0001104659-08-051124 8-K 3 20080807 2.02 9.01 20080808 20080808 NETLIST INC 0001282631 3674 954812784 DE 8-K 34 001-33170 081000706 475 GODDARD IRVINE CA 92618 8-K 1 a08-21267_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):  August 7, 2008

 

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.)

 

51 Discovery, Irvine, California

 

92618

(Address of principal executive offices)

 

(Zip Code)

 

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

 

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 August 7, 2008, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter ended June 28, 2008. 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 August 7, 2008.

 

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: August 8, 2008

 

NETLIST, INC.

 

 

 

 

 

 

 

 

/s/  Gail Itow

 

 

Gail Itow

 

 

Vice President and Secretary

 

3


EX-99.1 2 a08-21267_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

NEWS RELEASE for August 7, 2008 at 4:05 PM EDT

Contact:

Allen & Caron Inc

Gail Itow

 

Jill Bertotti (investors)

Chief Financial Officer

 

jill@allencaron.com

Netlist, Inc.

 

Len Hall (media)

(949) 435-0025

 

len@allencaron.com

 

 

(949) 474-4300

 

 

NETLIST REPORTS 2008 SECOND QUARTER, SIX-MONTH RESULTS

 

IRVINE, CA (August 7, 2008) . . . Netlist, Inc. (NASDAQ: NLST) today reported financial results for the second quarter and six months ended June 28, 2008.  Revenues for the 2008 second quarter were $18.4 million compared to $12.8 million for the second quarter ended June 30, 2007.  Gross profit for the second quarter of 2008 improved to $2.7 million, or a gross margin of 14.4 percent, compared with a gross loss of $5.9 million, or a negative gross margin of 46.2 percent, in the year-earlier period.

 

Net loss for this year’s second quarter was $2.3 million, or a $0.11 loss per share, compared to a net loss in the 2007 second quarter of $7.2 million, or $0.37 loss per share.  Fully diluted weighted-average shares outstanding for the 2008 second quarter were 19,855,000, compared to 19,653,000 in the corresponding prior year period.  These results include stock-based compensation expense in the 2008 second quarter of $375,000, compared to $294,000 in the prior year period.

 

Chief Executive Officer Chun K. Hong said, “We were pleased to return to top-line growth in the second quarter, both year-over-year and sequentially from the March 2008 period.  We achieved a good mix of high-density, low-power-memory modules for high end server applications coupled with high density laptop memory modules.  We currently expect additional high-density server module and flash programs with current and new OEM customers to come on line as the year progresses, which should make up a greater portion of the business and drive higher margins and bottom-line improvements.”

 

For this year’s first six months, revenues were $31.5 million, compared to $50.3 million for the prior year period.  Gross profit for the first six months of 2008 improved to $5.8 million, or a gross margin of 18.4 percent, compared with a gross loss of $474,000, or a negative gross margin of less than 1 percent, in the year-earlier period.

 

Net loss for the first six months of 2008 was $2.8 million, or a $0.14 loss per share, compared to a net loss in the first six months of the prior year of $6.6 million, or $0.34 loss per share.  Fully diluted weighted-average shares outstanding for this year’s first six months were 19,839,000, compared to 19,638,000 in the corresponding prior year period.  These results include

 



 

stock-based compensation expense in the first six months of 2008 of $619,000, compared to $622,000 in the prior year period.

 

As of June 28, 2008, cash, cash equivalents, restricted cash and investments in marketable securities were $25.8 million, total assets were $56.4 million, working capital was $31.5 million, total long-term debt was $397,000, and stockholders’ equity was $42.0 million.

 

Outlook for 2008

 

The Company currently projects that its revenue for the third quarter of 2008 will range from $28 million to $32 million However, if Netlist encounters adverse developments, such as the significant market price and customer demand deterioration, the risk of not achieving these current expectations will increase.

 

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 second quarter and six months ended June 28, 2008.  The dial-in number for the call is 1-866-394-5650.  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.netlist.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 equipment.  Netlist maintains its headquarters in Irvine, California with manufacturing facilities in Irvine and in Suzhou, 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; volatility in the pricing of DRAM ICs and NAND; changes in and uncertainty of customer demand, including delays in 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; the Company’s ability to attract and retain skilled personnel; the Company’s reliance on suppliers 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, dated February 29, 2008, and subsequent filings with the U.S. Securities and Exchange Commission made by the Company from time to time.  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 Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 28,

 

June 30,

 

June 28,

 

June 30,

 

 

 

2008

 

2007

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

18,429

 

$

12,811

 

$

31,533

 

$

50,349

 

Cost of sales(1)

 

15,770

 

18,734

 

25,743

 

50,823

 

Gross profit (loss)

 

2,659

 

(5,923

)

5,790

 

(474

)

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

1,716

 

1,478

 

3,292

 

2,545

 

Selling, general and administrative(1)

 

3,310

 

3,845

 

6,778

 

7,549

 

Total operating expenses

 

5,026

 

5,323

 

10,070

 

10,094

 

Operating loss

 

(2,367

)

(11,246

)

(4,280

)

(10,568

)

Other income:

 

 

 

 

 

 

 

 

 

Interest income, net

 

104

 

162

 

343

 

114

 

Other income (expense), net

 

23

 

4

 

(68

)

5

 

Total other income, net

 

127

 

166

 

275

 

119

 

Loss before provision (benefit) for income taxes

 

(2,240

)

(11,080

)

(4,005

)

(10,449

)

Provision (benefit) for income taxes

 

11

 

(3,864

)

(1,170

)

(3,864

)

Net loss

 

$

(2,251

)

$

(7,216

)

$

(2,835

)

$

(6,585

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.11

)

$

(0.37

)

$

(0.14

)

$

(0.34

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

19,855

 

19,653

 

19,839

 

19,638

 

 


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

 

Cost of sales

 

$

48

 

$

44

 

$

62

 

$

108

 

Research and development

 

62

 

19

 

85

 

65

 

Selling, general and administrative

 

265

 

231

 

472

 

449

 

 



 

Netlist, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

June 28,

 

December 29,

 

 

 

2008

 

2007

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

11,243

 

$

7,182

 

Restricted cash

 

2,000

 

 

Investments in marketable securities

 

11,595

 

15,573

 

Accounts receivable, net

 

6,441

 

12,034

 

Inventories

 

8,331

 

3,333

 

Income taxes receivable

 

903

 

708

 

Deferred taxes

 

3,899

 

3,464

 

Prepaid expenses and other current assets

 

975

 

392

 

Total current assets

 

45,387

 

42,686

 

 

 

 

 

 

 

Property and equipment, net

 

7,907

 

8,191

 

Deferred taxes

 

1,620

 

1,065

 

Long-term investments in marketable securities

 

974

 

7,814

 

Other assets

 

556

 

600

 

Total assets

 

$

56,444

 

$

60,356

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

4,952

 

$

6,697

 

Revolving line of credit

 

5,662

 

4,872

 

Current portion of long-term debt

 

547

 

740

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

118

 

Accrued expenses and other current liabilities

 

2,618

 

2,872

 

Total current liabilities

 

13,897

 

15,299

 

Long-term debt, net of current portion

 

397

 

638

 

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

 

167

 

226

 

Total liabilities

 

14,461

 

16,163

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

68,724

 

68,109

 

Accumulated deficit

 

(26,734

)

(23,899

)

Accumulated other comprehensive loss

 

(27

)

(37

)

Total stockholders’ equity

 

41,983

 

44,193

 

Total liabilities and stockholders’ equity

 

$

56,444

 

$

60,356

 

 

# # # #

 


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