QuickLogic Announces Fourth Quarter and Fiscal 2013 Results

SUNNYVALE, CA--(Marketwired - Feb 5, 2014) - QuickLogic Corporation (NASDAQ: QUIK), the leader in low-power Customer Specific Standard Products (CSSPs), today announced the financial results for its fourth quarter and fiscal year ended December 29, 2013.

Total revenue for the fourth quarter of 2013 was $8.9 million, down 2% sequentially and up 187% from the fourth quarter of 2012. During the fourth quarter, new product revenue of $7.0 million was down 1% sequentially and up 601% from the fourth quarter of 2012.

Total revenue for 2013 was up 74% at $26.1 million, compared with total revenue of $14.9 million in 2012. In 2013, new product revenue was up 208% at $18.2 million, compared with new product revenue of $5.9 million in 2012.

Under generally accepted accounting principles (GAAP), the net loss for the fourth quarter of 2013 was $3.2 million or $0.06 per share, compared with a net loss of $2.3 million, or $0.05 per share, in the third quarter of 2013, and a net loss of $2.6 million, or $0.06 per share, in the fourth quarter of 2012. Non-GAAP net loss for the fourth quarter of 2013 was $2.2 million, or $0.04 per share, compared with a non-GAAP net loss of $2.0 million, or $0.04 per share, in the third quarter of 2013, and a non-GAAP net loss of $2.0 million, or $0.04 per share, in the fourth quarter of 2012. 

GAAP net loss for 2013 was $12.3 million, or $0.27 per share, compared with a net loss of $12.3 million, or $0.29 per share, in 2012. Non-GAAP net loss for 2013 was $9.9 million, or $0.22 per share, compared with a non-GAAP net loss of $10.3 million, or $0.25 per share, in 2012.

Conference Call
QuickLogic will hold a conference call at 2:30 p.m. Pacific Standard Time today, February 5, 2014, 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 Standard Time today. 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: 43763797. The call recording will be archived until Wednesday, February 12, 2014 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 OEMs and 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 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 and QuickLogic 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.

QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended												Year Ended
			December 29, 2013				December 30, 2012				September 29, 2013				December 29, 2013				December 30, 2012
Revenue			$	8,863			$	3,086			$	9,066			$	26,072			$	14,944
Cost of revenue, excluding inventory write-down				5,923				1,546				5,907				16,754				7,431
Inventory write-down				172				19				130				551				447
Gross profit				2,768				1,521				3,029				8,767				7,066
Operating expenses:
	Research and development			2,473				1,624				2,052				8,375				8,743
	Selling, general and administrative			3,354				2,377				3,207				12,002				10,481
	Restructuring cost (credit)			-				-				(32	)			181				-
Income (loss) from operations				(3,059	)			(2,480	)			(2,198	)			(11,791	)			(12,158	)
Gain on sale of TowerJazz Semiconductor Ltd. shares				-				-				-				181				-
Interest expense				(17	)			(12	)			(8	)			(54	)			(61	)
Interest income and other (expense), net				(27	)			(32	)			(74	)			(157	)			(77	)
Income (loss) before income taxes				(3,103	)			(2,524	)			(2,280	)			(11,821	)			(12,296	)
Provision for (benefit from) income taxes				86				35				(18	)			455				18
Net income (loss)			$	(3,189	)		$	(2,559	)		$	(2,262	)		$	(12,276	)		$	(12,314	)
Net income (loss) per share:
	Basic		$	(0.06	)		$	(0.06	)		$	(0.05	)		$	(0.27	)		$	(0.29	)
	Diluted		$	(0.06	)		$	(0.06	)		$	(0.05	)		$	(0.27	)		$	(0.29	)
Weighted average shares:
	Basic			49,130				44,400				44,761				45,762				41,831
	Diluted			49,130				44,400				44,761				45,762				41,831

QUICKLOGIC CORPORATION
SUPPLEMENTAL RECONCILIATIONS OF GAAP AND NON-GAAP FINANCIAL MEASURES
(In thousands, except per share amounts)
(Unaudited)
				Three Months Ended												Year Ended
				December 29, 2013				December 30, 2012				September 29, 2013				December 29, 2013				December 30, 2012
GAAP income (loss) from operations				$	(3,059	)		$	(2,480	)		$	(2,198	)		$	(11,791	)		$	(12,158	)
	Adjustment for stock-based compensation within:
		Cost of revenue			156				39				24				232				179
		Research and development			380				116				74				666				455
		Selling, general and administrative			376				429				232				1,081				1,369
	Adjustment for the write-off of equipment within:
		Cost of revenue			66				-				-				66				-
		Selling, general and administrative			27				-				3				30				25
	Adjustment for restructuring costs (credit)				-				-				(32	)			181				-
Non-GAAP income (loss) from operations				$	(2,054	)		$	(1,896	)		$	(1,897	)		$	(9,535	)		$	(10,130	)
GAAP net income (loss)				$	(3,189	)		$	(2,559	)		$	(2,262	)		$	(12,276	)		$	(12,314	)
	Adjustment for stock-based compensation within:
		Cost of revenue			156				39				24				232				179
		Research and development			380				116				74				666				455
		Selling, general and administrative			376				429				232				1,081				1,369
	Adjustment for the write-off of equipment within:
		Cost of revenue			66				-				-				66				-
		Selling, general and administrative			27				-				3				30				25
		Other expense
	Adjustment for restructuring costs (credit)				-				-				(32	)			181				-
	Adjustment for gain on sale of TowerJazz Semiconductor Ltd. shares				-				-				-				(181	)			-
	Adjustment for tax effect on other comprehensive income				-				-				-				273				-
Non-GAAP net income (loss)				$	(2,184	)		$	(1,975	)		$	(1,961	)		$	(9,928	)		$	(10,286	)
GAAP net income (loss) per share				$	(0.06	)		$	(0.06	)		$	(0.05	)		$	(0.27	)		$	(0.29	)
	Adjustment for stock-based compensation				0.02				0.02				0.01				0.04				0.04
	Adjustment for write-off of equipment				*				-				*				*				*
	Adjustment for restructuring costs (credit)				-				-				*				0.01				-
	Adjustment for gain on sale of TowerJazz Semiconductor Ltd. shares				-				-				-				(0.01	)			-
	Adjustment for tax effect on other comprehensive income				-				-				-				0.01				-
Non-GAAP net income (loss) per share				$	(0.04	)		$	(0.04	)		$	(0.04	)		$	(0.22	)		$	(0.25	)
GAAP gross margin percentage					31.2	%			49.3	%			33.4	%			33.6	%			47.3	%
	Adjustment for stock-based compensation				1.8				1.3				0.3				0.9				1.3
	Adjustment for restructuring costs (credit)				-				-				*				*				-
	Adjustment for write-off of equipment				0.7				-				-				0.3				*
Non-GAAP gross margin percentage					33.7	%			50.6	%			33.7	%			34.8	%			48.6	%

* Figures were not considered in the reconciliation of Non-GAAP net loss per share and gross margin percentage due to the insignificant amount.

QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
				December 29, 2013				December 30, 2012(1)
ASSETS
Current assets:
	Cash and cash equivalents			$	37,406			$	22,578
	Short-term investment in TowerJazz Semiconductor Ltd.				-				345
	Accounts receivable, net				3,261				1,242
	Inventories				4,136				3,028
	Other current assets				1,272				986
		Total current assets			46,075				28,179
Property and equipment, net					2,840				2,659
Other assets					211				186
TOTAL ASSETS				$	49,126			$	31,024
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Revolving line of credit			$	1,000			$	-
	Trade payables				3,578				1,965
	Accrued liabilities				3,519				1,214
	Current portion of capital lease obligations				177				160
		Total current liabilities			8,274				3,339
Long-term liabilities:
	Capital lease obligations, less current portion				133				266
	Other long-term liabilities				121				141
		Total liabilities			8,528				3,746
Stockholders' equity:
	Common stock, at par value				54				45
	Additional paid-in capital				229,220				204,797
	Accumulated other comprehensive income (loss)				-				(11	)
	Accumulated deficit				(188,676	)			(177,553	)
		Total stockholders' equity			40,598				27,278
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	49,126			$	31,024

(1) Derived from the December 30, 2012 audited balance sheet included in the 2012 Annual Report on Form 10K of QuickLogic Corporation.

QUICKLOGIC CORPORATION

SUPPLEMENTAL DATA

(Unaudited)

			Percentage of Revenue												Change in Revenue
			Q4 2013			Q3 2013			Fiscal 2013			Fiscal 2012			Q3 2013 to Q4 2013			2012 to 2013
COMPOSITION OF REVENUE
Revenue by product: (1)
	New products		79	%		79	%		70	%		40	%		(1	)%		208	%
	Mature products		21	%		21	%		30	%		60	%		(6	)%		(13	)%
Revenue by geography:
	Korea		69	%		68	%		56	%		-			-			29849	%
	United States		9	%		11	%		14	%		34	%		(21	)%		(26	)%
	Japan		6	%		5	%		8	%		22	%		24	%		(38	)%
	Malaysia		6	%		6	%		8	%		11	%		(10	)%		21	%
	Europe		5	%		6	%		7	%		16	%		(26	)%		(26	)%
	China		4	%		4	%		5	%		12	%		11	%		(30	)%
	Rest of North America		1	%		-			2	%		2	%		160	%		42	%
	Rest of Asia Pacific		-			-			-			3	%		(46	)%		(82	)%

(1) New products include ArcticLink®, ArcticLink II, ArcticLink III, Eclipse™ II, PolarPro®, PolarPro II, PolarPro III, and QuickPCI II. Mature products include Eclipse, EclipsePlus, pASIC® 1, pASIC 2, pASIC 3, QuickFC, QuickMIPS, QuickPCI, QuickRAM, and V3, as well as royalty revenue, programming hardware and software.