QuickLogic Announces Fiscal 2009 Third 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 third quarter ended September 27, 2009.

Total revenue for the third quarter of 2009 was $3.3 million, up 14% from the second quarter of 2009 and down 47% from the third quarter of 2008. The sequential increase of revenue was primarily due to an increase in new product revenue and strong bookings towards the end of the second quarter. During the third quarter, new product revenue increased 67% to $1.4 million from $0.8 million in the second quarter of 2009. This sequential increase in new product revenue was mainly due to our customer specific standard product (CSSP) customers going into production in the third quarter.

Under generally accepted accounting principles (GAAP), the net loss for the third quarter of 2009 was $3.0 million, or $0.10 per share, compared with a net loss of $3.2 million, or $0.11 per share, in the second quarter of 2009 and a net loss of $0.6 million, or $0.02 per share, in the third quarter of 2008. Non-GAAP net loss for the third quarter of 2009 was $1.9 million, or $0.06 per share, compared with a non-GAAP net loss of $2.7 million, or $0.09 per share, in the second quarter of 2009 and a non-GAAP net loss of $0.2 million, or $0.01 per share, in the third quarter of 2008.

"We are pleased with the significant growth of new product shipments in the third quarter of this year," said Tom Hart, QuickLogic's Chairman of the Board and CEO. "This increase is primarily associated with our strategic focus of driving CSSPs into high growth mobile, battery-powered handheld electronics segments, such as wireless, broadband data cards. The new product bookings were strong in the third quarter, which should lead to another increase in new product revenue in the fourth quarter."

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Daylight Time today, October 27, 2009, to discuss the third 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 (888) 378-4361 by 2:20 p.m. Pacific Daylight 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 or (888) 203-1112 and reference the passcode: 9997974. The call recording will be archived until Friday, October 30, 2009 and the webcast will be available for 12 months.

About QuickLogic

QuickLogic Corporation (NASDAQ: QUIK) is the inventor and 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                   Nine Months Ended

                September   September   June 28,     September   September 28,
                27,         28,         2009         27,         2008
                2009        2008                     2009

Revenue         $ 3,332     $ 6,230     $ 2,911      $ 10,795    $ 25,996

Cost of
revenue,
excluding
inventory
write-down and    1,955       2,575       1,531        5,127       10,687
related
charges and
long-lived
asset
impairment

Inventory
write-down and    231         203         58           467         1,331
related
charges

Long-lived
asset             150         -           -            150         1,545
impairment

Gross profit      996         3,452       1,322        5,051       12,433

Operating
expenses:

Research and      1,400       1,354       1,877        4,889       6,785
development

Selling,
general and       2,525       2,666       2,709        7,877       10,956
administrative

Long-lived
asset             -           -           -            -           468
impairment

Restructuring     -           -           -            -           452
costs

Loss from         (2,929 )    (568   )    (3,264 )     (7,715 )    (6,228 )
operations

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

Interest          (31    )    (59    )    (23    )     (78    )    (202   )
expense

Interest
income and        (30    )    (46    )    45           (31    )    88
other, net

Loss before       (2,990 )    (673   )    (3,242 )     (7,824 )    (6,759 )
income taxes

Provision for
(benefit from)    7           (58    )    (15    )     (4     )    (24    )
income taxes

Net loss        $ (2,997 )  $ (615   )  $ (3,227 )   $ (7,820 )  $ (6,735 )

Net loss per
share:

Basic           $ (0.10  )  $ (0.02  )  $ (0.11  )   $ (0.26  )  $ (0.23  )

Diluted         $ (0.10  )  $ (0.02  )  $ (0.11  )   $ (0.26  )  $ (0.23  )

Weighted
average
shares:

Basic             30,322      29,772      30,081       30,104      29,589

Diluted           30,322      29,772      30,081       30,104      29,589





QUICKLOGIC CORPORATION

SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES

(In thousands, except per share amounts)

(Unaudited)

                Three Months Ended                       Nine Months Ended

                September     September    June 28,      September     September
                27,           28,          2009          27,           28,
                2009          2008                       2009          2008

GAAP loss from  $ (2,929 )    $ (568  )    $ (3,264 )    $ (7,715 )    $ (6,228 )
operations

Adjustment for
stock-based
compensation
within:

Cost of           110           49           71            232           220
revenue

Research and      213           89           138           439           443
development

Selling,
general and       535           251          358           1,138         1,308
administrative

Adjustment for
long-lived
asset
impairment
within:

Cost of           150           -            -             150           1,545
revenue

Operating         -             -            -             -             468
expenses

Adjustment for
the write-off
of equipment
within:

Cost of           96            30           -             96            30
revenue

Selling,
general and       2             -            -             2             15
administrative

Adjustment for
restructuring     -             -            -             -             452
costs

Non-GAAP loss
from            $ (1,823 )    $ (149  )    $ (2,697 )    $ (5,658 )    $ (1,747 )
operations

GAAP net loss   $ (2,997 )    $ (615  )    $ (3,227 )    $ (7,820 )    $ (6,735 )

Adjustment for
stock-based
compensation
within:

Cost of           110           49           71            232           220
revenue

Research and      213           89           138           439           443
development

Selling,
general and       535           251          358           1,138         1,308
administrative

Adjustment for
long-lived
asset
impairment
within:

Cost of           150           -            -             150           1,545
revenue

Operating         -             -            -             -             468
expenses

Adjustment for
the write-off
of equipment
within:

Cost of           96            30           -             96            30
revenue

Selling,
general and       2             -            -             2             15
administrative

Other expense     -             -            -             13            -

Adjustment for
restructuring     -             -            -             -             452
costs

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

Non-GAAP net    $ (1,891 )    $ (196  )    $ (2,660 )    $ (5,750 )    $ (1,837 )
loss

GAAP net loss   $ (0.10  )    $ (0.02 )    $ (0.11  )    $ (0.26  )    $ (0.23  )
per share

Adjustment for
stock-based       0.03          0.01         0.02          0.06          0.07
compensation

Adjustment for
long-lived        0.01          -            -             0.01          0.07
asset
impairment

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

Adjustment for
restructuring     -             -            -             -             0.02
costs

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

Non-GAAP net    $ (0.06  )    $ (0.01 )    $ (0.09  )    $ (0.19  )    $ (0.06  )
loss per share

GAAP gross
margin            29.9     %    55.4    %    45.4     %    46.8     %    47.8     %
percentage

Adjustment for
stock-based       3.3           0.8          2.5           2.1           0.8
compensation

Adjustment for
write-off of      4.5           -            -             1.4           5.9
long-lived
asset

Adjustment for
write-off of      2.9           0.5          -             0.9           0.2
equipment

Non-GAAP gross
margin            40.6     %    56.7    %    47.9     %    51.2     %    54.7     %
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)

                                      September 27, 2009    December 28, 2008(1)

ASSETS

Current assets:

Cash and cash equivalents             $ 13,886              $ 19,376

Short-term investment in Tower          823                   116
Semiconductor Ltd.

Accounts receivable, net                1,981                 1,746

Inventories                             1,844                 1,900

Other current assets                    612                   833

Total current assets                    19,146                23,971

Property and equipment, net             3,008                 3,493

Investment in Tower Semiconductor       414                   59
Ltd.

Other assets                            461                   903

TOTAL ASSETS                          $ 23,029              $ 28,426

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

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

Trade payables                          2,136                 1,992

Accrued liabilities                     1,114                 1,537

Deferred income on shipments to         7                     282
distributors

Deferred royalty revenue                63                    -

Current portion of debt and capital     436                   753
lease obligations

Total current liabilities               5,756                 6,564

Long-term liabilities:

Debt and capital lease obligations,     264                   -
less current portion

Total liabilities                       6,020                 6,564

Stockholders' equity:

Common stock, at par value              30                    30

Additional paid-in capital              171,751               169,846

Accumulated other comprehensive         1,062                 -
income

Accumulated deficit                     (155,834)             (148,014)

Total stockholders' equity              17,009                21,862

TOTAL LIABILITIES AND STOCKHOLDERS'   $ 23,029              $ 28,426
EQUITY



_________________________

(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

                         Q3 2009   Q3 2008   Q2 2009   Q3 2008 to   Q2 2009 to
                                                       Q3 2009      Q3 2009

COMPOSITION OF REVENUE

Revenue by product (1):

New products             41%       23%       28%       -4%          67%

Mature products          57%       74%       65%       -59%         2%

End-of-life products     2%        3%        7%        -68%         -72%

Revenue by geography:

North America            47%       33%       47%       -23%         17%

Europe                   20%       14%       19%       -26%         15%

Rest of world            26%       42%       19%       -66%         63%

Japan                    7%        11%       15%       -69%         -51%



_________________________

(1) New products include ArcticLink, PolarPro II, PolarPro, Eclipse II and QuickPCI II products. Mature products include QuickRAM, pASIC(R) 3, 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