FormFactor, Inc. Reports Third Quarter Results

Company Delivers Second Consecutive Quarter of Positive Cash Flow

Marketwired

LIVERMORE, CA--(Marketwired - Oct 24, 2013) - FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the third quarter of fiscal 2013 that ended on September 28, 2013. Quarterly revenues were $67.6 million, up 7.8% from $62.7 million in the second quarter of fiscal 2013, and up 63.9% from $41.3 million in the third quarter of fiscal 2012.

On a GAAP basis, net loss for the third quarter of fiscal 2013 was $10.7 million or $(0.20) per fully-diluted share, compared to a net loss for the second quarter of fiscal 2013 of $8.4 million or $(0.16) per fully-diluted share, and a net loss for the third quarter of fiscal 2012 of $14.5 million or $(0.29) per fully-diluted share.

On a Non-GAAP basis, net loss for the third quarter of fiscal 2013 was $3.5 million, or $(0.06) per fully-diluted share, compared to a net loss for the second quarter of fiscal 2013 of $0.3 million or $(0.01) per fully-diluted share, and a net loss for the third quarter of fiscal 2012 of $7.7 million or $(0.15) per fully-diluted share.

Although third quarter revenue was within the anticipated range, Non-GAAP gross profit at 24% of sales was significantly below the anticipated range, due to a combination of factors including lower than forecasted manufacturing utilization during September due to a significant drop in demand, lower margins on a specific high-volume DRAM design, increased warranty and service expenses caused by execution challenges at a specific customer and increased excess inventory charges.

For the third quarter, the difference between GAAP gross profit of $12.5 million, 19% of sales, and Non-GAAP gross profit of $16.3 million, 24% of sales, is that Non-GAAP gross profit excludes $0.6 million of stock-based compensation expense and $3.2 million of intangible asset amortization expense.

A reconciliation of GAAP to non-GAAP net loss and net loss per share is provided in the schedules included below.

Cash generation for the third quarter of fiscal 2013 was $1.8 million, compared to cash generation of $1.0 million for the second quarter of fiscal 2013 and cash usage of $1.6 million for the third quarter of fiscal 2012.

"We are currently addressing our Q3 operational execution challenges," said Tom St. Dennis, CEO and Executive Chairman of FormFactor. "Despite our financial performance in Q3, the company made progress in products addressing all markets and delivered positive cash flow for the second consecutive quarter."

The company has posted its revenue breakdown by region and market segment on the Investors section of its website at www.formfactor.com. FormFactor will conduct a conference call at 5:30 a.m. PDT, or 8:30 a.m. EDT, today.

The public is invited to listen to a live webcast of FormFactor's conference call on the Investors section of the company's web site at www.formfactor.com. A telephone replay of the conference call will be available approximately two hours after the conclusion of the call. The telephone replay will be available through October 26, 2013, 9:00 p.m. Pacific Daylight Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 72494882. Additionally, the replay will be available on the Investors section of our website, www.formfactor.com.

Non-GAAP Financial Measures:

This press release highlights the company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain charges that are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. FormFactor's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.

About FormFactor:

FormFactor, Inc. (NASDAQ: FORM) is a leader in advanced wafer test solutions. The company's advanced wafer probe cards enable semiconductor manufacturers to lower their overall production costs, improve yields and bring next-generation devices to market. FormFactor's acquisition of MicroProbe creates the leading wafer test solution provider for both memory and non-memory semiconductor manufacturers. FormFactor is headquartered in Livermore, California with operations in Europe, Asia and North America. For more information, visit the company's website at www.formfactor.com.

FormFactor, MicroProbe, and the FormFactor and MicroProbe logos are registered or unregistered trademarks of FormFactor, Inc. All other product, trademark, company or service names mentioned herein are the property of their respective owners.

Forward-looking Statements:

Statements in this press release that are not strictly historical in nature are forward-looking statements within the meaning of the federal securities laws, including statements regarding anticipated results, market conditions or trends, expectations and operating plans. These forward-looking statements are based on current information and expectations that are inherently subject to change and involve a number of risks and uncertainties. Actual events or results might differ materially from those in any forward-looking statement due to various factors, including, but not limited to: unexpected changes in the company's manufacturing utilization, greater than anticipated warranty and service expenses, variances in margins on specific product designs, increased inventory charges, and seasonal industry trends; risks of the company's ability to realize further operational efficiencies and achieve synergies through the MicroProbe integration; and changes in the market and macro-economic environments. Additional information concerning factors that could cause actual events or results to differ materially from those in any forward-looking statement is contained in the company's Form 10-K for the fiscal year ended December 29, 2012, as filed with the SEC, and subsequent SEC filings, including the company's Quarterly Reports on Forms 10-Q. Copies of the company's SEC filings are available at http://investors.formfactor.com/edgar.cfm. The company assumes no obligation to update the information in this press release, to revise any forward-looking statements or to update the reasons actual results could differ materially from those anticipated in forward-looking statements.

FORM-F

   
   
FORMFACTOR, INC.  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share amounts)  
(Unaudited)  
   
    Three Months Ended     Nine Months Ended  
    September 28, 2013     September 29, 2012     September 28, 2013     September 29, 2012  
Revenues   $ 67,634     $ 41,262     $ 182,987     $ 130,881  
Cost of revenues     55,088       33,110       144,961       102,406  
Gross profit     12,546       8,152       38,026       28,475  
Operating expenses:                                
  Research and development     10,301       8,573       32,145       30,355  
  Selling, general and administrative     12,952       11,594       41,057       34,273  
  Restructuring charges, net     143       2,481       4,215       2,584  
  Loss on sale of subsidiary     --       --       300       --  
  Impairment of long-lived assets     15       143       194       372  
    Total operating expenses     23,411       22,791       77,911       67,584  
Operating loss     (10,865 )     (14,639 )     (39,885 )     (39,109 )
Interest income, net     95       163       298       557  
Other income, net     (91 )     171       541       1,127  
Loss before income taxes     (10,861 )     (14,305 )     (39,046 )     (37,425 )
Provision for (benefit from) income taxes     (147 )     173       (152 )     (1,276 )
Net loss   $ (10,714 )   $ (14,478 )   $ (38,894 )   $ (36,149 )
Net loss per share:                                
  Basic and Diluted   $ (0.20 )   $ (0.29 )   $ (0.72 )   $ (0.73 )
Weighted-average number of shares used in per share calculations:                                
  Basic and Diluted     54,437       50,154       54,070       49,805  
                                   
                                   
   
   
FORMFACTOR, INC.  
RECONCILIATION OF NON-GAAP NET LOSS  
(In thousands, except per share amounts)  
(Unaudited)  
   
    Three Months Ended     Nine Months Ended  
    September 28, 2013     September 29, 2012     September 28, 2013     September 29, 2012  
                                 
GAAP net loss   $ (10,714 )   $ (14,478 )   $ (38,894 )   $ (36,149 )
Stock-based compensation     2,958       2,968       9,125       9,489  
Restructuring charges, net     143       2,481       4,215       2,584  
Acquisition and integration related expenses     106       1,175       1,300       1,175  
Amortization of intangibles, inventory and fixed assets fair value adjustment due to acquisition     3,955       --       12,947       --  
Impairment of long-lived assets and loss on sale of subsidiary     15       143       494       372  
Income tax valuation allowance     --       --       150       --  
Non-GAAP net loss   $ (3,537 )   $ (7,711 )   $ (10,663 )   $ (22,529 )
                                 
Non-GAAP net loss per share:                                
Basic and Diluted   $ (0.06 )   $ (0.15 )   $ (0.20 )   $ (0.45 )
                                 
Weighted-average number of shares used in per share calculations:                                
Basic and Diluted     54,437       50,154       54,070       49,805  
                                 
                                 
   
   
FORMFACTOR, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands)  
(Unaudited)  
   
    September 28, 2013     December 29, 2012  
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 59,470     $ 72,243  
  Marketable securities     96,868       93,545  
  Accounts receivable, net     46,320       28,919  
  Inventories, net     22,369       23,616  
  Deferred tax assets     4,206       4,613  
  Refundable income taxes     1,568       5,667  
  Prepaid expenses and other current assets     7,844       10,569  
    Total current assets     238,645       239,172  
Restricted cash     436       318  
Property, plant and equipment, net     36,945       45,515  
Goodwill     30,731       30,994  
Intangibles, net     61,495       74,276  
Deferred tax assets     4,460       4,207  
Other assets     1,004       1,200  
    Total assets   $ 373,716     $ 395,682  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 28,676     $ 21,015  
  Accrued liabilities     15,313       17,270  
  Capital leases, current portion     400       573  
  Income taxes payable     1,344       --  
  Deferred revenue     6,937       6,189  
    Total current liabilities     52,670       45,047  
Long-term income taxes payable     2,453       3,028  
Capital leases, net of current portion     --       340  
Deferred rent and other liabilities     7,910       8,009  
    Total liabilities     63,033       56,424  
Stockholders' equity:                
  Common stock and capital in excess of par value     692,940       681,211  
  Accumulated other comprehensive income     305       1,715  
  Accumulated deficit     (382,562 )     (343,668 )
    Total stockholders' equity     310,683       339,258  
    Total liabilities and stockholders' equity   $ 373,716     $ 395,682  
                     
                     
Contact:
Investor
Stan Finkelstein
Investor Relations
(925) 290-4321
Email Contact
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