|
|
2,400
|
|
|
3,100
|
|
Accounts receivable,
net
|
|
|
3,080
|
|
|
1,751
|
|
Inventories
|
|
|
4,386
|
|
|
3,160
|
|
Prepaid expenses and
other current assets
|
|
|
1,703
|
|
|
1,766
|
|
Total current
assets
|
|
|
20,152
|
|
|
19,253
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
509
|
|
|
645
|
|
Other
assets
|
|
|
82
|
|
|
70
|
|
Total
assets
|
|
$
|
20,743
|
|
$
|
19,968
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
7,766
|
|
$
|
4,028
|
|
Revolving line of
credit
|
|
|
2,570
|
|
|
676
|
|
Accrued payroll and
related liabilities
|
|
|
650
|
|
|
1,085
|
|
Accrued expenses and
other current liabilities
|
|
|
306
|
|
|
270
|
|
Notes payable and
capital lease obligation, current
|
|
|
23
|
|
|
151
|
|
Total current
liabilities
|
|
|
11,315
|
|
|
6,210
|
|
Convertible
promissory note, net of debt discount, and accrued
interest
|
|
|
14,638
|
|
|
14,251
|
|
Long-term warranty
liability
|
|
|
53
|
|
|
36
|
|
Total
liabilities
|
|
|
26,006
|
|
|
20,497
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
70
|
|
|
62
|
|
Additional paid-in
capital
|
|
|
149,580
|
|
|
144,035
|
|
Accumulated
deficit
|
|
|
(154,913)
|
|
|
(144,626)
|
|
Total
stockholders' deficit
|
|
|
(5,263)
|
|
|
(529)
|
|
Total
liabilities and stockholders' deficit
|
|
$
|
20,743
|
|
$
|
19,968
|
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
October
1,
|
September
30,
|
October
1,
|
|
|
2017
|
2016
|
2017
|
2016
|
|
|
|
|
|
|
|
|
|
|
Net product
revenue
|
|
$
9,010
|
|
$
2,589
|
|
$
29,840
|
|
$
7,260
|
|
Non-recurring
engineering revenues
|
|
-
|
|
-
|
|
-
|
|
6,857
|
|
Total net
revenues
|
|
9,010
|
|
2,589
|
|
29,840
|
|
14,117
|
|
Cost of
sales(1)
|
|
8,285
|
|
2,580
|
|
27,791
|
|
6,996
|
|
Gross
profit
|
|
725
|
|
9
|
|
2,049
|
|
7,121
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
1,159
|
|
1,463
|
|
4,142
|
|
4,940
|
|
Intellectual property
legal fees
|
|
749
|
|
409
|
|
2,129
|
|
2,255
|
|
Selling, general and
administrative(1)
|
|
1,780
|
|
2,398
|
|
5,645
|
|
6,822
|
|
Total
operating expenses
|
|
3,688
|
|
4,270
|
|
11,916
|
|
14,017
|
|
Operating
loss
|
|
(2,963)
|
|
(4,261)
|
|
(9,867)
|
|
(6,896)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(135)
|
|
(159)
|
|
(421)
|
|
(428)
|
|
Other income,
net
|
|
-
|
|
19
|
|
2
|
|
17
|
|
Total other
income, net
|
|
(135)
|
|
(140)
|
|
(419)
|
|
(411)
|
|
Loss before provision
for income taxes
|
|
(3,098)
|
|
(4,401)
|
|
(10,286)
|
|
(7,307)
|
|
Provision for
income taxes
|
|
-
|
|
-
|
|
1
|
|
1
|
|
Net loss
|
|
$ (3,098)
|
|
$ (4,401)
|
|
$ (10,287)
|
|
$ (7,308)
|
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.05)
|
|
$
(0.08)
|
|
$
(0.16)
|
|
$
(0.14)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
65,644
|
|
52,454
|
|
63,056
|
|
51,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
4
|
|
$
14
|
|
$
33
|
|
$
42
|
|
Research and
development
|
|
78
|
|
73
|
|
258
|
|
263
|
|
Selling, general and
administrative
|
|
213
|
|
246
|
|
649
|
|
789
|
|
Total stock-based
compensation
|
|
$
295
|
|
$
333
|
|
$
940
|
|
$
1,094
|
|
Netlist, Inc.
and Subsidiaries
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
October
1,
|
|
September
30,
|
|
October
1,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(3,098)
|
|
$
|
(4,401)
|
|
$
|
(10,287)
|
|
$
|
(7,308)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
135
|
|
|
159
|
|
|
421
|
|
|
428
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
1
|
Depreciation and
amortization
|
|
|
70
|
|
|
84
|
|
|
214
|
|
|
210
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(2,893)
|
|
|
(4,158)
|
|
|
(9,651)
|
|
|
(6,669)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
295
|
|
|
333
|
|
|
940
|
|
|
1,094
|
Other income,
net
|
|
|
-
|
|
|
(19)
|
|
|
(2)
|
|
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(2,598)
|
|
$
|
(3,844)
|
|
$
|
(8,713)
|
|
$
|
(5,592)
|
View original
content:http://www.prnewswire.com/news-releases/netlist-reports-third-quarter-2017-results-300547580.html
SOURCE Netlist, Inc.