FormFactor, Inc. Reports Fourth Quarter and Annual Results

LIVERMORE, CA -- (MARKET WIRE) -- Jan 28, 2010 -- FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the fourth quarter of fiscal 2009, that ended on December 26, 2009. Quarterly revenues were $33.0 million, down 24.6% from $43.8 million in the third quarter of fiscal 2009, and down 17.3% from $39.9 million in the fourth quarter of fiscal 2008.

For fiscal 2009, FormFactor posted revenue of $135.3 million, down 35.6% from $210.2 million in fiscal 2008.

Net loss for the fourth quarter of fiscal 2009 was $28.0 million or $(0.56) per share, compared to a net loss for the third quarter of fiscal 2009 of $19.4 million or $(0.39) per share and a net loss for the fourth quarter of fiscal 2008 of $30.0 million or $(0.61) per share. Net loss for fiscal 2009 was $155.7 million or $(3.15) per share, compared to a net loss for fiscal 2008 of $80.6 million or $(1.65) per share.

On a non-GAAP basis, net loss for the fourth quarter of fiscal 2009 was $22.8 million or $(0.46) per share, compared to a net loss for the third quarter of fiscal 2009 of $19.4 million or $(0.39) per share and a net loss for the fourth quarter of fiscal 2008 of $23.6 million or $(0.48) per share. On a non-GAAP basis, net loss for fiscal 2009 was $88.6 million or $(1.79) per share, compared to a net loss for fiscal 2008 of $57.0 million or $(1.17) per share. A reconciliation of GAAP to non-GAAP net loss and net loss per share is provided in the schedules included below.

"Although our Q4 results reflect delays in the timing of our customers' technology transitions, tooling cycles and volume plans, exiting the quarter, we are encouraged by the uptake in interest and orders we experienced from a broader customer base," said Mario Ruscev, CEO of FormFactor. "In 2009, in addition to delivering new technologies for our existing products, which helped us expand our share and customer reach, we also launched our next generation DRAM and Flash memory wafer probe cards incorporating our new product architectures. We are pleased by the customer reception of our new products, and we believe that these new technologies and products are critical to meeting customers' reduced lead times and enabling FormFactor's growth and expansion into markets we have not fully addressed. Although the timing of the recovery is still uncertain, we remain confident that we will return to growth in 2010."

The company has posted its revenue breakdown by region and market segment and GAAP to non-GAAP reconciliation information on the Investors section of its website at www.formfactor.com. FormFactor will conduct a conference call at 1:30 p.m. PST, or 4:30 p.m. EST, today. The public is invited to listen to a live web cast 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 February 1, 2010, 9:00 p.m. Pacific Standard Time, and can be accessed by dialing 888-203-1112 (domestic) or 719-457-0820 (international) and entering confirmation code 1210545.

About FormFactor:

Founded in 1993, FormFactor, Inc. (NASDAQ: FORM) is the leader in advanced wafer probe cards, which are used by semiconductor manufacturers to electrically test integrated circuits, or ICs. The company's wafer sort, burn-in and device performance testing products move IC testing upstream from post-packaging to the wafer level, enabling semiconductor manufacturers to lower their overall production costs, improve yields, and bring next-generation devices to market. 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 operations, business outlook, demand for our products and future growth. 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: changes in the market environment, including the demand for certain semiconductor devices, including DRAM and Flash memory devices; the company's ability to align its operating plans and structure with the current business environment to improve its operating efficiency; the company's ability to develop innovative testing technologies, to timely deliver and qualify new products that meet its customers' reduced lead times, testing requirements and lower their overall cost of test, and that enable the company to grow and expand into markets it has not fully addressed; and the timing of customers' technology transitions, tooling cycles and volume ramps and their effect on the company's future growth. 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 annual period ended December 27, 2008 and the company's filings on Form 10-Q for the quarterly periods in its fiscal 2009 as filed with the Securities and Exchange Commission ("SEC"), and subsequent SEC filings. 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.


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

                              Three Months Ended      Twelve Months Ended
                            ----------------------  ----------------------
                             December    December    December    December
                                26,         27,         26,         27,
                               2009        2008        2009        2008
                             ----------  ----------  ----------  ----------
 Revenues                   $   32,995  $   39,889  $  135,335  $  210,189
 Cost of revenues               35,797      39,300     135,804     173,926
                            ----------  ----------  ----------  ----------
 Gross profit (loss)            (2,802)        589        (469)     36,263
                            ----------  ----------  ----------  ----------

 Operating expenses:
  Research and development      15,686      16,221      57,509      65,509
  Selling, general and
   administrative                             16,489            26,170            78,428            95,208
    Restructuring  charges                        837                  473              8,780              9,157
    Impairment  of  long-lived
      assets                                                        -              4,400                      -              4,400
                                                        ----------    ----------    ----------    ----------
      Total  operating  expenses          33,012            47,264          144,717          174,274
                                                        ----------    ----------    ----------    ----------
  Operating  loss                                (35,814)        (46,675)      (145,186)      (138,011)

  Interest  income,  net                            711              1,638              3,282            12,446
  Other  income  (expense),
    net                                                            385                  249                (535)                653
                                                        ----------    ----------    ----------    ----------
  Loss  before  income  taxes            (34,718)        (44,788)      (142,439)      (124,912)
  Provision  for  (benefit
    from)  income  taxes                        (6,755)        (14,828)          13,214          (44,291)
                                                        ----------    ----------    ----------    ----------

  Net  loss                                      $    (27,963)  $    (29,960)  $  (155,653)  $    (80,621)
                                                        ==========    ==========    ==========    ==========

  Net  loss  per  share:
    Basic  and  Diluted                  $        (0.56)  $        (0.61)  $        (3.15)  $        (1.65)
                                                        ==========    ==========    ==========    ==========

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

    Basic  and  Diluted                          49,755            49,061            49,483            48,905
                                                        ==========    ==========    ==========    ==========



Reconciliation  of  Non-GAAP  Net  loss:

                                                            Three  Months  Ended            Twelve  Months  Ended
                                                        ----------------------    ----------------------
                                                          December        December        December        December
                                                                26,                  27,                  26,                  27,
                                                              2009                2008                2009                2008
                                                        ----------    ----------    ----------    ----------

  GAAP  Net  loss                            $    (27,963)  $    (29,960)  $  (155,653)  $    (80,621)
    Deferred  tax  valuation
      allowance                                                  -                      -            44,683                      -
    Stock-based  compensation
      related  to  option
      modification,  net  of
      related  income-tax
      impact  *                                                  39                      -              1,616                      -
    Stock-based
      compensation,  net  of
      related  income-tax
      impact  *                                            4,325              3,326            14,926            15,265
    Restructuring  charges,
      net  of  related
      income-tax  impact                              787                  292              5,805              5,653
    Impairment  of  long-lived
      assets,  net  of  related
      income-tax  impact                                  -              2,717                      -              2,717
                                                        ----------    ----------    ----------    ----------
  Non-GAAP  Net  loss                    $    (22,812)  $    (23,625)  $    (88,623)  $    (56,987)
                                                        ==========    ==========    ==========    ==========

  Non-GAAP  Net  loss  per
    share:
    Basic  and  Diluted                  $        (0.46)  $        (0.48)  $        (1.79)  $        (1.17)
                                                        ==========    ==========    ==========    ==========

Weighted-average  number  of
  shares  used  in  per  share
  calculations:
    Basic  and  Diluted                          49,755            49,061            49,483            48,905
                                                        ==========    ==========    ==========    ==========


*    There  was  no  related  income  tax  impact  to  stock-based  compensation  in
      the  third  and  fourth  quarters  of  fiscal  2009  as  a  result  of  the
      valuation  allowance  recorded  after  the  second  quarter.




                                              FORMFACTOR,  INC.
                          CONDENSED  CONSOLIDATED  BALANCE  SHEETS
            (In  thousands,  except  share  and  per  share  amounts)
                                                  (Unaudited)

                                                                                                December  26,      December  27,
                                                                                                        2009                    2008
                                                                                                ------------    -------------
  ASSETS
  Current  assets:
    Cash  and  cash  equivalents                                          $        122,043    $          337,926
    Marketable  securities                                                            327,192                184,968
    Accounts  receivable,  net                                                        29,412                  34,127
    Inventories                                                                                  25,548                  18,788
    Deferred  tax  assets,  net                                                          3,296                  23,039
    Refundable  income  taxes                                                          26,774                  29,413
    Prepaid  expenses  and  other  current  assets                      12,346                  14,702
                                                                                                ------------    -------------
        Total  current  assets                                                          546,611                642,963

    Restricted  cash                                                                                680                        680
    Property  and  equipment,  net                                                  97,758                113,813
    Deferred  tax  assets,  net                                                                68                  20,580
    Other  assets                                                                                  8,717                    7,674
                                                                                                ------------    -------------
        Total  assets                                                                $        653,834    $          785,710
                                                                                                ============    =============

  LIABILITIES  AND  STOCKHOLDERS'  EQUITY
  Current  liabilities:
    Accounts  payable                                                            $          29,250    $            33,214
    Accrued  liabilities                                                                  22,948                  25,693
    Income  taxes  payable                                                                      481                    1,904
    Deferred  revenue                                                                        10,856                    4,946
    Deferred  rent                                                                                    469                        452
                                                                                                ------------    -------------
        Total  current  liabilities                                                  64,004                  66,209
    Long-term  income  taxes  payable                                              6,423                    7,732
    Deferred  rent  and  other  liabilities                                    5,626                    5,705
                                                                                                ------------    -------------
        Total  liabilities                                                                  76,053                  79,646
                                                                                                ------------    -------------
  Stockholders'  equity
  Common  stock,  $0.001  par  value                                                      50                          49
  Additional  paid-in  capital                                                    630,333                602,295
  Accumulated  other  comprehensive  income                                1,253                    1,922
  Accumulated  deficit                                                                  (53,855)              101,798
                                                                                                ------------    -------------
        Total  stockholders'  equity                                              577,781                706,064
                                                                                                ------------    -------------
        Total  liabilities  and  stockholders'  equity    $        653,834    $          785,710
                                                                                                ============    =============
 

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