IRVINE, Calif., May 16, 2017 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST), today reported financial results for the first
quarter ended April 1,
2017.
Revenues for the first quarter ended April 1, 2017, were $9.4
million, compared to revenues of $4.6
million for the quarter ended April
2, 2016, an increase of 105%. Gross profit for the
quarter ended April 1, 2017, was
$680,000, or 7.2% of revenues,
compared to a gross profit of $3.5
million, or 75% of revenues, for the quarter ended
April 2, 2016. The first
quarter of 2016 included $3.4 million
in non-recurring engineering revenues and gross profit for Phase 1
of the five year Joint Development Agreement with Samsung
Electronics.
Net loss for the first quarter ended April 1, 2017, was ($3.3)
million, or ($0.05) loss per
share, compared to a net loss in the prior year period of
($1.4) million, or ($0.03) loss per share. These results
include stock-based compensation expense of $0.3 million and $0.5
million for the three month periods ended April 1, 2017 and April 2,
2016, respectively.
As of April 1, 2017, cash and cash
equivalents and restricted cash were $10.9
million, total assets were $19.8
million, working capital was $10.2
million, total debt, net of debt discounts, and accrued
interest was $16.0 million, and
stockholders' deficit was ($3.5)
million.
"We delivered an increase in first quarter revenue both
consecutively and year over year. These results have been
made possible through the
strategic partnership with Samsung and the inclusion of their
high-end memory and storage products to our offering," said
C.K. Hong, Netlist's Chief Executive
Officer. "We remain on track for initial customer sampling of
HybriDIMM and continue to make progress with target customers for
EV3 and NV4. We also are pleased with the recently announced transaction with TRGP
Capital Management to fund the patent infringement litigation
against SK hynix at the U.S. International Trade Commission (ITC)
and in Federal District Court. The ITC trial concluded last
week in Washington D.C. and a
ruling is expected in early October from the Administrative Law
Judge who presided over the proceeding."
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 income (loss) below under the heading "Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA."
Adjusted EBITDA was ($2.9) million
for the quarter ended April 1, 2017,
compared to adjusted EBITDA of ($0.8)
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 16, 2017 at 5:00 p.m.
Eastern Time to review the company's results for the first
quarter ended April 1, 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 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 raw data into business insight. The company
produces next generation persistent memory solutions that enable
businesses to transact quicker, gain insight faster and reduce
datacenter cost. Flagship products NVvault® and EXPRESSvault®
accelerate system performance and provide mission critical fault
tolerance. HybriDIMM™, Netlist's next-generation Storage
Class Memory, lowers cost and improves performance of big data
analytics and in-memory computing. The company holds a portfolio of
patents, many seminal, in the area of hybrid memory, storage class
memory, rank multiplication and load-reduction, among others.
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 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 HybriDIMM™ , as
well as our other products and technologies; the rapidly-changing
nature of technology in our industry; risks associated with
intellectual property, including patent infringement litigation
initiated by us or by others against us as well as the costs and
unpredictability of litigation over infringement of our
intellectual property; 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 predictions about the size of the market for
our products; delays in our and our customers' product releases and
development; introductions of new products by competitors; changes
in end-user demand for technology solutions; and general economic
and market conditions. Other risks and uncertainties are described
in our annual report on Form 10-K filed on March 31, 2017, 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 /
William Metzger
|
Gail M.
Sasaki
|
NLST@braincomm.com
|
Chief Financial
Officer
|
(212)
986-6667
|
(949)
435-0025
|
Netlist,
Inc.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April
1,
|
|
December
31,
|
|
|
2017
|
|
2016
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
7,770
|
|
$
|
9,476
|
|
Restricted
cash
|
|
3,100
|
|
|
3,100
|
|
Accounts receivable,
net
|
|
1,235
|
|
|
1,751
|
|
Inventories
|
|
4,497
|
|
|
3,160
|
|
Prepaid expenses and
other current assets
|
|
2,542
|
|
|
1,766
|
|
Total
current assets
|
|
19,144
|
|
|
19,253
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
602
|
|
|
645
|
|
Other
assets
|
|
71
|
|
|
70
|
|
Total
assets
|
$
|
19,817
|
|
$
|
19,968
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
$
|
6,255
|
|
$
|
4,028
|
|
Revolving line of
credit
|
|
1,410
|
|
|
676
|
|
Accrued payroll and
related liabilities
|
|
818
|
|
|
1,085
|
|
Accrued expenses and
other current liabilities
|
|
211
|
|
|
270
|
|
Notes payable and
capital lease obligation, current
|
|
248
|
|
|
151
|
|
Total
current liabilities
|
|
8,942
|
|
|
6,210
|
|
Convertible
promissory note, net of debt discount, and accrued
interest
|
|
14,380
|
|
|
14,251
|
|
Long-term warranty
liability
|
|
40
|
|
|
36
|
|
Total
liabilities
|
|
23,362
|
|
|
20,497
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
Preferred
stock
|
|
-
|
|
|
-
|
|
Common
stock
|
|
62
|
|
|
62
|
|
Additional paid-in
capital
|
|
144,361
|
|
|
144,035
|
|
Accumulated
deficit
|
|
(147,968)
|
|
|
(144,626)
|
|
Total
stockholders' deficit
|
|
(3,545)
|
|
|
(529)
|
|
Total
liabilities and stockholders' deficit
|
$
|
19,817
|
|
$
|
19,968
|
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
April
1,
|
|
April
2,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Net product
sales
|
|
$
9,426
|
|
$
1,171
|
Non-recurring
engineering revenues
|
|
-
|
|
3,429
|
Total net
revenues
|
|
9,426
|
|
4,600
|
Cost of
sales(1)
|
|
8,746
|
|
1,149
|
Gross
profit
|
|
680
|
|
3,451
|
Operating
expenses:
|
|
|
|
|
Research and
development(1)
|
|
1,496
|
|
1,646
|
Intellectual property
legal fees
|
|
466
|
|
823
|
Selling, general and
administrative(1)
|
|
1,914
|
|
2,265
|
Total
operating expenses
|
|
3,876
|
|
4,734
|
Operating
loss
|
|
(3,196)
|
|
(1,283)
|
Other
expense:
|
|
|
|
|
Interest expense,
net
|
|
(148)
|
|
(137)
|
Other income,
net
|
|
2
|
|
8
|
Total
other expense, net
|
|
(146)
|
|
(129)
|
Loss before provision
for income taxes
|
|
(3,342)
|
|
(1,412)
|
Provision for
income taxes
|
|
-
|
|
1
|
Net loss
|
|
$ (3,342)
|
|
$ (1,413)
|
Net loss per common
share:
|
|
|
|
|
Basic and
diluted
|
|
$
(0.05)
|
|
$
(0.03)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
Basic and
diluted
|
|
61,681
|
|
50,365
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
16
|
|
$
15
|
Research and
development
|
|
66
|
|
135
|
Selling, general and
administrative
|
|
182
|
|
308
|
Total stock-based
compensation
|
|
$
264
|
|
$
458
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
April
1,
|
|
April
2,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(3,342)
|
|
$
|
(1,413)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
148
|
|
|
137
|
|
|
|
|
Provision for income
taxes
|
|
|
-
|
|
|
1
|
|
|
|
|
Depreciation and
amortization
|
|
|
73
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(3,121)
|
|
|
(1,221)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
264
|
|
|
458
|
|
|
|
|
Other income,
net
|
|
|
(2)
|
|
|
(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(2,859)
|
|
$
|
(771)
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/netlist-reports-first-quarter-2017-results-300458820.html
SOURCE Netlist, Inc.