QuickLogic Announces Fiscal 2006 and Fourth Quarter Results - New Products Contribute 20% of 2006 Revenue
SUNNYVALE, Calif.--(BUSINESS WIRE)--
QuickLogic Corporation (NASDAQ: QUIK), the lowest power programmable logic leader, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2006.
Revenue for 2006 was $34.9 million, down 28 percent from $48.3 million in 2005. The change in revenue was primarily due to the Company's pASIC(R) 1 and pASIC 2 end-of-life program, which was partially offset by revenue growth from new products. These new products - Eclipse(TM) II, QuickPCI(R) II, PolarPro(TM) and QuickMIPS - contributed 20 percent of revenue in 2006, compared with four percent of revenue in 2005.
Under generally accepted accounting principles (GAAP), the 2006 net loss was $9.2 million, or $0.32 per share, compared with net income of $2.4 million, or $.08 per diluted share, in 2005. On a non-GAAP basis, the 2006 net loss was $7.7 million, or $0.27 per share, compared with net income of $3.9 million, or $0.14 per diluted share, in 2005.
Revenue for the fourth quarter of 2006 was $7.7 million, compared with $10.3 million in the fourth quarter of 2005 and $8.6 million in the third quarter of 2006. New products contributed 18 percent of revenue in the fourth quarter of 2006, compared with 12 percent of revenue in the fourth quarter of 2005 and 27 percent of revenue in the third quarter of 2006. For the first time, Aeroflex Incorporated reported royalty revenue to the Company, based on the sale of Aeroflex products which utilize QuickLogic's ViaLink(R) technology. Royalties contributed nine percent of fourth quarter revenue.
Under GAAP, the net loss for the fourth quarter of 2006 was $3.3 million, or $0.12 per share. This compares with a net loss of $456,000, or $0.02 per share, in the fourth quarter of 2005 and with a net loss of $3.0 million, or $0.10 per share, in the third quarter of 2006.
On a non-GAAP basis, the net loss for the fourth quarter of 2006 was $3.0 million, or $0.11 per share, compared with a net loss of $456,000, or $0.02 per share, in the fourth quarter of 2005 and with a net loss of $2.6 million, or $0.09 per share, in the third quarter of 2006.
QuickLogic reports net income, or loss, in accordance with GAAP and also on a non-GAAP basis to highlight infrequent or non-recurring charges. 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," the write-off of long-lived assets and write-downs of the Company's investment in Tower Semiconductor Ltd.
"In the short term, our new product revenue is fluctuating with the demand of a few customers," said E. Thomas Hart, chairman, president and CEO. "However, there continues to be strong interest in our low-power solutions, coupled with higher activity with Marvell Semiconductor, our embedded processor partner. We are focused on turning this interest into a significant customer base. We fully expect to expand our new product customer base this year."
Conference Call
QuickLogic will hold a conference call at 2:30 p.m. Pacific Time today, January 31, 2007, to discuss the fiscal year and fourth quarter 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 (913) 981-5545 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: 1249985. The call recording will be archived until February 7, 2007 and the webcast will be available for 12 months.
About QuickLogic
QuickLogic Corporation (NASDAQ: QUIK) is the leading provider of the lowest power programmable logic solutions for the portable electronics, industrial, communications and military markets. Our latest products, PolarPro, Eclipse II and QuickPCI II, are being used to implement bridge and control solutions in embedded systems requiring Wi-Fi, DVB-H and IDE or CE-ATA-based disk drives. QuickLogic's proprietary ViaLink technology offers significant benefits for programmable logic, including the lowest power, instant on capability and bulletproof intellectual property security. The Company is located at 1277 Orleans Drive, Sunnyvale, CA 94089-1138. For more information, please visit the QuickLogic web site at 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, the effect of the write-off of long-lived assets and write-downs of the Company's investment in Tower Semiconductor Ltd. in calculating non-GAAP (i) income (loss) from operations, (ii) net income (loss), (iii) net income (loss) per share, (iv) cost of revenue, and (v) certain operating expenses, including research and development and selling, general and administrative. 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. Investors should note, however, that the non-GAAP financial measures used by the Company may not be the same non-GAAP financial measures, and may not be calculated in the same manner, as that of other companies. The Company 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 net income (loss) to non-GAAP net income (loss) is included in the financial statements portion of this release. Investors are encouraged to review the related GAAP financial measures and the reconciliation of non-GAAP financial measures to 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, the customer base for our new products and the revenue generating potential of such products, which is dependent on the market acceptance of our new 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 pASIC 1 and pASIC 2 revenue, which has declined due to their end-of-life; 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; liquidity; 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 and logo, pASIC, QuickPCI and ViaLink are registered trademarks and 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.
Wirewatch code QUIK-E
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
--------------------------- -----------------
December December September December December
31, 31, 30, 31, 31,
2006 2005 2006 2006 2005
-------- -------- --------- -------- --------
Revenue $7,744 $10,317 $8,598 $34,924 $48,259
Cost of revenue 4,387 4,296 5,371 17,739 18,124
-------- -------- --------- -------- --------
Gross profit 3,357 6,021 3,227 17,185 30,135
Operating expenses:
Research and
development 2,117 2,411 2,429 9,303 9,648
Selling, general and
administrative 4,857 4,375 3,994 18,062 16,855
-------- -------- --------- -------- --------
Total operating expenses 6,974 6,786 6,423 27,365 26,503
-------- -------- --------- -------- --------
Income (loss) from
operations (3,617) (765) (3,196) (10,180) 3,632
Write-down of marketable
securities -- -- -- -- (1,466)
Interest expense (94) (37) (65) (329) (189)
Interest income and
other, net 400 280 333 1,366 542
-------- -------- --------- -------- --------
Income (loss) before
income taxes (3,311) (522) (2,928) (9,143) 2,519
Provision for income
taxes 25 (66) 23 71 169
-------- -------- --------- -------- --------
Net income (loss) $(3,336) $(456) $(2,951) $(9,214) $2,350
======== ======== ========= ======== ========
Net income (loss) per
share:
Basic $(0.12) $(0.02) $(0.10) $(0.32) $0.09
======== ======== ========= ======== ========
Diluted $(0.12) $(0.02) $(0.10) $(0.32) $0.08
======== ======== ========= ======== ========
Weighted average shares:
Basic 28,680 27,539 28,678 28,485 26,954
======== ======== ========= ======== ========
Diluted 28,680 27,539 28,678 28,485 28,039
======== ======== ========= ======== ========
QUICKLOGIC CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Years Ended
--------------------------- -----------------
December December September December December
31, 31, 30, 31, 31,
2006 2005 2006 2006 2005
-------- -------- --------- -------- --------
Revenue $7,744 $10,317 $8,598 $34,924 $48,259
Cost of revenue 4,342 4,296 5,302 17,523 18,121
-------- -------- --------- -------- --------
Gross profit 3,402 6,021 3,296 17,401 30,138
Operating expenses:
Research and
development 2,070 2,411 2,372 8,935 9,586
Selling, general and
administrative 4,649 4,375 3,796 17,167 16,854
-------- -------- --------- -------- --------
Total operating expenses 6,719 6,786 6,168 26,102 26,440
-------- -------- --------- -------- --------
Income (loss) from
operations (3,317) (765) (2,872) (8,701) 3,698
Interest expense (94) (37) (65) (329) (189)
Interest income and
other, net 400 280 333 1,366 542
-------- -------- --------- -------- --------
Income (loss) before
income taxes (3,011) (522) (2,604) (7,664) 4,051
Provision for income
taxes 25 (66) 23 71 169
-------- -------- --------- -------- --------
Net income (loss) $(3,036) $(456) $(2,627) $(7,735) $3,882
======== ======== ========= ======== ========
Net income (loss) per
share:
Basic $(0.11) $(0.02) $(0.09) $(0.27) $0.14
======== ======== ========= ======== ========
Diluted $(0.11) $(0.02) $(0.09) $(0.27) $0.14
======== ======== ========= ======== ========
Weighted average shares:
Basic 28,680 27,539 28,678 28,485 26,954
======== ======== ========= ======== ========
Diluted 28,680 27,539 28,678 28,485 28,039
======== ======== ========= ======== ========
QUICKLOGIC CORPORATION
GAAP AND NON-GAAP NET INCOME (LOSS) RECONCILIATION
(In thousands)
(Unaudited)
Three Months Ended Years Ended
--------------------------- -----------------
December December September December December
31, 31, 30, 31, 31,
2006 2005 2006 2006 2005
-------- -------- --------- -------- --------
GAAP net income (loss) $(3,336) $(456) $(2,951) $(9,214) $2,350
Charges excluded from
non-GAAP net income
(loss):
Stock-based
compensation (1) 300 -- 290 1,445 --
Write-off of long-lived
assets (1) -- -- 34 34 66
Write-down of
investment in Tower
Semiconductor Ltd. -- -- -- -- 1,466
-------- -------- --------- -------- --------
Non-GAAP net income
(loss) $(3,036) $(456) $(2,627) $(7,735) $3,882
======== ======== ========= ======== ========
_________________________
(1) The following non-GAAP adjustments have been made to the financial measures in the Non-GAAP Condensed Consolidated Statements of Operations:
Three Months Ended Years Ended
--------------------------- -----------------
December December September December December
31, 31, 30, 31, 31,
2006 2005 2006 2006 2005
-------- -------- --------- -------- --------
GAAP cost of revenue $4,387 $4,296 $5,371 $17,739 $18,124
Adjustment for the
write-off of long-
lived assets -- -- (33) (33) (3)
Adjustment for stock-
based compensation (45) -- (36) (183) --
-------- -------- --------- -------- --------
Non-GAAP cost of revenue $4,342 $4,296 $5,302 $17,523 $18,121
======== ======== ========= ======== ========
GAAP research and
development $2,117 $2,411 $2,429 $9,303 $9,648
Adjustment for the
write-off of long-
lived assets -- -- -- -- (62)
Adjustment for stock-
based compensation (47) -- (57) (368) --
-------- -------- --------- -------- --------
Non-GAAP research and
development $2,070 $2,411 $2,372 $8,935 $9,586
======== ======== ========= ======== ========
GAAP selling, general
and administrative $4,857 $4,375 $3,994 $18,062 $16,855
Adjustment for the
write-off of long-
lived assets -- -- (1) (1) (1)
Adjustment for stock-
based compensation (208) -- (197) (894) --
-------- -------- --------- -------- --------
Non-GAAP selling,
general and
administrative $4,649 $4,375 $3,796 $17,167 $16,854
======== ======== ========= ======== ========
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December December
31, 31,
2006 (2) 2005(1)
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $24,621 $28,283
Short-term investment in Tower Semiconductor Ltd. 1,530 1,297
Accounts receivable, net 2,839 5,556
Inventory 9,064 7,830
Other current assets 1,894 1,265
--------- ---------
Total current assets 39,948 44,231
Property and equipment, net 5,480 5,697
Investment in Tower Semiconductor Ltd. 769 653
Other assets 4,038 4,415
--------- ---------
TOTAL ASSETS $50,235 $54,996
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $4,383 $3,338
Accrued liabilities 2,462 3,434
Deferred income on shipments to distributors 1,152 1,626
Deferred royalty revenue 960 --
Current portion of debt and capital lease
obligations 2,292 1,790
--------- ---------
Total current liabilities 11,249 10,188
--------- ---------
Long-term liabilities:
Debt and capital lease obligations, less current
portion 1,618 1,163
Deferred royalty revenue -- 1,408
--------- ---------
Total long-term liabilities 1,618 2,571
--------- ---------
Total liabilities 12,867 12,759
--------- ---------
Stockholders' equity:
Common stock, at par value 29 28
Additional paid-in capital 164,138 159,179
Accumulated other comprehensive income 726 377
Accumulated deficit (127,525) (117,347)
--------- ---------
Total stockholders' equity 37,368 42,237
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $50,235 $54,996
========= =========
(1) Derived from the December 31, 2005 audited balance sheet included in the 2005 Annual Report on Form 10-K of QuickLogic Corporation.
(2) Additional paid-in capital includes a January 1, 2006 SAB 108 cumulative effect transition adjustment of $964,000 associated with the Company's internal review of stock option granting practices and related accounting, with an offsetting entry to accumulated deficit.
QUICKLOGIC CORPORATION
SUPPLEMENTAL DATA
(Unaudited)
Percentage of Revenue Change in Revenue
------------------------- ------------------
Q4 Q3 Fiscal Fiscal Q3 2006 to 2005 to
2006 2006 2006 2005 Q4 2006 2006
----- ----- ------ ------ ---------- -------
COMPOSITION OF REVENUE
Revenue by product (1):
Mature products 51% 45% 49% 62% 3% (43%)
Embedded standard
products 19% 23% 24% 24% (24%) (28%)
Advanced embedded
standard products 21% 32% 25% 14% (41%) 35%
Royalty 9% -- 2% -- n/a n/a
Revenue by geography:
North America 59% 45% 50% 56% 17% (36%)
Europe 24% 40% 32% 25% (47%) (5%)
Japan 8% 7% 9% 12% 12% (46%)
Rest of world 9% 8% 9% 7% 3% (7%)
Revenue by end-customer
segment:
Instrumentation and
test 41% 38% 40% 49% (2%) (41%)
Military and aerospace
systems 20% 10% 13% 19% 88% (48%)
Datacom and telecom 23% 37% 31% 19% (43)% 16%
Graphics and imaging 11% 12% 10% 6% (19%) 26%
Computing 5% 3% 6% 7% 35% (45%)
_________________________
(1) The mature product family includes pASIC 1, pASIC 2 and pASIC 3 products. The embedded standard product family includes QuickRAM, QuickPCI, QuickDSP, QuickFC and V3 products. The advanced embedded standard product family includes Eclipse, Eclipse II, QuickPCI II, QuickMIPS and PolarPro products, as well as programming hardware and software.
Source: QuickLogic Corporation
Released January 31, 2007