Netlist Reports Full Year and Fourth Quarter 2021 Results
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Netlist Reports Full Year and Fourth Quarter 2021 Results

Tuesday, March 1, 2022 8:00 AM
Netlist, Inc.
https://netlist.com/
Topic:
Earnings

IRVINE, CA / ACCESSWIRE / March 1, 2022 / Netlist, Inc. (OTCQB:NLST) today reported financial results for the full year and the fourth quarter ended January 1, 2022.

2021 Highlights:

  • Revenue increased 201% to $142.4 million compared to $47.2 million last year
  • Gross profit increased 626% to $48.9 million compared to $6.7 million last year
  • Net income reached $4.8 million or $0.02 per diluted share compared to ($0.04) last year
  • Current ratio increased by 159% as working capital improved by $55 million

"Netlist delivered strong financial results on the back of significant increases in revenue and gross profit in 2021," said Netlist's Chief Executive Officer, C.K. Hong. "During the year we more than doubled product sales, entered into a strategic relationship with the world's second-largest maker of memory chips, and made substantial progress in intellectual property initiatives. These accomplishments validate the strategies we have in place for both product sales and licensing, and position us for continued growth in 2022."

Netlist, Inc., Tuesday, March 1, 2022, Press release picture

Net sales for the full year ended January 1, 2022 were $142.4 million with $40 million in licensing fees and $102.4 million in product revenue, compared to net sales of $47.2 million for the full year ended January 2, 2021. Gross profit for the full year ended January 1, 2022 was $48.9 million, or 34.3% of net sales, compared to a gross profit of $6.7 million, or 14.3% of net sales, for the full year ended January 2, 2021.

Net income for the full year ended January 1, 2022 was $4.8 million, or $0.02 per share, compared to a net loss in the prior year period of ($7.3) million, or a loss per share of ($0.04). These results include stock-based compensation expense of $1.6 million and $0.8 million for the years ended January 1, 2022 and January 2, 2021, respectively.

Net sales for the fourth quarter ended January 1, 2022 were $36.3 million, compared to net sales of $11.5 million for the quarter ended January 2, 2021. Gross profit for the quarter ended January 1, 2022 was $2.0 million, or 5.6% of net sales, compared to a gross profit of $1.5 million, or 12.7% of net sales, for the quarter ended January 2, 2021.

Net loss for the fourth quarter ended January 1, 2022 was ($8.2) million, or a loss per share of ($0.04), 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 $0.4 million and $0.2 million for the quarters ended January 1, 2022 and January 2, 2021, respectively.

As of January 1, 2022, cash, cash equivalents and restricted cash was $58.5 million, total assets were $91.2 million, working capital was $52.6 million, total debt was $7.6 million, and stockholders' equity was $54.0 million.

Conference Call Information

C.K. Hong, Chief Executive Officer, and Gail Sasaki, Chief Financial Officer, will host an investor conference call today, March 1, 2022 at 12:00 p.m. Eastern Time to review Netlist's results for the fourth quarter ended January 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. 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 26, 2021, 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)

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

(unaudited)

January 1, January 2,
2022 2021
ASSETS
Current assets:
Cash and cash equivalents
$47,679 $13,326
Restricted cash
10,800 3,200
Accounts receivable, net
12,727 4,680
Inventories
15,670 3,198
Prepaid expenses and other current assets
1,126 514
Total current assets
88,002 24,918
Property and equipment, net
989 182
Operating lease right-of-use assets
1,891 114
Other assets
294 58
Total assets
$91,176 $25,272
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable
$25,887 $5,327
Revolving line of credit
7,000 3,678
Accrued payroll and related liabilities
1,308 806
Accrued expenses and other current liabilities
632 777
Long-term debt due within one year
562 17,056
Total current liabilities
35,389 27,644
Long-term debt
- 146
Operating lease liabilities
1,593 -
Other liabilities
152 102
Total liabilities
37,134 27,892
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock
- -
Common stock
231 195
Additional paid-in capital
243,866 192,071
Accumulated deficit
(190,055) (194,886)
Total stockholders' equity (deficit)
54,042 (2,620)
Total liabilities and stockholders' equity (deficit)
$91,176 $25,272

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


Three Months Ended Year Ended
January 1, January 2, January 1, January 2,
2022 2021 2022 2021
Net product sales
$36,346 $11,485 $102,355 $47,234
License fee
- - 40,000 -
Net sales
36,346 11,485 142,355 47,234
Cost of sales(1)
34,323 10,026 93,458 40,503
Gross profit
2,023 1,459 48,897 6,731
Operating expenses:
Research and development(1)
2,019 870 7,241 2,953
Intellectual property legal fees
4,909 111 19,494 2,368
Selling, general and administrative(1)
3,140 2,253 10,779 8,247
Total operating expenses
10,068 3,234 37,514 13,568
Operating (loss) income
(8,045) (1,775) 11,383 (6,837)
Other (expense) income, net:
Interest expense, net
(151) (94) (568) (531)
Other income, net
2 103 643 101
Total other (expense) income, net
(149) 9 75 (430)
(Loss) income before provision for income taxes
(8,194) (1,766) 11,458 (7,267)
Provision for income taxes
26 - 6,627 1
Net (loss) income
$(8,220) $(1,766) $4,831 $(7,268)
(Loss) earnings per share:
Basic
$(0.04) $(0.01) $0.02 $(0.04)
Diluted
$(0.04) $(0.01) $0.02 $(0.04)
Weighted-average common shares outstanding:
Basic
227,277 195,964 218,171 183,594
Diluted
233,943 195,964 225,589 183,594
(1) Amounts include stock-based compensation expense as follows:
Cost of sales
$3 $2 $12 $10
Research and development
132 42 570 196
Selling, general and administrative
283 137 998 557
Total stock-based compensation
$418 $181 $1,580 $763

For more information, please contact:

The Plunkett Group
Mike Smargiassi
[email protected]
(212) 739-6729

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

SOURCE: Netlist, Inc.

Topic:
Earnings
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