IRVINE, Calif., March 29, 2017 /PRNewswire/ -- Netlist, Inc.
(NASDAQ: NLST), today reported financial results for the fiscal
year and fourth quarter ended December
31, 2016.
Revenues for the year ended December 31,
2016, were $19.7 million,
compared to revenues of $8.0 million
for the year ended January 2, 2016,
an increase of 145%. Gross profit for the year ended
December 31, 2016, was $7.4 million, or 37.6 percent of revenues,
compared to a gross profit of $2.1
million, or 26.2 percent of revenues, for the year ended
January 2, 2016.
Net loss for the year ended December 31,
2016, was ($11.2) million, or
($0.21) loss per share, compared to a
net loss in the prior year period of ($20.5)
million, or ($0.42) loss per
share. These results include stock-based compensation expense
of $1.5 million and $1.8 million for the years ended December 31, 2016 and January 2, 2016, respectively.
Adjusted EBITDA loss was ($9.3)
million for the year ended December
31, 2016, compared to an adjusted EBITDA loss of
($15.3) million for the prior year
period.
Revenues for the three months ended December 31, 2016, were $5.5 million, compared to revenues of
$2.9 million for last year's fourth
quarter ended January 2, 2016, an
increase of 94%. Gross profit for the three months ended
December 31, 2016, was $275,000 compared to a gross profit of
$1.3 million, for the fourth quarter
ended January 2, 2016.
Net loss for the fourth quarter ended December 31, 2016, was ($3.9) million, or ($0.06) loss per share, compared to a net loss in
the prior year period of ($4.3)
million, or ($0.09) loss per
share. These results include stock-based compensation expense
of $0.4 million and $0.5 million for the three month periods ended
December 31, 2016 and January 2, 2016, respectively.
As of December 31, 2016, cash and
cash equivalents and restricted cash were $12.6 million, total assets were $20.0 million, working capital was $13.0 million, total debt, net of debt discounts,
and accrued interest was $14.4
million, and stockholders' deficit was ($0.5) million.
"We delivered improved financial performance in 2016,
highlighted by substantial revenue growth. Our more diversified
revenue stems from our Joint Development Agreement with Samsung
which included Non-Recurring Engineering Fees (NRE) to support the
development of HybriDIMM, our plug and play storage class memory
technology, and unique access to Samsung's enterprise-grade, memory
products for resale," said C.K.
Hong, Netlist's Chief Executive Officer. "During the year we
took significant steps toward defending our valuable intellectual
property by commencing legal actions against SK hynix at the ITC
and in the federal district court based on the infringement of
Netlist patents. We are seeking, among other things, a ban on the
importation of infringing SK hynix server memory products and look
forward to the opportunity to present our case in the ITC at trial
in May."
EBITDA and adjusted EBITDA are non-GAAP financial measures.
These non-GAAP financial measures are described below under the
heading "Note Regarding Use of Non-GAAP Financial Measures" and are
reconciled to the most directly comparable GAAP financial measure
net income (loss) below under the heading "Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted EBITDA."
Adjusted EBITDA was ($3.8) million
for the quarter ended December 31,
2016, compared to adjusted EBITDA of ($1.4) million for the prior year period.
Conference Call Information
C.K. Hong, Chief Executive Officer,
and Gail Sasaki, Chief Financial
Officer, will host an investor conference call today, March 29, 2017 at 5:00
p.m. Eastern Time to review the company's results for the
fourth quarter and full year ended December
31, 2016. The dial-in number for the call is
1-412-317-5443. 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 (Earnings Before Interest, Taxes, Depreciation and
Amortization), 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, stock-based compensation
and net other 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.
Adjusted EBITDA loss is a non-GAAP measure in which the net
interest expense, provision for income taxes, depreciation and
amortization, stock-based compensation and net other (income)
expense are added back to the GAAP basis loss. The non-GAAP
measures are described above and are reconciled to the
corresponding GAAP measure in the condensed consolidated financial
statements portion of this release under the heading "Unaudited
Schedule Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA."
About Netlist, Inc.
Netlist creates solutions
that accelerate turning raw data into business insight. The company
produces next generation persistent memory solutions that enable
businesses to transact quicker, gain insight faster and reduce
datacenter cost. Flagship products NVvault® and EXPRESSvault®
accelerate system performance and provide mission critical fault
tolerance. HybriDIMM™, Netlist's next-generation Storage
Class Memory, lowers cost and improves performance of big data
analytics and in-memory computing. The company holds a portfolio of
patents, many seminal, in the area of hybrid memory, storage class
memory, rank multiplication and load-reduction, among others.
Netlist is part of the Russell Microcap® Index. To learn
more, visit www.netlist.com.
Safe Harbor Statement:
This news release
contains forward-looking statements regarding future events and the
future performance of Netlist. A forward-looking statement is
neither a prediction nor a guarantee of future events or
circumstances and is based on currently available market,
operating, financial and competitive information and assumptions.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those expected
or projected, including, among others, risks associated with the
launch and commercial success of our products, programs and
technologies; the success of product, joint development and
licensing partnerships; continuing development, qualification and
volume production of HybriDIMM™ , as well as our other products and
technologies; the rapidly-changing nature of technology in our
industry; risks associated with intellectual property, including
patent infringement litigation initiated by us or by others against
us as well as the costs and unpredictability of litigation over
infringement of our intellectual property; volatility in the
pricing of DRAM ICs and NAND flash; changes in and uncertainty of
customer acceptance of, and demand for, our existing products and
products under development, including predictions about the size of
the market for our products; delays in our and our customers'
product releases and development; introductions of new products by
competitors; changes in end-user demand for technology solutions;
and general economic and market conditions. Other risks and
uncertainties are described in our annual report on Form 10-K filed
on March 4, 2016, and subsequent
filings with the U.S. Securities and Exchange Commission we make
from time to time, including the preliminary prospectus supplement
that we filed in connection with the proposed offering. Except as
required by law, we undertake 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.
|
Mike
Smargiassi
|
Gail M.
Sasaki
|
NLST@braincomm.com
|
Chief Financial
Officer
|
(212)
986-6667
|
(949)
435-0025
|
Netlist,
Inc.
|
Consolidated
Balance Sheets
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
January 2,
|
|
|
|
2016
|
|
2016
|
|
|
|
(unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
9,476
|
|
$
|
19,684
|
|
Restricted
cash
|
|
|
3,100
|
|
|
400
|
|
Accounts receivable,
net
|
|
|
1,751
|
|
|
716
|
|
Inventories
|
|
|
3,160
|
|
|
1,658
|
|
Prepaid expenses and
other current assets
|
|
|
1,766
|
|
|
1,739
|
|
Total current
assets
|
|
|
19,253
|
|
|
24,197
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
645
|
|
|
408
|
|
Other
assets
|
|
|
70
|
|
|
61
|
|
Total
assets
|
|
$
|
19,968
|
|
$
|
24,666
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
4,028
|
|
$
|
3,299
|
|
Revolving line of
credit
|
|
|
676
|
|
|
-
|
|
Accrued payroll and
related liabilities
|
|
|
1,085
|
|
|
1,243
|
|
Accrued expenses and
other current liabilities
|
|
|
270
|
|
|
304
|
|
Deferred
revenue
|
|
|
-
|
|
|
6,857
|
|
Accrued engineering
charges
|
|
|
-
|
|
|
500
|
|
Notes payable and
capital lease obligation, current
|
|
|
151
|
|
|
13
|
|
Total current
liabilities
|
|
|
6,210
|
|
|
12,216
|
|
Convertible
promissory note, net of debt discount, and accrued
interest
|
|
|
14,251
|
|
|
13,735
|
|
Long-term warranty
liability
|
|
|
36
|
|
|
49
|
|
Total
liabilities
|
|
|
20,497
|
|
|
26,000
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
deficit:
|
|
|
|
|
|
|
|
Preferred
stock
|
|
|
-
|
|
|
-
|
|
Common
stock
|
|
|
62
|
|
|
50
|
|
Additional paid-in
capital
|
|
|
144,035
|
|
|
132,011
|
|
Accumulated
deficit
|
|
|
(144,626)
|
|
|
(133,395)
|
|
Total
stockholders' deficit
|
|
|
(529)
|
|
|
(1,334)
|
|
Total
liabilities and stockholders' deficit
|
|
$
|
19,968
|
|
$
|
24,666
|
|
Netlist, Inc. and
Subsidiaries
|
Unaudited
Condensed Consolidated Statements of Operations
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
|
January
2,
|
|
December
31,
|
|
January
2,
|
|
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
Net product
sales
|
|
$
5,538
|
|
$
1,709
|
|
$
12,798
|
|
$
6,869
|
|
Non-recurring
engineering revenues
|
|
-
|
|
1,143
|
|
6,857
|
|
1,143
|
|
Total net
revenues
|
|
5,538
|
|
2,852
|
|
19,655
|
|
8,012
|
|
Cost of
sales(1)
|
|
5,263
|
|
1,583
|
|
12,259
|
|
5,915
|
|
Gross
profit
|
|
275
|
|
1,269
|
|
7,396
|
|
2,097
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Research and
development(1)
|
|
1,347
|
|
1,680
|
|
6,287
|
|
6,049
|
|
Intellectual property
legal fees
|
|
855
|
|
(1,091)
|
|
3,110
|
|
5,588
|
|
Selling, general and
administrative(1)
|
|
2,211
|
|
2,628
|
|
9,033
|
|
7,841
|
|
Total
operating expenses
|
|
4,413
|
|
3,217
|
|
18,430
|
|
19,478
|
|
Operating
loss
|
|
(4,138)
|
|
(1,948)
|
|
(11,034)
|
|
(17,381)
|
|
Other
expense:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(150)
|
|
(648)
|
|
(578)
|
|
(2,064)
|
|
Other income
(expense), net
|
|
369
|
|
(1,749)
|
|
386
|
|
(1,081)
|
|
Total other
income (expense), net
|
|
219
|
|
(2,397)
|
|
(192)
|
|
(3,145)
|
|
Loss before provision
for income taxes
|
|
(3,919)
|
|
(4,345)
|
|
(11,226)
|
|
(20,526)
|
|
Provision for
income taxes
|
|
4
|
|
-
|
|
5
|
|
1
|
|
Net loss
|
|
$ (3,923)
|
|
$ (4,345)
|
|
$ (11,231)
|
|
$ (20,527)
|
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
(0.06)
|
|
$
(0.09)
|
|
$
(0.21)
|
|
$
(0.42)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
61,233
|
|
50,354
|
|
53,784
|
|
48,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense as follows:
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
$
22
|
|
$
16
|
|
$
64
|
|
$
53
|
|
Research and
development
|
|
87
|
|
152
|
|
350
|
|
613
|
|
Selling, general and
administrative
|
|
245
|
|
309
|
|
1,061
|
|
1,104
|
|
Netlist, Inc.
|
Unaudited Schedule
Reconciling GAAP Net Loss to Non-GAAP EBITDA and Adjusted
EBITDA
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
January
2,
|
|
December
31,
|
|
January
2,
|
|
|
2016
|
|
2016
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net
loss
|
|
$
|
(3,923)
|
|
$
|
(4,345)
|
|
$
|
(11,231)
|
|
$
|
(20,527)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
150
|
|
|
648
|
|
|
578
|
|
|
2,064
|
Provision for income
taxes
|
|
|
4
|
|
|
-
|
|
|
5
|
|
|
1
|
Depreciation and
amortization
|
|
|
24
|
|
|
37
|
|
|
287
|
|
|
349
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
(loss)
|
|
|
(3,745)
|
|
|
(3,660)
|
|
|
(10,361)
|
|
|
(18,113)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
354
|
|
|
477
|
|
|
1,475
|
|
|
1,770
|
Other (income)
expense, net
|
|
|
(369)
|
|
|
1,749
|
|
|
(386)
|
|
|
1,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
|
$
|
(3,760)
|
|
$
|
(1,434)
|
|
$
|
(9,272)
|
|
$
|
(15,262)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/netlist-reports-full-year-and-fourth-quarter-2016-results-300430896.html
SOURCE Netlist, Inc.