Netlist: Fiscal 3Q11 Financial Results

(in US$ millions)	3Q10	3Q11	9 mo. 10	9 mo. 11
Revenues	10.6	16.3	27.8	44.3
*Growth*		54%		*59%*
Net income (loss)	(4.9)	(1.0)	(11.9)	(5.4)

Netlist, Inc. reported financial results for the third quarter and nine months ended October 1, 2011.

Revenues for the third quarter ended October 1, 2011, were $16.3 million, up 55 percent from revenues of $10.6 million for the third quarter ended October 2, 2010. Gross profit for the third quarter ended October 1, 2011, was $5.5 million, or 34 percent of revenues, compared to a gross profit of $3.0 million, or 29 percent of revenues, for the third quarter ended October 2, 2010, an increase of 83 percent.

Adjusted EBITDA after adding back net interest expense, income taxes, depreciation, amortization, stock-based compensation and net non-operating income was $32,000 for the third quarter ended October 1, 2011, compared to an adjusted EBITDA loss of $4.0 million for the prior year period.

Net loss for the third quarter ended October 1, 2011, was $1.0 million, or $0.04 loss per share, an improvement of 79 percent compared to the net loss in the prior year period of $4.9 million, or $0.20 loss per share. These results include stock-based compensation expense in the third quarter ended October 1, 2011, of $0.5 million compared with $0.4 million in the year-earlier period.

Chief Executive Officer C.K. Hong said: "Last quarter, we continued to execute on our base business and extended the trend of improving financial performance. We expanded our gross profit, decreased our operating loss and achieved EBITDA breakeven. In addition to all of the progress made in the third quarter, we are preparing to roll out several major items at next week’s Super Computing conference – SC11 – in Seattle, including demonstration of a powerful new product platform and announcement of important industry partnerships."

Revenues for the nine months ended October 1, 2011, were $44.3 million, up 60 percent from revenues of $27.8 million for the nine months ended October 2, 2010. Gross profit for the nine months ended October 1, 2011, was $14.3 million, or 32 percent of revenues, compared to a gross profit of $6.7 million, or 24 percent of revenues, for the nine months ended October 2, 2010, an increase of 114 percent for the period.

Adjusted EBITDA loss after adding back net interest expense (income), income taxes, depreciation, amortization, stock-based compensation and net non-operating expense (income) was $2.2 million for the first nine months ended October 1, 2011, compared to an adjusted EBITDA loss of $9.8 million for the prior year period.

Net loss for the nine months ended October 1, 2011, was $5.4 million, or $0.22 loss per share, compared to a net loss in the prior year period of $11.9 million, or $0.51 loss per share. These results include stock-based compensation expense of $1.2 million for both periods.

As of October 1, 2011, cash, cash equivalents, and investments in marketable securities were $11 million, total assets were $31 million, working capital was $16 million, total debt was $4 million, and stockholders’ equity was $18 million.