QuickLogic Announces Fiscal 2010 First Quarter Results - 27% Sequential Revenue Growth

SUNNYVALE, Calif.--(BUSINESS WIRE)-- QuickLogic Corporation (NASDAQ:QUIK), the lowest power Customer Specific Standard Products (CSSPs) leader, today announced the financial results for its fiscal first quarter ended April 4, 2010.

Total revenue for the first quarter of 2010 was $5.4 million, up 27% and 19% from the fourth quarter of 2009 and from the first quarter of 2009, respectively. During the first quarter, new product revenue increased to $2.1 million from $2.0 million in the fourth quarter of 2009. New product revenue accounted for 38% of the total revenue in the first quarter. During the first quarter, legacy product revenue increased 50% to $3.4 million from $2.2 million in the fourth quarter of 2009, accounting for 62% of the total revenue in the first quarter.

Under generally accepted accounting principles (GAAP), the net loss for the first quarter of 2010 was $0.1 million, or $0.00 per share, compared with a net loss of $1.9 million, or $0.06 per share, in the fourth quarter of 2009 and a net loss of $1.6 million, or $0.05 per share, in the first quarter of 2009. Non-GAAP net loss for the first quarter of 2010 was $0.5 million, or $0.01 per share, compared with a non-GAAP net loss of $1.3 million, or $0.04 per share, in the fourth quarter of 2009 and a non-GAAP net loss of $1.2 million, or $0.04 per share, in the first quarter of 2009.

"While we are satisfied we met our guidance on new product revenue and with the modest growth, we are even more pleased with the increase in the number of our customers and application segments we shipped CSSPs to during the first quarter," said Tom Hart, QuickLogic's Chairman of the Board and CEO. "Due to the broad OEM and ODM exposure that our CSSPs have received from their use on reference platforms, we are now shipping CSSPs to additional top tier 3G USB modem OEMs. Furthermore, we began production shipments of new CSSPs to customers in the mobile enterprise market segment - one of the fastest growing market segments and a segment where we believe we offer tremendous value, which should generate new product revenue for several years, owing to our customer's longer product life cycles in this market segment."

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Daylight Time today, May 6, 2010, 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 participate in the conference, please call (877) 377-7094 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 (706) 645-9291 and reference the passcode: 71028627. The call recording will be archived until Sunday, May 9, 2010 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 TowerJazz 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.

(In thousands, except per share amounts)

                                  Three Months Ended

                                  April 4, 2010  March 29, 2009  January 3, 2010

Revenue                           $ 5,429        $ 4,552         $ 4,279

Cost of revenue, excluding
inventory write-down and related    2,043          1,641           2,170
charges and long-lived asset

Inventory write-down and related    73             178             (49    )

Gross profit                        3,313          2,733           2,158

Operating expenses:

Research and development            2,060          1,612           1,314

Selling, general and                2,335          2,643           2,740

Restructuring costs                 -              -               59

Loss from operations                (1,082 )       (1,522 )        (1,955 )

Gain on sale of TowerJazz           993            -               -
Semiconductor Ltd. shares

Interest expense                    (18    )       (24    )        (15    )

Interest income and other           (21    )       (46    )        (23    )
(expense), net

Loss before income taxes            (128   )       (1,592 )        (1,993 )

Provision for (benefit from)        15             4               (59    )
income taxes

Net loss                          $ (143   )     $ (1,596 )      $ (1,934 )

Net loss per share:

Basic                             $ (0.00  )     $ (0.05  )      $ (0.06  )

Diluted                           $ (0.00  )     $ (0.05  )      $ (0.06  )

Weighted average shares:

Basic                               35,104         29,909          32,510

Diluted                             35,104         29,909          32,510

(In thousands, except per share amounts)

                                  Three Months Ended

                                  April 4, 2010  March 29, 2009  January 3, 2010

GAAP loss from operations         $ (1,082 )     $ (1,522 )      $ (1,955 )

Adjustment for stock-based
compensation within:

Cost of revenue                     47             51              48

Research and development            175            88              137

Selling, general and                430            245             390

Adjustment for restructuring        -              -               59

Non-GAAP loss from operations     $ (430   )     $ (1,138 )      $ (1,321 )

GAAP net loss                     $ (143   )     $ (1,596 )      $ (1,934 )

Adjustment for stock-based
compensation within:

Cost of revenue                     47             51              48

Research and development            175            88              137

Selling, general and                430            245             390

Adjustment for the write-off of
equipment within:

Other expense                       -              13              -

Adjustment for restructuring        -              -               59

Adjustment for gain on sale of

TowerJazz Semiconductor Ltd.        (993   )       -               -

Non-GAAP net loss                 $ (484   )     $ (1,199 )      $ (1,300 )

GAAP net loss per share           $ (0.00  )     $ (0.05  )      $ (0.06  )

Adjustment for stock-based          0.02           0.01            0.02

Adjustment for write-off of         -              *               -

Adjustment for restructuring        -              -               *

Adjustment for gain on sale of

TowerJazz Semiconductor Ltd.        (0.03  )       -               -

Non-GAAP net loss per share       $ (0.01  )     $ (0.04  )      $ (0.04  )

GAAP gross margin percentage        61.0     %     60.0     %      50.4     %

Adjustment for stock-based          0.9            1.2             1.1

Non-GAAP gross margin percentage    61.9     %     61.2     %      51.5     %

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

(In thousands)

                                             April 4, 2010  January 3, 2010(1)


Current assets:

Cash and cash equivalents                    $ 18,310       $ 18,195

Short-term investment in TowerJazz             1,089          868
Semiconductor Ltd.

Accounts receivable, net                       2,274          2,457

Inventories                                    2,440          2,119

Other current assets                           904            536

Total current assets                           25,017         24,175

Property and equipment, net                    2,780          2,693

Investment in TowerJazz Semiconductor Ltd.     -              437

Other assets                                   338            296

TOTAL ASSETS                                 $ 28,135       $ 27,601


Current liabilities:

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

Trade payables                                 2,462          2,721

Accrued liabilities                            1,095          1,108

Current portion of capital lease obligations   395            249

Total current liabilities                      5,952          6,078

Long-term liabilities:

Capital lease obligations, less current        243            264

Other long-term liabilities                    115            -

Total liabilities                              6,310          6,342

Stockholders' equity:

Common stock, at par value                     35             35

Additional paid-in capital                     178,696        177,862

Accumulated other comprehensive income         1,005          1,130

Accumulated deficit                            (157,911 )     (157,768 )

Total stockholders' equity                     21,825         21,259


(1) Derived from the January 3, 2010 audited balance sheet included in the
2009 Annual Report on Form 10-K of QuickLogic Corporation.


                 Percentage of Revenue      Change in Revenue

                 Q1 2010  Q1 2009  Q4 2009  Q1 2009 to Q1  Q4 2009 to Q1 2010


Revenue by
product (1):

New products     38%      15%      48%      215%           2%

Legacy products  62%      85%      52%      -14%           50%

Revenue by

North America    43%      53%      33%      -5%            62%

Europe           19%      22%      16%      3%             55%

Rest of world    26%      17%      39%      86%            -16%

Japan            12%      8%       12%      84%            33%

(1) New products represent products introduced since 2005, and include ArcticLink, PolarPro II, PolarPro,
Eclipse II and QuickPCI II products. Legacy products include QuickRAM, pASIC(R) 3, Eclipse, QuickDSP
and QuickFC products, as well as royalty revenue, programming hardware and software, pASIC 1,
pASIC 2, V3, QuickPCI and QuickMIPS products.

    Source: QuickLogic Corporation