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 18, 2010

 

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 18, 2010, Netlist, Inc. (the “Company”) issued a press release announcing the Company’s results of operations for the quarter and fiscal year ended January 2, 2010. 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 18, 2010.

 

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 19, 2010

 

NETLIST, INC.

 

 

 

 

 

 

 

 

/s/ Gail Itow

 

 

Gail Itow

 

 

Vice President and Secretary

 

3

Exhibit 99.1

 

 

NEWS RELEASE for February 18, 2010 at 4:00 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 FOURTH QUARTER, YEAR-END RESULTS

 

IRVINE, CA (February 18, 2010) . . . Netlist, Inc. (NASDAQ: NLST) today reported financial results for the fourth quarter and year ended January 2, 2010.

 

Revenues for the fourth quarter ended January 2, 2010, were $6.7 million compared to $6.6 million for the fourth quarter ended January 3, 2009, and up from the $6.4 million in revenue for the third quarter ended October 3, 2009.  Gross profit for the fourth quarter ended January 2, 2010, was $1.7 million, or 25.1 percent of revenues, compared to a gross loss of $283,000, or negative 4.3 percent of revenues for the fourth quarter ended January 3, 2009.

 

Net loss for the fourth quarter ended January 2, 2010, was $3.0 million, or $0.15 loss per share, compared to a net loss in the prior year period of $5.0 million, or $0.25 loss per share.  These results include stock-based compensation expense in the fourth quarter ended January 2, 2010, of $257,000 compared with $296,000 in the prior year period.

 

“During the last quarter, we made important strides toward anticipated commercialization of our two emerging proprietary memory platforms, HyperCloud™ and NetVault™.  We believe we are in a strong position to continue that progress and to see revenues from those new technologies during 2010,” Chief Executive Officer C.K. Hong said.  “I believe that one of the most important trends in the IT industry over the next decade is the build out of cloud computing.  We believe HyperCloud and NetVault technologies will play key roles in this trend by enabling efficient and cost-effective datacenters.”

 

Revenues for the year ended January 2, 2010, were $18.5 million compared to $67.0 million for the year ended January 3, 2009.  The year-over-year decline in annual revenue was primarily due to a reduction in demand from the Company’s current customer base and commoditization and end of life of some of its product offerings.  Netlist continues to focus on the development of high-margin subsystems based on custom logic devices.  Gross profit for the year ended January 2, 2010, was $3.0 million, or a gross margin of 16.0 percent, compared to gross profit of $7.6 million, or a gross margin of 11.3 percent in the year earlier.

 

Net loss for the year ended January 2, 2010 was $12.9 million, or $0.65 loss per share, compared to a net loss of $15.2 million, or a $0.77 loss per share, for the prior year.  These results include stock-based compensation expense in the year ended January 2, 2010, of $1.5 million compared with $1.3 million in the prior year period.

 


 

During the fourth quarter, the Company remained focused on preserving cash.  As of January 2, 2010, cash, cash equivalents, and investments in marketable securities were $14.8 million, total assets were $27.2 million, working capital was $13.4 million, total long-term debt was $51,000, and stockholders’ equity was $19.3 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 year ended January 2, 2010.  The dial-in number for the call is 1-877-941-2069.  The live webcast and archived replay of the call can be accessed in the Investors 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 Suzhou, China.

 

Safe Harbor Statement

 

This news release contains forward-looking statements regarding future events and the future performance of Netlist and its products, 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; risks associated with intellectual property; risks associated with new product development; volatility in the pricing of DRAM ICs and NAND; changes in and uncertainty of customer acceptance of and demand for the Company’s 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; litigation involving the Company; fluctuations in the market price of 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 March 30, 2009, 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

 


 

Netlist, Inc.

Unaudited Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

 

Three Months Ended

 

Year Ended

 

 

 

January 2,

 

January 3,

 

January 2,

 

January 3,

 

 

 

2010

 

2009

 

2010

 

2009

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

6,698

 

$

6,602

 

$

18,479

 

$

67,011

 

Cost of sales(1)

 

5,015

 

6,885

 

15,522

 

59,460

 

Gross profit

 

1,683

 

(283

)

2,957

 

7,551

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development(1)

 

2,464

 

1,928

 

8,083

 

6,871

 

Selling, general and administrative(1)

 

2,133

 

2,787

 

8,303

 

12,929

 

Total operating expenses

 

4,597

 

4,715

 

16,386

 

19,800

 

Operating loss

 

(2,914

)

(4,998

)

(13,429

)

(12,249

)

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest income, net

 

4

 

92

 

79

 

473

 

Other income (expense), net

 

(109

)

(82

)

25

 

(137

)

Total other income, net

 

(105

)

10

 

104

 

336

 

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

 

(3,019

)

(4,988

)

(13,325

)

(11,913

)

Provision (benefit) for income taxes

 

(3

)

(31

)

(412

)

3,301

 

Net loss

 

$

(3,016

)

$

(4,957

)

$

(12,913

)

$

(15,214

)

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.15

)

$

(0.25

)

$

(0.65

)

$

(0.77

)

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

19,876

 

19,855

 

19,876

 

19,847

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

$

11

 

$

38

 

$

224

 

$

144

 

Research and development

 

39

 

39

 

301

 

179

 

Selling, general and administrative

 

207

 

219

 

960

 

954

 

 

MORE-MORE-MORE

 


 

Netlist, Inc.

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

January 2,

 

January 3,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

9,942

 

$

15,214

 

Investments in marketable securities

 

3,949

 

5,199

 

Accounts receivable, net

 

4,273

 

1,917

 

Inventories

 

2,232

 

1,829

 

Income taxes receivable

 

—

 

1,880

 

Prepaid expenses and other current assets

 

854

 

761

 

Total current assets

 

21,250

 

26,800

 

 

 

 

 

 

 

Property and equipment, net

 

4,779

 

6,939

 

Long-term investments in marketable securities

 

941

 

960

 

Other assets

 

221

 

234

 

Total assets

 

$

27,191

 

$

34,933

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

4,057

 

$

1,786

 

Accrued payroll and related liabilities

 

1,706

 

799

 

Accrued expenses and other current liabilities

 

1,231

 

1,284

 

Accrued engineering charges

 

661

 

—

 

Current portion of long-term debt

 

108

 

474

 

Current portion of deferred gain on sale and leaseback transaction

 

108

 

118

 

Total current liabilities

 

7,871

 

4,461

 

Long-term debt, net of current portion

 

51

 

130

 

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

 

—

 

108

 

Total liabilities

 

7,922

 

4,699

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

71,332

 

69,383

 

Accumulated deficit

 

(52,026

)

(39,113

)

Accumulated other comprehensive loss

 

(57

)

(56

)

Total stockholders’ equity

 

19,269

 

30,234

 

Total liabilities and stockholders’ equity

 

$

27,191

 

$

34,933

 

 

# # # #