EX-99.1 2 a07-13972_1ex99d1.htm EX-99.1

Exhibit 99.1

NEWS RELEASE for May 10, 2007

Contact:

Allen & Caron Inc

Lee Kim

 

Jill Bertotti (investors)

Chief Financial Officer

 

jill@allencaron.com

Netlist, Inc.

 

Len Hall (media)

(949) 435-0025

 

len@allencaron.com

 

 

(949) 474-4300

 

 

NETLIST REPORTS 2007 FIRST QUARTER RESULTS

IRVINE, CA (May 10, 2007) . . . Netlist, Inc. (Nasdaq: NLST) today reported financial results for the quarter ended March 31, 2007.  These results are in line with the preliminary results that were announced April 16.

Revenues for the 2007 first quarter were $37.5 million compared with $26.0 million in the first quarter ended April 1, 2006, and gross margin for the quarter was 14.5 percent, up from 9.8 percent in the corresponding prior-year period.  Net income for the 2007 first quarter was $631,000, or $0.03 per diluted share, compared to a net loss of $242,000, or a $0.02 loss per diluted share, in the corresponding prior-year period.  Fully diluted weighted-average shares outstanding for this year’s first quarter were 21,425,000, compared with 10,753,000 in the corresponding prior-year period.  The increase was due to the Company’s initial public offering (IPO).  These results include stock-based compensation expense of $328,000 in the first quarter of 2007 and $73,000 in the first quarter of 2006.

Chief Executive Officer Chuck Hong said that the Company is pushing forward with its principal strategic focus of developing high-performance memory subsystems that offer a superior value proposition to its OEM customers and targeting new application markets.

“While it is difficult to predict the precise duration of the market conditions and customer ordering patterns that impacted the Company in the first quarter,” he said, “we are well positioned to push forward with numerous programs that will bring high-end memory subsystem products to market in the second half of 2007.”

As of March 31, 2007, cash, cash equivalents and investments in marketable securities were $34.7 million, total assets were $73.6 million, working capital was $40.2 million, total long-term debt was $1.0 million, and stockholders’ equity was $51.2 million.



Conference Call Information

Because management hosted a conference call following the announcement of Company’s preliminary first quarter results on April 16, Netlist will not be conducting a conference call today.

About Netlist, Inc.

Netlist designs and manufactures high-performance memory subsystems for the server and high- performance computing and communications markets. The Company’s memory subsystems are developed for applications in which high speed, high-capacity memory, functionality, small form factor, and heat dissipation are key requirements. These applications include tower servers, rack-mounted servers, blade servers, high performance computing clusters, engineering workstations, and telecommunication switches. Netlist maintains its headquarters and manufacturing facilities in Irvine, California, and is developing additional manufacturing capacity in the People’s Republic of China.

Safe Harbor Statement

This news release contains forward-looking statements regarding future events and the future performance of Netlist, including future opportunities and growth for the company’s business. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those expected or projected. These risks and uncertainties include, but are not limited to, the rapidly-changing nature of technology; volatility in the pricing of DRAM ICs; introductions of new products by competitors; changes in end-user demand for technology solutions; our ability to attract and retain skilled personnel; our reliance on suppliers of critical components; evolving industry standards; and the political and regulatory environment in the People’s Republic of China. Other risks and uncertainties are described in the Company’s annual report on Form 10-K, dated February 28, 2007, and other filings with the U.S. Securities and Exchange Commission made by the company from time to time.  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



NETLIST, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

 

 

Three Months Ended

 

 

 

March 31,
 2007

 

April 1,
 2006

 

Net sales

 

$

37,538

 

$

26,020

 

Cost of sales(1)

 

32,089

 

23,466

 

Gross profit

 

5,449

 

2,554

 

Operating expenses:

 

 

 

 

 

Research and development(1)

 

1,067

 

666

 

Selling, general and administrative(1)

 

3,704

 

1,803

 

Total operating expenses

 

4,771

 

2,469

 

Operating income

 

678

 

85

 

Other expense:

 

 

 

 

 

Interest expense, net of interest income

 

(48

)

(400

)

Other income (expense), net

 

1

 

(10

)

Total other expense, net

 

(47

)

(410

)

Income (loss) before provision (benefit) for income taxes

 

631

 

(325

)

Provision (benefit) for income taxes

 

—

 

(83

)

Net income (loss)

 

$

631

 

$

(242

)

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

Basic

 

$

0.03

 

$

(0.02

)

Diluted

 

$

0.03

 

$

(0.02

)

Weighted-average common shares outstanding:

 

 

 

 

 

Basic

 

19,624

 

10,753

 

Diluted

 

21,425

 

10,753

 

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

Cost of sales

 

$

64

 

$

7

 

Research and development

 

46

 

11

 

Selling, general and administrative

 

218

 

55

 

 



NETLIST, INC. AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(in thousands)

 

 

March 31,
2007

 

December 30,
2006

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

11,694

 

$

30,975

 

Investments in marketable securities

 

16,149

 

5,267

 

Accounts receivable, net

 

18,033

 

23,703

 

Inventories

 

13,380

 

19,473

 

Deferred taxes

 

1,100

 

1,054

 

Prepaid expenses and other current assets

 

897

 

988

 

Total current assets

 

61,253

 

81,460

 

Property and equipment, net

 

3,894

 

3,830

 

Deferred taxes

 

932

 

576

 

Long-term investments in marketable securities

 

6,842

 

1,502

 

Other assets

 

636

 

326

 

Total assets

 

$

73,557

 

$

87,694

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

5,491

 

$

11,680

 

Revolving line of credit

 

12,026

 

19,238

 

Current portion of long-term debt

 

865

 

1,033

 

Current portion of deferred gain on sale and leaseback transaction

 

118

 

118

 

Income taxes payable

 

108

 

552

 

Accrued expenses and other current liabilities

 

2,459

 

3,255

 

Total current liabilities

 

21,067

 

35,876

 

Long-term debt, net of current portion

 

1,010

 

1,230

 

Deferred gain on sale and leaseback transaction, net of current portion

 

314

 

344

 

Total liabilities

 

22,391

 

37,450

 

Commitments and contingencies

 

—

 

—

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

20

 

20

 

Additional paid-in capital

 

66,998

 

66,557

 

Note receivable from stockholder

 

(1

)

(1

)

Accumulated deficit

 

(15,855

)

(16,332

)

Accumulated other comprehensive income

 

4

 

—

 

Total stockholders’ equity

 

51,166

 

50,244

 

Total liabilities and stockholders’ equity

 

$

73,557

 

$

87,694

 

 

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