Netlist Reports First Quarter 2012 Results
IRVINE, CA -- (Marketwire) -- 05/15/12 -- Netlist, Inc. (NASDAQ: NLST), a designer and manufacturer of high-performance memory subsystems, today reported financial results for the first quarter ended March 31, 2012.
Revenues for the three months ended March 31, 2012, were $14.0 million, up 16 percent from revenues of $12.0 million for the first quarter ended April 2, 2011. Gross profit for the three months ended March 31, 2012, was $5.4 million, or 39 percent of revenues, compared to a gross profit of $3.8 million, or 32 percent of revenues, for the three months ended April 2, 2011, an increase of 43 percent for the period.
Adjusted EBITDA income (Earnings Before Interest, Taxes, Depreciation and Amortization) after adding back net interest expense, provision for income taxes, depreciation, amortization, stock-based compensation and net non-operating expense (income) was $43,000 for the three month period ended March 31, 2012, compared to an adjusted EBITDA loss of $1.9 million for the prior year period.
Net loss for the three months ended March 31, 2012, was $1.1 million, or $0.04 loss per share, compared to a net loss in the prior year period of $2.8 million, or $0.11 loss per share. These results include stock-based compensation expense of $523,000 for the first quarter of 2012, compared to $353,000 for the first quarter of 2011.
"HyperCloud (HCDIMM) is now available to ship with the world's top three high volume servers, and we are working closely with our OEM partners, HP and IBM, to introduce HCDIMMs to end-market users," said C.K. Hong, Chief Executive Officer of Netlist. "Even as we ramp-up HyperCloud and other new products in order to meet the anticipated rise in demand in the second half of the year, we have maintained a disciplined approach to managing our overall costs. As a result, we were able to expand our gross profit and achieve adjusted EBITDA break-even in the quarter. Looking ahead, beyond the impact of the near-term transitional phase on our top line results, we are well positioned for future growth as we begin to fully leverage our technologies in the fast growing cloud computing market."
As of March 31, 2012, cash, cash equivalents, and investments in marketable securities were $14.3 million, total assets were $36.9 million, working capital was $21.0 million, total debt was $2.8 million, and stockholders' equity was $23.4 million.
Conference Call Information
As previously announced, Netlist is conducting a conference call today
to be broadcast live over the Internet at 5:00 pm Eastern Time to
discuss and review the financial results for the first quarter ended
March 31, 2012. The dial-in number for the call is 1-800-860-2442. 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, 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, share-based compensation and non-operating net income and
expense that would normally be included in the most directly comparable
measures calculated and presented in accordance with Generally Accepted
Accounting Principles. 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.
About Netlist:
Netlist,
Inc. designs and manufactures high-performance, logic-based memory
subsystems for server and storage applications for cloud computing.
Netlist's flagship products include HyperCloud?, a patented memory
technology that breaks traditional memory barriers, NVvault? family of
products that enables data retention during power interruption,
EXPRESSvault?, a PCI Express backup/recovery solution for cache data
protection and a broad portfolio of industrial Flash and specialty
memory subsystems including VLP (very low profile) DIMMs and Planar-X
RDIMMs.
Netlist develops technology solutions for customer applications in which high-speed, high-capacity, small form factor and heat dissipation are key requirements for system memory. These customers include OEMs that design and build tower, rack-mounted, and blade servers, high-performance computing clusters, engineering workstations and telecommunications equipment. Founded in 2000, Netlist is headquartered in Irvine, CA with manufacturing facilities in Suzhou, People's Republic of China and an engineering design center in Silicon Valley, CA. Learn more at 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; the success of product partnerships;
continuing development, qualification and volume production of
EXPRESSvault?, NVvault?, HyperCloud? and VLP Planar-X RDIMM; the timing
and magnitude of the anticipated decrease in sales to our key customer;
our ability to leverage our NVvault? technology in a more diverse
customer base; the rapidly-changing nature of technology; risks
associated with intellectual property, including the costs and
unpredictability of litigation over infringement of our intellectual
property and the possibility of the Company's patents being re-examined
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 February 28, 2012,
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)
Netlist, Inc.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, December 31,
2012 2011
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 13,874 $ 10,535
Accounts receivable, net 10,333 11,399
Inventories 7,704 6,057
Prepaid expenses and other current assets 1,806 806
------------ ------------
Total current assets 33,717 28,797
Property and equipment, net 2,563 2,771
Long-term investments in marketable securities 451 444
Other assets 128 161
------------ ------------
Total assets $ 36,859 $ 32,173
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,225 $ 6,155
Accrued payroll and related liabilities 1,625 1,813
Accrued expenses and other current liabilities 1,191 460
Accrued engineering charges 450 450
Current portion of long-term debt 995 2,144
------------ ------------
Total current liabilities 11,486 11,022
Long-term debt, net of current portion 1,850 1,118
Other liabilities 80 94
------------ ------------
Total liabilities 13,416 12,234
------------ ------------
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value - 90,000 shares
authorized; 28,275 (2012) and 26,390 (2011)
shares issued and outstanding 28 26
Additional paid-in capital 97,285 92,709
Accumulated deficit (73,821) (72,740)
Accumulated other comprehensive loss (49) (56)
------------ ------------
Total stockholders' equity 23,443 19,939
------------ ------------
Total liabilities and stockholders' equity $ 36,859 $ 32,173
============ ============
Netlist, Inc.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
Quarter Ended
--------------------------
March 31, April 2,
2012 2011
------------ ------------
Net sales $ 13,967 $ 12,000
Cost of sales(1) 8,531 8,196
------------ ------------
Gross profit 5,436 3,804
------------ ------------
Operating expenses:
Research and development(1) 3,842 3,684
Selling, general and administrative(1) 2,609 2,917
------------ ------------
Total operating expenses 6,451 6,601
------------ ------------
Operating loss (1,015) (2,797)
------------ ------------
Other (expense) income:
Interest expense, net (71) (25)
Other income, net 5 -
------------ ------------
Total other expense, net (66) (25)
------------ ------------
Loss before provision for income taxes (1,081) (2,822)
Provision for income taxes - -
------------ ------------
Net loss $ (1,081) $ (2,822)
============ ============
Net loss per common share:
Basic and diluted $ (0.04) $ (0.11)
Weighted-average common shares outstanding:
Basic and diluted 26,729 24,881
(1) Amounts include stock-based compensation expense as follows:
Cost of sales $ 35 $ 13
Research and development 192 142
Selling, general and administrative 296 198
Netlist, Inc.
Schedule Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA
(in thousands)
Quarter Ended
--------------------------
March 31, April 2,
2012 2011
------------ ------------
GAAP net loss $ (1,081) $ (2,822)
Interest expense, net 71 25
Provision for income taxes - -
Depreciation and amortization 535 581
------------ ------------
EBITDA (475) (2,216)
Stock-based compensation 523 353
Other expense (income), net (5) -
------------ ------------
Adjusted EBITDA $ 43 $ (1,863)
============ ============
The table above reconciles net loss to EBITDA and Adjusted EBITDA. EBITDA is defined as net loss before net interest expense, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA before net non-operating expense (income) and stock-based compensation expense. Although EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance with GAAP, management believes that it is useful to Netlist, Inc. and to an investor in evaluating the Company because it is a widely used measure to evaluate a company's operating performance.
For more information, please contact:
Brainerd Communicators, Inc.
Corey Kinger/Mike Smargiassi (investors)
Sharon Oh (media)
NLST@braincomm.com
(212) 986-6667
Gail M. Sasaki
Chief Financial Officer
Netlist, Inc.
(949) 435-0025
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