QuickLogic Announces Fourth Quarter and Fiscal 2014 Results

SUNNYVALE, CA--(Marketwired - Feb 4, 2015) - QuickLogic Corporation (NASDAQ: QUIK), the innovator of ultra-low power Customer Specific Standard Products (CSSPs), today announced the financial results for its fourth quarter and fiscal year ended December 28, 2014.

Total revenue for the fourth quarter of 2014 was $5.7 million, representing an increase of 39% compared to $4.1 million in the third quarter of 2014. New product revenue for the fourth quarter of 2014 was $3.7 million, an increase of 68% compared to $2.2 million in the third quarter of 2014. Total revenue for 2014 was up 7% at $27.8 million, compared with total revenue of $26 million in 2013. In 2014, new product revenue was up 6% at $19.3 million, compared with new product revenue of $18.2 million in 2013.

Under generally accepted accounting principles in the United States of America (GAAP), the net loss for the fourth quarter of 2014 was $4.1 million, or $0.07 per share, compared with a net loss of $3.9 million, or $0.07 per share, in the third quarter of 2014 and a net loss of $3.2 million, or $0.06 per share, in the fourth quarter of 2013. Non-GAAP net loss for the fourth quarter of 2014 was $3.7 million, or $0.06 per share, compared with a non-GAAP net loss of $3.5 million, or $0.06 per share, in the third quarter of 2014 and a non-GAAP net loss of $2.2 million, or $0.04 per share, in the fourth quarter of 2013.

GAAP net loss for 2014 was $13.1 million, or $0.23 per share, compared with a net loss of $12.3 million, or $0.27 per share, in 2013. Non-GAAP net loss for 2014 was $10.8 million, or $0.19 per share, compared with a non-GAAP net loss of $9.9 million, or $0.22 per share, in 2013.

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Standard Time today, February 4, 2015, 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, you may dial (877) 377-7094 by 2:20 p.m. Pacific Standard 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: 67815194. The call recording will be archived until Wednesday, February 11, 2015 and the webcast will be available for 12 months.

About QuickLogic

QuickLogic Corporation (NASDAQ: QUIK) is the leading provider of ultra-low power, customizable Sensor Hub, Display, and Connectivity semiconductor solutions for smartphone, tablet, wearable, and mobile enterprise OEMs. Called Customer Specific Standard Products (CSSPs), these programmable 'silicon plus software' solutions enable our customers to bring hardware-differentiated products to market quickly and cost effectively. 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 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. 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.

QuickLogic is a registered trademark and the QuickLogic logo is a trademark 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 28, 2014				December 29, 2013				September 28, 2014				December 28, 2014				December 29, 2013
Revenue			$	5,721			$	8,863			$	4,124			$	27,845			$	26,072
Cost of revenue, excluding inventory write-down				3,487				5,923				2,364				16,678				16,754
Inventory write-down (sold)				22				172				(3	)			118				551
Gross profit				2,212				2,768				1,763				11,049				8,767
Operating expenses:
	Research and development			3,432				2,473				3,057				12,186				8,375
	Selling, general and administrative			2,771				3,354				2,579				11,663				12,002
	Restructuring cost			--				--				--				--				181
Total operating expense				6,203				5,827				5,636				23,849				20,558
Loss from operations				(3,991	)			(3,059	)			(3,873	)			(12,800	)			(11,791	)
Gain on sale of TowerJazz Semiconductor Ltd. shares				--				--				--				--				181
Interest expense				(18	)			(17	)			(34	)			(85	)			(54	)
Interest income and other (expense), net				(47	)			(27	)			(17	)			(126	)			(157	)
Loss before income taxes				(4,056	)			(3,103	)			(3,924	)			(13,011	)			(11,821	)
Provision for income taxes				86				86				6				68				455
Net loss			$	(4,142	)		$	(3,189	)		$	(3,930	)		$	(13,079	)		$	(12,276	)
Net loss per share:
	Basic		$	(0.07	)		$	(0.06	)		$	(0.07	)		$	(0.23	)		$	(0.27	)
	Diluted		$	(0.07	)		$	(0.06	)		$	(0.07	)		$	(0.23	)		$	(0.27	)
Weighted average shares:
	Basic			55,982				49,130				55,812				55,401				45,762
	Diluted			55,982				49,130				55,812				55,401				45,762

QUICKLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
				December 28, 2014				December 29, 2013 (1)
ASSETS
Current assets:
	Cash and cash equivalents			$	30,050			$	37,406
	Accounts receivable, net				1,552				3,261
	Inventories				4,952				4,136
	Other current assets				1,146				1,272
		Total current assets			37,700				46,075
Property and equipment, net					3,217				2,840
Other assets					222				211
TOTAL ASSETS				$	41,139			$	49,126
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Revolving line of credit			$	--			$	1,000
	Trade payables				2,506				3,578
	Accrued liabilities				1,574				3,519
	Current portion of capital lease obligations				225				177
		Total current liabilities			4,305				8,274
Long-term liabilities:
	Revolving line of credit				1,000				--
	Capital lease obligations, less current portion				191				133
	Other long-term liabilities				76				121
		Total liabilities			5,572				8,528
Stockholders' equity:
	Common stock, at par value				56				54
	Additional paid-in capital				238,419				230,373
	Accumulated deficit				(202,908	)			(189,829	)
		Total stockholders' equity			35,567				40,598
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	41,139			$	49,126

(1)	Derived from the December 29, 2013 audited balance sheet included in the 2013 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)
(Unaudited)
				Three Months Ended												Year Ended
				December 28, 2014				December 29, 2013				September 28, 2014				December 28, 2014				December 29, 2013
GAAP loss from operations				$	(3,991	)		$	(3,059	)		$	(3,873	)		$	(12,800	)		$	(11,791	)
	Adjustment for stock-based compensation within:
		Cost of revenue			27				156				32				137				232
		Research and development			174				380				176				924				666
		Selling, general and administrative			291				376				244				1,181				1,081
	Adjustment for the write-off of equipment within:
		Cost of revenue			--				66				--				--				66
	Selling, general and administrative				--				27				5				5				30
	Adjustment for restructuring costs				--				--				--				--				181
Non-GAAP loss from operations				$	(3,499	)		$	(2,054	)		$	(3,416	)		$	(10,553	)		$	(9,535	)
GAAP net loss				$	(4,142	)		$	(3,189	)		$	(3,930	)		$	(13,079	)		$	(12,276	)
	Adjustment for stock-based compensation within:
		Cost of revenue			27				156				32				137				232
		Research and development			174				380				176				924				666
		Selling, general and administrative			291				376				244				1,181				1,081
	Adjustment for the write-off of equipment within:
		Cost of revenue			--				66				--				--				66
		Selling, general and administrative			--				27				5				5				30
	Adjustment for restructuring costs				--				--				--				--				181
	Adjustment for gain on sale of TowerJazz Semiconductor Ltd. shares				--				--				--				--				(181	)
	Adjustment for tax effect on other comprehensive income				--				--				--				--				273
Non-GAAP net loss				$	(3,650	)		$	(2,184	)		$	(3,473	)		$	(10,832	)		$	(9,928	)
GAAP net loss per share				$	(0.07	)		$	(0.06	)		$	(0.07	)		$	(0.23	)		$	(0.27	)
	Adjustment for stock-based compensation				0.01				0.02				0.01				0.04				0.04
	Adjustment for the write-off of equipment				--				*				--				--				*
	Adjustment for restructuring costs				--				--				--				--				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 loss per share				$	(0.06	)		$	(0.04	)		$	(0.06	)		$	(0.19	)		$	(0.22	)
GAAP gross margin percentage					38.7	%			31.2	%			42.7	%			39.7	%			33.6	%
	Adjustment for stock-based compensation				0.4	%			1.8	%			0.8	%			0.5	%			0.9	%
	Adjustment for the write-off equipment				--	%			0.7	%			--	%			--	%			0.3	%
	Adjustment for restructuring costs				--	%			--	%			--	%			--	%			*
Non-GAAP gross margin percentage					39.1	%			33.7	%			43.5	%			40.2	%			34.8	%

* Figures were not considered for reconciliation due to the insignificant amount.

QUICKLOGIC CORPORATION
SUPPLEMENTAL DATA
(Unaudited)
			Percentage of Revenue												Change in Revenue
			Q4 2014			Q3 2014			Fiscal 2014			Fiscal 2013			Q3 2014 to Q4 2014			2013 to 2014
COMPOSITION OF REVENUE
Revenue by product: (1)
	New products		64	%		54	%		69	%		70	%		68	%		6	%
	Mature products		36	%		46	%		31	%		30	%		8	%		9	%
Revenue by geography:
	Asia Pacific		70	%		57	%		72	%		77	%		70	%		--	%
	Europe		10	%		17	%		12	%		7	%		(16	)%		89	%
	North America		20	%		26	%		16	%		16	%		7	%		3	%

(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.