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Netlist Reports Third Quarter 2020 Results

·7 min read

IRVINE, CA / ACCESSWIRE / November 10, 2020 / Netlist, Inc. (OTCQB:NLST) today reported financial results for the third quarter ended September 26, 2020.

Net sales for the third quarter ended September 26, 2020 were $10.2 million, compared to net sales of $6.1 million for the quarter ended September 28, 2019. Gross profit for the quarter ended September 26, 2020 was $1.3 million, or 13.1% of net sales, compared to a gross profit of $0.5 million, or 7.4% of net sales, for the quarter ended September 28, 2019.

Net loss for the third quarter ended September 26, 2020 was ($2.1) million, or a loss per share of ($0.01), compared to a net loss in the prior year period of ($3.1) million, or a loss per share of ($0.02). These results include stock-based compensation expense of $0.2 million for both of the quarters ended September 26, 2020 and September 28, 2019.

As of September 26, 2020, cash, cash equivalents and restricted cash was $17.5 million, total assets were $28.3 million, working capital was $13.6 million, total debt and accrued interest, net of debt discount, was $20.2 million, and stockholders' deficit was ($1.2) million.

"We delivered another quarter of positive financial performance with revenue increasing nearly 70% and bottom line improvement of 30% over the year ago period. These gains came from expanded gross margins on higher revenue along with proactive expense management," said Netlist's Chief Executive Officer, C.K. Hong. "We also remain active with our intellectual property licensing and enforcement efforts and look forward to resuming the case against Google, and the Markman Hearing in the SK hynix case early next year."

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, November 10, 2020 at 12:00 p.m. Eastern Time to review Netlist's results for the third quarter ended September 26, 2020. 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. The Company's NVMe™ SSD portfolio provides industry-leading performance offered in multiple capacities and form factors. 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 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 in the areas of server memory, 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; the competitive landscape of Netlist's industry; and general economic, political and market conditions, including quarantines, factory slowdowns or shutdowns, and travel restrictions resulting from the COVID-19 pandemic. 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 10, 2020, 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
Mike Smargiassi
NLST@theplunkettgroup.com
(212) 739-6729

Netlist, Inc.
Gail M. Sasaki
Chief Financial Officer
(949) 435-0025

Netlist, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands)

(unaudited)

September 26,

December 28,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$

14,287

$

8,966

Restricted cash

3,200

2,750

Accounts receivable, net

4,203

3,672

Inventories

4,521

3,496

Prepaid expenses and other current assets

297

627

Total current assets

26,508

19,511

Property and equipment, net

199

286

Operating lease right-of-use assets

218

968

Other assets

1,377

1,376

Total assets

$

28,302

$

22,141

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Accounts payable

$

8,053

$

9,134

Revolving line of credit

3,388

2,990

Accrued payroll and related liabilities

665

740

Accrued expenses and other current liabilities

454

793

Current portion of long-term debt and note payable

389

412

Total current liabilities

12,949

14,069

Long-term debt

16,426

15,793

Operating lease liabilities

-

498

Other liabilities

111

144

Total liabilities

29,486

30,504

Commitments and contingencies

Stockholders' deficit:

Preferred stock

-

-

Common stock

195

169

Additional paid-in capital

191,741

179,086

Accumulated deficit

(193,120

)

(187,618

)

Total stockholders' deficit

(1,184

)

(8,363

)

Total liabilities and stockholders' deficit

$

28,302

$

22,141

Netlist, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)


Three Months Ended


Nine Months Ended

September 26,

September 28,

September 26,

September 28,

2020

2019

2020

2019

Net sales

$

10,212

$

6,116

$

35,749

$

16,733

Cost of sales(1)

8,875

5,666

30,477

15,600

Gross profit

1,337

450

5,272

1,133

Operating expenses:

Research and development(1)

731

583

2,083

1,738

Intellectual property legal fees

784

979

2,257

3,567

Selling, general and administrative(1)

1,816

1,747

5,994

5,724

Total operating expenses

3,331

3,309

10,334

11,029

Operating loss

(1,994

)

(2,859

)

(5,062

)

(9,896

)

Other expense, net:

Interest expense, net

(139

)

(245

)

(437

)

(775

)

Other income (expense), net

3

(4

)

(2

)

(5

)

Total other expense, net

(136

)

(249

)

(439

)

(780

)

Loss before provision for income taxes

(2,130

)

(3,108

)

(5,501

)

(10,676

)

Provision for income taxes

-

-

1

1

Net loss

$

(2,130

)

$

(3,108

)

$

(5,502

)

$

(10,677

)

Net loss per common share:

Basic and diluted

$

(0.01

)

$

(0.02

)

$

(0.03

)

$

(0.07

)

Weighted-average common shares outstanding:

Basic and diluted

192,257

148,058

179,154

142,624

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

Cost of sales

$

1

$

6

$

8

$

20

Research and development

63

67

154

163

Selling, general and administrative

148

170

420

599

Total stock-based compensation

$

212

$

243

$

582

$

782

SOURCE: Netlist, Inc. via EQS Newswire



View source version on accesswire.com:
https://www.accesswire.com/615669/Netlist-Reports-Third-Quarter-2020-Results