0001104659-08-014065 8-K 3 20080228 2.02 9.01 20080229 20080229 NETLIST INC 0001282631 3674 954812784 DE 8-K 34 001-33170 08653277 475 GODDARD IRVINE CA 92618 8-K 1 a08-6937_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, 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 February 28, 2008, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter and year ended December 29, 2007. 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, 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: February 28, 2008

NETLIST, INC.

 

 

 

 

 

/s/ Gail Itow

 

Gail Itow

 

Vice President and Secretary

 

3


EX-99.1 2 a08-6937_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NEWS RELEASE for February 28, 2008 at 4:05 PM EST

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 2007 FOURTH QUARTER, YEAR-END RESULTS

 

IRVINE, CA (February 28, 2008) . . . Netlist, Inc. (NASDAQ: NLST) today reported financial results for the fourth quarter and year ended December 29, 2007.  Revenues for the 2007 fourth quarter were $22.5 million compared to $42.0 million for the fourth quarter ended December 30, 2006.  Revenues for the fourth quarter fell squarely within Netlist’s prior estimate that revenue for the quarter was projected to exceed $20 million, while the continued weak DRAM market and the level of OEM customer orders affected pricing and business levels as compared to the fourth quarter of 2006.  Despite these factors that impacted revenue, gross margin for the fourth quarter of 2007 improved to 22.7 percent compared to 16.2 percent in the year-earlier period.

 

Chief Executive Officer Chun K. Hong said, “We continue to be encouraged by the growing number of opportunities in the various memory module markets.  As we stated last quarter, several programs were winding down to lower levels at the close of 2007, but we have several more programs set to commence throughout 2008 – especially in the second half of the year.  We continue to invest in sales and marketing in order to take advantage of more opportunities and increase the number of OEM design-wins and qualifications.”

 

Net loss for the 2007 fourth quarter was $171,000, or a $0.01 loss per diluted share, compared to net income in the 2006 fourth quarter of $2.0 million, or $0.12 per diluted share.  Fully diluted weighted-average shares outstanding for the 2007 fourth quarter was 19,730,000, compared to 16,793,000 in the corresponding prior year period.  These results include stock-based compensation expense in the 2007 fourth quarter of $247,000, compared to $145,000 in the prior year period.

 

Total 2007 revenues were $100.1 million, compared to $151.4 million for 2006.  Gross margin for 2007 was 8.8 percent, compared with 14.7 percent in the prior year.  Revenues and gross margins for 2007 were adversely impacted by the well-publicized decline throughout the year in the DRAM market and the related decline in sales to OEM customers.

 

Net loss for 2007 was $7.4 million, or a $0.38 loss per diluted share, compared to net income for the prior year of $5.1 million, or $0.34 per diluted share.  Fully diluted weighted-average shares outstanding for 2007 was 19,674,000, compared to 15,331,000 in the prior year.  These results

 



 

include stock-based compensation expense in 2007 of $1.2 million, compared to $592,000 in 2006.

 

As of December 29, 2007, cash, cash equivalents and investments in marketable securities were $30.6 million, total assets were $60.4 million, working capital was $27.4 million, total long-term debt was $638,000, and stockholders’ equity was $44.2 million.

 

Outlook for 2008

 

The Company currently projects that its revenue for the first quarter of 2008 should exceed $15 million with an accelerating growth pattern in subsequent quarters as planned programs come online.  In addition, the Company projects that revenue for all of 2008 will exceed that posted in 2007.  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 fourth quarter and year ended December 29, 2007.  The dial-in number for the call is 1-888-680-0890.  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; uncertainty of customer demand, including delays in expected qualifications; 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 28, 2008, quarterly report on Form 10-Q dated November 6, 2007, 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 Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 29,

 

December 30,

 

December 29,

 

December 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

22,517

 

$

42,009

 

$

100,060

 

$

151,448

 

Cost of sales(1)

 

17,411

 

35,210

 

91,261

 

129,181

 

Gross profit

 

5,106

 

6,799

 

8,799

 

22,267

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

947

 

927

 

4,748

 

3,315

 

Selling, general and administrative(1)

 

4,311

 

2,697

 

15,900

 

9,191

 

Total operating expenses

 

5,258

 

3,624

 

20,648

 

12,506

 

Operating income (loss)

 

(152

)

3,175

 

(11,849

)

9,761

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

139

 

(311

)

395

 

(1,825

)

Other expense, net

 

44

 

58

 

16

 

(24

)

Total other income (expense), net

 

183

 

(253

)

411

 

(1,849

)

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

 

31

 

2,922

 

(11,438

)

7,912

 

Provision (benefit) for income taxes

 

202

 

948

 

(4,025

)

2,844

 

Net income (loss)

 

$

(171

)

$

1,974

 

$

(7,413

)

$

5,068

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.01

)

$

0.14

 

$

(0.38

)

$

0.43

 

Diluted

 

$

(0.01

)

$

0.12

 

$

(0.38

)

$

0.34

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

19,730

 

13,616

 

19,674

 

11,705

 

Diluted

 

19,730

 

16,793

 

19,674

 

15,331

 

 


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

 

Cost of sales

 

$

10

 

$

44

 

$

171

 

$

104

 

Research and development

 

44

 

54

 

149

 

125

 

Selling, general and administrative

 

193

 

47

 

861

 

363

 

 



 

Netlist, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

December 29,

 

December 30,

 

 

 

2007

 

2006

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,182

 

$

30,975

 

Investments in marketable securities

 

15,573

 

5,267

 

Accounts receivable, net

 

12,034

 

23,703

 

Inventories

 

3,333

 

19,473

 

Income taxes receivable

 

708

 

 

Deferred taxes

 

3,464

 

1,054

 

Prepaid expenses and other current assets

 

392

 

988

 

Total current assets

 

42,686

 

81,460

 

 

 

 

 

 

 

Property and equipment, net

 

8,191

 

3,830

 

Deferred taxes

 

1,065

 

576

 

Long-term investments in marketable securities

 

7,814

 

1,502

 

Other assets

 

600

 

326

 

Total assets

 

$

60,356

 

$

87,694

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

6,697

 

$

11,680

 

Revolving line of credit

 

4,872

 

19,238

 

Current portion of long-term debt

 

740

 

1,033

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

118

 

Income taxes payable

 

 

552

 

Accrued expenses and other current liabilities

 

2,872

 

3,255

 

Total current liabilities

 

15,299

 

35,876

 

Long-term debt, net of current portion

 

638

 

1,230

 

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

 

226

 

344

 

Total liabilities

 

16,163

 

37,450

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

68,109

 

66,557

 

 

 

 

 

 

 

Note receivable from stockholder

 

 

(1

)

 

 

 

 

 

 

Accumulated deficit

 

(23,899

)

(16,332

)

 

 

 

 

 

 

Accumulated other comprehensive income

 

(37

)

 

Total stockholders’ equity

 

44,193

 

50,244

 

Total liabilities and stockholders’ equity

 

$

60,356

 

$

87,694

 

 

# # # #

 


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