0001104659-13-025897 8-K 3 20130328 2.02 9.01 20130329 20130329 NETLIST INC 0001282631 3674 954812784 DE 1231 8-K 34 001-33170 13727621 51 DISCOVERY, STE 150 IRVINE CA 92618 949-435-0025 51 DISCOVERY, STE 150 IRVINE CA 92618 8-K 1 a13-9188_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): March 28, 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 March 28, 2013, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter and fiscal year ended December 29, 2012. 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 March 28, 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: March 29, 2013

By:

/s/ Gail M. Sasaki

 

 

Gail M. Sasaki

 

 

Vice President and Chief Financial Officer

 

3


EX-99.1 2 a13-9188_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

NETLIST REPORTS FOURTH QUARTER AND FULL YEAR 2012 RESULTS

 

IRVINE, CALIFORNIA, March 28, 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 fourth quarter and full year ended December 29, 2012.

 

Revenues for the 12 months ended December 29, 2012, were $36.9 million, compared to revenues of $60.7 million for the 12 months ended December 31, 2011.  Gross profit for the 12 months ended December 29, 2012, was $9.4 million, or 25.5 percent of revenues, compared to a gross profit of $20.3 million, or 33.4 percent of revenues, for the 12 months ended December 31, 2011.

 

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 non-operating expense (income) was $9.6 million for the 12 month period ended December 29, 2012, compared to an adjusted EBITDA loss of $1.5 million for the prior year period.

 

Net loss for the 12 months ended December 29, 2012, was $14.0 million, or $0.50 loss per share, compared to a net loss in the prior year period of $5.6 million, or $0.22 loss per share.  These results include stock-based compensation expense of $1.9 million for 2012, compared to $1.6 million for 2011.

 

“Our financial results reflect the transition of our business model from one that is concentrated on customized projects for individual clients, into one that is driven by advanced, IP-based solutions that serve the broader cloud infrastructure,” said C.K. Hong, Chief Executive Officer of Netlist.   “Our new technologies uniquely address growing memory capacity and performance constraints in high-speed servers and storage systems in the cloud.  In the year ahead, we remain focused on working with our major OEM partners to roll out our new products across a wide range of industries.  Despite near-term declines related to our mature business, we believe that this transition period will ultimately lead to a more diversified business model.”

 

Revenues for the fourth quarter ended December 29, 2012, were $6.0 million, compared to revenues of $16.4 million for the fourth quarter ended December 31, 2011.  Gross profit for the fourth quarter ended December 29, 2012, was $837,000, or 14.0 percent of revenues, compared to a gross profit of $6.0 million, or 36.6 percent of revenues, for the fourth quarter ended December 31, 2011.

 

Adjusted EBITDA after adding back net interest expense, benefit of income taxes, depreciation, amortization, stock-based compensation and net non-operating expense (income) was a loss of $3.1 million for the fourth quarter ended December 29, 2012, compared to an adjusted EBITDA income of $718,000 for the prior year period.

 

Net loss for the fourth quarter ended December 29, 2012, was $4.1 million or $0.14 loss per share, compared to the net loss in the prior year period of $227,000, or $0.01 loss per share.  These results include stock-based compensation expense in the fourth quarter ended December 29, 2012, of $371,000 compared with $397,000 in the year-earlier period.

 



 

As of December 29, 2012, cash, cash equivalents, and investments in marketable securities were $8.1 million, total assets were $22.4 million, working capital was $11.1 million, total debt was $3.5 million, and stockholders’ equity was $13.7 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 review the financial results for the fourth quarter and full year ended December 29, 2012.  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. 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 and an engineering design center in Silicon Valley, CA. 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.

Corey Kinger/Mike Smargiassi (investors)

Gail M. Sasaki

Sharon Oh (media)

Chief Financial Officer

NLST@braincomm.com

(949) 435-0025

(212) 986-6667

 

 



 

Netlist, Inc.

Consolidated Balance Sheets

(in thousands)

 

 

 

December 29,

 

December 31,

 

 

 

2012

 

2011

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,755

 

$

10,535

 

Investment in marketable securities

 

415

 

 

Accounts receivable, net

 

3,434

 

11,399

 

Inventories

 

7,380

 

6,057

 

Prepaid expenses and other current assets

 

723

 

806

 

Total current assets

 

19,707

 

28,797

 

 

 

 

 

 

 

Property and equipment, net

 

2,560

 

2,771

 

Long-term investments in marketable securities

 

 

444

 

Other assets

 

130

 

161

 

Total assets

 

$

22,397

 

$

32,173

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

3,367

 

$

6,155

 

Accrued payroll and related liabilities

 

784

 

1,813

 

Accrued expenses and other current liabilities

 

497

 

460

 

Accrued engineering charges

 

450

 

450

 

Current portion of long-term debt

 

3,493

 

2,144

 

Total current liabilities

 

8,591

 

11,022

 

Long-term debt, net of current portion

 

 

1,118

 

Other liabilities

 

94

 

94

 

Total liabilities

 

8,685

 

12,234

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

30

 

26

 

Additional paid-in capital

 

100,403

 

92,709

 

Accumulated deficit

 

(86,721

)

(72,740

)

Accumulated other comprehensive loss

 

 

(56

)

Total stockholders’ equity

 

13,712

 

19,939

 

Total liabilities and stockholders’ equity

 

$

22,397

 

$

32,173

 

 



 

Netlist, Inc.

Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 29,

 

December 31,

 

December 29,

 

December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

5,963

 

$

16,381

 

$

36,873

 

$

60,729

 

Cost of sales(1)

 

5,126

 

10,389

 

27,474

 

40,468

 

Gross profit

 

837

 

5,992

 

9,399

 

20,261

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

2,618

 

3,502

 

12,845

 

14,924

 

Selling, general and administrative(1)

 

2,098

 

2,694

 

10,075

 

10,705

 

Total operating expenses

 

4,716

 

6,196

 

22,920

 

25,629

 

Operating loss

 

(3,879

)

(204

)

(13,521

)

(5,368

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(90

)

(81

)

(338

)

(228

)

Other (expense) income, net

 

(146

)

2

 

(134

)

(56

)

Total other income (expense), net

 

(236

)

(79

)

(472

)

(284

)

Loss before tax benefit

 

(4,115

)

(283

)

(13,993

)

(5,652

)

Income tax benefit

 

(17

)

(56

)

(12

)

(53

)

Net loss

 

$

(4,098

)

$

(227

)

$

(13,981

)

$

(5,599

)

Net loss per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.14

)

$

(0.01

)

$

(0.50

)

$

(0.22

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

28,279

 

28,306

 

27,853

 

25,086

 

 


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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

9

 

$

28

 

$

114

 

$

79

 

Research and development

 

129

 

134

 

667

 

600

 

Selling, general and administrative

 

233

 

235

 

1,110

 

941

 

 



 

Netlist, Inc.

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

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

December 29,

 

December 31,

 

December 29,

 

December 31,

 

 

 

2012

 

2011

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss

 

$

(4,098

)

$

(227

)

$

(13,981

)

$

(5,599

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

90

 

81

 

338

 

228

 

Benefit of income taxes

 

(17

)

(56

)

(12

)

(53

)

Depreciation and amortization

 

446

 

525

 

1,987

 

2,242

 

EBITDA

 

(3,579

)

323

 

(11,668

)

(3,182

)

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

371

 

397

 

1,891

 

1,620

 

Other (income) expense, net

 

146

 

(2

)

134

 

56

 

Adjusted EBITDA

 

$

(3,062

)

$

718

 

$

(9,643

)

$

(1,506

)

 


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