QuickLogic Corporation

Feb 8, 2011

QuickLogic Announces Fourth Quarter and Fiscal 2010 Results -- 2010 New Product Revenue up 93% Year Over Year

SUNNYVALE, CA -- (MARKET WIRE) -- 02/08/11 -- QuickLogic Corporation (NASDAQ: QUIK), the lowest power programmable semiconductor solutions leader, today announced the financial results for its fourth quarter and fiscal year ended January 2, 2011.

Total revenue for the fourth quarter of 2010 was $7.0 million, up 63% from the fourth quarter of 2009 and down 5% from the third quarter of 2010. During the fourth quarter, new product revenue of $2.3 million was up 10% from the fourth quarter of 2009 and down 19% from the third quarter of 2010. This sequential decrease in new product revenue was primarily driven by our customer's rebalancing of inventory across the broadband wireless data card market.

Under generally accepted accounting principles (GAAP), the net loss for the fourth quarter of 2010 was $70,000 or $0.00 per diluted share, compared with a net loss of $1.9 million, or $0.06 per diluted share, in the fourth quarter of 2009, and a net income of $0.6 million, or $0.01 per diluted share, in the third quarter of 2010. Non-GAAP net income for the fourth quarter of 2010 was $0.5 million, or $0.01 per diluted share, compared with a non-GAAP net loss of $1.3 million, or $0.04 per diluted share, in the fourth quarter of 2009, and a non-GAAP net income of $0.9 million, or $0.02 per diluted share, in the third quarter of 2010.

Total Revenue for 2010 was up 74% to $26.2 million, compared with revenue of $15.1 million in 2009. GAAP net income for 2010 was $0.1 million, or $0.00 per diluted share, compared with a net loss of $9.8 million, or $0.32 per diluted share, in 2009. Non-GAAP net income for 2010 was $1.3 million, or $0.03 per diluted share, compared with a non-GAAP net loss of $7.1 million, or $0.23 per diluted share, in 2009.

"I am very pleased with our 2010 results, including a significant increase in our revenue and our return to profitability. While quarterly revenue was impacted by a channel-wide inventory rebalancing, we are excited we initiated production shipments in the fourth quarter of our Visual Enhancement Engine (VEE) and Display Power Optimizer (DPO) technology to BenQ in its new innovative Android™ Tablet," said Andy Pease, QuickLogic's President and CEO. "We expect this will be the first of many tablet and smartphone designs to be reported this year. With the widespread consumption of video in mobile devices, our customers are leveraging the dramatically extended battery life and direct sunlight visibility delivered by our VEE/DPO enabled CSSPs."

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Standard Time today, February 8, 2011, to discuss its current financial results. The conference call is being webcast and can be accessed via QuickLogic's website at www.quicklogic.com. To join the live conference, please dial (877) 377-7094 by 2:20 p.m. Pacific Standard Time today. A recording of the call will be available starting one hour after completion of the call. To access the recording, please call (706) 645-9291 and reference the passcode: 39105943. The call recording will be archived until Friday, February 11, 2011 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

About VEE

QuickLogic's VEE technology, based on the iridix® core from Apical Ltd, greatly enhances the viewability of mobile displays under challenging viewing conditions such as bright ambient light while dynamically optimizing displayed content to provide the most natural viewing experience for the user. Used in conjunction with the VEE technology, QuickLogic's Display Power Optimizer (DPO) technology has been field-proven to extend system battery life of tablets and smartphones by as much as 36% through reduced display backlight without comprising the viewing experience.

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 gain on sale of the Company's investment in TowerJazz Semiconductor Ltd., the effect of the write-off of long-lived assets and equipment, the tax effect on other comprehensive income 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; inventory rebalancing in the channel; 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, and QuickLogic are registered trademarks and Eclipse, QuickPCI, QuickRAM 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        Year Ended

                                -------------------------  ----------------

                                January  January  October  January  January

                                2, 2011  3, 2010  3, 2010  2, 2011  3, 2010

                                -------  -------  -------  -------  -------



Revenue                         $ 6,958  $ 4,279  $ 7,333  $26,199  $15,074

Cost of revenue, excluding

 inventory write-down and

 related charges and long-

 lived asset impairment

                                  2,283    2,170    2,619    9,498    7,297

Inventory write-down and

 related charges                     21      (49)      17      111      418

Long-lived asset impairment           -        -        -        -      150



                                -------  -------  -------  -------  -------

Gross profit                      4,654    2,158    4,697   16,590    7,209

Operating expenses:

  Research and development        2,048    1,314    1,817    7,458    6,203

  Selling, general and

   administrative                 2,685    2,740    2,535   10,073   10,617

  Restructuring costs                 -       59        -        -       59



                                -------  -------  -------  -------  -------

Income (loss) from operations       (79)  (1,955)     345     (941)  (9,670)

Gain on sale of TowerJazz

 Semiconductor Ltd. shares            -        -        -      993        -

Interest expense                    (10)     (15)     (12)     (67)     (93)

Interest income and other

 (expense), net                       -      (23)      25      (46)     (54)



                                -------  -------  -------  -------  -------

Income (loss) before income

 taxes                              (89)  (1,993)     358      (61)  (9,817)

Provision for (benefit from)

 income taxes                       (20)     (59)    (192)    (184)     (63)



                                -------  -------  -------  -------  -------

Net income (loss)               $   (69) $(1,934) $   550  $   123  $(9,754)

                                =======  =======  =======  =======  =======



Net income (loss) per share:

  Basic                         $ (0.00) $ (0.06) $  0.02  $  0.00  $ (0.32)

                                =======  =======  =======  =======  =======

  Diluted                       $ (0.00) $ (0.06) $  0.01  $  0.00  $ (0.32)

                                =======  =======  =======  =======  =======



Weighted average shares:

  Basic                          36,228   32,510   35,634   35,729   30,739

                                =======  =======  =======  =======  =======

  Diluted                        36,228   32,510   38,711   39,038   30,739

                                =======  =======  =======  =======  =======









                              QUICKLOGIC CORPORATION

       SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES

                     (In thousands, except per share amounts)

                                    (Unaudited)



                                    Three Months Ended        Years Ended

                                -------------------------  ----------------

                                January  January  October  January  January

                                2, 2011  3, 2010  3, 2010  2, 2011  3, 2010

                                -------  -------  -------  -------  -------

GAAP income (loss) from

 operations                     $   (79) $(1,955) $   345  $  (941) $(9,670)

  Adjustment for stock-based

   compensation within:

     Cost of revenue                 49       48       34      169      280

     Research and development       143      137      147      645      576

     Selling, general and

      administrative                373      390      387    1,604    1,528

  Adjustment for long-lived

   asset impairment within:

     Cost of revenue                  -        -        -        -      150

  Adjustment for the write-off

   of equipment within:

     Cost of revenue                  -        -        -        -       96

     Selling, general and

      administrative                  -        -        8        -       15

  Adjustment for restructuring

   costs                              -       59        -        -       59

                                -------  -------  -------  -------  -------

Non-GAAP income (loss) from

 operations                     $   486  $(1,321) $   921  $ 1,477  $(6,966)

                                =======  =======  =======  =======  =======



GAAP net income (loss)          $   (69) $(1,934) $   550  $   123  $(9,754)

  Adjustment for stock-based

   compensation within:

     Cost of revenue                 49       48       34      169      280

     Research and development       143      137      147      645      576

     Selling, general and

      administrative                373      390      387    1,604    1,528

  Adjustment for long-lived

   asset impairment within:

     Cost of revenue                  -        -        -        -      150

  Adjustment for the write-off

   of equipment within:

     Cost of revenue                  -        -        -        -       96

     Selling, general and

      administrative                  -        -        8        8       15

  Adjustment for gain on sale

   of investment in TowerJazz

   Semiconductor Ltd.                 -        -        -     (993)       -



  Adjustment for restructuring

   costs                              -       59        -        -       59

  Adjustment for tax effect on

   other comprehensive income         -        -     (209)    (209)       -

                                -------  -------  -------  -------  -------

Non-GAAP net income (loss)      $   496  $(1,300) $   917  $ 1,347  $(7,050)

                                =======  =======  =======  =======  =======



GAAP net income (loss) per

 diluted share                  $ (0.00) $ (0.06) $  0.01  $  0.00  $ (0.32)

  Adjustment for stock-based

   compensation                    0.01     0.02     0.02     0.06     0.08

  Adjustment for long-lived

   asset impairment                   -        -        -        -     0.01

  Adjustment for write-off of

   equipment                          -        -        *        *        *

  Adjustment for restructuring

   costs                              -        *        -        -        *

  Adjustment for gain on sale

   of investment in TowerJazz

   Semiconductor Ltd.                 -        -        -    (0.02)       -

  Adjustment for tax effect on

   other comprehensive income         -        -    (0.01)   (0.01)       -

                                -------  -------  -------  -------  -------

Non-GAAP net income (loss) per

 diluted share                  $  0.01  $ (0.04) $  0.02  $  0.03  $ (0.23)

                                =======  =======  =======  =======  =======



GAAP gross margin percentage       66.9%    50.4%    64.0%    63.3%    47.8%

  Adjustment for stock-based

   compensation                     0.7      1.1      0.5      0.7      1.9

  Adjustment for write-off of

   long-lived asset                   -        -        -        -      1.0

  Adjustment for write-off of

   equipment                          -        -        -        -      0.6

                                -------  -------  -------  -------  -------

Non-GAAP gross margin

 percentage                        67.6%    51.5%    64.5%    64.0%    51.3%

                                =======  =======  =======  =======  =======



*  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)



                                          January 2, 2011   January 3, 2010

                                          ---------------   ---------------

                 ASSETS

Current assets:

  Cash and cash equivalents               $        21,956   $        18,195

  Short-term investment in Tower

   Semiconductor Ltd.                                 909               868

  Accounts receivable, net                          4,143             2,457

  Inventories                                       3,344             2,119

  Other current assets                                772               536

                                          ---------------   ---------------

    Total current assets                           31,124            24,175

Property and equipment, net                         2,312             2,693

Investment in Tower Semiconductor Ltd.                  -               437

Other assets                                          192               296

                                          ---------------   ---------------

TOTAL ASSETS                              $        33,628   $        27,601

                                          ===============   ===============



  LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

  Revolving line of credit                $             -   $         2,000

  Trade payables                                    2,152             2,721

  Accrued liabilities                               1,303             1,108

  Deferred royalty revenue                            328                 -

  Current portion of debt and capital

   lease obligations                                  408               249

                                          ---------------   ---------------

    Total current liabilities                       4,191             6,078

                                          ---------------   ---------------

Long-term liabilities:

  Capital lease obligations, less

   current portion                                      -               264

  Other long-term liabilities                         124                 -

                                          ---------------   ---------------

    Total liabilities                               4,315             6,342

                                          ---------------   ---------------

Stockholders' equity:

  Common stock, at par value                           38                35

  Additional paid-in capital                      186,304           177,862

  Accumulated other comprehensive income              616             1,130

  Accumulated deficit                            (157,645)         (157,768)

                                          ---------------   ---------------

    Total stockholders' equity                     29,313            21,259

                                          ---------------   ---------------

TOTAL LIABILITIES AND STOCKHOLDERS'

 EQUITY                                   $        33,628   $        27,601

                                          ===============   ===============









                           QUICKLOGIC CORPORATION

                              SUPPLEMENTAL DATA

                                 (Unaudited)



                              Percentage of Revenue       Change in Revenue

                         ------------------------------  -------------------

                           Q4      Q3    Fiscal  Fiscal  Q3 2010 to  2009 to

                          2010    2010    2010    2009     Q4 2010     2010

                         ------  ------  ------  ------  ----------  -------

COMPOSITION OF REVENUE



Revenue by product(1):

  New products             32%     38%     36%     32%      -19%       93%

  Mature products          68%     62%     64%     68%       3%        65%



Revenue by geography:

  North America            30%     35%     35%     45%      -18%       34%

  Europe                   28%     10%     17%     19%      156%       59%

  Rest of world            31%     45%     37%     26%      -34%       148%

  Japan                    11%     10%     11%     10%       3%        89%



(1)  New products represent products introduced since 2005, and include

     ArcticLink, PolarPro II, PolarPro, Eclipse II and QuickPCI II products.

     Mature products include QuickRAM, pASIC® 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.



Contacts:



Ralph S. Marimon

Vice President of Finance

Chief Financial Officer

(408) 990-4000

Email Contact



Andrea Vedanayagam

(408) 656-4494

Email Contact



Source: QuickLogic

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