Netlist Inc (NLST) SEC Filing 8-K Material Event for the period ending Monday, March 1, 2021

 

Exhibit 99.1

 

Netlist Reports Full Year and Fourth Quarter 2020 Results

 

IRVINE, CALIFORNIA, March 1, 2021 - Netlist, Inc. (OTCQB: NLST) today reported financial results for the full year and the fourth quarter ended January 2, 2021.

 

Net sales for the full year ended January 2, 2021 were $47.2 million, compared to net sales of $26.1 million for the full year ended December 28, 2019. Gross profit for the full year ended January 2, 2021 was $6.7 million, or 14.3% of net sales, compared to a gross profit of $2.6 million, or 9.8% of net sales, for the full year ended December 28, 2019.

 

Net loss for the full year ended January 2, 2021 was ($7.3) million, or a loss per share of ($0.04), compared to a net loss in the prior year period of ($12.5) million, or a loss per share of ($0.08). These results include stock-based compensation expense of $0.8 million and $1.0 million for the years ended January 2, 2021 and December 28, 2019, respectively.

 

Net sales for the fourth quarter ended January 2, 2021 were $11.5 million, compared to net sales of $9.4 million for the quarter ended December 28, 2019. Gross profit for the quarter ended January 2, 2021 was $1.5 million, or 12.7% of net sales, compared to a gross profit of $1.4 million, or 15.3% of net sales, for the quarter ended December 28, 2019.

 

Net loss for the fourth quarter ended January 2, 2021 was ($1.8) million, or a loss per share of ($0.01), compared to a net loss in the prior year period of ($1.8) million, or a loss per share of ($0.01). These results include stock-based compensation expense of $0.2 million for both of the quarters ended January 2, 2021 and December 28, 2019.

 

As of January 2, 2021, cash, cash equivalents and restricted cash was $16.5 million, total assets were $25.3 million, working capital was ($2.7) million, total debt and accrued interest, net of debt discount, was $20.9 million, and stockholders’ deficit was ($2.6) million.

 

“During 2020 revenue grew by 81%, gross profit dollars improved by 162% and operating expenses decreased by 3.5%, resulting in a 42% improvement to the bottom line compared to the prior year,” said Netlist’s Chief Executive Officer, C.K. Hong. “For 2021 we are well positioned to execute on the product business and our intellectual property initiatives. We look forward to the resumption of the Google case and the SK hynix jury trial.”

 

Conference Call Information

 

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, March 1, 2021 at 5:00 p.m. Eastern Time to review Netlist’s results for the fourth quarter ended January 2, 2021. 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	Netlist, Inc.
Mike Smargiassi	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)
		January 2,				December 28,
		2021				2019
ASSETS
Current assets:
Cash and cash equivalents		$	13,326			$	8,966
Restricted cash			3,200				2,750
Accounts receivable, net			4,680				3,672
Inventories			3,198				3,496
Prepaid expenses and other current assets			514				627
Total current assets			24,918				19,511
Property and equipment, net			182				286
Operating lease right-of-use assets			114				968
Other assets			58				1,376
Total assets		$	25,272			$	22,141
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable		$	5,327			$	9,134
Revolving line of credit			3,678				2,990
Accrued payroll and related liabilities			806				740
Accrued expenses and other current liabilities			777				793
Long-term debt due within one year			17,056				412
Total current liabilities			27,644				14,069
Long-term debt			146				15,793
Operating lease liabilities			—				498
Other liabilities			102				144
Total liabilities			27,892				30,504
Commitments and contingencies
Stockholders' deficit:
Preferred stock			—				—
Common stock			195				169
Additional paid-in capital			192,071				179,086
Accumulated deficit			(194,886	)			(187,618	)
Total stockholders' deficit			(2,620	)			(8,363	)
Total liabilities and stockholders' deficit		$	25,272			$	22,141

 

 

Netlist, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except per share amounts)
		Three Months Ended								Year Ended
		January 2,				December 28,				January 2,				December 28,
		2021				2019				2021				2019
Net sales		$	11,485			$	9,370			$	47,234			$	26,103
Cost of sales(1)			10,026				7,933				40,503				23,533
Gross profit			1,459				1,437				6,731				2,570
Operating expenses:
Research and development(1)			870				645				2,953				2,383
Intellectual property legal fees			111				564				2,368				4,131
Selling, general and administrative(1)			2,253				1,822				8,247				7,546
Total operating expenses			3,234				3,031				13,568				14,060
Operating loss			(1,775	)			(1,594	)			(6,837	)			(11,490	)
Other income (expense), net:
Interest expense, net			(94	)			(170	)			(531	)			(945	)
Other income (expense), net			103				1				101				(4	)
Total other income (expense), net			9				(169	)			(430	)			(949	)
Loss before provision for income taxes			(1,766	)			(1,763	)			(7,267	)			(12,439	)
Provision for income taxes			—				12				1				13
Net loss		$	(1,766	)		$	(1,775	)		$	(7,268	)		$	(12,452	)
Net loss per common share:
Basic and diluted		$	(0.01	)		$	(0.01	)		$	(0.04	)		$	(0.08	)
Weighted-average common shares outstanding:
Basic and diluted			195,964				164,658				183,594				148,132
(1)  Amounts include stock-based compensation expense as follows:
Cost of sales		$	2			$	6			$	10			$	26
Research and development			42				50				196				213
Selling, general and administrative			137				151				557				750
Total stock-based compensation		$	181			$	207			$	763			$	989