IRVINE, Calif., Feb. 29, 2016 /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 fourth quarter and full year
ended January 2, 2016.
Revenues for the three months ended January 2, 2016, were $2.9
million, compared to revenues of $2.5
million for the fourth quarter ended December 27, 2014. Gross profit for the
three months ended January 2, 2016,
was $1.3 million compared to a gross
loss of ($113,000), for the fourth
quarter ended December 27,
2014.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) loss is a non-GAAP measure in which the net
interest expense, benefit of income taxes, depreciation,
amortization, stock-based compensation and net other income
(expense) are added back to the GAAP basis net income (loss). The
non-GAAP measures are described below and are reconciled to the
corresponding GAAP measure in the consolidated financial statements
portion of this release under the heading "Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA."
The adjusted EBITDA loss was ($1.4)
million for the fourth quarter ended January 2, 2016, compared to an adjusted EBITDA
loss of ($4.8) million for the prior
year period.
Net loss for the fourth quarter ended January 2, 2016, was ($4.3) million, or ($0.09) loss per share, compared to a net loss in
the prior year period of ($5.8)
million, or ($0.14) loss per
share. These results include stock-based compensation expense
of $0.5 million for the fourth
quarters of 2015 and 2014 and nonrecurring other expense of
$1.7 million in the fourth quarter of
2015.
Revenues for the twelve months ended January 2, 2016, were $8.0
million, compared to revenues of $19.2 million for the twelve months ended
December 27, 2014. Gross profit
for the twelve months ended January 2,
2016, was $2.1 million, or
26.2 percent of revenues, compared to a gross profit of
$4.0 million, or 20.7 percent of
revenues, for the twelve months ended December 27, 2014.
Adjusted EBITDA loss was ($15.3)
million for the twelve months ended January 2, 2016, compared to an adjusted EBITDA
loss of ($10.9) million for the prior
year period.
Net loss for the twelve months ended January 2, 2016, was ($20.5) million, or ($0.42) loss per share, compared to a net loss in
the prior year period of ($15.4)
million, or ($0.38) loss per
share. These results include stock-based compensation expense
of $1.8 million and $2.0 million for the twelve month periods ended
January 2, 2016 and December 27, 2014, respectively and nonrecurring
other expense of $1.0 million for the
twelve months ended January 2, 2016.
As of January 2, 2016, cash and
cash equivalents and restricted cash were $20.1 million, total assets were $24.7 million, working capital was $11.9 million, total debt, net of debt discounts,
was $13.7 million, and stockholders'
deficit was ($1.3) million.
"The company's 2015 financial results reflect our significant
investment in technology and patents for a new class of memory
technology," said C.K. Hong,
Netlist's Chief Executive Officer. During the year we forged a
strategic, multi-pronged alliance with Samsung which provided
funding and critical validation for HyperVault. We enter 2016
with momentum across our business as we kicked off joint
development activities with Samsung, secured a landmark patent
victory against Inphi affirming our ownership of key intellectual
property for LRDIMMs, and expanded our product offering with the
introduction of NV4. We are excited about the opportunities
for our breakthrough solutions in the emerging hybrid memory and
storage class memory markets, as well as prospects for licensing of
our patent portfolio."
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, February 29, 2015 at 5:00
p.m. Eastern Time to review the company's results for the
fourth quarter ended January 2,
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 (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, Inc.
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 space. Flagship products
NVvault® and EXPRESSvault™ accelerate system performance and
provide mission critical fault tolerance. HyperVault®, Netlist's
next-generation architecture, 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. To learn more,
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, our ability to regain compliance with NASDAQ listing
rules, risks associated with the launch and commercial success of
our products, programs and technologies; our 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 2,
|
|
December 27,
|
|
|
|
2016
|
|
2014
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,684
|
|
$
|
11,040
|
|
Restricted
cash
|
|
|
400
|
|
|
700
|
|
Accounts receivable,
net
|
|
|
716
|
|
|
1,091
|
|
Inventories
|
|
|
1,658
|
|
|
1,880
|
|
Prepaid expenses and
other current assets
|
|
|
1,739
|
|
|
735
|
|
Total current
assets
|
|
|
24,197
|
|
|
15,446
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
408
|
|
|
393
|
|
Other
assets
|
|
|
61
|
|
|
69
|
|
Total
assets
|
|
$
|
24,666
|
|
$
|
15,908
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' (DEFICIT) EQUITY
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
3,299
|
|
$
|
3,957
|
|
Accrued payroll and
related liabilities
|
|
|
1,243
|
|
|
710
|
|
Accrued expenses and
other current liabilities
|
|
|
340
|
|
|
420
|
|
Deferred
revenue
|
|
|
6,857
|
|
|
-
|
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
|
Current portion of
long-term debt, net of debt discount
|
|
|
13
|
|
|
1,952
|
|
Total current
liabilities
|
|
|
12,252
|
|
|
7,539
|
|
Long-term debt, net
of current portion and debt discount
|
|
|
13,699
|
|
|
3,551
|
|
Long-term warranty
liability
|
|
|
49
|
|
|
99
|
|
Total
liabilities
|
|
|
26,000
|
|
|
11,189
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
(deficit) equity:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
50
|
|
|
41
|
|
Additional paid-in
capital
|
|
|
132,011
|
|
|
117,546
|
|
Accumulated
deficit
|
|
|
(133,395)
|
|
|
(112,868)
|
|
Total stockholders'
(deficit) equity
|
|
|
(1,334)
|
|
|
4,719
|
|
Total liabilities and
stockholders' (deficit) equity
|
|
$
|
24,666
|
|
$
|
15,908
|
|
Netlist, Inc. and
Subsidiaries
|
|
Unaudited
Condensed Consolidated Statements of Operations
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
Year
Ended
|
|
|
|
January 2,
|
|
December 27,
|
|
|
January 2,
|
|
December 27,
|
|
|
2016
|
|
2014
|
|
|
2016
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
|
1,709
|
|
$
|
2,516
|
|
$
|
6,869
|
|
$
|
19,195
|
|
Non-recurring
engineering revenues
|
|
|
1,143
|
|
|
-
|
|
|
1,143
|
|
|
-
|
|
Total net
revenues
|
|
|
2,852
|
|
|
2,516
|
|
|
8,012
|
|
|
19,195
|
|
Cost of
sales(1)
|
|
|
1,583
|
|
|
2,629
|
|
|
5,915
|
|
|
15,231
|
|
Gross profit
(loss)
|
|
|
1,269
|
|
|
(113)
|
|
|
2,097
|
|
|
3,964
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
|
1,680
|
|
|
1,234
|
|
|
6,049
|
|
|
4,586
|
|
Intellectual property
legal fees, net of settlement transactions
|
|
|
(1,091)
|
|
|
2,465
|
|
|
5,588
|
|
|
6,387
|
|
Selling, general and
administrative(1)
|
|
|
2,628
|
|
|
1,611
|
|
|
7,841
|
|
|
6,796
|
|
Total operating
expenses
|
|
|
3,217
|
|
|
5,310
|
|
|
19,478
|
|
|
17,769
|
|
Operating
loss
|
|
|
(1,948)
|
|
|
(5,423)
|
|
|
(17,381)
|
|
|
(13,805)
|
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(648)
|
|
|
(393)
|
|
|
(2,064)
|
|
|
(1,574)
|
|
Other income
(expense), net
|
|
|
(1,748)
|
|
|
5
|
|
|
(1,081)
|
|
|
-
|
|
Total other expense,
net
|
|
|
(2,396)
|
|
|
(388)
|
|
|
(3,145)
|
|
|
(1,574)
|
|
Loss before provision
for income tax
|
|
|
(4,344)
|
|
|
(5,811)
|
|
|
(20,526)
|
|
|
(15,379)
|
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
2
|
|
Net loss
|
|
$
|
(4,344)
|
|
$
|
(5,811)
|
|
$
|
(20,527)
|
|
$
|
(15,381)
|
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.09)
|
|
$
|
(0.14)
|
|
$
|
(0.42)
|
|
$
|
(0.38)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,354
|
|
|
41,483
|
|
|
48,967
|
|
|
40,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include
stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
|
16
|
|
$
|
14
|
|
$
|
53
|
|
$
|
56
|
|
Research and
development
|
|
|
152
|
|
|
178
|
|
|
613
|
|
|
726
|
|
Selling, general and
administrative
|
|
|
309
|
|
|
269
|
|
|
1,104
|
|
|
1,230
|
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
January 2,
|
|
December 27,
|
|
January 2,
|
|
December 27,
|
|
|
2016
|
|
2014
|
|
2016
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(4,344)
|
|
$
|
(5,811)
|
|
$
|
(20,527)
|
|
$
|
(15,381)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
648
|
|
|
393
|
|
|
2,064
|
|
|
1,574
|
Provision for income
taxes
|
|
|
-
|
|
|
-
|
|
|
1
|
|
|
2
|
Depreciation and
amortization
|
|
|
37
|
|
|
160
|
|
|
349
|
|
|
882
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(3,659)
|
|
|
(5,258)
|
|
|
(18,113)
|
|
|
(12,923)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
477
|
|
|
461
|
|
|
1,770
|
|
|
2,012
|
Other expense
(income), net
|
|
|
1,748
|
|
|
(5)
|
|
|
1,081
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(1,434)
|
|
$
|
(4,802)
|
|
$
|
(15,262)
|
|
$
|
(10,911)
|
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To view the original version on PR Newswire,
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SOURCE Netlist, Inc.