Netlist plummets on Q2 loss announcement
Shares of Netlist, Inc. (Nasdaq: NLST) plummeted 27.78%, or $1.00 to $2.60 in after-hours trading Monday after the supplier of high-performance memory subsystems announced it now expects a loss for the second quarter.
For the three months ended June 30, 2007, the Irvine, Calif. company said it expects a fully diluted net loss of approximately $0.35 to $0.37 per share. This includes estimated stock-based compensation expense of $0.3 million, according to the company. Netlist went public in November of 2006.
Netlist said revenue and gross margins for the quarter were adversely impacted by the decline in the DRAM market and a related decline in demand from OEM customers.
“Our operating results for the second quarter were severely impacted by two principal factors,” Netlist CEO Chuck Hong said. “First, the unexpected continued decline in the DRAM market during the second quarter affected the sales, pricing and gross margin on our lower-ASP, high-volume products. Secondly, we experienced delays in qualifying new products on our customers' high-end product platforms, as well as lower shipments on certain qualified products.”
During the second quarter the company also recorded special charges of approximately $5 million to reflect the impact of declining DRAM prices on inventory values.
“While we have recently implemented prudent cuts in expenses and personnel related to the current market softness, we are still very much committed to our long-term strategy of developing high-performance memory subsystems and new applications that offer a superior value proposition to our OEM customers,” said Hong.
