0001104659-13-064304 8-K 3 20130813 2.02 9.01 20130815 20130815 NETLIST INC 0001282631 3674 954812784 DE 1231 8-K 34 001-33170 131043173 51 DISCOVERY, STE 150 IRVINE CA 92618 949-435-0025 51 DISCOVERY, STE 150 IRVINE CA 92618 8-K 1 a13-18806_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 13, 2013

 

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 August 13, 2013, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter ended June 29, 2013. 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 13, 2013

 

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: August 15, 2012

By:

/s/ Gail M. Sasaki

 

 

Gail M. Sasaki

 

 

Vice President and Chief Financial Officer

 

3


EX-99.1 2 a13-18806_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NETLIST REPORTS SECOND QUARTER 2013 RESULTS

 

IRVINE, CALIFORNIA, August 13, 2013 - Netlist, Inc. (NASDAQ: NLST), a leading provider of high performance and hybrid memory solutions for the cloud computing and storage markets, today reported financial results for the second quarter ended June 29, 2013.

 

Revenues for the three months ended June 29, 2013, were $5.1 million, compared to revenues of $10.6 million for the second quarter ended June 30, 2012.  Gross profit for the three months ended June 29, 2013, was $0.2 million, or 4.9 percent of revenues, compared to a gross profit of $2.7 million, or 25.9 percent of revenues, for the three months ended June 30, 2013.

 

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 other income was ($2.0) million for the three month period ended June 29, 2013, compared to an adjusted EBITDA loss of ($2.9) million for the prior year period.

 

Net loss for the three months ended June 29, 2013, was ($2.9) million, or ($0.09) loss per share, compared to a net loss in the prior year period of ($4.0) million, or ($0.14) loss per share.  These results include stock-based compensation expense of $369,000 for the second quarter of 2013, compared to $482,000 for the second quarter of 2012.

 

“During the second quarter, we continued our focus on the introduction of our industry-leading products to the high performance server market, while laying the groundwork to maximize our related IP assets,” said C.K. Hong, Chief Executive Officer of Netlist.  “Our financial results reflect the transitional process underway in our business, combined with our focus on managing costs and preserving liquidity.  In July, we announced the qualification of 32GB HyperCloud® on the world’s best-selling server, HP’s ProLiant DL380p Gen8.  We also strengthened our financial resources through a strategic financing arrangement backed by our patent portfolio with Fortress Investment Group LLC.  Looking ahead, we are committed to unlocking the value of our patent portfolio for the current and future generations of server memory.”

 

Revenues for the six months ended June 29, 2013, were $11.0 million, compared to revenues of $24.5 million for the six months ended June 30, 2012.  Gross profit for the six months ended June 29, 2013, was $0.8 million, or 7.4 percent of revenues, compared to a gross profit of $8.2 million, or 33.3 percent of revenues, for the six months ended June 30, 2012.

 

Net loss for the six months ended June 29, 2013, was ($6.0) million, or ($0.20) loss per share, compared to a net loss in the prior year period of ($5.1) million, or ($0.18) loss per share.  These results include stock-based compensation expense of $803,000 and $1 million for the six month periods ended June 29, 2013 and June 30, 2012, respectively.

 

As of June 29, 2013, cash and cash equivalents were $6.8 million, total assets were $16.6 million, working capital was $9.5 million, total debt was $2.9 million, and stockholders’ equity was $8.5 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 to review the financial results for the second quarter ended June 29, 2013.  The dial-in number for the call is 1-412-858-4600.  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 (“GAAP”). 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™ and EXPRESSvault™ family of products that significantly accelerate system performance and provide mission critical fault tolerance, 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. 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 patent infringement litigation against us as well as the costs and unpredictability of litigation over infringement of our intellectual property and the possibility of our patents being reexamined 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 March 29, 2013, 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.

Netlist, Inc.

Aakash Mehta / Mike Smargiassi

Gail M. Sasaki

NLST@braincomm.com

Chief Financial Officer

(212) 986-6667

(949) 435-0025

 



 

Netlist, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except par value)

 

 

 

(unaudited)

 

(audited)

 

 

 

June 29,

 

December 29,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,817

 

$

7,755

 

Investments in marketable securities

 

 

415

 

Accounts receivable, net

 

2,064

 

3,434

 

Inventories

 

5,305

 

7,380

 

Prepaid expenses and other current assets

 

472

 

723

 

Total current assets

 

14,658

 

19,707

 

 

 

 

 

 

 

Property and equipment, net

 

1,804

 

2,560

 

Other assets

 

126

 

130

 

Total assets

 

$

16,588

 

$

22,397

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,438

 

$

3,367

 

Accrued payroll and related liabilities

 

710

 

784

 

Accrued expenses and other current liabilities

 

435

 

497

 

Accrued engineering charges

 

450

 

450

 

Current portion of long-term debt

 

111

 

3,493

 

Total current liabilities

 

5,144

 

8,591

 

Long-term debt, net of current portion

 

2,800

 

 

Other liabilities

 

105

 

94

 

Total liabilities

 

8,049

 

8,685

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.001 par value - 90,000 shares authorized; 30,460 (2013) and 30,348 (2012) shares issued and outstanding

 

30

 

30

 

Additional paid-in capital

 

101,263

 

100,403

 

Accumulated deficit

 

(92,754

)

(86,721

)

Total stockholders’ equity

 

8,539

 

13,712

 

Total liabilities and stockholders’ equity

 

$

16,588

 

$

22,397

 

 



 

Netlist, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 29,

 

June 30,

 

June 29,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

Net sales

 

$

5,065

 

$

10,552

 

11,029

 

$

24,519

 

Cost of sales(1)

 

4,818

 

7,814

 

10,216

 

16,345

 

Gross profit

 

247

 

2,738

 

813

 

8,174

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

1,457

 

3,770

 

3,299

 

7,612

 

Selling, general and administrative(1)

 

1,571

 

2,871

 

3,327

 

5,480

 

Total operating expenses

 

3,028

 

6,641

 

6,626

 

13,092

 

Operating loss

 

(2,781

)

(3,903

)

(5,813

)

(4,918

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(88

)

(79

)

(218

)

(150

)

Other income, net

 

7

 

3

 

1

 

8

 

Total other expense, net

 

(81

)

(76

)

(217

)

(142

)

Loss before provision for income taxes

 

(2,862

)

(3,979

)

(6,030

)

(5,060

)

Provision for income taxes

 

1

 

1

 

3

 

1

 

Net loss

 

$

(2,863

)

$

(3,980

)

(6,033

)

$

(5,061

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.09

)

$

(0.14

)

(0.20

)

$

(0.18

)

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

30,320

 

28,111

 

30,263

 

27,420

 

 


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

 

Cost of sales

 

$

11

 

$

42

 

23

 

$

77

 

Research and development

 

118

 

153

 

278

 

345

 

Selling, general and administrative

 

240

 

287

 

502

 

583

 

 



 

Netlist, Inc. and Subsidiaries

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

(in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 29,

 

June 30,

 

June 29,

 

June 30,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(2,863

)

$

(3,980

)

$

(6,033

)

$

(5,061

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

88

 

79

 

218

 

150

 

Provision for income taxes

 

1

 

1

 

3

 

1

 

Depreciation and amortization

 

395

 

535

 

813

 

1,070

 

EBITDA

 

(2,379

)

(3,365

)

(4,999

)

(3,840

)

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

369

 

482

 

803

 

1,005

 

Other expense (income), net

 

(7

)

(3

)

(1

)

(8

)

Adjusted EBITDA

 

$

(2,017

)

$

(2,886

)

$

(4,197

)

$

(2,843

)

 


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