FormFactor, Inc. Reports Fourth Quarter and Annual Results

LIVERMORE, CA--(Marketwired - Feb 4, 2015) - FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the fourth quarter of fiscal 2014 that ended on December 27, 2014. Quarterly revenues were $71.3 million, down 4% from $73.9 million in the third quarter of fiscal 2014, and up 47% from $48.5 million in the fourth quarter of fiscal 2013.

For fiscal 2014, FormFactor posted revenue of $268.5 million, up 16% from $231.5 million in fiscal 2013.

On a GAAP basis, net loss for the fourth quarter of fiscal 2014 was $(1.9) million, or $(0.03) per fully-diluted share, compared to a net loss for the third quarter of fiscal 2014 of $(0.3) million, or $0.00 per fully-diluted share, and a net loss for the fourth quarter of fiscal 2013 of $(18.8) million, or $(0.34) per fully-diluted share. Net loss for fiscal 2014 was $(19.2) million, or $(0.34) per fully-diluted share, compared to a net loss of $(57.7) million, or $(1.06) per fully-diluted share, for fiscal 2013.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2014 was $6.5 million, or $0.11 per fully-diluted share, compared to a net income for the third quarter of fiscal 2014 of $9.0 million, or $0.16 per fully-diluted share, and a net loss for the fourth quarter of fiscal 2013 of $(10.9) million, or $(0.20) per fully-diluted share. On a non-GAAP basis, net income for fiscal 2014 was $18.2 million, or $0.32 per fully-diluted share, compared to a net loss of $(21.5) million, or $(0.40) per fully-diluted share, for fiscal 2013. A reconciliation of GAAP to non-GAAP net income (loss) and net income (loss) per share is provided in the schedules included below.

Cash generation for the fourth quarter of fiscal 2014 was $9.5 million, compared to cash generated of $5.3 million for the third quarter of fiscal 2014 and cash usage of $(5.2) million for the fourth quarter of fiscal 2013. For fiscal year 2014, cash generation was $12.7 million vs. cash usage of $(14.6) million for fiscal year 2013. 

"In 2014 we delivered significant revenue growth, while generating cash and non-GAAP profit in 3 of the 4 quarters and for the year in total. In Q4 2014 we experienced strong industry-wide demand for our products, and as we begin the year our strong execution enables us to continue to build on the foundation set in 2014" said Mike Slessor, Chief Executive Officer of FormFactor, Inc.

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 1:30 p.m. Pacific Time, or 4:30 p.m. Eastern Time, 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 February 6, 2015, 9:00 p.m. Pacific Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 68677756. 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) helps semiconductor manufacturers test the integrated circuits (ICs) that power consumer mobile devices, as well as computing, automotive and other applications. The company is one of the world's leading providers of essential wafer test technologies and expertise, with an extensive portfolio of high-performance probe cards for DRAM, Flash and SoC devices. Customers use FormFactor's products and services to lower overall production costs, improve their yields and enable complex next-generation ICs. Headquartered in Livermore, California, the company services its customers from a network of facilities 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 demand for the company's products; seasonal industry trends; risks of the company's ability to realize further operational efficiencies, to realize sustainable profitability, to achieve its growth objectives, and to meet customer demand for the company's DRAM, Flash Memory and SoC products; 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 28, 2013, 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/sec.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								Fiscal Year Ended
				December 27, 2014				December 28, 2013				December 27, 2014				December 28, 2013
Revenues				$	71,285			$	48,546			$	268,530			$	231,533
Cost of revenues					50,337				44,288				191,091				189,249
Gross profit					20,948				4,258				77,439				42,284
Operating expenses:
	Research and development				10,706				9,994				42,725				42,139
	Selling, general and administrative				12,631				12,160				51,385				53,217
	Restructuring charges, net				584				443				2,668				4,658
	Loss on sale of subsidiary				--				--				--				300
	Impairment of long-lived assets				390				567				1,219				761
		Total operating expenses			24,311				23,164				97,997				101,075
Operating loss					(3,363	)			(18,906	)			(20,558	)			(58,791	)
Interest income, net					69				88				302				386
Other income, net					155				82				161				623
Loss before income taxes					(3,139	)			(18,736	)			(20,095	)			(57,782	)
(Benefit from) provision for income taxes					(1,268	)			53				(910	)			(99	)
Net loss				$	(1,871	)		$	(18,789	)		$	(19,185	)		$	(57,683	)
Net loss per share:
	Basic and diluted			$	(0.03	)		$	(0.34	)		$	(0.34	)		$	(1.06	)
Weighted-average number of shares used in per share calculations:
	Basic and diluted				56,472				54,608				55,908				54,204

FORMFACTOR, INC.
RECONCILIATION OF NON-GAAP NET INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited)
			Three Months Ended								Fiscal Year Ended
			December 27, 2014				December 28, 2013				December 27, 2014				December 28, 2013
GAAP net loss			$	(1,871	)		$	(18,789	)		$	(19,185	)			(57,683	)
Stock-based compensation				3,256				2,999				13,279				12,124
Restructuring charges, net				584				443				2,668				4,658
Acquisition and integration related expenses				25				(8	)			423				1,292
Amortization of intangibles, inventory and fixed assets fair value adjustment due to acquisition				3,654				3,910				18,539				16,857
Impairment of long-lived assets and loss on sale of subsidiary				390				567				1,219				1,061
Loss contingency				498				--				1,218				--
Income tax valuation allowance				--				--				--				150
Non-GAAP net income (loss)			$	6,536			$	(10,878	)		$	18,161			$	(21,541	)
Non-GAAP net loss per share:
	Basic		$	0.12			$	(0.20	)		$	0.32			$	(0.40	)
	Diluted		$	0.11			$	(0.20	)		$	0.32			$	(0.40	)
Weighted-average number of shares used in per share calculations:
	Basic			56,472				54,608				55,908				54,204
	Diluted			58,234				54,608				57,510				54,204

FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
				December 27, 2014				December 28, 2013
ASSETS
Current assets:
	Cash and cash equivalents			$	113,940			$	59,196
	Marketable securities				49,897				91,895
	Accounts receivable, net				45,152				30,189
	Inventories, net				25,548				20,707
	Deferred tax assets				2,036				2,776
	Refundable income taxes				782				782
	Prepaid expenses and other current assets				6,919				6,106
		Total current assets			244,274				211,651
Restricted cash					435				435
Property, plant and equipment, net					25,498				35,190
Goodwill					30,731				30,731
Intangibles, net					38,689				57,470
Deferred tax assets					3,466				3,960
Other assets					1,150				1,271
		Total assets		$	344,243			$	340,708
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	20,274			$	16,313
	Accrued liabilities				21,217				13,985
	Capital leases, current portion				--				270
	Income taxes payable				68				172
	Deferred revenue				6,303				7,030
		Total current liabilities			47,862				37,770
Long-term income taxes payable					1,094				2,497
Deferred tax liabilities					2,208				3,029
Deferred rent and other liabilities					3,643				3,326
		Total liabilities			54,807				46,622
Stockholders' equity:
	Common stock and capital in excess of par value				711,733				695,686
	Accumulated other comprehensive loss				(1,761	)			(249	)
	Accumulated deficit				(420,536	)			(401,351	)
		Total stockholders' equity			289,436				294,086
		Total liabilities and stockholders' equity		$	344,243			$	340,708