0001104659-07-080050 8-K 3 20071101 2.02 9.01 20071106 20071106 NETLIST INC 0001282631 3674 954812784 DE 8-K 34 001-33170 071216327 475 GODDARD IRVINE CA 92618 8-K 1 a07-28444_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):  November 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.)

 

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 November 1, 2007, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the third quarter ended September 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 November 1, 2007.

 

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: November 1, 2007

NETLIST, INC.

 

 

 

 

 

 

 

 

/s/ Gail Itow

 

 

Gail Itow

 

 

Vice President and Secretary

 

 

3


EX-99.1 2 a07-28444_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NEWS RELEASE for November 1, 2007 at 4:05 PM EDT

 

Contact:

 

Allen & Caron Inc

 

Nita Moritz

 

 

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 THIRD QUARTER, NINE-MONTH RESULTS

 

IRVINE, CA (November 1, 2007) . . . Netlist, Inc. (NASDAQ: NLST) today reported financial results for the third quarter and nine months ended September 29, 2007.

 

Revenues for this year’s third quarter were $27.2 million compared to $43.5 million for the third quarter ended September 30, 2006.  While revenues did rebound from the $12.8 million recorded in this year’s second quarter, impacts of the decline in the DRAM market and the related decline in demand from certain OEM customers continued to impact pricing and business levels as compared to last year’s third quarter.  Gross margin for this year’s third quarter was 15.3 percent compared to16.0 percent in the year-earlier period.

 

Chief Executive Officer Chuck Hong said that some market stabilization in the DRAM market and resumption of certain OEM customer programs in the third quarter led to more active demand for Netlist products.  He commented, “While the business environment remains quite challenging, we are encouraged by the growing number of opportunities in the various memory module markets.  We continue to invest in sales and marketing in order to take advantage of these opportunities and increase the number of OEM design-wins and qualifications. Our goal is to be engaged in many more programs simultaneously to reduce the ‘lumpiness’ of quarter-to-quarter revenue levels that we are currently experiencing.”

 

Net loss for this year’s third quarter was $657,000, or a $0.03 loss per diluted share, compared to net income in last year’s third quarter of $1.8 million, or $0.12 per diluted share.  Included in the net loss was a pre-tax charge for net inventory losses of $1.5 million.  Fully diluted weighted-average shares outstanding for this year’s third quarter was 19,689,000, compared to 15,401,000 in the corresponding prior year period.  The increase was due to the Company’s initial public offering (IPO) in November 2006.  These results include stock-based compensation expense in the 2007 third quarter of $312,000, compared to $300,000 in the prior year period.

 

Revenues for the first nine months of 2007 were $77.5 million, compared to $109.4 million for the nine months ended September 30, 2006.  Gross margin for this year’s first nine months was 4.8 percent, compared with 14.1 percent in the prior year period.  Revenues and gross margins for this year’s first nine months were adversely impacted by the well-publicized decline throughout 2007 in the DRAM market and the related decline in demand from OEM customers.

 



 

 

Net loss for the first nine months of 2007 was $7.2 million, or a $0.37 loss per diluted share, compared to net income for the year-earlier period of $3.1 million, or $0.21 per diluted share.  Fully diluted weighted-average shares outstanding for this year’s first nine months was 19,655,000, compared to 15,248,000 in the prior year period.  These results include stock-based compensation expense in the first nine months of 2007 of $934,000, compared to $447,000 in prior year period.

 

As of September 30, 2007, cash, cash equivalents and investments in marketable securities were $30.6 million, total assets were $68.3 million, working capital was $27.1 million, total long-term debt was $939,000, and stockholders’ equity was $44.0 million.

 

Outlook for the Fourth Quarter of 2007

The DRAM market conditions remain uncertain in the near term. The Company currently projects that its revenue for the fourth quarter again should exceed $20 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

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 third quarter and nine months ended September 29, 2007.  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 switches. Netlist maintains its headquarters and manufacturing facilities in Irvine, California, 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, 2007, quarterly report on Form 10-Q dated August 14, 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 Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 29,

2007

 

September 30,

2006

 

September 29,

2007

 

September 30,

2006

 

Net sales

 

$

27,194

 

$

43,505

 

$

77,543

 

$

109,439

 

Cost of sales(1)

 

23,027

 

36,524

 

73,850

 

93,971

 

Gross profit

 

4,167

 

6,981

 

3,693

 

15,468

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

1,256

 

874

 

3,801

 

2,388

 

Selling, general and administrative(1)

 

4,040

 

2,583

 

11,589

 

6,494

 

Total operating expenses

 

5,296

 

3,457

 

15,390

 

8,882

 

Operating income (loss)

 

(1,129

)

3,524

 

(11,697

)

6,586

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

142

 

(565

)

256

 

(1,514

)

Other expense, net

 

(33

)

(87

)

(28

)

(82

)

Total other income (expense), net

 

109

 

(652

)

228

 

(1,596

)

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

 

(1,020

)

2,872

 

(11,469

)

4,990

 

Provision (benefit) for income taxes

 

(363

)

1,084

 

(4,227

)

1,896

 

Net income (loss)

 

$

(657

)

$

1,788

 

$

(7,242

)

$

3,094

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.03

)

$

0.16

 

$

(0.37

)

$

0.28

 

Diluted

 

$

(0.03

)

$

0.12

 

$

(0.37

)

$

0.21

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

19,689

 

11,235

 

19,655

 

11,072

 

Diluted

 

19,689

 

15,401

 

19,655

 

15,248

 


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

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

53

 

$

46

 

$

161

 

$

60

 

Research and development

 

40

 

49

 

105

 

71

 

Selling, general and administrative

 

219

 

205

 

668

 

316

 

 



Netlist, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

September 29,

 2007

 

December 30,

2006

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,450

 

$

30,975

 

Investments in marketable securities

 

16,079

 

5,267

 

Accounts receivable, net

 

16,338

 

23,703

 

Inventories

 

5,958

 

19,473

 

Deferred taxes

 

4,970

 

1,054

 

Prepaid expenses and other current assets

 

447

 

988

 

Total current assets

 

50,242

 

81,460

 

 

 

 

 

 

 

Property and equipment, net

 

8,071

 

3,830

 

Deferred taxes

 

1,237

 

576

 

Long-term investments in marketable securities

 

8,103

 

1,502

 

Other assets

 

690

 

326

 

Total assets

 

$

68,343

 

$

87,694

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

9,221

 

$

11,680

 

Revolving line of credit

 

10,280

 

19,238

 

Current portion of long-term debt

 

829

 

1,033

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

118

 

Income taxes payable

 

 

552

 

Accrued expenses and other current liabilities

 

2,739

 

3,255

 

Total current liabilities

 

23,187

 

35,876

 

Long-term debt, net of current portion

 

939

 

1,230

 

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

 

255

 

344

 

Total liabilities

 

24,381

 

37,450

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

67,653

 

66,557

 

Note receivable from stockholder

 

 

(1

)

Accumulated deficit

 

(23,729

)

(16,332

)

Accumulated other comprehensive income

 

18

 

 

Total stockholders’ equity

 

43,962

 

50,244

 

Total liabilities and stockholders’ equity

 

$

68,343

 

$

87,694

 

 

# # # #

 

 

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