0001104659-07-062737 8-K 3 20070814 2.02 9.01 20070815 20070815 NETLIST INC 0001282631 3674 954812784 DE 8-K 34 001-33170 071058197 475 GODDARD IRVINE CA 92618 8-K 1 a07-21995_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 14, 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 August 14, 2007, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the second quarter ended June 30, 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 August 14, 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: August 14, 2007

 

NETLIST, INC.

 

 

 

 

 

 

 

 

/s/ Lee Kim

 

 

 

Lee Kim

 

 

Vice President and

 

 

Chief Financial Officer

 

3



EX-99.1 2 a07-21995_1ex99d1.htm EX-99.1

Exhibit 99.1

NEWS RELEASE for August 14, 2007 at 4:05 PM EDT

 

 

 

Contact:

Allen & Caron Inc

 

Chuck Hong

 

Jill Bertotti (investors)

 

Chief Executive Officer

 

jill@allencaron.com

 

Netlist, Inc.

 

Len Hall (media)

 

(949) 435-0025

 

len@allencaron.com

 

 

 

(949) 474-4300

 

 

 

NETLIST REPORTS 2007 SECOND QUARTER, SIX-MONTH RESULTS

IRVINE, CA (August 14, 2007) . . . Netlist, Inc. (Nasdaq: NLST) today reported financial results for the second quarter and six months ended June 30, 2007.  These results are in line with the preliminary results that were announced July 2.

Revenues for the second quarter and six months ended June 30, 2007 were $12.8 million and $50.3 million, respectively, compared to $39.9 million and $65.9 million for the second quarter and six months ended July 1, 2006.  Revenue and gross margins for the quarter were adversely impacted by the decline in the DRAM market and the related decline in demand from OEM customers.

Net loss for this year’s second quarter was $7.2 million, or a $0.37 loss per diluted share, compared to net income in last year’s second quarter of $1.5 million, or $0.10 per diluted share.  Net loss for the first six months of 2007 was $6.6 million, or a $0.34 loss per diluted share, compared to net income for the year-earlier period of $1.3 million, or $0.09 per diluted share.  Fully diluted weighted-average shares outstanding for this year’s second quarter and first six months were 19,653,000 and 19,638,000, respectively, compared to 15,681,000 and 15,427,000 in the corresponding prior year periods.  The increase was due to the Company’s initial public offering (IPO).  These results include stock-based compensation expense in the 2007 second quarter and first six months of $294,000 and $622,000, respectively, compared to $74,000 and $147,000 in prior year periods.  In addition, the Company recorded special charges of $4.4 million during the second quarter to reflect the impact of declining DRAM prices on inventory values.

Chief Executive Officer Chuck Hong said that DRAM price stabilization that was seen at the end of the second quarter was continuing and that sales and customer purchasing patterns were improving in response.

He commented, “We believe that Netlist and the memory market have turned a corner and we are cautiously optimistic that the remainder of the year will show improving trends on both top and bottom lines.  We are seeing progress made on important new OEM programs that we anticipate will come on line by the end of the year and feel that those programs will make a positive contribution to both sales and margins as they are based on proprietary technologies developed at Netlist.”




As of June 30, 2007, cash, cash equivalents and investments in marketable securities were $30.4 million, total assets were $58.6 million, working capital was $27.5 million, total long-term debt was $1.0 million, and stockholders’ equity was $44.3 million.

Outlook for the Third Quarter of 2007

While DRAM market conditions remain quite uncertain, the Company currently believes that it can re-establish revenue growth in the third quarter and that total revenues are expected to exceed $20 million.  However, if Netlist encounters adverse developments, such as the significant market price and customer demand deterioration that the Company encountered in the second quarter, the risk of not achieving such growth 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 review the financial results for the second quarter and six months ended June 30, 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 May 15, 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.

Consolidated Condensed Unaudited Statements of Operations

(in thousands, except per share amounts)

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30,

 

July 1,

 

June 30,

 

July 1,

 

 

 

2007

 

2006

 

2007

 

2006

 

Net sales

 

$

12,811

 

$

39,914

 

$

50,349

 

$

65,934

 

Cost of sales(1)

 

18,734

 

33,981

 

50,823

 

57,447

 

Gross profit (loss)

 

(5,923

)

5,933

 

(474

)

8,487

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

1,478

 

848

 

2,545

 

1,514

 

Selling, general and administrative(1)

 

3,845

 

2,108

 

7,549

 

3,911

 

Total operating expenses

 

5,323

 

2,956

 

10,094

 

5,425

 

Operating income (loss)

 

(11,246

)

2,977

 

(10,568

)

3,062

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

162

 

(549

)

114

 

(949

)

Other income, net

 

4

 

15

 

5

 

5

 

Total other income (expense), net

 

166

 

(534

)

119

 

(944

)

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

 

(11,080

)

2,443

 

(10,449

)

2,118

 

Provision (benefit) for income taxes

 

(3,864

)

895

 

(3,864

)

812

 

Net income (loss)

 

$

(7,216

)

$

1,548

 

$

(6,585

)

$

1,306

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.37

)

$

0.14

 

$

(0.34

)

$

0.12

 

Diluted

 

$

(0.37

)

$

0.10

 

$

(0.34

)

$

0.09

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

19,653

 

11,223

 

19,638

 

10,988

 

Diluted

 

19,653

 

15,681

 

19,638

 

15,427

 


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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

44

 

$

7

 

$

108

 

$

14

 

Research and development

 

19

 

11

 

65

 

22

 

Selling, general and administrative

 

231

 

56

 

449

 

111

 

 




 

Netlist, Inc.

Consolidated Condensed Unaudited Balance Sheets

(in thousands)

 

 

June 30,

 

December 30,

 

 

 

2007

 

2006

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

4,999

 

$

30,975

 

Investments in marketable securities

 

16,588

 

5,267

 

Accounts receivable, net

 

7,289

 

23,703

 

Inventories

 

6,023

 

19,473

 

Deferred taxes

 

4,903

 

1,054

 

Prepaid expenses and other current assets

 

685

 

988

 

Total current assets

 

40,487

 

81,460

 

 

 

 

 

 

 

Property and equipment, net

 

7,236

 

3,830

 

Deferred taxes

 

1,122

 

576

 

Long-term investements in marketable securities

 

8,855

 

1,502

 

Other assets

 

918

 

326

 

Total assets

 

$

58,618

 

$

87,694

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

4,392

 

$

11,680

 

Revolving line of credit

 

4,807

 

19,238

 

Current portion of long-term debt

 

866

 

1,033

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

118

 

Income taxes payable

 

181

 

552

 

Accrued expenses and other current liabilities

 

2,659

 

3,255

 

Total current liabilities

 

13,023

 

35,876

 

Long-term debt, net of current portion

 

1,029

 

1,230

 

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

 

285

 

344

 

Total liabilities

 

14,337

 

37,450

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

67,340

 

66,557

 

Note receivable from stockholder

 

 

(1

)

Accumulated deficit

 

(23,072

)

(16,332

)

Accumulated other comprehensive loss

 

(7

)

 

Total stockholders’ equity

 

44,281

 

50,244

 

Total liabilities and stockholders’ equity

 

$

58,618

 

$

87,694

 

 

# # # #



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