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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.         

Contacts:
Sue Cheung
Principal Accounting Officer and Corporate Controller
(408) 990-4076

Email Contact 

Andrea Vedanayagam
(408) 656-4494

Email Contact