QuickLogic Announces Fiscal 2010 Third Quarter Results -- Company Returns to GAAP Profitability and New Product Revenue Increases 20% Sequentially
SUNNYVALE, CA -- (MARKET WIRE) -- 11/02/10 -- QuickLogic Corporation (NASDAQ: QUIK), the lowest power Customer Specific Standard Products (CSSPs) leader, today announced the financial results for its fiscal third quarter ended October 3, 2010.
Total revenue for the third quarter of 2010 was $7.3 million, up 13% sequentially and 120% compared to the third quarter of 2009. During the third quarter, new product revenue increased 20% sequentially to $2.8 million, accounting for 38% of total revenue. During the third quarter, legacy product revenue increased 9% sequentially to $4.6 million, accounting for 62% of total revenue in the third quarter.
Under generally accepted accounting principles (GAAP), the net income for the third quarter of 2010 was $0.6 million, or $0.01 per diluted share, compared with a net loss of $0.2 million, or $0.01 per diluted share, in the second quarter of 2010 and a net loss of $3.0 million, or $0.10 per diluted share, in the third quarter of 2009. Non-GAAP net income for the third quarter of 2010 was $0.9 million, or $0.02 per diluted share, compared with a non-GAAP net income of $0.4 million, or $0.01 per diluted share, in the second quarter of 2010 and a non-GAAP net loss of $1.9 million, or $0.06 per diluted share, in the third quarter of 2009.
"We are pleased to report our second consecutive quarter of doubling year-over-year revenue growth, as well as our return to profitability," said Tom Hart, QuickLogic's Chairman of the Board and CEO. "Our CSSP strategy is clearly being embraced by our targeted customers, driven by our innovative technology, unique engagement model and the user experience our solutions bring to the mobile consumer."
Conference Call
QuickLogic will hold a conference call at 2:30 p.m. Pacific Daylight Time today, November 2, 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 join the live conference, please dial (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: 18996275. The call recording will be archived until Friday, November 5, 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., the effect of the write-off of long-lived assets and 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; 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.
Note to Editors: Financial Tables Follow
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
----------------------------- -------------------
October September July 4, October September
3, 2010 27, 2009 2010 3, 2010 27, 2009
-------- --------- -------- -------- ---------
Revenue $ 7,333 $ 3,332 $ 6,479 $ 19,241 $ 10,795
Cost of revenue,
excluding inventory
write-down and related
charges and long-lived
asset impairment 2,619 1,955 2,553 7,215 5,127
Inventory write-down and
related charges 17 231 - 90 467
Long-lived asset
impairment - 150 - - 150
-------- --------- -------- -------- ---------
Gross profit 4,697 996 3,926 11,936 5,051
Operating expenses:
Research and
development 1,817 1,400 1,533 5,410 4,889
Selling, general and
administrative 2,535 2,525 2,518 7,388 7,877
-------- --------- -------- -------- ---------
Income (loss) from
operations 345 (2,929) (125) (862) (7,715)
Gain on sale of
TowerJazz Semiconductor
Ltd. shares 993
Interest expense (12) (31) (27) (57) (78)
Interest income and
other (expense), net 25 (30) (50) (46) (31)
-------- --------- -------- -------- ---------
Income (loss) before
income taxes 358 (2,990) (202) 28 (7,824)
Provision for (benefit
from) income taxes (192) 7 13 (164) (4)
-------- --------- -------- -------- ---------
Net income (loss) $ 550 $ (2,997) $ (215) $ 192 $ (7,820)
======== ========= ======== ======== =========
Net income (loss) per
share:
Basic $ 0.02 $ (0.10) $ (0.01) $ 0.01 $ (0.26)
======== ========= ======== ======== =========
Diluted $ 0.01 $ (0.10) $ (0.01) $ 0.01 $ (0.26)
======== ========= ======== ======== =========
Weighted average shares:
Basic 35,634 30,322 35,383 35,436 30,104
======== ========= ======== ======== =========
Diluted 38,711 30,322 35,383 37,911 30,104
======== ========= ======== ======== =========
QUICKLOGIC CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
----------------------------- -------------------
October September July 4, October September
3, 2010 27, 2009 2010 3, 2010 27, 2009
-------- --------- -------- -------- ---------
GAAP income (loss) from
operations $ 345 $ (2,929) $ (125) $ (862) $ (7,715)
Adjustment for stock-
based compensation
within:
Cost of revenue 34 110 39 120 232
Research and
development 147 213 180 502 439
Selling, general and
administrative 387 535 414 1,231 1,138
Adjustment for long-
lived asset impairment
within:
Cost of revenue - 150 - - 150
Adjustment for the
write-off of equipment
within:
Cost of revenue - 96 - - 96
Selling, general and
administrative 8 2 - 8 2
-------- --------- -------- -------- ---------
Non-GAAP income (loss)
from operations $ 921 $ (1,823) $ 508 $ 999 $ (5,658)
======== ========= ======== ======== =========
GAAP net income (loss) $ 550 $ (2,997) $ (215) $ 192 $ (7,820)
Adjustment for stock-
based compensation
within:
Cost of revenue 34 110 39 120 232
Research and
development 147 213 180 502 439
Selling, general and
administrative 387 535 414 1,231 1,138
Adjustment for long-
lived asset impairment
within:
Cost of revenue - 150 - - 150
Adjustment for the
write-off of equipment
within:
Cost of revenue - 96 - - 96
Selling, general and
administrative 8 2 - 8 2
Other expense - - - - 13
Adjustment for gain on
sale of TowerJazz
Semiconductor Ltd.
Shares - - - (993) -
Adjustment for tax
effect on other
comprehensive income (209) - - (209) -
-------- --------- -------- -------- ---------
Non-GAAP net income
(loss) $ 917 $ (1,891) $ 418 $ 851 $ (5,750)
======== ========= ======== ======== =========
GAAP net income (loss)
per diluted share $ 0.01 $ (0.10) $ (0.01) $ 0.01 $ (0.26)
Adjustment for stock-
based compensation 0.02 0.03 0.02 0.05 0.06
Adjustment for long-
lived asset impairment - 0.01 - - 0.01
Adjustment for write-
off of equipment * * - * *
Adjustment for gain on
sale of TowerJazz
Semiconductor Ltd.
Shares - - - (0.03) -
Adjustment for tax
effect on other
comprehensive income (0.01) - - (0.01) -
-------- --------- -------- -------- ---------
Non-GAAP net income
(loss) per diluted
share $ 0.02 $ (0.06) $ 0.01 $ 0.02 $ (0.19)
======== ========= ======== ======== =========
GAAP gross margin
percentage 64.0% 29.9% 60.6% 62.0% 46.8%
Adjustment for stock-
based compensation 0.5 3.3 0.6 0.7 2.1
Adjustment for write-
off of long-lived
asset - 4.5 - - 1.4
Adjustment for write-
off of equipment - 2.9 - - 0.9
-------- --------- -------- -------- ---------
Non-GAAP gross margin
percentage 64.5% 40.6% 61.2% 62.7% 51.2%
======== ========= ======== ======== =========
* Figures were not considered in the reconciliation of GAAP and Non-GAAP measures due to the insignificant amount.
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 3, January 3,
2010 2010 (1)
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 19,153 $ 18,195
Short-term investment in TowerJazz
Semiconductor Ltd. 870 868
Accounts receivable, net 4,009 2,457
Inventories 2,641 2,119
Other current assets 860 536
----------- ------------
Total current assets 27,533 24,175
Property and equipment, net 2,505 2,693
Investment in TowerJazz Semiconductor Ltd. - 437
Other assets 195 296
----------- ------------
TOTAL ASSETS $ 30,233 $ 27,601
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Revolving line of credit $ 2,000 $ 2,000
Trade payables 2,419 2,721
Accrued liabilities 1,019 1,108
Deferred income 9 -
Current portion of debt and capital lease
obligations 406 249
----------- ------------
Total current liabilities 5,853 6,078
----------- ------------
Long-term liabilities:
Capital lease obligations, less current portion 37 264
Other long-term liabilities 119 -
----------- ------------
Total liabilities 6,009 6,342
----------- ------------
Stockholders' equity:
Common stock, at par value 36 35
Additional paid-in capital 181,187 177,862
Accumulated other comprehensive income 577 1,130
Accumulated deficit (157,576) (157,768)
----------- ------------
Total stockholders' equity 24,224 21,259
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,233 $ 27,601
=========== ============
(1) Derived from the January 3, 2010 audited balance sheet included in the 2009 Annual Report on Form 10-K of QuickLogic Corporation.
QUICKLOGIC CORPORATION
SUPPLEMENTAL DATA
(Unaudited)
Percentage of Revenue Change in Revenue
-------------------------- -----------------------
Q3 2009 to Q2 2010 to
Q3 2010 Q3 2009 Q2 2010 Q3 2010 Q3 2010
COMPOSITION OF REVENUE
Revenue by product (1):
New products 38% 41% 35% 103% 20%
Legacy Products 62% 59% 65% 133% 10%
Revenue by geography:
North America 35% 47% 33% 61% 19%
Europe 10% 20% 13% 19% -9%
Rest of world 45% 26% 43% 272% 19%
Japan 10% 7% 11% 241% 3%
(1) New products represent products introduced since 2005, and include ArcticLink, ArcticLink II, PolarPro, PolarPro II, Eclipse II and QuickPCI II products. Legacy products include Eclipse, pASIC 1, pASIC 2, pASIC 3, QuickDSP, QuickFC, QuickMIPS, QuickPCI, QuickRAM and V3 products, as well as royalty revenue, programming hardware and software.
Contacts: Ralph S. Marimon Vice President of Finance Chief Financial Officer (408) 990-4000 Email Contact Andrea Vedanayagam (408) 656-4494 Email Contact
Released November 2, 2010
