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August 13, 2014

Netlist Reports Second Quarter 2014 Financial Results

Aug. 13 — Netlist, Inc., a leading provider of high performance memory solutions for the cloud computing and storage markets, has reported financial results for the second quarter ended June 28, 2014.

Revenues for the three months ended June 28, 2014, were $4.9 million, compared to revenues of $5.1 million for the second quarter ended June 29, 2013. Gross profit for the three months ended June 28, 2014, was $1.0 million, or 20.0 percent of revenues, compared to a gross profit of $0.2 million, or 4.9 percent of revenues for the second quarter ended June 29, 2013.

The adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) loss was ($2.3) million for the second quarter ended June 28, 2014, compared to an adjusted EBITDA loss of ($2.0) million for the prior year period.

Net loss for the second quarter ended June 28, 2014, was ($3.5) million, or ($0.08) loss per share, compared to a net loss in the prior year period of ($2.9) million, or ($0.09) loss per share. These results include stock-based compensation expense of $515,000 for the second quarter of 2014, compared to $369,000 for the second quarter of 2013.

Commenting on the results, C.K. Hong, Netlist’s Chief Executive Officer, stated, “During the second quarter, we continued to focus on executing our strategic plan. We made significant progress in qualifying our newest NVvault product at one of the world’s largest hyperscale customers and showcased that product as the industry’s best performing NVDIMM running at 2DPC 1600 at the recent Flash Memory Summit. We are also pleased with the progress made in the trade secrets litigation against the ULLtraDIMM product from SanDisk, which it produced in partnership with Diablo, a former contractor to Netlist. In fact, Diablo acknowledged in recent court filings that earlier versions of the ULLtraDIMM did use actual Netlist chips, though they have taken the position that they were allowed to do so — a position with which we obviously disagree. This admission and the evidence we have reviewed so far supports our assertions in the case and we intend to vigorously pursue every remedy available to us.”

Revenues for the six months ended June 28, 2014, were $11.9 million, compared to revenues of $11.0 million for the six months ended June 29, 2013. Gross profit for the six months ended June 28, 2014, was $3.0 million, or 24.9 percent of revenues, compared to a gross profit of $0.8 million, or 7.4 percent of revenues, for the six months ended June 29, 2013.

Net loss for the six months ended June 28, 2014, was ($5.5) million, or ($0.14) loss per share, compared to a net loss in the prior year period of ($6.0) million, or ($0.20) loss per share. These results include stock-based compensation expense of $1,046,000 and $803,000 for the six month periods ended June 28, 2014 and June 29, 2013, respectively.

As of June 28, 2014, cash and cash equivalents and restricted cash were $17.3 million, total assets were $24.4 million, working capital was $17.4 million, total debt, net of debt discounts, was $5.4 million, and stockholders’ equity was $13.6 million.

About Netlist

Netlist, Inc. designs and manufactures high-performance, logic-based memory subsystems for server and storage applications for cloud computing. Netlist’s flagship products include NVvault and EXPRESSvault family of products that significantly accelerate system performance and provide mission critical fault tolerance, HyperCloud, a patented memory technology that breaks traditional performance barriers, and a broad portfolio of industrial Flash and specialty memory subsystems including VLP (very low profile) DIMMs and Planar-X RDIMMs. Netlist has steadily invested in and grown its worldwide IP portfolio, which now includes 51 issued or granted patents and more than 30 U.S. and foreign pending patent applications in the areas of high performance memory and hybrid memory technologies.

Source: Netlist

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