0001104659-12-014106 8-K 3 20120228 2.02 9.01 20120228 20120228 NETLIST INC 0001282631 3674 954812784 DE 1231 8-K 34 001-33170 12648602 51 DISCOVERY, STE 150 IRVINE CA 92618 949-435-0025 51 DISCOVERY, STE 150 IRVINE CA 92618 8-K 1 a12-4356_18k.htm 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported): February 28, 2012

 

NETLIST, INC.

(Exact Name of Registrant as Specified in its Charter)

 

Delaware
(State or Other Jurisdiction of
Incorporation)

 

001-33170
(Commission
File Number)

 

95-4812784
(IRS Employer
Identification Number)

 

51 Discovery, Suite 150

Irvine, California 92618
(Address of Principal Executive Offices)

 

(949) 435-0025

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Item 2.02.  Results of Operations and Financial Condition.

 

On February 28, 2012, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter and fiscal year ended December 31, 2011. The press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein in its entirety.

 

The information included in this Item 2.02 of Current Report on Form 8-K, including the attached Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01.  Financial Statements and Exhibits.

 

(d)                                 Exhibits.

 

Exhibit

 

 

Number

 

Description

 

 

 

99.1

 

Press Release, dated February 28, 2012

 

2



 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

NETLIST, INC.

 

 

 

 

 

 

Date: February 28, 2012

By:

/s/ Gail M. Sasaki

 

 

Gail M. Sasaki

 

 

Vice President and Chief Financial Officer

 

3


EX-99.1 2 a12-4356_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NETLIST REPORTS FOURTH QUARTER AND FULL YEAR 2011 RESULTS

 

2011 Revenues Increase 60% and Gross Profit Doubles

Completes Memory Qualification of HyperCloud™ at Major OEMs

 

IRVINE, CALIFORNIA, February 28, 2012 - Netlist, Inc. (NASDAQ: NLST), a leading provider of cloud computing memory subsystems, today reported financial results for the fourth quarter and full year ended December 31, 2011.

 

Revenues for the 12 months ended December 31, 2011, were $60.7 million, up 60 percent from revenues of $37.9 million for the 12 months ended January 1, 2011.  Gross profit for the 12 months ended December 31, 2011, was $20.3 million, or 33 percent of revenues, compared to a gross profit of $9.9 million, or 26 percent of revenues, for the 12 months ended January 1, 2011, an increase of 104 percent for the period.

 

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) loss after adding back net interest expense, benefit of income taxes, depreciation, amortization, stock-based compensation and net non-operating expense (income) was $1.5 million for the 12 month period ended December 31, 2011, compared to an adjusted EBITDA loss of $12.1 million for the prior year period.

 

Net loss for the 12 months ended December 31, 2011, was $5.6 million, or $0.22 loss per share, compared to a net loss in the prior year period of $15.1 million, or $0.64 loss per share.  These results include stock-based compensation expense of $1.6 million for 2011, compared to $1.5 million for 2010.

 

“In the past year we made great progress in strategically advancing our position in the high performance memory market while improving our financial results,” said C.K. Hong, Chief Executive Officer of Netlist.  “Revenues increased by over 60%, driving a 100% increase in our gross profit without an increase in operating expenses - highlighting the improving operating leverage in our model.  Ongoing investments in new technologies as well as partnerships culminated in successful qualifications of HyperCloud and VLP memory at major OEMs in recent months. We expect these efforts to lead to significant growth of our business in the second half of the year.”

 

Revenues for the fourth quarter ended December 31, 2011, were $16.4 million, up 62 percent from revenues of $10.1 million for the fourth quarter ended January 1, 2011.  Gross profit for the fourth quarter ended December 31, 2011, was $6.0 million, or 37 percent of revenues, compared to a gross profit of $3.3 million, or 33 percent of revenues, for the fourth quarter ended January 1, 2011, an increase of 82 percent.

 

Adjusted EBITDA after adding back net interest expense, benefit of income taxes, depreciation, amortization, stock-based compensation and net non-operating income was $718,000 for the fourth quarter ended December 31, 2011, compared to an adjusted EBITDA loss of $2.3 million for the prior year period.

 



 

Net loss for the fourth quarter ended December 31, 2011, was $227,000 or $0.01 loss per share, compared to the net loss in the prior year period of $3.2 million, or $0.13 loss per share.  These results include stock-based compensation expense in the fourth quarter ended December 31, 2011, of $397,000 compared with $261,000 in the year-earlier period.

 

As of December 31, 2011, cash, cash equivalents, and investments in marketable securities were $11 million, total assets were $32 million, working capital was $18 million, total debt was $3 million, and stockholders’ equity was $20 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 fourth quarter and full year ended December 31, 2011.  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, benefit of 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 robust portfolio of high performance 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 servers, rack-mounted servers, 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. 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 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 quarterly report on Form 10-Q filed on November 15, 2011, 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.

Gail M. Sasaki

Corey Kinger (investors)

Chief Financial Officer

kinger@braincomm.com

Netlist, Inc.

Sharon Oh (media)

(949) 435-0025

oh@braincomm.com

 

(212) 986-6667

 

 



 

Netlist, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

 

 

 

2011

 

2011

 

2011

 

2011

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

16,381

 

$

10,096

 

$

60,729

 

$

37,855

 

Cost of sales(1)

 

10,389

 

6,807

 

40,468

 

27,910

 

Gross profit

 

5,992

 

3,289

 

20,261

 

9,945

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

3,502

 

3,606

 

14,924

 

14,762

 

Selling, general and administrative(1)

 

2,694

 

2,878

 

10,705

 

11,041

 

Total operating expenses

 

6,196

 

6,484

 

25,629

 

25,803

 

Operating loss

 

(204

)

(3,195

)

(5,368

)

(15,858

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(81

)

(43

)

(228

)

(42

)

Other (expense) income, net

 

2

 

 

(56

)

71

 

Total other income (expense), net

 

(79

)

(43

)

(284

)

29

 

Loss before tax benefit

 

(283

)

(3,238

)

(5,652

)

(15,829

)

Income tax benefit

 

(56

)

(1

)

(53

)

(714

)

Net loss

 

$

(227

)

$

(3,237

)

$

(5,599

)

$

(15,115

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.01

)

$

(0.13

)

$

(0.22

)

$

(0.64

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

28,306

 

25,188

 

25,086

 

23,779

 

 


(1)  Amounts include stock-based compensation expense as follows:

 

Cost of sales

 

$

28

 

$

9

 

$

79

 

$

42

 

Research and development

 

134

 

60

 

600

 

357

 

Selling, general and administrative

 

235

 

192

 

941

 

1,083

 

 



 

Netlist, Inc.

Consolidated Balance Sheets

(in thousands)

 

 

 

December 31,

 

January 1,

 

 

 

2011

 

2011

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

10,535

 

$

14,210

 

Investments in marketable securities

 

 

824

 

Accounts receivable, net

 

11,399

 

6,451

 

Inventories

 

6,057

 

4,509

 

Prepaid expenses and other current assets

 

806

 

1,396

 

Total current assets

 

28,797

 

27,390

 

 

 

 

 

 

 

Property and equipment, net

 

2,771

 

4,077

 

Long-term investments in marketable securities

 

444

 

890

 

Other assets

 

161

 

337

 

Total assets

 

$

32,173

 

$

32,694

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

6,155

 

$

6,256

 

Accrued payroll and related liabilities

 

1,813

 

1,762

 

Accrued expenses and other current liabilities

 

460

 

369

 

Accrued engineering charges

 

450

 

638

 

Current portion of long-term debt

 

2,144

 

674

 

Total current liabilities

 

11,022

 

9,699

 

Long-term debt, net of current portion

 

1,118

 

1,063

 

Other liabilities

 

94

 

85

 

Total liabilities

 

12,234

 

10,847

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

26

 

25

 

Additional paid-in capital

 

92,709

 

89,074

 

Accumulated deficit

 

(72,740

)

(67,141

)

Accumulated other comprehensive loss

 

(56

)

(111

)

Total stockholders’ equity

 

19,939

 

21,847

 

Total liabilities and stockholders’ equity

 

$

32,173

 

$

32,694

 

 



 

Netlist, Inc.

Schedule Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 31,

 

January 1,

 

December 31,

 

January 1,

 

 

 

2011

 

2011

 

2011

 

2011

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(227

)

$

(3,237

)

$

(5,599

)

$

(15,115

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

81

 

43

 

228

 

42

 

Benefit of income taxes

 

(56

)

(1

)

(53

)

(714

)

Depreciation and amortization

 

525

 

596

 

2,242

 

2,287

 

 

 

 

 

 

 

 

 

 

 

EBITDA

 

323

 

(2,599

)

(3,182

)

(13,500

)

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

397

 

261

 

1,620

 

1,482

 

Other (income) expense, net

 

(2

)

 

56

 

(71

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

718

 

$

(2,338

)

$

(1,506

)

$

(12,089

)

 

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.

 

# # #

 


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