The revenues for the fourth quarter of 2008 were $6.6 million compared to $22.5 million for the fourth quarter of 2007. Negative gross profit for the fourth quarter of 2008, was $283,000, or a negative gross margin of 4.3%, compared with a gross profit of $5.1 million, or a gross margin of 22.7%, in the year-earlier period. Gross profit for the year-end 2008, was $7.6 million, or a gross margin of 11.3%, compared to a gross profit of $8.8 million, or a gross margin of 8.8%, for the year-end 2007.
Net loss for the fourth quarter of 2008, was $5.0 million, or $0.25 loss per share, compared to a net loss in the prior year-end of $171,000, or $0.01 loss per share. Fully diluted weighted-average shares outstanding for the fourth quarter of 2008, were 19,855,000, compared to 19,730,000 in the corresponding year-earlier period. These results incorporate stock-based compensation expense in the fourth quarter of 2008 of $296,000, compared with $247,000 in the prior year-end.
The net loss for the year-end 2008 includes a non-cash provision for income taxes of $4.5 million which was recorded during the third quarter to establish a partial valuation allowance against deferred tax assets.
As of January 3, 2009, cash, cash equivalents, and investments in marketable securities were $21.4 million, total assets were $34.9 million, working capital was $22.3 million, total long-term debt was $130,000, and stockholders’ equity was $30.2 million.
The company also announced that it will migrate away from the commoditized memory module market and focus on higher-margin, longer-lifecycle chip-based products.
‘The memory module markets were lucrative until the combination of crashing DRAM prices and an abundance of low-cost competition resulted in a fully commoditized marketplace,’ stated Chuck Hong, chief executive officer of Netlist. ‘While we have identified certain memory module programs where we can still bring value, our principle development efforts will now be directed to new chip-based technologies that better fit the changing needs of the computing and storage marketplace.’
Hong said the company is currently engaged in major OEM qualification activities with new products based on its DxD chipset and should begin to drive new revenue streams next year.
‘While revenue in the next few quarters will continue to be impacted by our choice to not participate in certain markets, the combination of higher-value module programs and the kick-off of new chip-based programs should allow for a reversal of recent revenue trends toward the end of the year and beyond,’ added Hong. ‘The adoption of this new strategic focus has reinvigorated our entire company.’
