SOURCE: FormFactor

FormFactor

October 28, 2015 16:05 ET

FormFactor, Inc. Reports Third Quarter Results

Company Again Delivers Positive Results Despite a Challenging Demand Environment

LIVERMORE, CA--(Marketwired - Oct 28, 2015) - FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the third quarter of fiscal 2015 ended September 26, 2015. Quarterly revenues were $65.9 million, down 11% from $73.9 million in the second quarter of fiscal 2015, and down 11% from $73.9 million in the third quarter of fiscal 2014.

On a GAAP basis, net loss for the third quarter of fiscal 2015 was $(2.5) million, or $(0.04) per fully-diluted share, compared to a net income for the second quarter of fiscal 2015 of $0.8 million, or $0.01 per fully-diluted share, and a net loss for the third quarter of fiscal 2014 of $(0.3) million, or $0.00 per fully-diluted share.

On a non-GAAP basis, net income for the third quarter of fiscal 2015 was $3.3 million, or $0.06 per fully-diluted share, compared to net income for the second quarter of fiscal 2015 of $6.7 million, or $0.11 per fully-diluted share, and net income for the third quarter of fiscal 2014 of $9.0 million, or $0.16 per fully-diluted share. A reconciliation of GAAP to non-GAAP net income and net income per share is provided in the schedules included below.

Cash generation after stock repurchases for the third quarter of fiscal 2015 was $5.1 million, compared to cash generation of $7.1 million for the second quarter of fiscal 2015 and cash generation of $5.3 million for the third quarter of fiscal 2014. Stock repurchases in the third quarter of fiscal 2015 were $3.5 million. There were no stock repurchases in fiscal 2014.

"Our continued focus on cost control and operational execution enabled FormFactor to deliver a 6th consecutive quarter of non-GAAP profitability and cash generation, despite well-publicized industry demand headwinds," said Mike Slessor, CEO of FormFactor, Inc. "In addition, we experienced strengthening demand towards the end of Q3 with continued momentum into Q4, as customers increasingly rely on FormFactor to enable their new product introductions and ramps."

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. PDT, or 4:30 p.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 recording of the conference call will be available approximately two hours after the conclusion of the call. The recording will be available by telephone through October 30, 2015, 9:00 p.m. PDT, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 54747281. The recording will also be available on the Investors 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 and non-GAAP earnings per fully-diluted share that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses and gains. Reconciliations of the adjustments to GAAP results for the three and nine months ended September 26, 2015 are provided below. 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 Net Income and Adjustments" following the tables below.

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; changes in historical demand on a seasonal basis; risks to the company's ability to execute on its operational model; risks to the company's ability to realize sustainable profitability, to achieve its growth objectives, and to meet customer demand for its 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 27, 2014, as filed with the SEC, and subsequent SEC filings. 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 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 26, 2015     September 27, 2014     September 26, 2015     September 27, 2014  
Revenues   $ 65,862     $ 73,933     $ 210,576     $ 197,245  
Cost of revenues     47,407       49,791       146,028       140,754  
Gross profit     18,455       24,142       64,548       56,491  
Operating expenses:                                
  Research and development     10,645       11,198       32,947       32,019  
  Selling, general and administrative     11,108       13,309       34,373       38,754  
  Restructuring charges, net     59       28       562       2,084  
  Impairment of long-lived assets     --       86       8       829  
    Total operating expenses     21,812       24,621       67,890       73,686  
Operating loss     (3,357 )     (479 )     (3,342 )     (17,195 )
Interest income, net     65       75       213       233  
Other income (expense), net     982       228       2,584       6  
Loss before income taxes     (2,310 )     (176 )     (545 )     (16,956 )
Provision for income taxes     215       101       359       358  
Net loss   $ (2,525 )   $ (277 )   $ (904 )   $ (17,314 )
Net loss per share:                                
  Basic and Diluted   $ (0.04 )   $ 0.00     $ (0.02 )   $ (0.31 )
Weighted-average number of shares used in per share calculations:                                
  Basic and Diluted     58,209       56,297       57,757       55,720  
                                   
                                   
                                   
FORMFACTOR, INC.  
RECONCILIATION OF NON-GAAP NET INCOME  
(In thousands, except per share amounts)  
(Unaudited)  
   
    Three Months Ended     Nine Months Ended  
    September 26, 2015     September 27, 2014     September 26, 2015     September 27, 2014  
GAAP net loss   $ (2,525 )   $ (277 )   $ (904 )   $ (17,314 )
Stock-based compensation     3,100       3,934       8,515       10,023  
Restructuring charges, net     59       28       562       2,084  
Acquisition and integration related expenses (recoveries)     285       (31 )     196       398  
Amortization of intangibles, inventory and fixed assets fair value adjustment due to acquisition     3,428       4,983       10,150       14,885  
Impairment of long-lived assets     --       86       8       829  
Loss contingency     --       307       --       720  
Gain on sale of intellectual property     (1,040 )     --       (1,040 )     --  
Business interruption insurance claim recovery     --       --       (1,521 )     --  
Non-GAAP net income   $ 3,307     $ 9,030     $ 15,966     $ 11,625  
                                 
Non-GAAP net income per share:                                
Basic   $ 0.06     $ 0.16     $ 0.28     $ 0.21  
Diluted   $ 0.06     $ 0.16     $ 0.27     $ 0.20  
                                 
Weighted-average number of shares used in per share calculations:                                
Basic     58,209       56,297       57,757       55,720  
Diluted     58,784       57,597       58,922       57,110  
                                 
                                 
                                 
FORMFACTOR, INC.  
CONDENSED CONSOLIDATED BALANCE SHEETS  
(In thousands)  
(Unaudited)  
   
    September 26,
2015
    December 27,
2014
 
ASSETS                
Current assets:                
  Cash and cash equivalents   $ 142,185     $ 113,940  
  Marketable securities     41,654       49,897  
  Accounts receivable, net     36,682       45,152  
  Inventories, net     27,000       25,548  
  Deferred tax assets     2,029       2,036  
  Refundable income taxes     --       782  
  Prepaid expenses and other current assets     6,501       6,919  
    Total current assets     256,051       244,274  
Restricted cash     435       435  
Property, plant and equipment, net     23,821       25,498  
Goodwill     30,731       30,731  
Intangibles, net     28,869       38,689  
Deferred tax assets     3,440       3,466  
Other assets     865       1,150  
    Total assets   $ 344,212     $ 344,243  
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current liabilities:                
  Accounts payable   $ 21,159     $ 20,274  
  Accrued liabilities     18,492       21,217  
  Income taxes payable     166       68  
  Deferred revenue     4,215       6,303  
    Total current liabilities     44,032       47,862  
Long-term income taxes payable     1,034       1,094  
Deferred tax liabilities     2,208       2,208  
Deferred rent and other liabilities     3,404       3,643  
    Total liabilities     50,678       54,807  
Commitments and contingencies                
Stockholders' equity:                
  Common stock and capital in excess of par value     717,140       711,733  
  Accumulated other comprehensive loss     (2,166 )     (1,761 )
  Accumulated deficit     (421,440 )     (420,536 )
    Total stockholders' equity     293,534       289,436  
    Total liabilities and stockholders' equity   $ 344,212     $ 344,243  
                     
                     
                     

About our Non-GAAP Net Income and Adjustments:

We believe that the presentation of non-GAAP net income and non-GAAP earnings per fully-diluted share provides supplemental information that we believe are important to understanding financial and business trends relating to our financial condition and results of operations. Non-GAAP net income and non-GAAP earnings per fully-diluted share 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 and non-GAAP earnings per fully-diluted share 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 the Company's activities and other factors, facilitates comparability of the Company's operating performance from period to period. We have chosen to provide this 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 and non-GAAP fully-diluted earnings per share by adjusting GAAP net income and GAAP earnings per fully-diluted share to remove the impact of certain adjustments and the tax effect 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 or earnings per fully-diluted share prepared 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 and non-GAAP earnings per fully-diluted share 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 "Reconciliation of non-GAAP Net Income" included in this press release.

Contact Information

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