QuickLogic Announces Third Quarter Fiscal 2008 Results - Operational Realignment Improves Financial Results
SUNNYVALE, Calif.--(BUSINESS WIRE)--
QuickLogic Corporation (NASDAQ:QUIK), the lowest power programmable solutions leader, today announced the financial results for its fiscal third quarter ended September 28, 2008.
Total revenue for the third quarter of 2008 of $6.2 million was at the high end of the Company's revenue guidance, while being down 29 percent from the second quarter of 2008 and down 31 percent from the third quarter of 2007. The sequential decline in revenue was primarily due to anticipated declines in end-of-life product revenue. New product revenue also decreased in the third quarter, as anticipated, due to the product line of a large consumer OEM nearing the end of its expected product life. The year-on-year decrease in revenue was primarily due to a decline in end-of-life product revenue.
Under generally accepted accounting principles (GAAP), the net loss for the third quarter of 2008 improved to $615,000, or $0.02 per share, compared with a net loss of $4.7 million, or $0.16 per share, in the second quarter of 2008 and a net loss of $1.5 million, or $0.05 per share, in the third quarter of 2007. Gross margin increased to 55.4% for the third quarter of 2008 compared with 36.8% for the second quarter of 2008 and 52.2% for the third quarter of 2007.
On a non-GAAP basis, the net loss for the third quarter of 2008 improved to $196,000, or $0.01 per share, compared with a net loss of $929,000, or $0.03 per share, in the second quarter of 2008 and a net loss of $1.0 million, or $0.04 per share, in the third quarter of 2007. Gross margin, on a non-GAAP basis, increased to 56.7% for the third quarter of 2008 compared with 55.7% for the second quarter of 2008 and 53.0% for the third quarter of 2007.
"Our third quarter results demonstrated the benefits of our recently completed operational realignment," said E. Thomas Hart, chairman, president and CEO. "We had a 36% reduction in our non-GAAP operating expenses compared with the second quarter and our ending cash was essentially unchanged from the prior quarter. We are encouraged by the continued growth of customer design activity for our CSSP solutions and that the operational realignment gives us the agility to drive future revenue growth."
Conference Call
QuickLogic will hold a conference call at 2:30 p.m. Pacific Time today, October 23, 2008, 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 (877) 397-0297 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 or (888) 203-1112 and reference the pass code: 4545787. The call recording will be archived until October 30, 2008 and the webcast will be available for 12 months.
About QuickLogic
QuickLogic Corporation is the pioneer of innovative, customizable semiconductor solutions for mobile and portable electronics original equipment manufacturers (OEM) and original design manufacturers (ODM). 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 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, long-lived asset impairment, the write-down of the Company's investment in Tower Semiconductor Ltd. and the effect of the write-off of equipment 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 pages 5 and 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 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 on pages 5 and 6 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 relating to the Company's financial performance, ability to respond to specific customer opportunities and new product design activity, operating expense containment, and revenue generating potential. 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.
The QuickLogic name and logo are registered 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 September September
28, 30, June 29, 28, 30,
2008 2007 2008 2008 2007
--------- --------- -------- --------- ---------
Revenue $6,230 $9,025 $8,743 $25,996 $23,672
Cost of revenue,
excluding inventory
write-down and
related charges and
long-lived asset
impairment 2,575 4,005 3,810 10,687 10,157
Inventory write-down
and related charges 203 309 172 1,331 3,533
Long-lived asset
impairment -- -- 1,545 1,545 --
--------- --------- -------- --------- ---------
Gross profit 3,452 4,711 3,216 12,433 9,982
Operating expenses:
Research and
development 1,354 2,342 2,610 6,785 6,968
Selling, general
and administrative 2,666 3,953 3,970 10,956 12,933
Long-lived asset
impairment -- -- 468 468 --
Restructuring costs -- -- 452 452 --
--------- --------- -------- --------- ---------
Total operating
expenses 4,020 6,295 7,500 18,661 19,901
--------- --------- -------- --------- ---------
Loss from operations (568) (1,584) (4,284) (6,228) (9,919)
Write-down of
investment in Tower
Semiconductor Ltd. -- -- (417) (417) --
Interest expense (59) (69) (72) (202) (226)
Interest income and
other, net (46) 189 30 88 752
--------- --------- -------- --------- ---------
Loss before income
taxes (673) (1,464) (4,743) (6,759) (9,393)
Provision for income
taxes (58) 29 -- (24) 71
--------- --------- -------- --------- ---------
Net loss $(615) $(1,493) $(4,743) $(6,735) $(9,464)
========= ========= ======== ========= =========
Net loss per share:
Basic $(0.02) $(0.05) $(0.16) $(0.23) $(0.33)
========= ========= ======== ========= =========
Diluted $(0.02) $(0.05) $(0.16) $(0.23) $(0.33)
========= ========= ======== ========= =========
Weighted average
shares:
Basic 29,772 29,116 29,589 29,589 28,966
========= ========= ======== ========= =========
Diluted 29,772 29,116 29,589 29,589 28,966
========= ========= ======== ========= =========
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 September September
28, 30, June 29, 28, 30,
2008 2007 2008 2008 2007
--------- --------- -------- --------- ---------
GAAP loss from
operations $(568) $(1,584) $(4,284) $(6,228) $(9,919)
Adjustment for
stock-based
compensation
within:
Cost of revenue 49 67 106 220 176
Research and
development 89 94 196 443 273
Selling, general
and
administrative 251 291 615 1,308 812
Adjustment for
long-lived asset
impairment within:
Cost of revenue -- -- 1,545 1,545 --
Operating
expenses -- -- 468 468 --
Adjustment for
write-off of
equipment within:
Cost of revenue 30 5 -- 30 5
Selling, general
and
administrative -- 2 15 15 2
Adjustment for
restructuring
costs -- -- 452 452 --
--------- --------- -------- --------- ---------
Non-GAAP loss from
operations $(149) $(1,125) $(887) $(1,747) $(8,651)
========= ========= ======== ========= =========
GAAP net loss $(615) $(1,493) $(4,743) $(6,735) $(9,464)
Adjustment for
stock-based
compensation
within:
Cost of revenue 49 67 106 220 176
Research and
development 89 94 196 443 273
Selling, general
and
administrative 251 291 615 1,308 812
Adjustment for
long-lived asset
impairment within:
Cost of revenue -- -- 1,545 1,545 --
Operating
expenses -- -- 468 468 --
Adjustment for
write-off of
equipment within:
Cost of revenue 30 5 -- 30 5
Selling, general
and
administrative -- 2 15 15 2
Adjustment for
restructuring
costs -- -- 452 452 --
Adjustment for
write-down of
investment in
Tower
Semiconductor Ltd. -- -- 417 417 --
--------- --------- -------- --------- ---------
Non-GAAP net loss $(196) $(1,034) $(929) $(1,837) $(8,196)
========= ========= ======== ========= =========
GAAP net loss per
share $(0.02) $(0.05) $(0.16) $(0.23) $(0.33)
Adjustment for
stock-based
compensation 0.01 0.01 0.03 0.07 0.05
Adjustment for
long-lived asset
impairment -- -- 0.07 0.07 --
Adjustment for
write-off of
equipment -- -- -- -- --
Adjustment for
restructuring
costs -- -- 0.02 0.02 --
Adjustment for
write-down of
investment in
Tower
Semiconductor Ltd. -- -- 0.01 0.01 --
--------- --------- -------- --------- ---------
Non-GAAP net loss per
share $(0.01) $(0.04) $(0.03) $(0.06) $(0.28)
========= ========= ======== ========= =========
QUICKLOGIC CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES
(Continued)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------- -------------------
September September June September September
28, 30, 29, 28, 30,
2008 2007 2008 2008 2007
--------- --------- ------ --------- ---------
GAAP weighted average
shares 29,772 29,116 29,589 29,589 28,966
Adjustment for stock-
based compensation -- -- -- -- --
Adjustment for long-
lived asset
impairment -- -- -- -- --
Adjustment for write-
off of equipment -- -- -- -- --
Adjustment for
restructuring costs -- -- -- -- --
Adjustment for write-
down of investment
in Tower
Semiconductor Ltd. -- -- -- -- --
--------- --------- ------ --------- ---------
Non-GAAP weighted
average shares 29,772 29,116 29,589 29,589 28,966
GAAP gross margin
percentage 55.4% 52.2% 36.8% 47.8% 42.2%
Adjustment for stock-
based compensation 0.8% 0.8% 1.2% 0.8% 0.7%
Adjustment for long-
lived asset
impairment -- -- 17.7% 5.9% --
Adjustment for write-
off of equipment 0.5% -- -- 0.2% --
--------- --------- ------ --------- ---------
Non-GAAP gross margin
percentage 56.7% 53.0% 55.7% 54.7% 42.9%
========= ========= ====== ========= =========
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September December
28, 30,
2008 2007(1)
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 18,833 $ 20,868
Short-term investment in Tower Semiconductor
Ltd. 519 1,279
Accounts receivable, net 2,279 2,634
Inventories 2,457 5,770
Other current assets 919 1,607
---------- ----------
Total current assets 25,007 32,158
Property and equipment, net 4,013 5,877
Investment in Tower Semiconductor Ltd. 261 644
Other assets 1,027 2,745
---------- ----------
TOTAL ASSETS $ 30,308 $ 41,424
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 2,000 $ --
Trade payables 1,453 4,207
Accrued liabilities 2,009 2,228
Deferred revenue less cost of revenue 239 516
Deferred royalty revenue -- 431
Current portion of debt and capital lease
obligations 764 2,497
---------- ----------
Total current liabilities 6,465 9,879
---------- ----------
Long-term liabilities:
Debt and capital lease obligations, less
current portion 186 2,527
---------- ----------
Total liabilities 6,651 12,406
---------- ----------
Stockholders' equity:
Common stock, at par value 30 29
Additional paid-in capital 169,397 167,298
Accumulated other comprehensive income (loss) (376) 350
Accumulated deficit (145,394) (138,659)
---------- ----------
Total stockholders' equity 23,657 29,018
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,308 $ 41,424
========== ==========
(1) Derived from the December 30, 2007 audited balance sheet included
in the 2007 Annual Report on Form 10-K of QuickLogic Corporation.
QUICKLOGIC CORPORATION
SUPPLEMENTAL DATA
(Unaudited)
Percentage of Change in
Revenue Revenue
-------------------- ----------------
Q3 2007 Q2 2008
Q3 Q3 Q2 to to
2008 2007 2008 Q3 2008 Q3 2008
------ ------ ------ ------- --------
COMPOSITION OF REVENUE
Revenue by product (1):
New products 23% 18% 29% (12%) (45%)
Mature products 74% 50% 53% 2% 1%
End-of-life products 3% 32% 18% (93%) (88%)
Revenue by geography:
North America 33% 50% 38% (55%) (39%)
Europe 14% 22% 15% (55%) (36%)
Asia Pacific 42% 19% 39% 49% (22%)
Japan 11% 9% 8% (11%) 3%
Revenue by end-customer
segment:
Instrumentation and test 53% 47% 65% (22%) (42%)
Military and aerospace
systems 12% 15% 9% (47%) (13%)
Datacom and telecom 8% 14% 8% (62%) (28%)
Graphics and imaging 24% 19% 17% (12%) 4%
Computing 3% 5% 1% (50%) 65%
(1) The Company changed the definition of its product families in the
third quarter of 2007 and adjusted prior periods to conform to the
new definitions. New products include ArcticLink(TM), PolarPro(R),
Eclipse(TM) II and QuickPCI(R) II products. Mature products include
QuickRAM(R), 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
Released October 23, 2008
