Netlist Reports Second Quarter 2019 Results

IRVINE, Calif., Aug. 8, 2019 /PRNewswire/ -- Netlist, Inc. NLST today reported financial results for the second quarter ended June 29, 2019.

Netlist logo (PRNewsFoto/Netlist, Inc.) (PRNewsfoto/Netlist, Inc.)

Net sales for the second quarter ended June 29, 2019 were $5.5 million, compared to net sales of $8.4 million for the quarter ended June 30, 2018.  Gross profit for the quarter ended June 29, 2019 was $0.4 million, or 7.3% of net sales, compared to a gross profit of $0.5 million, or 5.7% of net sales, for the quarter ended June 30, 2018. 

GAAP net loss for the second quarter ended June 29, 2019 was ($3.5) million, or a loss per share of ($0.02), compared to a net loss in the prior year period of ($3.4) million, or a loss per share of ($0.04).  These results include stock-based compensation expense of $0.2 million for the quarters ended June 29, 2019 and June 30, 2018.

As of June 29, 2019, cash, cash equivalents and restricted cash was $9.5 million, total assets were $17.7 million, working capital was $3.1 million, total debt and accrued interest, net of debt discount, was $19.4 million, and stockholders' deficit was ($12.1) million.

"During the quarter net sales and gross margins improved on a sequential basis," said Netlist's Chief Executive Officer, C.K. Hong. "We signed a memorandum of understanding with a major semiconductor company for the ASIC implementation of the HybriDIMM Media Controller. Finally, we completed the trial against SK hynix at the United States International Trade Commission and look forward to the Initial Determination this fall."

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, August 8, 2019 at 5:00 p.m. Eastern Time to review Netlist's results for the second quarter ended June 29, 2019.  The dial-in number for the call is 1-412-317-5443.  The live webcast and archived replay of the call can be accessed for 90 days in the Investors section of Netlist's website at www.netlist.com.

About Netlist

Netlist provides high-performance SSDs and modular memory subsystems to enterprise customers in diverse industries.  HybriDIMM™, Netlist's next-generation storage class memory product, addresses the growing need for real-time analytics in Big Data applications, in-memory databases, high-performance computing and advanced data storage solutions. Netlist also manufactures and provides a line of specialty and legacy memory products to storage customers, appliance customers, system builders and cloud and datacenter customers. Netlist holds a portfolio of patents, many seminal, in the areas of hybrid memory, storage class memory, rank multiplication and load reduction. To learn more, visit www.netlist.com.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements other than historical facts and often address future events or Netlist's future performance.  Forward-looking statements contained in this news release include statements about Netlist's ability to execute on its strategic initiatives. All forward-looking statements reflect management's present expectations regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements. These risks, uncertainties and other factors include, among others: risks related to Netlist's plans for its intellectual property, including its strategies for monetizing, licensing, expanding, and defending its patent portfolio; risks associated with patent infringement litigation initiated by Netlist, such as its ongoing proceedings against SK hynix Inc., or by others against Netlist, as well as the costs and unpredictability of any such litigation; risks associated with Netlist's product sales, including the market and demand for products sold by Netlist and its ability to successfully develop and launch new products that are attractive to the market; the success of product, joint development and licensing partnerships, including its relationship with Samsung Electronics Co., Ltd.; the competitive landscape of Netlist's industry; and general economic, political and market conditions.  All forward-looking statements reflect management's present assumptions, expectations and beliefs regarding future events and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed in or implied by any forward-looking statements.  These and other risks and uncertainties are described in Netlist's annual report on Form 10-K for its most recently completed fiscal year filed on March 22, 2019, and the other filings it makes with the U.S. Securities and Exchange Commission from time to time, including any subsequently filed quarterly and current reports.  In light of these risks, uncertainties and other factors, these forward-looking statements should not be relied on as predictions of future events.  These forward-looking statements represent Netlist's assumptions, expectations and beliefs only as of the date they are made, and except as required by law, Netlist undertakes no obligation to revise or update any forward-looking statements for any reason.

(Tables Follow)

For more information, please contact:



The Plunkett Group 

Netlist, Inc.

Mike Smargiassi/Sharon Oh 

Gail M. Sasaki

NLST@theplunkettgroup.com 

Chief Financial Officer

(212) 739-6729 

(949) 435-0025

 

Netlist, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands)

































(unaudited)













June 29,



December 29,







2019



2018



ASSETS















Current assets:















Cash and cash equivalents



$

7,432



$

14,802



Restricted cash





2,050





1,850



Accounts receivable, net





2,406





2,917



Inventories





2,294





2,946



Prepaid expenses and other current assets





541





677



Total current assets





14,723





23,192



















Property and equipment, net





328





279



Operating lease right-of-use assets





1,267







Other assets





1,393





1,394



Total assets



$

17,711



$

24,865



















LIABILITIES AND STOCKHOLDERS' DEFICIT















Current liabilities:















Accounts payable



$

8,100



$

9,497



Revolving line of credit





2,060





2,293



Accrued payroll and related liabilities





542





604



Accrued expenses and other current liabilities





797





343



Note payable





127





376



Total current liabilities





11,626





13,113



Convertible promissory notes and accrued interest, net of debt discounts





17,247





17,346



Operating lease liabilities





768







Other liabilities





150





78



Total liabilities





29,791





30,537



















Commitments and contingencies































Stockholders' deficit:















Preferred stock











Common stock





142





139



Additional paid-in capital





170,513





169,355



Accumulated deficit





(182,735)





(175,166)



Total stockholders' deficit





(12,080)





(5,672)



Total liabilities and stockholders' deficit



$

17,711



$

24,865



 

Netlist, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands, except per share amounts)









































Three Months Ended



Six Months Ended





June 29,

June 30,

June 29,

June 30,





2019

2018

2019

2018



















Net sales



$   5,512



$  8,426



$ 10,617



$ 17,305

Cost of sales(1)



5,108



7,944



9,934



16,444

Gross profit 



404



482



683



861

Operating expenses:

















Research and development(1)



565



783



1,155



1,791

Intellectual property legal fees



1,093



1,388



2,588



3,599

Selling, general and administrative(1)



2,004



1,585



3,977



3,276

Total operating expenses



3,662



3,756



7,720



8,666

Operating loss



(3,258)



(3,274)



(7,037)



(7,805)

Other expense, net:

















Interest expense, net



(258)



(133)



(530)



(280)

Other expense, net



(2)



(10)



(1)



(5)

Total other expense, net



(260)



(143)



(531)



(285)

Loss before provision for income taxes 



(3,518)



(3,417)



(7,568)



(8,090)

Provision for income taxes



1





1



Net loss



$ (3,519)



$ (3,417)



$ (7,569)



$ (8,090)

Net loss per common share:

















Basic and diluted



$   (0.02)



$   (0.04)



$   (0.05)



$   (0.09)

Weighted-average common shares outstanding:

















Basic and diluted



140,773



91,685



139,906



87,073





































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































Cost of sales



$          7



$         6



$        14



$        12

Research and development



45



56



96



136

Selling, general and administrative



145



111



429



266

Total stock-based compensation



$      197



$     173



$      539



$      414

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/netlist-reports-second-quarter-2019-results-300898794.html

SOURCE Netlist, Inc.

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