QuickLogic Announces Fiscal 2016 Second Quarter Results

SUNNYVALE, CA -- (Marketwired) -- Aug 03, 2016 -- QuickLogic Corporation (NASDAQ: QUIK), the innovator of ultra-low power programmable sensor processing solutions, today announced the financial results for its fiscal second quarter ended July 3, 2016.

Total revenue for the second quarter of 2016 was $2.72 million, representing a decrease of 8% compared to $2.95 million in the first quarter of 2016 and a decrease of 45% compared to $4.97 million in the second quarter of 2015. New product revenue for the second quarter of 2016 was $1.20 million, a decrease of 20% compared to $1.49 million in the first quarter of 2016 and a decrease of 59% compared to $2.95 million in the second quarter of 2015. During the second quarter of 2016, mature product revenue was $1.52 million, an increase of 4% compared to $1.46 million sequentially and a decrease of 25% compared to $2.02 million in the second quarter of 2015. New product revenue accounted for 44% of the total revenue in the second quarter of 2016 compared to 51% in the first quarter of 2016 and 59% in the second quarter of 2015.

Under generally accepted accounting principles in the United States of America (GAAP), the net loss for the second quarter of 2016 was $5.57 million, or $0.08 per share, compared to a net loss of $5.09 million, or $0.09 per share in the first quarter of 2016 and a net loss of $4.28 million, or $0.08 per share, in the second quarter of 2015. Non-GAAP net loss for the second quarter of 2016 was $4.82 million, or $0.07 per share, compared to a non-GAAP net loss of $4.53 million, or $0.08 per share in the first quarter of 2016 and a non-GAAP net loss of $3.62 million, or $0.06 per share, in the second quarter of 2015.

GAAP and Non-GAAP cost of goods (COGS) for three and six months period ended July 3, 2016, include an inventory reserve of $203,000 for PolarPro III product. This reserve had an impact of 7.5% and 3% on gross margins for the three and six months period ended July 3, 2016. GAAP research and development (R&D) costs include a fixed asset write down of $312,000. This write down was eliminated in the presentation of non-GAAP consolidated statement of operation in the three and six months period ended July 3, 2016. The Impact of the write down on the earnings per share for the three and six months period ended July 3, 2016 was not material.

Conference Call

QuickLogic Corporation (NASDAQ: QUIK) will hold a conference call at 2:30 p.m. Pacific Daylight Saving Time/ 5:30 p.m. Eastern Daylight Saving Time today, August 3, 2016, to discuss its current financial results. The conference call will be webcasted and can be accessed via the Company's website at http://ir.quicklogic.com/events.cfm. To join the live conference, you may dial (877) 377-7094 by 2:20 p.m. Pacific Daylight Saving Time. A recording of the call will be available starting one hour after completion of the call. To access the recording, please call (404) 537-3406 and reference the passcode: 50333781. The call recording will be archived until Wednesday, August 10, 2016 and the webcast will be available for 12 months on the Company's website.

About QuickLogic

QuickLogic Corporation (NASDAQ: QUIK) enables OEMs to maximize battery life for highly differentiated, immersive user experiences with Smartphone, Wearable and IoT devices. QuickLogic delivers these benefits through industry leading ultra-low power customer programmable SoC semiconductor solutions, embedded software, and algorithm solutions for always-on voice and sensor processing. For more information about QuickLogic, 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, 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 the Company's 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.

Forward Looking Statements

This press release contains forward-looking statements regarding our future business expectations, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors including: 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 and other potential factors and uncertainties that could cause actual results to differ from the results predicted are described in more detail in the Company's public reports filed with the Securities and Exchange Commission (the "SEC"), including the risks discussed in the "Risk Factors" section in the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and in the Company's prior press releases, which are available on the Company's Investor Relations website at http://ir.quicklogic.com/and on the SEC website at www.sec.gov. In addition, please note that the date of this press release as August 3, 2016, and any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update these statements as a result of new information or future events.

QuickLogic and the QuickLogic 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                  Six  Months  Ended    
                                                  -----------------------------    -------------------  
                                                    July  3,      June  28,    April  3,      July  3,      June  28,  
                                                      2016              2015            2016            2016              2015      
                                                  --------    ---------    --------    --------    ---------  
Revenue                                    $    2,717    $      4,973    $    2,950    $    5,667    $    11,132  
Cost  of  revenue                          1,941            2,830          1,794          3,735            6,110  
                                                  --------    ---------    --------    --------    ---------  
Gross  profit                                    776            2,143          1,156          1,932            5,022  
Operating  expenses:                                                                                                                  
    Research  and                                                                                                                            
      development                            3,683            3,493          3,447          7,130            6,970  
    Selling,  general  and                                                                                                            
      administrative                      2,591            2,690          2,693          5,284            5,650  
    Restructuring  cost                      --                169                --                --                169  
                                                  --------    ---------    --------    --------    ---------  
Total  operating  expense          6,274            6,352          6,140        12,414          12,789  
                                                  --------    ---------    --------    --------    ---------  
Loss  from  operations              (5,498)        (4,209)      (4,984)    (10,482)        (7,767)
Interest  expense                            (34)              (15)            (38)            (72)              (29)
Interest  income  and                                                                                                                  
  other  (expense),  net                  (15)              (33)              (7)            (22)              (59)
                                                  --------    ---------    --------    --------    ---------  
Loss  before  income  taxes      (5,547)        (4,257)      (5,029)    (10,576)        (7,855)
Provision  for  income                                                                                                                
  taxes                                                  27                  21                64                91                  61  
                                                  --------    ---------    --------    --------    ---------  
Net  loss                                  $  (5,574)  $    (4,278)  $  (5,093)  $(10,667)  $    (7,916)
                                                  ========    =========    ========    ========    =========  
Net  loss  per  share:                                                                                                                  
    Basic                                    $    (0.08)  $      (0.08)  $    (0.09)  $    (0.17)  $      (0.14)
                                                  ========    =========    ========    ========    =========  
    Diluted                                $    (0.08)  $      (0.08)  $    (0.09)  $    (0.17)  $      (0.14)
                                                  ========    =========    ========    ========    =========  
Weighted  average  shares:                                                                                                        
    Basic                                        67,415          56,359        58,371        62,893          56,275  
                                                  ========    =========    ========    ========    =========  
    Diluted                                    67,415          56,359        58,371        62,893          56,275  
                                                  ========    =========    ========    ========    =========  
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                      QUICKLOGIC  CORPORATION                                                      
                                      CONDENSED  CONSOLIDATED  BALANCE  SHEETS                                        
                                                              (In  thousands)                                                              
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                                                                                                January  3,    
                                                                                                July  3,  2016          2016  (1)      
                                                                                              -------------    -------------  
                                        ASSETS                                                                                                    
Current  assets:                                                                                                                          
    Cash  and  cash  equivalents                                        $            18,970    $            19,136  
    Accounts  receivable,  net                                                          1,485                    1,601  
    Inventories                                                                                    2,318                    2,878  
    Other  current  assets                                                                      983                    1,312  
                                                                                              -------------    -------------  
        Total  current  assets                                                            23,756                  24,927  
Property  and  equipment,  net                                                        3,090                    3,315  
Other  assets                                                                                          307                        219  
                                                                                              -------------    -------------  
TOTAL  ASSETS                                                                      $            27,153    $            28,461  
                                                                                              =============    =============  
          LIABILITIES  AND  STOCKHOLDERS'  EQUITY                                                                      
Current  liabilities:                                                                                                                
    Trade  payables                                                              $              1,537    $              4,032  
    Accrued  liabilities                                                                    1,434                    1,482  
    Current  portion  of  capital  lease  obligations                      142                        281  
                                                                                              -------------    -------------  
        Total  current  liabilities                                                    3,113                    5,795  
Long-term  liabilities:                                                                                                            
    Revolving  line  of  credit                                                          4,000                    2,000  
    Capital  lease  obligations,  less  current                                                                      
      portion                                                                                              109                        208  
    Other  long-term  liabilities                                                        120                        133  
                                                                                              -------------    -------------  
        Total  liabilities                                                                    7,342                    8,136  
                                                                                              -------------    -------------  
Stockholders'  equity:                                                                                                              
    Common  stock,  at  par  value                                                            68                          57  
    Additional  paid-in  capital                                                  251,166                241,024  
    Accumulated  deficit                                                              (231,423)            (220,756)
                                                                                              -------------    -------------  
        Total  stockholders'  equity                                                19,811                  20,325  
                                                                                              -------------    -------------  
TOTAL  LIABILITIES  AND  STOCKHOLDERS'  EQUITY          $            27,153    $            28,461  
                                                                                              =============    =============  
(1)  Derived  from  the  January  3,  2016  audited  balance  sheet  included  in  the    
        2015  Annual  Report  on  Form  10-K  of  QuickLogic  Corporation.                            
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                      QUICKLOGIC  CORPORATION                                                      
        SUPPLEMENTAL  RECONCILIATIONS  OF  GAAP  AND  NON-GAAP  FINANCIAL  MEASURES        
                    (In  thousands,  except  per  share  amounts  and  percentages)                    
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                              Three  Months  Ended                  Six  Months  Ended    
                                                  -----------------------------    -------------------  
                                                    July  3,      June  28,    April  3,      July  3,      June  28,  
                                                      2016              2015            2016            2016              2015      
                                                  --------    ---------    --------    --------    ---------  
GAAP  loss  from                                                                                                                            
  operations                            $  (5,498)  $    (4,209)  $  (4,984)  $(10,482)  $    (7,767)
    Adjustment  for  stock-                                                                                                          
      based  compensation                                                                                                              
      within:                                                                                                                                    
        Cost  of  revenue                        47                  27                38                85                  66  
        Research  and                                                                                                                        
          development                            175                212              291              466                403  
        Selling,  general  and                                                                                                        
          administrative                      217                252              233              450                519  
    Adjustment  for  the                                                                                                                
      write-off  of                                                                                                                          
      equipment  within:                                                                                                                
    Research  and                                                                                                                            
      development                                312                  --                --              312                  --  
    Adjustment  for                                                                                                                        
      restructuring  costs                  --                169                --                --                169  
                                                  --------    ---------    --------    --------    ---------  
Non-GAAP  loss  from                                                                                                                    
  operations                            $  (4,747)  $    (3,549)  $  (4,422)  $  (9,169)  $    (6,610)
                                                  ========    =========    ========    ========    =========  
GAAP  net  loss                        $  (5,574)  $    (4,278)  $  (5,093)  $(10,667)  $    (7,916)
    Adjustment  for  stock-                                                                                                          
      based  compensation                                                                                                              
      within:                                                                                                                                    
        Cost  of  revenue                        47                  27                38                85                  66  
        Research  and                                                                                                                        
          development                            175                212              291              466                403  
        Selling,  general  and                                                                                                        
          administrative                      217                252              233              450                519  
    Adjustment  for  the                                                                                                                
      write-off  of                                                                                                                          
      equipment  within:                                                                                                                
    Research  and                                                                                                                            
      development                                312                  --                --              312                  --  
    Adjustment  for                                                                                                                        
      restructuring  costs                  --                169                --                --                169  
                                                  --------    ---------    --------    --------    ---------  
Non-GAAP  net  loss                $  (4,823)  $    (3,618)  $  (4,531)  $  (9,354)  $    (6,759)
                                                  ========    =========    ========    ========    =========  
GAAP  net  loss  per  share    $    (0.08)  $      (0.08)  $    (0.09)  $    (0.17)  $      (0.14)
    Adjustment  for  stock-                                                                                                          
      based  compensation                0.01              0.01            0.01            0.02              0.02  
    Adjustment  for  the                                                                                                                
      write-off  of                                                                                                                          
      equipment                                          *                --                --                    *                --  
    Adjustment  for                                                                                                                        
      restructuring  costs                  --              0.01                --                --                      *
                                                  --------    ---------    --------    --------    ---------  
Non-GAAP  net  loss  per                                                                                                              
  share                                      $    (0.07)  $      (0.06)  $    (0.08)  $    (0.15)  $      (0.12)
                                                  ========    =========    ========    ========    =========  
GAAP  gross  margin                                                                                                                      
  percentage                                    28.6%            43.1%          39.2%          34.1%            45.1%
    Adjustment  for  stock-                                                                                                          
      based  compensation                  1.7%              0.5%            1.3%            1.5%              0.6%
    Adjustment  for  the                                                                                                                
      write-off  equipment                      *                --%              --%                  *                --%
    Adjustment  for                                                                                                                        
      restructuring  costs                  --%                    *              --%              --%                    *
                                                  ========    =========    ========    ========    =========  
Non-GAAP  gross  margin                                                                                                              
  percentage                                    30.3%            43.6%          40.5%          35.6%            45.7%
                                                  ========    =========    ========    ========    =========  
                                                                                                                                                        
  *  Figures  were  not  considered  for  reconciliation  due  to  the  insignificant    
                                                                      amount.                                                                    
                                                                                                                                                        
                                                                                                                                                        
                                                                                                                                                        
                                                    QUICKLOGIC  CORPORATION                                                        
                                                          SUPPLEMENTAL  DATA                                                            
                                                                (Unaudited)                                                                  
                                                                                                                                                        
                                                  Percentage  of  Revenue                Change  in  Revenue          
                                          ----------------------------    -----------------------    
                                                                                                      Q2  2015  to      Q1  2016  to    
                                            Q2  2016      Q2  2015      Q1  2016        Q2  2016            Q2  2016      
                                          --------    --------    --------    ----------      ----------    
COMPOSITION  OF                                                                                                                            
  REVENUE                                                                                                                                        
Revenue  by  product:                                                                                                                  
  (1)                                                                                                                                                
    New  products                          44%              59%              51%                (59)%                (20)%
    Mature  products                    56%              41%              49%                (25)%                    4%  
Revenue  by                                                                                                                                    
  geography:                                                                                                                                  
    Asia  Pacific                          65%              70%              58%                (49)%                    3%  
    North  America                        24%              22%              28%                (41)%                (22)%
    Europe                                      11%                8%              14%                (26)%                (26)%
(1)  New  products  include  all  products  manufactured  on  180  nanometer  or            
        smaller  semiconductor  processes.  Mature  products  include  all  products      
        produced  on  semiconductor  processes  larger  than  180  nanometers.                  
 

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