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FormFactor, Inc. Reports 2022 Third Quarter Results

FormFactor, Inc.
FormFactor, Inc.

Announces Operational Restructuring to Align Cost Structure with Weaker Demand

LIVERMORE, Calif., Oct. 26, 2022 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the third quarter of fiscal 2022 ended September 24, 2022. Quarterly revenues were $180.9 million, a decrease of 11.3% compared to $203.9 million in the second quarter of fiscal 2022, and a decrease of 4.8% from $190.0 million in the third quarter of fiscal 2021.

  • As anticipated, third quarter revenue, gross margin and profitability were down sequentially, chiefly due to the expected reduction in Foundry & Logic probe card demand

  • To better align FormFactor’s cost structure with these reduced demand levels, which are now expected to extend well into next year, the Company has implemented an operational restructuring during the fourth quarter of 2022

  • Systems Segment’s record third quarter revenue expected to continue in the fourth quarter, highlighting benefits of lab-to-fab diversification strategy and positive impact of recent tuck-in acquisitions

“We expect the current cyclical downturn in demand, which impacted FormFactor’s third quarter revenue and profitability, to extend well into next year,” said Mike Slessor, CEO of FormFactor, Inc. “To preserve profitability at the revenue run rates we believe are likely to prevail until the downturn ends, we have announced decisive steps to better align FormFactor’s cost structure with these temporarily reduced demand levels.”

Third Quarter Highlights

On a GAAP basis, net income for the third quarter of fiscal 2022 was $4.4 million, or $0.06 per fully-diluted share, compared to net income for the second quarter of fiscal 2022 of $30.2 million, or $0.38 per fully-diluted share, and net income for the third quarter of fiscal 2021 of $20.5 million, or $0.26 per fully-diluted share. Gross margin for the third quarter of fiscal 2022 was 34.4%, compared with 46.3% in the second quarter of fiscal 2022, and 42.2% in the third quarter of fiscal 2021.

On a non-GAAP basis, net income for the third quarter of fiscal 2022 was $18.3 million, or $0.24 per fully-diluted share, compared to net income for the second quarter of fiscal 2022 of $36.8 million, or $0.46 per fully-diluted share, and net income for the third quarter of fiscal 2021 of $31.6 million, or $0.40 per fully-diluted share. On a non-GAAP basis, gross margin for the third quarter of fiscal 2022 was 39.0%, compared with 47.4% in the second quarter of fiscal 2022, and 46.0% in the third quarter of fiscal 2021.

A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.

GAAP net cash provided by operating activities for the third quarter of fiscal 2022 was $24.2 million, compared to $42.6 million for the second quarter of fiscal 2022, and $34.3 million for the third quarter of fiscal 2021. Free cash flow for the third quarter of fiscal 2022 was $15.5 million, compared to free cash flow for the second quarter of fiscal 2022 of $28.3 million, and free cash flow for the third quarter of 2021 of $14.4 million. A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below.

Outlook

Dr. Slessor added, “Our sequentially weaker outlook is due to three primary factors; one, the new US-China trade restrictions announced on October 7th; two, weaker DRAM probe card demand; and three, further softness in Foundry & Logic probe card demand, with specific weakness in RF probe cards. These factors notwithstanding, we remain confident in the long-term growth prospects for the industry overall, driven by the fundamental trends of semiconductor content growth and innovations like advanced packaging.”

For the fourth quarter ending December 31, 2022, FormFactor is providing the following outlook*:

 

 

GAAP

 

Reconciling Items**

 

Non-GAAP

Revenue

 

$155 million +/- $5 million

 

 

$155 million +/- $5 million

Gross Margin

 

27% +/- 1.5%

 

$9 million

 

33% +/- 1.5%

Net income per diluted share

 

($0.22) +/- $0.03

 

$0.25

 

$0.03 +/- $0.03

*This outlook assumes consistent foreign currency rates.
**Reconciling items are stock-based compensation, restructuring charges, and amortization of intangibles, inventory, and fixed asset fair value adjustments due to acquisitions.

We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PDT, or 4:25 p.m. EDT, today.

The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our 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 replay will be available on the Investor Relations section of our website, www.formfactor.com.

Use of Non-GAAP Financial Information:

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we disclose certain non-GAAP measures of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses and non-GAAP operating income, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and nine months ended September 24, 2022, and for outlook provided before, as well as for the comparable periods of fiscal 2021, are provided below, and on the Investor Relations section of our website at www.formfactor.com. Information regarding the ways in which management uses non-GAAP financial information to evaluate its business, management's reasons for using this non-GAAP financial information, and limitations associated with the use of non-GAAP financial information, is included under “About our Non-GAAP Financial Measures” following the tables below.

About FormFactor:

FormFactor, Inc. (Nasdaq: FORM), is a leading provider of essential test and measurement technologies along the full semiconductor product life cycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding future financial and operating results, customer demand, conditions in the semiconductor industry, and growth opportunities, and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as infectious diseases and pandemics, military conflicts, political volatility and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. We continue to operate in an environment with substantial uncertainties arising from global, regional and national health crises such as the COVID-19 pandemic, including with respect to their impact on our operations, capacity, customer demand, and supply chain, as well as the macroeconomic environment. In addition, there are varying barriers to international trade, including restrictive trade and export regulations, dynamic tariffs, trade disputes between the U.S. and other countries, such as the recent US-China restrictions, and national security developments or tensions, that may substantially restrict or condition our sales to or in certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.

Investor Contact:

Stan Finkelstein
Investor Relations
(925) 290-4321
ir@formfactor.com

FORMFACTOR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 24,
2022

 

June 25,
2022

 

September 25,
2021

 

September 24,
2022

 

September 25,
2021

Revenues

$

180,869

 

 

$

203,907

 

 

$

189,964

 

 

$

581,950

 

 

$

564,676

 

Cost of revenues

 

118,656

 

 

 

109,538

 

 

 

109,745

 

 

 

331,144

 

 

 

331,468

 

Gross profit

 

62,213

 

 

 

94,369

 

 

 

80,219

 

 

 

250,806

 

 

 

233,208

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

26,549

 

 

 

28,317

 

 

 

26,026

 

 

 

82,000

 

 

 

75,526

 

Selling, general and administrative

 

31,637

 

 

 

33,406

 

 

 

30,940

 

 

 

97,949

 

 

 

91,434

 

Total operating expenses

 

58,186

 

 

 

61,723

 

 

 

56,966

 

 

 

179,949

 

 

 

166,960

 

Operating income

 

4,027

 

 

 

32,646

 

 

 

23,253

 

 

 

70,857

 

 

 

66,248

 

Interest income

 

709

 

 

 

300

 

 

 

121

 

 

 

1,147

 

 

 

463

 

Interest expense

 

(152

)

 

 

(119

)

 

 

(151

)

 

 

(463

)

 

 

(447

)

Other income, net

 

1,041

 

 

 

551

 

 

 

58

 

 

 

1,784

 

 

 

36

 

Income before income taxes

 

5,625

 

 

 

33,378

 

 

 

23,281

 

 

 

73,325

 

 

 

66,300

 

Provision for income taxes

 

1,274

 

 

 

3,136

 

 

 

2,784

 

 

 

8,860

 

 

 

8,273

 

Net income

$

4,351

 

 

$

30,242

 

 

$

20,497

 

 

$

64,465

 

 

$

58,027

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.06

 

 

$

0.39

 

 

$

0.26

 

 

$

0.83

 

 

$

0.75

 

Diluted

$

0.06

 

 

$

0.38

 

 

$

0.26

 

 

$

0.82

 

 

$

0.73

 

Weighted-average number of shares used in per share calculations:

 

 

 

 

 

 

 

 

 

Basic

 

77,245

 

 

 

77,897

 

 

 

77,869

 

 

 

77,796

 

 

 

77,643

 

Diluted

 

77,688

 

 

 

79,210

 

 

 

79,029

 

 

 

78,492

 

 

 

79,190

 


FORMFACTOR, INC. 
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 24,
2022

 

June 25,
2022

 

September 25,
2021

 

September 24,
2022

 

September 25,
2021

GAAP Revenue

$

180,869

 

 

$

203,907

 

 

$

189,964

 

 

$

581,950

 

 

$

564,676

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of deferred revenue fair value adjustments due to acquisitions

 

 

 

 

 

 

 

57

 

 

 

 

 

 

260

 

Non-GAAP Revenue

$

180,869

 

 

$

203,907

 

 

$

190,021

 

 

$

581,950

 

 

$

564,936

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross Profit

$

62,213

 

 

$

94,369

 

 

$

80,219

 

 

$

250,806

 

 

$

233,208

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions

 

1,241

 

 

 

1,139

 

 

 

1,545

 

 

 

3,548

 

 

 

13,598

 

Stock-based compensation

 

1,022

 

 

 

734

 

 

 

1,392

 

 

 

2,834

 

 

 

3,806

 

Restructuring charges

 

6,060

 

 

 

454

 

 

 

4,322

 

 

 

6,653

 

 

 

4,490

 

Non-GAAP Gross Profit

$

70,536

 

 

$

96,696

 

 

$

87,478

 

 

$

263,841

 

 

$

255,102

 

 

 

 

 

 

 

 

 

 

 

GAAP Gross Margin

 

34.4

%

 

 

46.3

%

 

 

42.2

%

 

 

43.1

%

 

 

41.3

%

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions

 

0.6

%

 

 

0.5

%

 

 

0.8

%

 

 

0.6

%

 

 

2.4

%

Stock-based compensation

 

0.6

%

 

 

0.4

%

 

 

0.7

%

 

 

0.5

%

 

 

0.7

%

Restructuring charges

 

3.4

%

 

 

0.2

%

 

 

2.3

%

 

 

1.1

%

 

 

0.8

%

Non-GAAP Gross Margin

 

39.0

%

 

 

47.4

%

 

 

46.0

%

 

 

45.3

%

 

 

45.2

%

 

 

 

 

 

 

 

 

 

 

GAAP operating expenses

$

58,186

 

 

$

61,723

 

 

$

56,966

 

 

$

179,949

 

 

$

166,960

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangibles

 

(1,567

)

 

 

(1,526

)

 

 

(1,604

)

 

 

(4,654

)

 

 

(4,909

)

Stock-based compensation

 

(6,973

)

 

 

(5,624

)

 

 

(6,528

)

 

 

(19,039

)

 

 

(17,779

)

Restructuring charges

 

(114

)

 

 

(127

)

 

 

(311

)

 

 

(415

)

 

 

(777

)

Gain on contingent consideration

 

 

 

 

 

 

 

 

 

 

 

 

 

95

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

(209

)

Non-GAAP operating expenses

$

49,532

 

 

$

54,446

 

 

$

48,523

 

 

$

155,841

 

 

$

143,381

 

 

 

 

 

 

 

 

 

 

 

GAAP operating income

$

4,027

 

 

$

32,646

 

 

$

23,253

 

 

$

70,857

 

 

$

66,248

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions

 

2,808

 

 

 

2,665

 

 

 

3,149

 

 

 

8,202

 

 

 

18,507

 

Stock-based compensation

 

7,995

 

 

 

6,358

 

 

 

7,920

 

 

 

21,873

 

 

 

21,585

 

Restructuring charges

 

6,174

 

 

 

581

 

 

 

4,633

 

 

 

7,068

 

 

 

5,267

 

Gain on contingent consideration

 

 

 

 

 

 

 

 

 

 

 

 

 

(95

)

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

209

 

Non-GAAP operating income

$

21,004

 

 

$

42,250

 

 

$

38,955

 

 

$

108,000

 

 

$

111,721

 


FORMFACTOR, INC. 
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 24,
2022

 

June 25,
2022

 

September 25,
2021

 

September 24,
2022

 

September 25,
2021

GAAP net income

$

4,351

 

 

$

30,242

 

 

$

20,497

 

 

$

64,465

 

 

$

58,027

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions

 

2,808

 

 

 

2,665

 

 

 

3,149

 

 

 

8,202

 

 

 

18,507

 

Stock-based compensation

 

7,995

 

 

 

6,358

 

 

 

7,920

 

 

 

21,873

 

 

 

21,585

 

Restructuring charges

 

6,174

 

 

 

581

 

 

 

4,633

 

 

 

7,068

 

 

 

5,267

 

Gain on contingent consideration

 

 

 

 

 

 

 

 

 

 

 

 

 

(95

)

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

209

 

Income tax effect of non-GAAP adjustments

 

(3,017

)

 

 

(3,071

)

 

 

(4,571

)

 

 

(7,813

)

 

 

(12,650

)

Non-GAAP net income

$

18,311

 

 

$

36,775

 

 

$

31,628

 

 

$

93,795

 

 

$

90,850

 

 

 

 

 

 

 

 

 

 

 

GAAP net income per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.06

 

 

$

0.39

 

 

$

0.26

 

 

$

0.83

 

 

$

0.75

 

Diluted

$

0.06

 

 

$

0.38

 

 

$

0.26

 

 

$

0.82

 

 

$

0.73

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.24

 

 

$

0.47

 

 

$

0.41

 

 

$

1.21

 

 

$

1.17

 

Diluted

$

0.24

 

 

$

0.46

 

 

$

0.40

 

 

$

1.19

 

 

$

1.15

 


FORMFACTOR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

 

Nine Months Ended

 

September 24,
2022

 

September 25,
2021

Cash flows from operating activities:

 

 

 

Net income

$

64,465

 

 

$

58,027

 

Selected adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

Depreciation

 

21,189

 

 

 

19,256

 

Amortization

 

7,056

 

 

 

16,362

 

Stock-based compensation expense

 

21,873

 

 

 

21,585

 

Provision for excess and obsolete inventories

 

16,078

 

 

 

11,621

 

Non-cash restructuring charges

 

710

 

 

 

1,592

 

Gain on contingent consideration

 

 

 

 

(95

)

Other activity impacting operating cash flows

 

(20,323

)

 

 

(26,319

)

Net cash provided by operating activities

 

111,048

 

 

 

100,437

 

Cash flows from investing activities:

 

 

 

Acquisition of property, plant and equipment

 

(39,024

)

 

 

(51,353

)

Acquisition of business

 

(3,350

)

 

 

 

Purchase of promissory note receivable

 

(1,000

)

 

 

 

Purchases of marketable securities, net

 

(8,639

)

 

 

(43,623

)

Net cash used in investing activities

 

(52,013

)

 

 

(94,976

)

Cash flows from financing activities:

 

 

 

Purchase of common stock through stock repurchase program

 

(73,478

)

 

 

(23,951

)

Proceeds from issuances of common stock

 

10,499

 

 

 

10,647

 

Tax withholdings related to net share settlements of equity awards

 

(15,564

)

 

 

(12,643

)

Payment of contingent consideration

 

 

 

 

(3,873

)

Principal repayments on term loans

 

(6,421

)

 

 

(7,049

)

Net cash used in financing activities

 

(84,964

)

 

 

(36,869

)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(5,708

)

 

 

(2,216

)

Net decrease in cash, cash equivalents and restricted cash

 

(31,637

)

 

 

(33,624

)

Cash, cash equivalents and restricted cash, beginning of period

 

155,342

 

 

 

191,098

 

Cash, cash equivalents and restricted cash, end of period

$

123,705

 

 

$

157,474

 


FORMFACTOR, INC. 
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
(In thousands)
(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 24,
2022

 

June 25,
2022

 

September 25,
2021

 

September 24,
2022

 

September 25,
2021

Net cash provided by operating activities

$

24,247

 

 

$

42,646

 

 

$

34,282

 

 

$

111,048

 

 

$

100,437

 

Adjustments:

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

161

 

 

 

131

 

 

 

157

 

 

 

455

 

 

 

496

 

Acquisition related payments in working capital

 

 

 

 

 

 

 

 

 

 

 

 

 

209

 

Capital expenditures

 

(8,908

)

 

 

(14,510

)

 

 

(20,031

)

 

 

(39,024

)

 

 

(51,353

)

Free cash flow

$

15,500

 

 

$

28,267

 

 

$

14,408

 

 

$

72,479

 

 

$

49,789

 


FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

 

September 24,
2022

 

June 25,
2022

 

December 25,
2021

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

120,602

 

 

$

136,395

 

 

$

151,010

 

Marketable securities

 

130,991

 

 

 

129,919

 

 

 

125,055

 

Accounts receivable, net of allowance for credit losses

 

110,497

 

 

 

107,726

 

 

 

115,541

 

Inventories, net

 

132,029

 

 

 

143,475

 

 

 

111,548

 

Restricted cash

 

1,263

 

 

 

2,102

 

 

 

2,233

 

Prepaid expenses and other current assets

 

20,932

 

 

 

17,447

 

 

 

18,652

 

Total current assets

 

516,314

 

 

 

537,064

 

 

 

524,039

 

Restricted cash

 

1,840

 

 

 

1,802

 

 

 

2,099

 

Operating lease, right-of-use-assets

 

31,508

 

 

 

33,499

 

 

 

35,210

 

Property, plant and equipment, net of accumulated depreciation

 

163,384

 

 

 

157,814

 

 

 

146,555

 

Goodwill

 

209,105

 

 

 

212,357

 

 

 

212,299

 

Intangibles, net

 

28,208

 

 

 

30,872

 

 

 

36,342

 

Deferred tax assets

 

67,775

 

 

 

65,059

 

 

 

61,995

 

Other assets

 

4,229

 

 

 

3,980

 

 

 

1,981

 

Total assets

$

1,022,363

 

 

$

1,042,447

 

 

$

1,020,520

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

75,021

 

 

$

60,927

 

 

$

57,862

 

Accrued liabilities

 

46,328

 

 

 

54,835

 

 

 

50,836

 

Current portion of term loans, net of unamortized issuance costs

 

2,734

 

 

 

4,725

 

 

 

8,931

 

Deferred revenue

 

31,974

 

 

 

31,255

 

 

 

23,224

 

Operating lease liabilities

 

7,699

 

 

 

7,843

 

 

 

7,901

 

Total current liabilities

 

163,756

 

 

 

159,585

 

 

 

148,754

 

Term loans, less current portion, net of unamortized issuance costs

 

14,653

 

 

 

14,915

 

 

 

15,434

 

Deferred tax liabilities

 

2,232

 

 

 

2,909

 

 

 

3,623

 

Long-term operating lease liabilities

 

27,858

 

 

 

29,511

 

 

 

31,009

 

Other liabilities

 

5,562

 

 

 

5,542

 

 

 

5,920

 

Total liabilities

 

214,061

 

 

 

212,462

 

 

 

204,740

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock

 

77

 

 

 

77

 

 

 

78

 

Additional paid-in capital

 

843,453

 

 

 

860,584

 

 

 

898,945

 

Accumulated other comprehensive loss

 

(17,899

)

 

 

(8,996

)

 

 

(1,449

)

Accumulated deficit

 

(17,329

)

 

 

(21,680

)

 

 

(81,794

)

Total stockholders’ equity

 

808,302

 

 

 

829,985

 

 

 

815,780

 

Total liabilities and stockholders’ equity

$

1,022,363

 

 

$

1,042,447

 

 

$

1,020,520

 

About our Non-GAAP Financial Measures:

We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP revenue, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP, and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, revenue, gross profit, gross margin, operating expenses, or operating income in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations” and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release.

Source: FormFactor, Inc.
FORM-F


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