QuickLogic Announces Fiscal 2007 Third Quarter Results - New Product Revenue Ramps Sequentially at Top Tier Customers
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 30, 2007.
Revenue for the third quarter of 2007 was $9.0 million, up seven percent from $8.4 million in the second quarter of 2007 and up five percent from $8.6 million in the third quarter of 2006. New product revenue increased by $1.0 million sequentially; this growth was partially offset by a decline in end-of-life product revenue. Higher end-of-life and mature product revenue was a major contributor to the year-on-year increase in revenue. New products - ArcticLink(TM), PolarPro(TM), Eclipse(TM) II and QuickPCI(R) II - contributed 18 percent of revenue in the third quarter of 2007, seven percent in the second quarter of 2007 and 25 percent of revenue in the third quarter of 2006.
Under generally accepted accounting principles (GAAP), the net loss for the third quarter of 2007 was $1.5 million, or $0.05 per share, compared with a net loss of $2.1 million, or $0.07 per share, in the second quarter of 2007 and a net loss of $3.0 million, or $0.10 per share, in the third quarter of 2006. Non-GAAP net loss for the third quarter of 2007 was $1.0 million, or $0.04 per share, compared with a non-GAAP net loss of $1.7 million, or $0.06 per share, in the second quarter of 2007 and a non-GAAP net loss of $2.6 million, or $0.09 per share, in the third quarter of 2006.
QuickLogic reports certain financial measures, including net loss, in accordance with GAAP and also on a non-GAAP basis. Non-GAAP results, where applicable, exclude stock-based compensation recorded in accordance with Statement of Financial Accounting Standards (SFAS) No. 123R, "Share-based Payment" and the write-off of long-lived assets. For a full reconciliation of GAAP net loss to non-GAAP net loss, please refer to the schedule on page 5 of this press release.
"We are pleased with our significant increase in revenue compared with the second quarter," said E. Thomas Hart, chairman, president and CEO. "We are getting good design traction for our Customer Specific Standard Products (CSSPs) with top customers in our target markets. The trend for these customers is to design platforms that enable them to generate multiple products. The inherent flexibility of CSSPs serves well to "future-proof" these platforms, extending their life over several product generations. This allows our customers to bring new products to market more quickly and cost effectively with lower risk."
Conference Call
QuickLogic will hold a conference call at 2:30 p.m. Pacific Time today, October 24, 2007, 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/investors. To participate, please call (888) 684-1265 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: 5642724. The call recording will be archived until November 1, 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 solutions for the portable electronics, industrial, communications and military markets. Our new products - ArcticLink, PolarPro, Eclipse II and QuickPCI - 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(R) 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. Website 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 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. For a full reconciliation of these GAAP measures to non-GAAP measures, please refer to the schedule on page 5 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 the basis for the allocation of Company resources, management of operations and the measurement of profit-dependent cash 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 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 and the revenue generating potential of such new products, which is dependent on the market acceptance of our 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 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, QuickPCI and ViaLink are registered trademarks of and ArcticLink, 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.
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
--------------------------- ------------------
Sept. 30, Oct. 1, July 1, Sept. 30, Oct. 1,
2007 2006 2007 2007 2006
--------- -------- -------- --------- --------
Revenue $ 9,025 $ 8,598 $ 8,405 $23,672 $27,180
Cost of revenue,
excluding inventory
write-down and related
charges 4,005 4,157 3,216 10,157 11,668
Inventory write-down
and related charges 309 1,214 759 3,533 1,684
--------- -------- -------- --------- --------
Gross profit 4,711 3,227 4,430 9,982 13,828
Operating expenses:
Research and
development 2,342 2,429 2,339 6,968 7,186
Selling, general and
administrative 3,953 3,994 4,387 12,933 13,205
--------- -------- -------- --------- --------
Total operating
expenses 6,295 6,423 6,726 19,901 20,391
--------- -------- -------- --------- --------
Loss from operations (1,584) (3,196) (2,296) (9,919) (6,563)
Interest expense (69) (65) (72) (226) (235)
Interest income and
other, net 189 333 317 752 966
--------- -------- -------- --------- --------
Loss before income
taxes (1,464) (2,928) (2,051) (9,393) (5,832)
Provision for income
taxes 29 23 27 71 46
--------- -------- -------- --------- --------
Net loss $(1,493) $(2,951) $(2,078) $(9,464) $(5,878)
========= ======== ======== ========= ========
Net loss per share:
Basic $ (0.05) $ (0.10) $ (0.07) $ (0.33) $ (0.21)
========= ======== ======== ========= ========
Diluted $ (0.05) $ (0.10) $ (0.07) $ (0.33) $ (0.21)
========= ======== ======== ========= ========
Weighted average
shares:
Basic 29,116 28,678 28,966 28,966 28,420
========= ======== ======== ========= ========
Diluted 29,116 28,678 28,966 28,966 28,420
========= ======== ======== ========= ========
QUICKLOGIC CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
--------------------------- ------------------
Sept. 30, Oct. 1, July 1, Sept. 30, Oct. 1,
2007 2006 2007 2007 2006
--------- -------- -------- --------- --------
GAAP loss from
operations $(1,584) $(3,196) $(2,296) $(9,919) $(6,563)
Adjustment for the
write-off of long-
lived assets within:
Cost of revenue 5 33 -- 5 33
Selling, general and
administrative 2 1 -- 2 1
Adjustment for stock-
based compensation
within:
Cost of revenue 67 36 54 176 138
Research and
development 94 57 94 273 321
Selling, general and
administrative 291 197 280 812 686
--------- -------- -------- --------- --------
Non-GAAP loss from
operations $(1,125) $(2,872) $(1,868) $(8,651) $(5,384)
========= ======== ======== ========= ========
GAAP net loss $(1,493) $(2,951) $(2,078) $(9,464) $(5,878)
Adjustment for the
write-off of long-
lived assets within:
Cost of revenue 5 33 -- 5 33
Selling, general and
administrative 2 1 -- 2 1
Adjustment for stock-
based compensation
within:
Cost of revenue 67 36 54 176 138
Research and
development 94 57 94 273 321
Selling, general and
administrative 291 197 280 812 686
--------- -------- -------- --------- --------
Non-GAAP net loss $(1,034) $(2,627) $(1,650) $(8,196) $(4,699)
========= ======== ======== ========= ========
GAAP net loss per share $ (0.05) $ (0.10) $ (0.07) $ (0.33) $ (0.21)
Adjustment for the
write-off of long-
lived assets and
stock-based
compensation 0.01 0.01 0.01 0.05 0.04
--------- -------- -------- --------- --------
Non-GAAP net loss per
share $ (0.04) $ (0.09) $ (0.06) $ (0.28) $ (0.17)
========= ======== ======== ========= ========
GAAP weighted average
shares 29,116 28,678 28,966 28,966 28,420
Adjustment for the
write-off of long-
lived assets and
stock-based
compensation -- -- -- -- --
--------- -------- -------- --------- --------
Non-GAAP weighted
average shares 29,116 28,678 28,966 28,966 28,420
========= ======== ======== ========= ========
GAAP gross margin
percentage 52.2% 37.5% 52.7% 42.2% 50.9%
Adjustment for the
write-off of long-
lived assets and
stock-based
compensation 0.8% 0.8% 0.6% 0.7% 0.6%
--------- -------- -------- --------- --------
Non-GAAP gross margin
percentage 53.0% 38.3% 53.3% 42.9% 51.5%
========= ======== ======== ========= ========
QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
Sept. 30, Dec. 31,
2007 2006(1)
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 20,846 $ 24,621
Short-term investment in Tower Semiconductor
Ltd. 1,601 1,530
Accounts receivable, net 2,583 2,839
Inventory 4,838 9,064
Other current assets 1,395 1,894
---------- ----------
Total current assets 31,263 39,948
Property and equipment, net 4,786 5,480
Investment in Tower Semiconductor Ltd. 806 769
Other assets 3,142 4,038
---------- ----------
TOTAL ASSETS $ 39,997 $ 50,235
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables $ 3,002 $ 4,383
Accrued liabilities 2,644 2,462
Deferred income on shipments to distributors 1,159 1,152
Deferred royalty revenue 548 960
Current portion of debt and capital lease
obligations 1,544 2,292
---------- ----------
Total current liabilities 8,897 11,249
---------- ----------
Long-term liabilities:
Debt and capital lease obligations, less
current portion 912 1,618
---------- ----------
Total liabilities 9,809 12,867
---------- ----------
Stockholders' equity:
Common stock, at par value 29 29
Additional paid-in capital 166,314 164,138
Accumulated other comprehensive income 834 726
Accumulated deficit (136,989) (127,525)
---------- ----------
Total stockholders' equity 30,188 37,368
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 39,997 $ 50,235
========== ==========
(1) Derived from the December 31, 2006 audited balance sheet included
in the 2006 Annual Report on Form 10-K of QuickLogic Corporation.
QUICKLOGIC CORPORATION
SUPPLEMENTAL DATA
(Unaudited)
Percentage of Change in
Revenue Revenue
----------------- -----------
Q3 Q2
2006 2007
Q3 Q3 Q2 to to
Q3 Q3
2007 2006 2007 2007 2007
----- ----- ----- ----- -----
COMPOSITION OF REVENUE
Revenue by product (1):
New products 18% 25% 7% (24%) 165%
Mature products 50% 50% 52% 6% 4%
End-of-life products 32% 25% 41% 32% (16%)
Revenue by geography:
North America 50% 45% 60% 16% (11%)
Europe 22% 40% 20% (43%) 15%
Japan 9% 7% 9% 36% 6%
Rest of world 19% 8% 11% 151% 100%
Revenue by end-customer segment:
Instrumentation and test 47% 38% 32% 29% 59%
Military and aerospace systems 15% 10% 19% 68% (16%)
Datacom and telecom 14% 37% 26% (59%) (40%)
Graphics and imaging 19% 12% 20% 63% 3%
Computing 5% 3% 3% 58% 57%
(1) The Company changed the definition of its product families this
quarter. New products include ArcticLink, 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.
Source: QuickLogic Corporation
Released October 24, 2007
