0001104659-07-006485 8-K 3 20070201 2.02 9.01 20070201 20070201 NETLIST INC 0001282631 3674 954812784 DE 8-K 34 001-33170 07571914 475 GODDARD IRVINE CA 92618 8-K 1 a07-3197_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 1, 2007

Netlist, Inc.

(Exact name of registrant as specified in its charter)

Delaware

 

001-33170

 

95-4812784

(State or other jurisdiction
of incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

 

 

 

 

475 Goddard, Irvine, California

 

92618

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code:  (949) 435-0025

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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 (see General Instruction A.2. below):

 

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 1, 2007, Netlist, Inc. issued a Press Release announcing the consolidated results for the quarter and year ending December 30, 2006.

A copy of this Press Release is furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01                                             Financial Statements and Exhibits

(d)                                 Exhibits

99.1                           Press Release, dated February 1, 2007 issued by Netlist, Inc.

2




SIGNATURES

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.

Date: February 1, 2007

NETLIST, INC.

 

 

 

 

 

 

 

/s/  Lee Kim

 

 

Lee Kim

 

Vice President, Chief Financial Officer
and Secretary

 

3



EX-99.1 2 a07-3197_1ex99d1.htm EX-99.1

Exhibit 99.1

NEWS RELEASE for February 1, 2007 at 4:05 PM EST

Contact:

Allen & Caron Inc

 

Lee Kim

 

Dan Matsui or Jill Bertotti

 

Chief Financial Officer

 

(949) 474-4300

 

Netlist, Inc.

 

d.matsui@allencaron.com

 

(949) 435-0025

 

jill@allencaron.com

 

 

 

NETLIST REPORTS 2006 FOURTH QUARTER, YEAR-END RESULTS

Revenue Growth, Rising Margins Drive Profits for Quarter and Year

IRVINE, CA (February 1, 2007) . . . Netlist, Inc. (Nasdaq: NLST) today reported financial results for its fiscal fourth quarter and year ended December 30, 2006.

 

Revenues for the fourth quarter rose 80 percent to $42.0 million from $23.3 million in the 2005 fourth quarter, and gross margin for the quarter increased to 16.2 percent from 8.1 percent in the corresponding prior year period. Net income for the 2006 fourth quarter was $2.0 million, or $0.12 per diluted share, compared to a net loss of $304,000, or a $0.02 loss per diluted share, in the corresponding prior year period. Fully diluted weighted-average shares outstanding for the 2006 fourth quarter were 16,793,000, compared with 10,673,000 in the prior-year period. These results include stock-based compensation expense of $145,000 in the fourth quarter of 2006 and a credit of $6,000 in the fourth quarter of 2005.

 

Chief Executive Officer Chuck Hong commented: “We are encouraged with both the quarterly and yearly financial results, not only because they represent strong growth and profitability, but also because they result from stronger demand in our target markets.  They also reflect our ability to rapidly apply the company’s resources and intellectual property to opportunities these markets offer and our ability to deliver the quality that these markets demand.

 

“Demand for Netlist memory subsystems grew in 2006, as customer requirements for higher-capacity, faster, more compact and cooler-running memory components continue to outstrip the capabilities of most suppliers,” Hong continued. “Gross margins improved due to a combination of improving product mix and more efficient utilization of our manufacturing capacity. In addition, operating profitability improved as our OEM-focused business model allowed us to realize revenue growth rates in excess of incremental investment in R&D and sales and marketing.”

 

Revenues for fiscal year 2006 rose 90 percent to $151.4 million from $79.9 million in 2005, and gross margins improved to 14.7 percent from 7.5 percent in 2005.  For 2006, net income was $5.1 million, or $0.34 per diluted share, compared to a net loss of $2.3 million, or a $0.22 loss per diluted share, in 2005. Fully diluted weighted-average shares outstanding for 2006 were 15,331,000, compared with 10,673,000 a year ago. These results include stock based compensation expense of $592,000 in 2006 and a credit of $61,000 in 2005.




 

“From a revenue standpoint, we continued to make progress throughout the year by further penetrating our current OEM customers, adding new customers, and broadening our market coverage through the continuing development of new memory technologies,” stated Hong. “We attribute this growth and ongoing progress to our belief that Netlist is well positioned in the high-performance memory subsystem sector.  We own proprietary technologies that, with continuing investment and the addition of larger-scale manufacturing capacity in China, will enable us to realize the opportunities offered by current and anticipated demand in our markets.” 

 

On November 29, 2006, Netlist successfully completed an initial public offering (IPO) of 6,250,000 shares of common stock followed by an additional 937,500 shares sold by selling stockholders to underwriters to cover over-allotments.   

 

As of December 30, 2006, cash, cash equivalents and short-term investments were $36.2 million, total assets were $87.7 million, working capital was $45.6 million, total long-term debt was $1.2 million, and stockholders’ equity was $50.2 million.

 

Outlook for First Quarter of 2007

 

The following statements are based upon management's current expectations. These statements are forward-looking, and actual results may differ materially. The Company undertakes no obligation to update these statements.

 

For the first quarter of 2007, Netlist estimates net sales will be in the range of $40 to $42 million, and gross margin will be approximately the same as the fourth quarter of 2006.  Fully diluted earnings per share for the first quarter are estimated to be in the range of $0.07 to $0.08 per share, including estimated stock-based compensation expense of $300,000.

 

Conference Call Information

As previously announced, Netlist is conducting a conference call today to be broadcast live over the Internet at 4:30 PM Eastern Standard Time to review the financial results for the fourth quarter and fiscal-year ended December 30, 2006. The live webcast and archived replay of the call can be accessed in the Events page of the Investor Relations section of Netlist’s website at www.netlistinc.com.

 

About Netlist, Inc

Netlist designs and manufactures high-performance memory subsystems for the server and high- performance computing and communications markets. The company's memory subsystems are developed for applications in which high speed, high-capacity memory, functionality, small form factor, and heat dissipation are key requirements. These applications include tower servers, rack-mounted servers, blade servers, high performance computing clusters, engineering workstations, and telecommunication switches. Netlist maintains its headquarters and manufacturing facilities in Irvine, California, and plans to establish additional manufacturing capacity in China.

 

Safe Harbor Statement

This news release contains forward-looking statements regarding future events and the future performance of Netlist, including future opportunities and growth for the company’s business. 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, the rapidly-changing nature of technology; evolving industry standards; 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 the political and regulatory environment in China. Other risks and uncertainties are described in the Company's registration statement on Form S-1, dated November 29, 2006, and other filings with the U.S. Securities and Exchange Commission made by the company from time to time.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.




Netlist, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

Dec. 30,
2006

 

Dec. 31,
2005

 

Dec. 30,
2006

 

Dec. 31,
2005

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

42,009

 

$

23,304

 

$

151,448

 

$

79,856

 

Cost of sales

 

35,210

 

21,410

 

129,181

 

73,892

 

Gross profit

 

6,799

 

1,894

 

22,267

 

5,964

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

927

 

468

 

3,315

 

2,961

 

Selling, general & administrative

 

2,697

 

1,368

 

9,191

 

5,062

 

Total operating expenses

 

3.624

 

1,836

 

12,506

 

8,023

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

3,175

 

58

 

9,761

 

(2,059

)

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net of interest income

 

(333

)

(472

)

(1,825

)

(1,221

)

Other income (expense), net

 

80

 

9

 

(24

)

21

 

Total other expense, net

 

(253

)

(463

)

(1,849

)

(1,200

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before provision (benefit) for income taxes

 

2,922

 

(405

)

7,912

 

(3,259

)

Provision (benefit) for income taxes

 

948

 

(101

)

2,844

 

(912

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

1,974

 

$

(304

)

$

5,068

 

$

(2,347

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.14

 

$

(0.02

)

$

0.43

 

$

(0.22

)

Diluted

 

$

0.12

 

$

(0.02

)

$

0.34

 

$

(0.22

)

 

 

 

 

 

 

 

 

 

 

Weighed-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

13,616

 

10,673

 

11,705

 

10,673

 

Diluted

 

16,793

 

10,673

 

15,331

 

10,673

 

 




Netlist, Inc.
Consolidated Balance Sheets
(in thousands, except per share amounts)

 

 

December 30,
2006

 

December 31,
2005

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

30,975

 

$

953

 

Short-term investments

 

5,267

 

-

 

Accounts receivable, net of allowance for sales returns and doubtful accounts of $88 (2006) and $109 (2005), respectively

 

23,703

 

13,140

 

Inventories

 

19,473

 

6,816

 

Income taxes receivable

 

-

 

259

 

Deferred taxes

 

1,072

 

902

 

Prepaid expenses and other current assets

 

988

 

434

 

Total current assets

 

81,478

 

22,504

 

Property and equipment, net

 

3,830

 

2,437

 

Deferred taxes

 

580

 

759

 

Long-term investments

 

1,502

 

-

 

Other assets

 

326

 

142

 

Total assets

 

$

87,716

 

$

25,842

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

11,680

 

$

6,645

 

Revolving line of credit

 

19,238

 

9,463

 

Current portion of long term debt

 

1,033

 

720

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

116

 

Current portion of convertible notes payable

 

-

 

1,000

 

Income taxes payable

 

574

 

-

 

Accrued expenses and other current liabilities

 

3,256

 

1,841

 

Total current liabilities

 

35,899

 

19,785

 

 

 

 

 

 

 

Long term debt, net of current portion

 

1,230

 

988

 

Deferred gain on sale and leaseback transaction, net of current portion

 

344

 

464

 

Convertible notes payable, net of current portion

 

-

 

1,750

 

Total liabilities

 

37,473

 

22,987

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Series A convertible preferred stock, $2.00 par value— 1,000 shares authorized, issued and outstanding (liquidation preference of $2,000 at 2005)

 

-

 

2,000

 

Common stock, $0.001 par value—16,000 shares authorized; 19,544 (2006) and 10,673 (2005) shares issued and outstanding

 

20

 

11

 

Additional paid in capital

 

66,557

 

22,604

 

Note receivable from stockholder

 

(1

)

(23

)

Deferred stock-based compensation

 

-

 

(337

)

Accumulated deficit

 

(16,333

)

(21,400

)

Total stockholders’ equity

 

50,243

 

2,855

 

Total liabilities and stockholders’ equity

 

$

87,716

 

$

25,842

 

 

 



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