IRVINE, Calif., May 17, 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 first quarter ended April 2, 2016.
Revenues for the quarter ended April 2,
2016, were $4.6 million, up
118% from revenues of $2.1 million
for the quarter ended March 28,
2015. Gross profit for the quarter ended April 2, 2016, was $3.5
million, or 75 % of revenues compared to a gross profit of
$699,000, or 33% of revenues for the
quarter ended March 28,
2015.
Net loss for the quarter ended April 2,
2016, was ($1.4) million, or
($0.03) loss per share, compared to a
net loss in the prior year period of ($6.5)
million, or ($0.14) loss per
share. These results include stock-based compensation expense
of $0.5 million for the first
quarters of both 2016 and 2015.
"We are pleased to have delivered 118% year over year growth in
revenues with gross margins of 75% during the first quarter.
Our financial results for the quarter reflect the benefit of our
joint development agreement with Samsung as we remain on pace to
sample a first generation NVDIMM-P storage class memory product
with select customers later this year," said C.K. Hong, Netlist's Chief Executive Officer.
"During the quarter we also secured major victories for our
portfolio of fundamental patents related to high performance and
nonvolatile memory at DDR3 and DDR4. We remain focused on
capturing license opportunities as well as leveraging our
intellectual property assets to drive the adoption of our
breakthrough products in the marketplace."
As of April 2, 2016, cash and cash
equivalents and restricted cash were $15.3
million, total assets were $19.9
million, working capital was $11.0
million, total debt, net of debt discounts, was $13.9 million, and stockholders' deficit was
($2.2) million.
Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation
and Amortization) loss is a non-GAAP measure in which the net
interest expense, provision for 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 condensed 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 ($0.8)
million for the quarter ended April
2, 2016, compared to an adjusted EBITDA loss of ($5.3) million for the prior year period.
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, May 17, 2016 at 5:00 p.m.
Eastern Time to review the company's results for the first
quarter ended April 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 produce next generation persistent memory solutions
that enable businesses to transact quicker, gain insight faster,
and reduce datacenter costs. 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. A
forward‑looking statement is neither a prediction nor a guarantee
of future events or circumstances and is based on currently
available market, operating, financial and competitive information
and assumptions. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially
from those expected or projected, including, among others, risks
associated with the launch and commercial success of our products,
programs and technologies; the success of product, joint
development and licensing partnerships; continuing development,
qualification and volume production of HyperVault™, EXPRESSvault™,
NVvault®, HyperCloud® and VLP Planar-X RDIMM; the timing and
magnitude of the continued decrease in our sales; our ability to
leverage our NVvault® and EXPRESSvault™ technology in a more
diverse customer base; our need to raise additional capital and our
ability to obtain financing when necessary; the rapidly-changing
nature of technology; risks associated with intellectual property,
including 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 or reviewed by the United States Patent and
Trademark office and the Patent Trial and Appeal Board; volatility
in the pricing of DRAM ICs and NAND flash; 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 our and our customers' product releases and development;
introductions of new products by competitors; changes in end-user
demand for technology solutions; our ability to attract and retain
skilled personnel; our reliance on suppliers of critical components
and vendors in the supply chain; fluctuations in the market price
of critical components; evolving industry standards; the political
and regulatory environment in the
People's Republic of China; and general economic and market
conditions. Other risks and uncertainties are described in our
annual report on Form 10-K filed on March 4,
2016, and subsequent filings with the U.S. Securities and
Exchange Commission we make from time to time. Except as required
by law, we undertake 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.
|
Condensed
Consolidated Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
(unaudited)
|
|
(audited)
|
|
|
April 2,
|
|
January 2,
|
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
14,890
|
|
$
|
19,684
|
Restricted
cash
|
|
|
400
|
|
|
400
|
Accounts receivable,
net
|
|
|
475
|
|
|
716
|
Inventories
|
|
|
1,603
|
|
|
1,658
|
Prepaid expenses and
other current assets
|
|
|
1,968
|
|
|
1,739
|
Total current
assets
|
|
|
19,336
|
|
|
24,197
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
493
|
|
|
408
|
Other
assets
|
|
|
78
|
|
|
61
|
Total
assets
|
|
$
|
19,907
|
|
$
|
24,666
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
3,246
|
|
$
|
3,299
|
Accrued payroll and
related liabilities
|
|
|
689
|
|
|
1,243
|
Accrued expenses and
other current liabilities
|
|
|
336
|
|
|
340
|
Deferred
revenue
|
|
|
3,429
|
|
|
6,857
|
Accrued engineering
charges
|
|
|
500
|
|
|
500
|
Notes
payable
|
|
|
181
|
|
|
13
|
Total current
liabilities
|
|
|
8,381
|
|
|
12,252
|
Convertible
promissory note, net of debt discount
|
|
|
13,753
|
|
|
13,699
|
Long-term warranty
liability
|
|
|
22
|
|
|
49
|
Total
liabilities
|
|
|
22,156
|
|
|
26,000
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
Common
stock
|
|
|
50
|
|
|
50
|
Additional paid-in
capital
|
|
|
132,509
|
|
|
132,011
|
Accumulated
deficit
|
|
|
(134,808)
|
|
|
(133,395)
|
Total stockholders'
deficit
|
|
|
(2,249)
|
|
|
(1,334)
|
Total liabilities and
stockholders' deficit
|
|
$
|
19,907
|
|
$
|
24,666
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
April 2,
|
|
March 28,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
|
1,171
|
|
$
|
2,114
|
Non-recurring
engineering revenues
|
|
|
3,429
|
|
|
-
|
Total net
revenues
|
|
|
4,600
|
|
|
2,114
|
Cost of
sales(1)
|
|
|
1,149
|
|
|
1,415
|
Gross
profit
|
|
|
3,451
|
|
|
699
|
Operating
expenses:
|
|
|
|
|
|
|
Research and
development(1)
|
|
|
1,646
|
|
|
1,384
|
Intellectual property
legal fees
|
|
|
823
|
|
|
3,542
|
Selling, general and
administrative(1)
|
|
|
2,265
|
|
|
1,759
|
Total operating
expenses
|
|
|
4,734
|
|
|
6,685
|
Operating
loss
|
|
|
(1,283)
|
|
|
(5,986)
|
Other expense,
net:
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(137)
|
|
|
(480)
|
Other income,
net
|
|
|
8
|
|
|
9
|
Total other expense,
net
|
|
|
(129)
|
|
|
(471)
|
Loss before provision
for income tax
|
|
|
(1,412)
|
|
|
(6,457)
|
Provision for income
taxes
|
|
|
1
|
|
|
1
|
Net loss
|
|
$
|
(1,413)
|
|
$
|
(6,458)
|
Net loss per common
share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.03)
|
|
$
|
(0.14)
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
50,365
|
|
|
44,708
|
|
|
|
|
|
|
|
(1) Amounts include
stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
|
15
|
|
$
|
14
|
Research and
development
|
|
|
135
|
|
|
190
|
Selling, general and
administrative
|
|
|
308
|
|
|
307
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
April 2,
|
|
March 28,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(1,413)
|
|
$
|
(6,458)
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
137
|
|
|
480
|
Provision for income
taxes
|
|
|
1
|
|
|
1
|
Depreciation and
amortization
|
|
|
54
|
|
|
148
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(1,221)
|
|
|
(5,829)
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
458
|
|
|
511
|
Other income,
net
|
|
|
(8)
|
|
|
(9)
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(771)
|
|
$
|
(5,327)
|
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SOURCE Netlist, Inc.