FormFactor, Inc. Reports Third Quarter Results

LIVERMORE, CA--(Marketwire - Nov 1, 2012) - FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the third quarter of fiscal 2012 that ended on September 29, 2012. Quarterly revenues were $41.3 million, down 25% from $54.8 million in the second quarter of fiscal 2012, and down 21% from $52.1 million in the third quarter of fiscal 2011.

On a GAAP basis, net loss for the third quarter of fiscal 2012 was $(14.5) million, or $(0.29) per fully-diluted share, compared to a net loss for the second quarter of fiscal 2012 of ($4.2) million or $(0.08) per fully-diluted share, and a net loss for the third quarter of fiscal 2011 of $(9.9) million or $(0.20) per fully-diluted share. The results for the third quarter of fiscal 2012 include restructuring charges, net of related income-tax impact, in the amount of $2.5 million, or $0.05 per fully diluted share. The results for the third quarter of fiscal 2011 include restructuring charges, net of related income-tax impact, in the amount of $0.3 million or $0.01 per fully diluted share.

On a Non-GAAP basis, net loss for the third quarter of fiscal 2012 was $(7.7) million, or $(0.15) per fully-diluted share, compared to a net loss for the second quarter of fiscal 2012 of $(0.5) million or $(0.01) per fully-diluted share, and a net loss for the third quarter of fiscal 2011 of $(6.2) million or $(0.12) per fully-diluted share. A reconciliation of GAAP to non-GAAP net loss and net loss per share is provided in the schedules included below.

Cash usage for the third quarter of fiscal 2012 was $1.6 million, compared to cash usage of $2.6 million for the second quarter of fiscal 2012 and cash usage of $8.6 million for the third quarter of fiscal 2011. There was no stock buyback during the third quarter of fiscal 2012, compared to a stock buyback of $5.5 million for the third quarter of fiscal 2011.

"We saw softening demand in Q3 in the personal computer and mobile device markets, which negatively impacted our business," said Tom St. Dennis, CEO of FormFactor. "We continued our focus on operational efficiencies during Q3, and also undertook a transformational strategic step through our acquisition of Micro-Probe, which closed on October 16^th."

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 website 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 November 3, 2012, 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 35897047. 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 and the FormFactor logo are registered 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, 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: our ability to successfully integrate and realize the anticipated benefits of the Micro-Probe acquisition; risks around customers' engagement with the newly combined entities; risks of the company's ability to meet customers' test roadmaps; risks of the company's ability to realize further operational efficiencies; personnel retention; 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 31, 2011, 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								Year to Date
				September 29, 2012				September 24, 2011				September 29, 2012				September 24, 2011
Revenues				$	41,262			$	52,115			$	130,881			$	139,101
Cost of revenues					33,110				40,141				102,406				113,168
Gross profit					8,152				11,974				28,475				25,933
Operating expenses:
	Research and development				8,573				10,423				30,355				32,861
	Selling, general and administrative				11,594				11,200				34,273				34,741
	Restructuring charges, net				2,481				258				2,584				197
	Impairment of long-lived assets				143				100				372				451
		Total operating expenses			22,791				21,981				67,584				68,250
Operating loss					(14,639	)			(10,007	)			(39,109	)			(42,317	)
Interest income, net					163				335				557				1,128
Other income (expense), net					171				(75	)			1,127				135
Loss before income taxes					(14,305	)			(9,747	)			(37,425	)			(41,054	)
Provision for (benefit from) income taxes					173				157				1,276				(2,048	)
Net loss				$	(14,478	)		$	(9,904	)		$	(36,149	)		$	(39,006	)
Net loss per share:
	Basic and Diluted			$	(0.29	)		$	(0.20	)		$	(0.73	)		$	(0.77	)
Weighted-average number of shares used in per share calculations:
	Basic and Diluted				50,154				50,747				49,805				50,719

 

Reconciliation of Non-GAAP Net Loss:
			Three Months Ended								Year to Date
			September 29, 2012				September 24, 2011				September 29, 2012				September 24, 2011
GAAP net loss			$	(14,478	)		$	(9,904	)		$	(36,149	)		$	(39,006	)
Stock-based compensation, net of related income-tax impact *				2,968				3,339				9,489				9,661
Restructuring charges, net of related income-tax impact *				2,481				258				2,584				197
Acquisition costs, net of related income-tax impact *				1,175				-				1,175				-
Impairment of long-lived assets, net of related income-tax impact *				143				100				372				451
Income tax valuation allowance release				-				-				-				(2,450	)
Non-GAAP net loss			$	(7,711	)		$	(6,207	)		$	(22,529	)		$	(31,147	)
Non-GAAP net loss per share:
	Basic and Diluted		$	(0.15	)		$	(0.12	)		$	(0.45	)		$	(0.61	)
Weighted-average number of shares used in per share calculations:
	Basic and Diluted			50,154				50,747				49,805				50,719

*	There was no related income-tax impact to stock-based compensation, restructuring and impairment charges in fiscal 2012 and fiscal 2011 as a result of the valuation allowance recorded after the second quarter of fiscal 2009.

FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
				September 29, 2012				December 31, 2011
ASSETS
Current assets:
	Cash and cash equivalents			$	162,062			$	139,049
	Marketable securities				114,101				157,642
	Accounts receivable, net				16,891				12,662
	Inventories				20,054				18,092
	Deferred tax assets				729				1,162
	Prepaid expenses and other current assets				6,367				8,368
		Total current assets			320,204				336,975
Restricted cash					318				317
Property, plant and equipment, net					32,912				35,132
Deferred tax assets					5,902				5,954
Other assets					3,495				4,693
		Total assets		$	362,831			$	383,071
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	10,856			$	9,731
	Accrued liabilities				17,412				13,966
	Income taxes payable				434				100
	Deferred revenue				6,093				4,798
		Total current liabilities			34,795				28,595
Long-term income taxes payable					1,355				4,112
Deferred rent and other liabilities					4,228				3,712
		Total liabilities			40,378				36,419
Stockholders' equity:
	Common stock and capital in excess of par value				663,923				652,074
	Accumulated other comprehensive income				2,800				2,700
	Accumulated deficit				(344,270	)			(308,122	)
		Total stockholders' equity			322,453				346,652
		Total liabilities and stockholders' equity		$	362,831			$	383,071