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Netlist Reports Third Quarter 2022 Results


Irvine, 10/27/2022 / 08:03, EST/EDT - EQS Newswire - Netlist, Inc.


IRVINE, CA / ACCESSWIRE / October 27, 2022 / Netlist, Inc. (OTCQB:NLST) today reported financial results for the third quarter ended October 1, 2022.

Netlist, Inc., Thursday, October 27, 2022, Press release picture

Third Quarter 2022 Highlights:

  • Net product sales increased by 29% to $34.4 million compared to $26.7 million for last year's quarter.

  • Year-to-date net product sales more than doubled to $140.0 million compared to $66.0 million for the prior year period.

"Netlist delivered double digit revenue gains from the year ago quarter and continues to execute on both its product and licensing strategies," said Chief Executive Officer, C.K. Hong. "However, the quarterly results reflect the impact of the current over-supplied environment, which is expected to continue into 2023."

Net product sales for the third quarter ended October 1, 2022 were $34.4 million, compared to net product sales of $26.7 million for the third quarter ended October 2, 2021. Product gross profit for the third quarter ended October 1, 2022 was $2.2 million, compared to a product gross profit of $2.5 million for the third quarter ended October 2, 2021.

Net product sales for the nine months ended October 1, 2022 were $140.0 million, compared to net product sales of $66.0 million for the nine months ended October 2, 2021. Product gross profit for the nine months ended October 1, 2022 was $10.3 million, compared to a product gross profit of $6.9 million for the nine months ended October 2, 2021.

Net loss for the third quarter ended October 1, 2022 was ($9.6) million, or ($0.04) per share, compared to a net loss in the prior year period of ($10.7) million, or ($0.05) per share. These results include stock-based compensation expense of $0.9 million and $0.4 million for the quarters ended October 1, 2022 and October 2, 2021, respectively.

Net loss for the nine months ended October 1, 2022 was ($20.4) million, or ($0.09) per share, compared to a net income in the prior year period of $13.1 million, or $0.06 per share. These results include stock-based compensation expense of $2.4 million and $1.2 million for the nine months ended October 1, 2022 and October 2, 2021, respectively.

As of October 1, 2022, cash, cash equivalents and restricted cash was $43.4 million, total assets were $77.0 million, working capital was $37.2 million, total debt was $8.0 million, and stockholders' equity was $38.7 million.

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, October 27, 2022 at 12:00 p.m. Eastern Time to review Netlist's results for the third quarter ended October 1, 2022. 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 solid-state drives and modular memory solutions to enterprise customers in diverse industries. The Company's NVMe™ SSDs in various capacities and form factors and the line of custom and specialty memory products bring industry-leading performance to server and storage appliance customers and cloud service providers. Netlist licenses its portfolio of intellectual property including patents, in server memory, hybrid memory and storage class memory, to companies that implement Netlist's technology. 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, 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. The military conflict between Russia and Ukraine may increase the likelihood of supply interruptions. 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 1, 2022, 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)

October 1,

January 1,

2022

2022

ASSETS

Current assets:

Cash and cash equivalents

$

23,342

$

47,679

Restricted cash

20,100

10,800

Accounts receivable, net

10,668

12,727

Inventories

18,391

15,670

Prepaid expenses and other current assets

868

1,126

Total current assets

73,369

88,002

Property and equipment, net

1,166

989

Operating lease right-of-use assets

2,207

1,891

Other assets

297

294

Total assets

$

77,039

$

91,176

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

24,112

$

25,887

Revolving line of credit

8,000

7,000

Accrued payroll and related liabilities

1,714

1,308

Accrued expenses and other current liabilities

2,374

632

Long-term debt due within one year

1

562

Total current liabilities

36,201

35,389

Operating lease liabilities

1,845

1,593

Other liabilities

317

152

Total liabilities

38,363

37,134

Commitments and contingencies

Stockholders' equity:

Preferred stock

-

-

Common stock

233

231

Additional paid-in capital

248,920

243,866

Accumulated deficit

(210,477

)

(190,055

)

Total stockholders' equity

38,676

54,042

Total liabilities and stockholders' equity

$

77,039

$

91,176

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

Three Months Ended

Nine Months Ended

October 1,

October 2,

October 1,

October 2,

2022

2021

2022

2021

Net product sales

$

34,424

$

26,749

$

139,982

$

66,009

License fee

-

-

-

40,000

Net sales

34,424

26,749

139,982

106,009

Cost of sales(1)

32,244

24,241

129,691

59,135

Gross profit

2,180

2,508

10,291

46,874

Operating expenses:

Research and development(1)

2,550

2,038

7,679

5,222

Intellectual property legal fees

5,577

8,461

11,716

14,585

Selling, general and administrative(1)

3,767

2,590

11,429

7,639

Total operating expenses

11,894

13,089

30,824

27,446

Operating (loss) income

(9,714

)

(10,581

)

(20,533

)

19,428

Other income (expense), net:

Interest income (expense), net

34

(125

)

38

(417

)

Other income (expense), net

82

(2

)

74

641

Total other income (expense), net

116

(127

)

112

224

(Loss) income before provision for income taxes

(9,598

)

(10,708

)

(20,421

)

19,652

Provision for income taxes

-

-

1

6,601

Net (loss) income

$

(9,598

)

$

(10,708

)

$

(20,422

)

$

13,051

Earnings (loss) per common share:

Basic

$

(0.04

)

$

(0.05

)

$

(0.09

)

$

0.06

Diluted

$

(0.04

)

$

(0.05

)

$

(0.09

)

$

0.06

Weighted-average common shares outstanding:

Basic

231,739

224,020

231,194

215,135

Diluted

231,739

224,020

231,194

235,862

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


Cost of sales

$

22

$

2

$

41

$

9

Research and development

283

160

674

438

Selling, general and administrative

587

283

1,649

715

Total stock-based compensation

$

892

$

445

$

2,364

$

1,162

SOURCE: Netlist, Inc.


Attachment

File: fs_for_earnings_release__q3_2022


10/27/2022 EQS Newswire / EQS Group AG



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