QUICKLOGIC CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited) Three Months Ended Year Ended ---------------------------- ------------------ January January October January January 1, 2017 3, 2016 2, 2016 1, 2017 3, 2016 -------- -------- -------- -------- -------- Revenue $ 2,945 $ 3,630 $ 2,809 $ 11,421 $ 18,956 Cost of revenue 1,995 2,349 1,918 7,648 11,411 -------- -------- -------- -------- -------- Gross profit 950 1,281 891 3,773 7,545 Operating expenses: Research and development 2,380 3,490 2,755 12,265 14,144 Selling, general and administrative 2,322 2,461 2,704 10,310 10,619 Restructuring cost -- 49 -- -- 295 -------- -------- -------- -------- -------- Total operating expense 4,702 6,000 5,459 22,575 25,058 -------- -------- -------- -------- -------- Loss from operations (3,752) (4,719) (4,568) (18,802) (17,513) Interest expense (66) (18) (37) (175) (82) Interest income and other (expense), net (43) (9) (41) (106) (107) -------- -------- -------- -------- -------- Loss before income taxes (3,861) (4,746) (4,646) (19,083) (17,702) Provision for (benefit from) income taxes (3) 100 (23) 65 146 -------- -------- -------- -------- -------- Net loss $ (3,858) $ (4,846) $ (4,623) $(19,148) $(17,848) ======== ======== ======== ======== ======== Net loss per share: Basic $ (0.05) $ (0.09) $ (0.07) $ (0.29) $ (0.32) ======== ======== ======== ======== ======== Diluted $ (0.05) $ (0.09) $ (0.07) $ (0.29) $ (0.32) ======== ======== ======== ======== ======== Weighted average shares: Basic 67,941 56,729 67,781 65,377 56,472 ======== ======== ======== ======== ======== Diluted 67,941 56,729 67,781 65,377 56,472 ======== ======== ======== ======== ======== QUICKLOGIC CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) January 1, January 3, 2017 2016 (1) ----------- ----------- ASSETS Current assets: Cash and cash equivalents $ 14,870 $ 19,136 Accounts receivable, net 839 1,601 Inventories 2,017 2,878 Other current assets 1,123 1,312 ----------- ----------- Total current assets 18,849 24,927 Property and equipment, net 2,765 3,315 Other assets 230 219 ----------- ----------- TOTAL ASSETS $ 21,844 $ 28,461 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Revolving line of credit $ 6,000 $ -- Trade payables 2,018 4,032 Accrued liabilities 1,580 1,482 Current portion of capital lease obligations 209 281 ----------- ----------- Total current liabilities 9,807 5,795 Long-term liabilities: Revolving line of credit -- 2,000 Capital lease obligations, less current portion -- 208 Other long-term liabilities 49 133 ----------- ----------- Total liabilities 9,856 8,136 ----------- ----------- Stockholders' equity: Common stock, at par value 68 57 Additional paid-in capital 251,824 241,024 Accumulated deficit (239,904) (220,756) ----------- ----------- Total stockholders' equity 11,988 20,325 ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 21,844 $ 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 Year Ended ------------------------- ------------------ January January October January January 1, 2017 3, 2016 2, 2016 1, 2017 3, 2016 ------- ------- ------- -------- -------- GAAP loss from operations $(3,752) $(4,719) $(4,568) $(18,802) $(17,513) Adjustment for stock-based compensation within: Cost of revenue 13 14 34 132 109 Research and development 55 213 137 658 826 Selling, general and administrative 57 306 286 793 1,065 Adjustment for the write- off of equipment within: Cost of revenue 17 -- 33 50 8 Research and development -- -- 1 313 -- Selling, general and administrative -- -- 5 5 -- Adjustment for restructuring costs -- 49 -- -- 295 ------- ------- ------- -------- -------- Non-GAAP loss from operations $(3,610) $(4,137) $(4,072) $(16,851) $(15,210) ======= ======= ======= ======== ======== GAAP net loss $(3,858) $(4,846) $(4,623) $(19,148) $(17,848) Adjustment for stock-based compensation within: Cost of revenue 13 14 34 132 109 Research and development 55 213 137 658 826 Selling, general and administrative 57 306 286 793 1,065 Adjustment for the write- off of equipment within: Cost of revenue 17 -- 33 50 8 Research and development -- -- 1 313 -- Selling, general and administrative -- -- 5 5 -- Adjustment for restructuring costs -- 49 -- -- 295 Adjustment for tax effect on other comprehensive income -- -- -- -- -- ------- ------- ------- -------- -------- Non-GAAP net loss $(3,716) $(4,264) $(4,127) $(17,197) $(15,545) ======= ======= ======= ======== ======== GAAP net loss per share $ (0.05) $ (0.09) $ (0.07) $ (0.29) $ (0.32) Adjustment for stock-based compensation * 0.01 0.01 0.03 0.04 Adjustment for the write- off of equipment * * * * * Adjustment for restructuring costs -- * -- -- * ------- ------- ------- -------- -------- Non-GAAP net loss per share $ (0.05) $ (0.08) $ (0.06) $ (0.26) $ (0.28) ======= ======= ======= ======== ======== GAAP gross margin percentage 32.3% 35.3% 31.7% 33.0% 39.8% Adjustment for stock-based compensation 0.4% 0.4% 1.2% 1.2% 0.6% Adjustment for the write- off of equipment 0.6% --% 1.2% 0.4% * Adjustment for restructuring costs --% * --% --% * ======= ======= ======= ======== ======== Non-GAAP gross margin percentage 33.3% 35.7% 34.1% 34.6% 40.4% ======= ======= ======= ======== ======== * Figures were not considered for reconciliation due to the insignificant amount. QUICKLOGIC CORPORATION SUPPLEMENTAL DATA (Unaudited) Change in Percentage of Revenue Revenue ---------------------------------- ---------------- Q3 2016 2015 Fiscal Fiscal to to Q4 2016 Q3 2016 2016 2015 Q4 2016 2016 ------- ------- ------- ------- ------- ------ COMPOSITION OF REVENUE Revenue by product: (1) New products 54% 48% 49% 63% 19% (53)% Mature products 46% 52% 51% 37% (8)% (16)% Revenue by geography: Asia Pacific 64% 62% 63% 67% 10% (44)% North America 26% 24% 25% 23% 12% (35)% Europe 10% 14% 12% 10% (30)% (25)% (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.