QuickLogic Corporation

Jan 30, 2008

QuickLogic Announces Fourth Quarter and Fiscal 2007 Results - Fourth Quarter New Product Revenue More Than Doubles Sequentially

SUNNYVALE, Calif., Jan 30, 2008 (BUSINESS WIRE) -- QuickLogic Corporation (NASDAQ:QUIK), the lowest power programmable solutions leader, today announced the financial results for its fourth quarter and fiscal year ended December 30, 2007.

Total revenue for the fourth quarter of 2007 was $10.7 million, up 19 percent from the third quarter of 2007 and up 39 percent from the fourth quarter of 2006. Higher new product revenue was the major contributor to the sequential and year-on-year revenue increase. New products - ArcticLink(TM), PolarPro(TM), Eclipse(TM) II and QuickPCI(R) II - grew to contribute 33 percent of revenue in the fourth quarter of 2007, 18 percent in the third quarter of 2007 and 15 percent of revenue in the fourth quarter of 2006.

Under generally accepted accounting principles (GAAP), the net loss for the fourth quarter of 2007 was $1.7 million, or $0.06 per share, compared with a net loss of $1.5 million, or $0.05 per share, in the third quarter of 2007 and a net loss of $3.3 million, or $0.12 per share, in the fourth quarter of 2006. Non-GAAP net loss for the fourth quarter of 2007 was $1.1 million, or $0.04 per share, compared with a non-GAAP net loss of $1.0 million, or $0.04 per share, in the third quarter of 2007 and a non-GAAP net loss of $3.0 million, or $0.11 per share, in the fourth quarter of 2006.

Revenue for 2007 was $34.4 million, compared with revenue of $34.9 million in 2006. Under GAAP, the net loss for 2007 was $11.1 million, or $0.38 per share, compared with a net loss of $9.2 million, or $0.32 per share, in 2006. Non-GAAP net loss for 2007 was $9.3 million, or $0.32 per share, compared with a non-GAAP net loss of $7.7 million, or $0.27 per share, in 2006.

QuickLogic reports certain financial measures, including net loss, in accordance with GAAP and also on a non-GAAP basis. Non-GAAP results, where applicable, exclude stock-based compensation recorded in accordance with Statement of Financial Accounting Standards (SFAS) No. 123(R), "Share-based Payment" and the write-off of long-lived assets. For a full reconciliation of GAAP net loss to non-GAAP net loss, please refer to the schedule on page 6 of this press release.

"New product revenue in our fourth quarter was $3.5 million, a $1.9 million increase over new product revenue in the third quarter. The sale of Customer Specific Standard Products, or CSSPs, into the portable navigation device market drove the increase in product sales," said E. Thomas Hart, chairman, president and CEO. "Our low power CSSPs allow mobile device manufacturers to bring new products to market more quickly and cost effectively with lower risk. The CSSP message - 'Your idea, our platform, customized for you' - resonates well in our target markets, as we continue to engage with more top tier mobile device manufacturers."

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Time today, January 30, 2008, to discuss the fourth quarter and fiscal year financial results. The conference call is being webcast and can be accessed via QuickLogic's website at www.quicklogic.com/investors. To participate, please call (877) 419-6598 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: 5211845. The call recording will be archived until February 6, 2008 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 OEMs and 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.

Non-GAAP Financial Measures

QuickLogic reports financial information in accordance with generally accepted accounting principles (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 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. For a full reconciliation of these GAAP measures to non-GAAP measures, please refer to the schedule on page 6 of this press release. 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 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 design activity of our new products and the revenue generating potential of such new products, which is dependent on the market acceptance of our products and the level of customer orders. Actual results could differ materially from any such 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.

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

Note to Editors: Financial Tables Follow

                        QUICKLOGIC CORPORATION
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except per share amounts)
                             (Unaudited)

                           Three Months Ended          Years Ended
                       --------------------------- -------------------
                       December December September December  December
                         30,      31,       30,       30,       31,
                         2007     2006     2007      2007      2006
                       -------- -------- --------- --------- ---------
Revenue                $10,745  $ 7,744   $ 9,025  $ 34,417  $ 34,924
Cost of revenue,
 excluding inventory
 write-down and
 related charges         5,312    3,224     4,005    15,469    14,892
Inventory write-down
 and related charges       408    1,163       309     3,941     2,847
                       -------- -------- --------- --------- ---------
Gross profit             5,025    3,357     4,711    15,007    17,185
Operating expenses:
   Research and
    development          2,549    2,117     2,342     9,517     9,303
   Selling, general
    and administrative   4,230    4,857     3,953    17,163    18,062
                       -------- -------- --------- --------- ---------
      Total operating
       expenses          6,779    6,974     6,295    26,680    27,365
                       -------- -------- --------- --------- ---------
Loss from operations    (1,754)  (3,617)   (1,584)  (11,673)  (10,180)
Interest expense           (54)     (94)      (69)     (280)     (329)
Interest income and
 other, net                142      400       189       894     1,366
                       -------- -------- --------- --------- ---------
Loss before income
 taxes                  (1,666)  (3,311)   (1,464)  (11,059)   (9,143)
Provision for income
 taxes                       4       25        29        75        71
                       -------- -------- --------- --------- ---------
Net loss               $(1,670) $(3,336)  $(1,493) $(11,134) $ (9,214)
                       ======== ======== ========= ========= =========

Net loss per share:
   Basic               $ (0.06) $ (0.12)  $ (0.05) $  (0.38) $  (0.32)
                       ======== ======== ========= ========= =========
   Diluted             $ (0.06) $ (0.12)  $ (0.05) $  (0.38) $  (0.32)
                       ======== ======== ========= ========= =========
Weighted average
 shares:
   Basic                29,267   28,680    29,116    29,041    28,485
                       ======== ======== ========= ========= =========
   Diluted              29,267   28,680    29,116    29,041    28,485
                       ======== ======== ========= ========= =========

                        QUICKLOGIC CORPORATION
 SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES
               (In thousands, except per share amounts)
                             (Unaudited)

                           Three Months Ended          Years Ended
                       --------------------------- -------------------
                       December December September December  December
                         30,      31,       30,       30,       31,
                         2007     2006     2007      2007      2006
                       -------- -------- --------- --------- ---------
GAAP loss from
 operations            $(1,754) $(3,617)  $(1,584) $(11,673) $(10,180)
  Adjustment for the
   write-off of long-
   lived assets
   within:
   Cost of revenue         161       --         5       166        33
   Selling, general
    and administrative      --       --         2         2         1
  Adjustment for
   stock-based
   compensation
   within:
   Cost of revenue          53       45        67       229       183
   Research and
    development            103       47        94       376       368
   Selling, general
    and administrative     287      208       291     1,099       894
                       -------- -------- --------- --------- ---------
Non-GAAP loss from
 operations            $(1,150) $(3,317)  $(1,125) $ (9,801) $ (8,701)
                       ======== ======== ========= ========= =========

GAAP net loss          $(1,670) $(3,336)  $(1,493) $(11,134) $ (9,214)
  Adjustment for the
   write-off of long-
   lived assets
   within:
   Cost of revenue         161       --         5       166        33
   Selling, general
    and administrative      --       --         2         2         1
  Adjustment for
   stock-based
   compensation
   within:
   Cost of revenue          53       45        67       229       183
   Research and
    development            103       47        94       376       368
   Selling, general
    and administrative     287      208       291     1,099       894
                       -------- -------- --------- --------- ---------
Non-GAAP net loss      $(1,066) $(3,036)  $(1,034) $ (9,262) $ (7,735)
                       ======== ======== ========= ========= =========

GAAP net loss per
 share                 $ (0.06) $ (0.12)  $ (0.05) $  (0.38) $  (0.32)
  Adjustment for the
   write-off of long-
   lived assets and
   stock-based
   compensation           0.02     0.01      0.01      0.06      0.05
                       -------- -------- --------- --------- ---------
Non-GAAP net loss per
 share                 $ (0.04) $ (0.11)  $ (0.04) $  (0.32) $  (0.27)
                       ======== ======== ========= ========= =========

GAAP weighted average
 shares                 29,267   28,680    29,116    29,041    28,485
  Adjustment for the
   write-off of long-
   lived assets and
   stock-based
   compensation             --       --        --        --        --
                       -------- -------- --------- --------- ---------
Non-GAAP weighted
 average shares         29,267   28,680    29,116    29,041    28,485
                       ======== ======== ========= ========= =========

GAAP gross margin
 percentage               46.8%    43.3%     52.2%     43.6%     49.2%
  Adjustment for the
   write-off of long-
   lived assets and
   stock-based
   compensation            2.0%     0.6%      0.8%      1.2%      0.6%
                       -------- -------- --------- --------- ---------
Non-GAAP gross margin
 percentage               48.8%    43.9%     53.0%     44.8%     49.8%
                       ======== ======== ========= ========= =========

                        QUICKLOGIC CORPORATION
                CONDENSED CONSOLIDATED BALANCE SHEETS
                            (In thousands)
                             (Unaudited)

                                                 December   December
                                                    30,         31,
                                                    2007     2006(1)
                                                 ---------- ----------
                     ASSETS

Current assets:
  Cash and cash equivalents                      $  20,868  $  24,621
  Short-term investment in Tower Semiconductor
   Ltd.                                              1,279      1,530
  Accounts receivable, net                           2,634      2,839
  Inventory                                          5,770      9,064
  Other current assets                               1,607      1,894
                                                 ---------- ----------
     Total current assets                           32,158     39,948
Property and equipment, net                          5,877      5,480
Investment in Tower Semiconductor Ltd.                 644        769
Other assets                                         2,745      4,038
                                                 ---------- ----------

TOTAL ASSETS                                     $  41,424  $  50,235
                                                 ========== ==========

      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Trade payables                                 $   4,207  $   4,383
  Accrued liabilities                                2,228      2,462
  Deferred income on shipments to distributors         516      1,152
  Deferred royalty revenue                             431        960
  Current portion of debt and capital lease
   obligations                                       2,497      2,292
                                                 ---------- ----------
     Total current liabilities                       9,879     11,249
                                                 ---------- ----------

Long-term liabilities:
  Debt and capital lease obligations, less
   current portion                                   2,527      1,618
                                                 ---------- ----------
     Total liabilities                              12,406     12,867
                                                 ---------- ----------

Stockholders' equity:
  Common stock, at par value                            29         29
  Additional paid-in capital                       167,298    164,138
  Accumulated other comprehensive income               350        726
  Accumulated deficit                             (138,659)  (127,525)
                                                 ---------- ----------
     Total stockholders' equity                     29,018     37,368
                                                 ---------- ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY       $  41,424  $  50,235
                                                 ========== ==========

(1) Derived from the December 31, 2006 audited balance sheet included
 in the 2006 Annual Report on Form 10-K of QuickLogic Corporation.

                        QUICKLOGIC CORPORATION
                          SUPPLEMENTAL DATA
                             (Unaudited)

                               Percentage of Revenue      Change in
                                                            Revenue
                            --------------------------- --------------
                              Q4     Q3   Fiscal Fiscal Q3 2007 2006
                                                           to     to
                             2007   2007   2007   2006  Q4 2007  2007
                            ------ ------ ------ ------ ------- ------
COMPOSITION OF REVENUE

Revenue by product (1):
  New products                 33%    18%    19%    19%   117%    (3%)
  Mature products              39%    50%    48%    50%    (8%)   (5%)
  End-of-life products         28%    32%    33%    31%     7%     5%

Revenue by geography:
  North America                41%    50%    53%    50%    (3%)    4%
  Europe                       16%    22%    18%    32%   (11%)  (45%)
  Asia Pacific                 33%    19%    20%     9%   101%   126%
  Japan                        10%     9%     9%     9%    40%     3%


Revenue by end-customer
 segment:
  Instrumentation and test     55%    47%    43%    40%    41%     7%
  Military and aerospace
   systems                     10%    15%    14%    13%   (23%)    8%
  Datacom and telecom          12%    14%    19%    31%    (4%)  (40%)
  Graphics and imaging         17%    19%    19%    10%    10%    81%
  Computing                     6%     5%     5%     6%    46%   (18%)

(1) New products include ArcticLink, 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.

QUIK-G

SOURCE: QuickLogic Corporation

QuickLogic Corporation
Carl M. Mills, Chief Financial Officer, 408-990-4000
cmills@quicklogic.com
or
Andrea Vedanayagam
Director, Corporate Communications, 408-990-4000
andrea@quicklogic.com

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