QuickLogic Announces Fiscal 2009 Second Quarter Results

SUNNYVALE, Calif.--(BUSINESS WIRE)-- QuickLogic Corporation (NASDAQ:QUIK), the lowest power programmable semiconductor solutions leader, today announced the financial results for its fiscal second quarter ended June 28, 2009.

During the second quarter, new product revenue increased 24% from the first quarter of 2009. However, as we previously announced, a sharp decline in demand for our legacy products sold into the US and Western European markets caused a decline in total revenue for the second quarter of 2009 to $2.9 million, down 36 percent from the first quarter of 2009 and down 67 percent from the second quarter of 2008.

Under generally accepted accounting principles (GAAP), the net loss for the second quarter of 2009 was $3.2 million, or $0.11 per share, compared with a net loss of $1.6 million, or $0.05 per share, in the first quarter of 2009 and a net loss of $4.7 million, or $0.16 per share, in the second quarter of 2008. Non-GAAP net loss for the second quarter of 2009 was $2.7 million, or $0.09 per share, compared with a non-GAAP net loss of $1.2 million, or $0.04 per share, in the first quarter of 2009 and a non-GAAP net loss of $0.9 million, or $0.03 per share, in the second quarter of 2008.

"The U.S. and Western European market served by our legacy products have been among those hardest hit during this recession and, for the most part, are still struggling. This is unfortunate, but it is a part of the equation that we can do little to impact. However, the part of the equation that we can drive is moving forward," said QuickLogic's CEO, Tom Hart. "While second quarter shipments for new products came in at the low end of our expectations, bookings were strong during the last half of June. We believe this will lead to a material increase in new product shipments in Q3."

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Time today, July 28, 2009, to discuss the second quarter financial results. The conference call is being webcast and can be accessed via QuickLogic's website at www.quicklogic.com. To participate, please call (877) 419-6596 by 2:20 p.m. Pacific Time. A recording of the call will be available starting one hour after completion of the call. To access the recording, please call (719) 457-0820 and reference the pass code: 5081417. The call recording will be archived until July 31, 2009 and the webcast will be available for 12 months.

About QuickLogic

QuickLogic Corporation (NASDAQ:QUIK) is the pioneer of innovative, customizable semiconductor solutions for mobile and portable electronics original equipment manufacturers (OEMs) and original design manufacturers (ODMs). These silicon plus software solutions are called Customer Specific Standard Products (CSSPs). CSSPs enable our customers to bring their products to market more quickly and remain in the market longer, with the low power, cost and size demanded by the mobile and portable electronics market. For more information about QuickLogic and CSSPs, visit www.quicklogic.com. Code: QUIK-G

Non-GAAP Financial Measures

QuickLogic reports financial information in accordance with GAAP, but believes that non-GAAP financial measures are helpful in evaluating its operating results and comparing its performance to comparable companies. Accordingly, the Company excludes charges related to stock-based compensation , restructuring, the write-down of the Company's investment in Tower Semiconductor Ltd. and the effect of the write-off of long-lived assets in calculating non-GAAP (i) income (loss) from operations, (ii) net income (loss), (iii) net income (loss) per share, and (iv) gross margin percentage. The Company provides this non-GAAP information to enable investors to evaluate its operating results in a manner similar to how the Company analyzes its operating results and to provide consistency and comparability with similar companies in the Company's industry.

Management uses the non-GAAP measures, which exclude gains, losses and other charges that are considered by management to be outside of the Company's core operating results, internally to evaluate its operating performance against results in prior periods and its operating plans and forecasts. In addition, the non-GAAP measures are used to plan for the Company's future periods, and serve as a basis for the allocation of Company resources, management of operations and the measurement of profit-dependent cash and equity compensation paid to employees and executive officers.

Investors should note, however, that the non-GAAP financial measures used by QuickLogic may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. QuickLogic does not itself, nor does it suggest that investors should, consider such non-GAAP financial measures alone or as a substitute for financial information prepared in accordance with GAAP. A reconciliation of GAAP financial measures to non-GAAP financial measures is included in the financial statements portion of this press release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures with their most directly comparable GAAP financial measures.

Safe Harbor Statement Under The Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements made by our CEO relating to the revenue generating potential of new products, which is dependent on the market acceptance of our products and the level of customer orders. Actual results could differ materially from the results described in these forward-looking statements. Factors that could cause actual results to differ materially include: delays in the market acceptance of the Company's new products; the ability to convert design opportunities into customer revenue; our ability to replace revenue from end-of-life products; the level and timing of customer design activity; the market acceptance of our customers' products; the risk that new orders may not result in future revenue; our ability to introduce and produce new products based on advanced wafer technology on a timely basis; our ability to adequately market the low power, competitive pricing and short time-to-market of our new products; intense competition, including the introduction of new products by competitors; our ability to hire and retain qualified personnel; changes in product demand or supply; capacity constraints; and general economic conditions. These factors and others are described in more detail in the Company's public reports filed with the Securities and Exchange Commission, including the risks discussed in the "Risk Factors" section in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and in the Company's prior press releases.

ArcticLink, pASIC, PolarPro, QuickLogic, QuickPCI and QuickRAM are registered trademarks and Eclipse and the QuickLogic logo are trademarks of QuickLogic Corporation. All other brands or trademarks are the property of their respective holders and should be treated as such.


QUICKLOGIC CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

                Three Months Ended                     Six Months Ended

                June 28,     June 29,     March 29,    June 28, 2009  June 29,
                2009         2008         2009                        2008

Revenue         $ 2,911      $ 8,743      $ 4,552      $ 7,463        $ 19,766

Cost of
revenue,
excluding
inventory
write-down and    1,531        3,810        1,641        3,172          8,112
related charges
and long-lived
asset
impairment

Inventory
write-down and    58           172          178          236            1,128
related charges

Long-lived
asset             -            1,545        -            -              1,545
impairment

Gross profit      1,322        3,216        2,733        4,055          8,981

Operating
expenses:

 Research and     1,877        2,610        1,612        3,489          5,431
 development

 Selling,
 general and      2,709        3,970        2,643        5,352          8,290
 administrative

 Long-lived
 asset            -            468          -            -              468
 impairment

 Restructuring    -            452          -            -              452
 costs

Loss from         (3,264 )     (4,284 )     (1,522 )     (4,786 )       (5,660 )
operations

Write-down of
investment in
Tower                          (417   )     -                           (417   )
Semiconductor
Ltd.

Interest          (23    )     (72    )     (24    )     (47    )       (143   )
expense

Interest income   45           30           (46    )     (1     )       134
and other, net

Loss before       (3,242 )     (4,743 )     (1,592 )     (4,834 )       (6,086 )
income taxes

Provision for
(benefit from)    (15    )     -            4            (11    )       34
income taxes

Net loss        $ (3,227 )   $ (4,743 )   $ (1,596 )   $ (4,823 )     $ (6,120 )

Net loss per
share:

 Basic          $ (0.11  )   $ (0.16  )   $ (0.05  )   $ (0.16  )     $ (0.21  )

 Diluted        $ (0.11  )   $ (0.16  )   $ (0.05  )   $ (0.16  )     $ (0.21  )

Weighted
average shares:

 Basic            30,081       29,589       29,909       29,994         29,498

 Diluted          30,081       29,589       29,909       29,994         29,498





QUICKLOGIC CORPORATION

SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

(Unaudited)

                 Three Months Ended                        Six Months Ended

                 June 28,      June 29,      March 29,     June 28,      June 29,
                 2009          2008          2009          2009          2008

GAAP loss from   $ (3,264 )    $ (4,284 )    $ (1,522 )    $ (4,786 )    $ (5,660 )
operations

 Adjustment for
 stock-based
 compensation
 within:

  Cost of          71            106           51            122           171
  revenue

  Research and     138           196           88            226           354
  development

  Selling,
  general and      358           615           245           603           1,057
  administrative

 Adjustment for
 long-lived
 asset
 impairment
 within:

  Cost of          -             1,545         -             -             1,545
  revenue

  Operating        -             468           -             -             468
  expenses

 Adjustment for
 the write-off
 of equipment
 within:

  Selling,
  general and      -             15            -             -             15
  administrative

 Adjustment for
 restructuring     -             452           -             -             452
 costs

Non-GAAP loss    $ (2,697 )    $ (887   )    $ (1,138 )    $ (3,835 )    $ (1,598 )
from operations

GAAP net loss    $ (3,227 )    $ (4,743 )    $ (1,596 )    $ (4,823 )    $ (6,120 )

 Adjustment for
 stock-based
 compensation
 within:

  Cost of          71            106           51            122           171
  revenue

  Research and     138           196           88            226           354
  development

  Selling,
  general and      358           615           245           603           1,057
  administrative

 Adjustment for
 long-lived
 asset
 impairment
 within:

  Cost of          -             1,545         -             -             1,545
  revenue

  Operating        -             468           -             -             468
  expenses

 Adjustment for
 the write-off
 of equipment
 within:

  Selling,
  general and      -             15            -             -             15
  administrative

  Other expense    -             -             13            13            -

 Adjustment for
 restructuring     -             452           -             -             452
 costs

 Adjustment for
 write-down of
 investment in     -             417           -             -             417
 Tower
 Semiconductor
 Ltd.

Non-GAAP net     $ (2,660 )    $ (929   )    $ (1,199 )    $ (3,859 )    $ (1,641 )
loss

GAAP net loss    $ (0.11  )    $ (0.16  )    $ (0.05  )    $ (0.16  )    $ (0.21  )
per share

 Adjustment for
 stock-based       0.02          0.03          0.01          0.03          0.05
 compensation

 Adjustment for
 long-lived        -             0.07          -             -             0.07
 asset
 impairment

 Adjustment for
 write-off of      -             *             *             *             *
 equipment

 Adjustment for
 restructuring     -             0.02          -             -             0.02
 costs

 Adjustment for
 write-down of
 investment in     -             0.01          -             -             0.01
 Tower
 Semiconductor
 Ltd.

Non-GAAP net     $ (0.09  )    $ (0.03  )    $ (0.04  )    $ (0.13  )    $ (0.06  )
loss per share

GAAP gross
margin             45.4     %    36.8     %    60.0     %    54.3     %    45.4     %
percentage

 Adjustment for
 stock-based       2.5           1.2           1.2           1.7           0.9
 compensation

 Adjustment for
 write-off of      -             17.7          -             -             7.8
 long-lived
 asset

Non-GAAP gross
margin             47.9     %    55.7     %    61.2     %    56.0     %    54.1     %
percentage

* Figures were not considered in the reconciliation of Non-GAAP net loss per share
due to the insignificant amount.




QUICKLOGIC CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

                                            June 28, 2009  December 28, 2008(1)

ASSETS

Current assets:

 Cash and cash equivalents                  $ 16,450       $ 19,376

 Short-term investment in Tower               286            116
 Semiconductor Ltd.

 Accounts receivable, net                     1,468          1,746

 Inventories                                  2,042          1,900

 Other current assets                         721            833

  Total current assets                        20,967         23,971

Property and equipment, net                   3,465          3,493

Investment in Tower Semiconductor Ltd.        144            59

Other assets                                  676            903

TOTAL ASSETS                                $ 25,252       $ 28,426

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

 Revolving line of credit                   $ 2,000        $ 2,000

 Trade payables                               2,224          1,992

 Accrued liabilities                          1,532          1,537

 Deferred income on shipments to              11             282
 distributors

 Deferred royalty revenue                     48             -

 Current portion of debt and capital lease    612            753
 obligations

  Total current liabilities                   6,427          6,564

Long-term liabilities:

 Debt and capital lease obligations, less     390            -
 current portion

  Total liabilities                           6,817          6,564

Stockholders' equity:

 Common stock, at par value                   30             30

 Additional paid-in capital                   170,987        169,846

 Accumulated other comprehensive income       255            -

 Accumulated deficit                          (152,837 )     (148,014 )

  Total stockholders' equity                  18,435         21,862

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 25,252       $ 28,426

(1) Derived from the December 28, 2008 audited balance sheet included in the
2008 Annual Report on Form 10-K of QuickLogic Corporation.




QUICKLOGIC CORPORATION

SUPPLEMENTAL DATA

(Unaudited)

                    Percentage of Revenue      Change in Revenue

                    Q2 2009  Q2 2008  Q1 2009  Q2 2008 to Q2  Q1 2009 to Q2 2009
                                               2009

COMPOSITION OF
REVENUE

Revenue by product
(1):

     New products   28 %     29 %     15 %     (68 )%         24  %

     Mature         65 %     53 %     79 %     (59 )%         (48 )%
     products

     End-of-life    7  %     18 %     6  %     (86 )%         (25 )%
     products

Revenue by
geography:

     North America  47 %     38 %     53 %     (59 )%         (44 )%

     Europe         19 %     15 %     22 %     (59 )%         (43 )%

     Rest of world  19 %     39 %     17 %     (84 )%         (29 )%

     Japan          15 %     8  %     8  %     (34 )%         23  %

     New products include ArcticLink, PolarPro II, PolarPro, Eclipse II and
     QuickPCI II products. Mature products include QuickRAM, pASIC(R) 3,
(1)  Eclipse, QuickDSP and QuickFC products, as well as royalty revenue,
     programming hardware and software. End-of-life products include pASIC 1,
     pASIC 2, V3, QuickPCI and QuickMIPS products.




    Source: QuickLogic Corporation