PR Newswire | Nov 4, 2020 04:06PM EST

11/04 15:05 CST

QuickLogic Reports Fiscal 2020 Third Quarter Results SAN JOSE, Calif., Nov. 4, 2020

SAN JOSE, Calif., Nov. 4, 2020 /PRNewswire/ -- QuickLogic Corporation (NASDAQ: QUIK) ("QuickLogic" or the "Company"), a developer of ultra-low power multi-core voice enabled SoCs, embedded FPGA IP, and Endpoint AI solutions, today announced its financial results for the third quarter of fiscal 2020, ended September 27, 2020.

Recent Highlights

* SensiML now supports QuickLogic's QuickFeather IoT Development Kit * SensiML Analytics Toolkit seamlessly integrated with Google's TensorFlow Lite for Microcontrollers * SensiML supports AI-based algorithms running on SensorTile Box IoT kit from STMicroelectronics * QuickLogic joined CHIPS Alliance to expand open source FPGA initiative and to make FPGA tools more accessible * QuickLogic became a member of OpenHW Group to make hardware-based IP available to the open source ecosystem * SensiML joined the ARM AI Partner Program to simplify the deployment of Machine Learning (ML) and AI on intelligent endpoint devices * QuickLogic announced the availability of eFPGA technology on 28nm FD-SOI process and also became a member of the Samsung SAFE(tm) IP Partner Program

Fiscal 2020Third Quarter Financial Results

Total revenue for the third quarter of 2020 was $1.8 million, a decrease of 19% compared with the second quarter of 2020, and 18% compared with the third quarter of 2019. New product revenue was $0.7 million in the third quarter of 2020, a decrease of 22% compared with the second quarter of 2020, and 37% compared with the third quarter of 2019. The decreases were primarily due to lower sales of display bridge and connectivity product revenue. Mature product revenue was $1.1 million in the third quarter of 2020, down 17% compared with the second quarter of 2020, and flat compared with the third quarter of 2019.

Third quarter 2020 GAAP gross margin was 51.9%, compared with 45.7% in the second quarter of 2020, and 48.2% in the third quarter of 2019.

Third quarter 2020 non-GAAP gross margin was 53.9%, compared with 47.1% in the second quarter of 2020 and 48.9% in the third quarter of 2019.

Third quarter 2020 GAAP operating expenses of $3.0 million improved from $3.9 million in the second quarter of 2020, and $5.2 million in the third quarter of 2019.

Third quarter 2020 non-GAAP operating expenses of $2.6 million improved from $3.2 million in the second quarter of 2020, and from $4.5 million in the third quarter of 2019, due to updates to estimated restructuring charges.

Third quarter 2020 GAAP net loss was $2.1 million, or $0.19 per share, compared with a net loss of $3.0 million, or $0.35 per share, in the second quarter of 2020, and a net loss of $4.3 million, or $0.51 per share, in the third quarter of 2019.

Third quarter 2020 non-GAAP net loss was $1.7 million, or $0.15 per share, compared with a net loss of $2.2 million, or $0.26 per share, in the second quarter of 2020, and a net loss of $3.5 million, or $0.42 per share, in the third quarter of 2019.

Please see the section below titled "Non-GAAP Financial Measures" for an explanation of the Company's non-GAAP financial measures.

Conference Call

QuickLogic will hold a conference call at 2:30 p.m. Pacific Time / 5:30 p.m. Eastern Time today, November 4, 2020, to discuss its current financial results. The conference call will be webcast at QuickLogic's IR Site Events Page at https://ir.quicklogic.com/ir-calendar. To join the live conference, you may dial (877) 407-0792 and international participants should dial (201) 689-8263 by 2:15 p.m. Pacific Time. No Passcode is needed to join the conference call. A recording of the call will be available starting approximately one hour after completion. To access the recording, please call (412) 317-6671 and reference the passcode 13711703. The call recording, which can be accessed by phone, will be archived until Wednesday, November 11, 2020, and the webcast will be available for 12 months on the Company's website.

About QuickLogic

QuickLogic is a fabless semiconductor company that develops low power, multi-core semiconductor platforms and Intellectual Property (IP) for Artificial Intelligence (AI), voice and sensor processing. The solutions include an embedded FPGA IP (eFPGA) for hardware acceleration and pre-processing, and heterogeneous multi-core SoCs that integrate eFPGA with other processors and peripherals. The Analytics Toolkit from the Company's wholly-owned subsidiary, SensiML Corporation, completes the end-to-end solution with accurate sensor algorithms using AI technology. The full range of platforms, software tools and eFPGA IP enables the practical and efficient adoption of AI, voice and sensor processing across the multitude of mobile, wearable, hearable, consumer, industrial, edge and endpoint IoT applications. For more information, visit www.quicklogic.com and https://www.quicklogic.com/blog/.

QuickLogic uses its website (www.quicklogic.com), the company blog( https://www.quicklogic.com/blog/), corporate Twitter account (@QuickLogic_Corp), Facebook page( https://www.facebook.com/QuickLogic), and LinkedIn page( https://www.linkedin.com/company/13512/) as channels of distribution of information about its products, its planned financial and other announcements, its attendance at upcoming investor and industry conferences, and other matters. Such information may be deemed material information, and QuickLogic may use these channels to comply with its disclosure obligations under Regulation FD. Therefore, investors should monitor the Company's website and its social media accounts in addition to following the Company's press releases, SEC filings, public conference calls, and webcasts.

Non-GAAP Financial Measures

QuickLogic reports financial information in accordance with United States Generally Accepted Accounting Principles, or U.S. 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 U.S. GAAP. A reconciliation of U.S. 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 U.S. GAAP financial measures and the reconciliation of non-GAAP financial measures with their most directly comparable U.S. GAAP financial measures.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, expectations regarding our future business, and actual results may differ 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 by competitors; our ability to hire and retain qualified personnel; our ability to capitalize on synergies with our newly acquired subsidiary SensiML Corporation; changes in product demand or supply; general economic conditions; political events, international trade disputes, natural disasters and other business interruptions that could disrupt supply or delivery of, or demand for, the Company's products; the unpredictable and ongoing impact of the COVID-19 pandemic; and changes in tax rates and exposure to additional tax liabilities. These and other potential factors and uncertainties that could cause actual results to differ materially from the results contemplated or implied 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 is November 4, 2020, 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.

ArcticLink, QuickLogic and the QuickLogic logo are registered trademarks and EOS and ArcticPro are trademarks of QuickLogic Corporation. All other brands or trademarks are the property of their respective holders and should be treated as such.

CODE: QUIK-E

-Tables Follow -

QUICKLOGIC CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(Unaudited)

Three Months Ended Nine Months Ended

September September June 28, September September 27, 2020 29, 2019 2020 27, 2020 29, 2019

Revenue $ 1,780 $ 2,158 $ 2,196 $ 6,134 $ 7,439

Cost of revenue 857 1,117 1,192 3,092 3,397

Gross profit 923 1,041 1,004 3,042 4,042

Operating expenses:

Research and development 1,380 3,139 2,200 5,399 9,596

Selling, general and administrative 1,478 2,095 1,665 5,022 6,881

Restructuring expenses 111 - 34 624 -

Total operating expense 2,969 5,234 3,899 11,045 16,477

Loss from operations (2,046) (4,193) (2,895) (8,003) (12,435)

Interest expense (36) (63) (183) (299) (270)

Interest and other income, net 27 55 72 94 153

Loss before income taxes (2,055) (4,201) (3,006) (8,208) (12,552)

Provision for (benefit from) income taxes 10 70 (27) 1 (171)

Net loss $ (2,065) $ (4,271) $ (2,979) $ (8,209) $ (12,381)

Net loss per share:

Basic and Diluted (1) $ (0.19) $ (0.51) $ (0.35) $ (0.88) $ (1.66)

Weighted average shares:

Basic and Diluted (1) 11,023 8,313 8,560 9,315 7,441

Note: Net loss equals to comprehensive loss for all periods presented.

(1) Net loss per share, and weighted average shares outstanding basic anddiluted for the three and nine months ended September 29, 2019 are adjusted toreflect 1-for-14 reverse stock split effected on December 23, 2019.

QUICKLOGIC CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands)(Unaudited)

September 27, December 29, 2020 2019

ASSETS

Current assets:

Cash, cash equivalents and restricted cash $ 24,685 $ 21,548

Accounts receivable, net 1,115 1,991

Inventories 3,138 3,260

Other current assets 1,167 1,565

Total current assets 30,105 28,364

Property and equipment, net 563 830

Capitalized internal-use software, net 844 333

Right of use assets 1,995 2,370

Intangible assets, net 897 1,008

Goodwill 185 185

Other assets 279 314

TOTAL ASSETS $ 34,868 $ 33,404

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:

Revolving line of credit $ 15,000 $ 15,000

Trade payables 1,010 1,003

Accrued liabilities 1,368 1,133

Paycheck protection program loan, current portion 660 -

Deferred revenue 45 158

Current portion of capital lease obligations 709 704

Total current liabilities 18,792 17,998

Long-term liabilities:

Paycheck protection program loan, less current portion 532 -

Capital lease obligations, less current portion 1,297 1,583

Total liabilities 20,621 19,581

Stockholders' equity:

Common stock, par value 11 8

Additional paid-in capital 305,703 297,073

Accumulated deficit (291,467) (283,258)

Total stockholders' equity 14,247 13,823

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 34,868 $ 33,404

QUICKLOGIC CORPORATIONSUPPLEMENTAL RECONCILIATIONS OF US GAAP AND NON-GAAP FINANCIAL MEASURES(in thousands, except per share amounts and percentages)(Unaudited)

Three Months Ended Nine Months Ended

September September June 28, September September 27, 2020 29, 2019 2020 27, 2020 29, 2019

US GAAP loss from operations $ (2,046) $ (4,193) $ (2,895) $ (8,003) $ (12,435)

Adjustment for stock-based compensationwithin:

Cost of revenue 37 15 31 80 59

Research and development 51 521 486 73 1,708

Selling, general and administrative 170 212 224 448 723

Restructuring expenses and asset write-offs (1) 120 - 34 633 2

Non-GAAP loss from operations $ (1,668) $ (3,445) $ (2,120) $ (6,769) $ (9,943)

US GAAP net loss $ (2,065) $ (4,271) $ (2,979) $ (8,209) $ (12,381)

Adjustment for stock-based compensationwithin:

Cost of revenue 37 15 31 80 59

Research and development 51 521 486 73 1,708

Selling, general and administrative 170 212 224 448 723

Restructuring expenses and asset write-offs (1) 120 - 34 633 2

Non-GAAP net loss $ (1,687) $ (3,523) $ (2,204) $ (6,975) $ (9,889)

US GAAP net loss per share, basic and diluted (2) $ (0.19) $ (0.51) $ (0.35) $ (0.88) $ (1.66)

Adjustment for stock-based compensation 0.03 0.09 0.09 0.07 0.33

Restructuring expenses and asset write-offs (1) 0.01 * * 0.06 0

Non-GAAP net loss per share, basic and diluted $ (0.15) $ (0.42) $ (0.26) $ (0.75) $ (1.33)

US GAAP gross margin percentage 51.9 % 48.2 % 45.7 % 49.6 % 54.3 %

Adjustment for stock-based compensation 2.0 % 0.7 % 1.4 % 1.3 % 0.8 %included in cost of revenue

Non-GAAP gross margin percentage 53.9 % 48.9 % 47.1 % 50.9 % 55.1 %

* Figures were not considered for reconciliation due to the insignificantamount.

(1) Include asset write-offs of $9,000 in the three and nine months endedSeptember 27, 2020 and $2,000 for the nine months ended September 29, 2019.

(2) Net loss per share for the three and nine months ended September 29,2019 is adjusted to reflect 1-for-14 reverse stock split effected on December23, 2019.

QUICKLOGIC CORPORATIONSUPPLEMENTAL DATA(Unaudited)

Percentage of Revenue Change in Revenue

Q3 2020 Q3 2019 Q2 2020 Q3 2020 to Q3 2020 to Q3 2019 Q2 2020

COMPOSITION OF REVENUE

Revenue by product: (1)

New products 36 % 47 % 37 % (37) % (22) %

Mature products 64 % 53 % 63 % - % (17) %

Revenue by geography:

Asia Pacific 18 % 25 % 36 % (39) % (59) %

North America 61 % 70 % 58 % (28) % (15) %

Europe 21 % 5 % 6 % 233 % 176 %

_____________________

New products include all products manufactured on 180 nanometer or smaller [(1) semiconductor processes, eFPGA IP license, QuickAI and SensiML AI software ] as a service (SaaS) revenues. Mature products include all products produced on semiconductor processes larger than 180 nanometer.

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SOURCE QuickLogic Corporation