FORMFACTOR INC - FORM 8-K - EX-99.01 - EARNINGS RELEASE - February 5, 2014

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Exhibit 99.01

 
 
News Release
 
Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4321
ir@formfactor.com
 
FormFactor, Inc. Reports Fourth Quarter and Annual Results
 
LIVERMORE, Calif. — February 5, 2014 —FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the fourth quarter of fiscal 2013 that ended on December 28, 2013. Quarterly revenues were $48.5 million, down 28% from $67.6 million in the third quarter of fiscal 2013, and up 2% from $47.7 million in the fourth quarter of fiscal 2012.
 
For fiscal 2013, FormFactor posted revenue of $231.5 million, up 30% from $178.5 million in fiscal 2012.
 
On a GAAP basis, net loss for the fourth quarter of fiscal 2013 was $(18.8) million, or $(0.34) per fully-diluted share, compared to a net loss for the third quarter of fiscal 2013 of $(10.7) million, or $(0.20) per fully-diluted share, and a net income for the fourth quarter of fiscal 2012 of $0.6 million, or $0.01 per fully-diluted share. Net loss for fiscal 2013 was $(57.7) million, or $(1.06) per fully-diluted share, compared to a net loss of $(35.5) million, or $(0.70) per fully-diluted share, for fiscal 2012.
 
On a non-GAAP basis, net loss for the fourth quarter of fiscal 2013 was $(10.9) million, or $(0.20) per fully-diluted share, compared to a net loss for the third quarter of fiscal 2013 of $(3.5) million, or $(0.06) per fully-diluted share, and a net loss for the fourth quarter of fiscal 2012 of $(13.3) million, or $(0.25) per fully-diluted share. On a non-GAAP basis, net loss for fiscal 2013 was $(21.5) million, or $(0.40) 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 fourth quarter of fiscal 2013 was $(5.2) million, compared to cash generated of $1.8 million for the third quarter of fiscal 2013 and cash usage of $(110.4) million for the fourth quarter of fiscal 2012. Excluding cash usage attributable to the acquisition of Astria, but including cash from Astria’s operations subsequent to the acquisition, cash usage for the fourth quarter of fiscal 2012 was $(13.7) million.
 
"Despite certain market and seasonality challenges in the fourth quarter, FormFactor made significant progress in our operational and financial performance in 2013”, said Tom St. Dennis, FormFactor CEO and Executive Chairman. “2013 marked the first full year of the FormFactor/MicroProbe business combination and we delivered 2 quarters of positive cash flow for the first time since 2007. Exiting the year as a leader in both the DRAM and Logic markets, we are positioning FormFactor for sustainable profitability as we move into 2014.”

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. PST, or 4:30 p.m. EST, 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 7, 2014, 9:00 p.m. Pacific Standard Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 31046117. 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, 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 and the company’s manufacturing utilization, supplier and manufacturing challenges; seasonal industry trends; risks of the company’s ability to realize further operational efficiencies and achieve synergies through the MicroProbe integration; risks of the company’s operational execution and ability to be profitable in 2014; 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 29, 2012, 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
 
Fiscal Year Ended
 
December 28, 2013
 
December 29, 2012
 
December 28, 2013
 
December 29, 2012
Revenues
$
48,546

 
$
47,654

 
$
231,533

 
$
178,535

Cost of revenues
44,288

 
50,798

 
189,249

 
153,204

Gross profit (loss)
4,258

 
(3,144
)
 
42,284

 
25,331

Operating expenses:
 

 
 

 
 

 
 
Research and development
9,994

 
9,775

 
42,139

 
40,130

Selling, general and administrative
12,160

 
14,958

 
53,217

 
49,231

Restructuring charges, net
443

 
333

 
4,658

 
2,917

Loss on sale of subsidiary
—

 
—

 
300

 
—

Impairment of long-lived assets
567

 
49

 
761

 
421

Gain on settlement of litigation
—

 
(3,250
)
 
—

 
(3,250
)
Total operating expenses
23,164

 
21,865

 
101,075

 
89,449

Operating loss
(18,906
)
 
(25,009
)
 
(58,791
)
 
(64,118
)
Interest income, net
88

 
134

 
386

 
691

Other income, net
82

 
334

 
623

 
1,461

Loss before income taxes
(18,736
)
 
(24,541
)
 
(57,782
)
 
(61,966
)
Provision for (benefit from) income taxes
53

 
(25,144
)
 
(99
)
 
(26,420
)
Net (loss) income
$
(18,789
)
 
$
603

 
$
(57,683
)
 
$
(35,546
)
 
 
 
 
 
 
 
 
Net (loss) income per share:
 

 
 

 
 
 
 
Basic
$
(0.34
)
 
$
0.01

 
$
(1.06
)
 
$
(0.70
)
Diluted
$
(0.34
)
 
$
0.01

 
$
(1.06
)
 
$
(0.70
)
 
 
 
 
 
 
 
 
Weighted-average number of shares used in per share calculations:
 

 
 
 
 
 
 
Basic
54,608

 
52,745

 
54,204

 
50,551

Diluted
54,608

 
52,921

 
54,204

 
50,551












 








FORMFACTOR, INC. 
RECONCILIATION OF NON-GAAP NET LOSS
(In thousands, except per share amounts)
(Unaudited)
 
 
Three Months Ended
 
Fiscal Year Ended
 
December 28, 2013
 
December 29, 2012
 
December 28, 2013
 
December 29, 2012
 
 
 
 
 
 
 
 
GAAP net (loss) income
$
(18,789
)
 
$
603

 
$
(57,683
)
 
(35,546
)
Stock-based compensation
2,999

 
3,560

 
12,124

 
13,049

Restructuring charges, net
443

 
333

 
4,658

 
2,917

Acquisition and integration related expenses
(8
)
 
1,785

 
1,292

 
2,960

Amortization of intangibles, inventory and fixed assets fair value adjustment due to acquisition
3,910

 
9,125

 
16,857

 
9,125

Impairment of long-lived assets and loss on sale of subsidiary
567

 
49

 
1,061

 
420

Gain on litigation
—

 
(3,250
)
 
—

 
(3,250
)
Income tax valuation allowance
—

 
(25,520
)
 
150

 
(25,520
)
Non-GAAP net loss
$
(10,878
)
 
$
(13,315
)
 
$
(21,541
)
 
$
(35,845
)
 
 
 
 
 
 
 
 
Non-GAAP net loss per share:
 
 
 
 
 
 
 
Basic
$
(0.20
)
 
$
(0.25
)
 
$
(0.40
)
 
$
(0.71
)
Diluted
$
(0.20
)
 
$
(0.25
)
 
$
(0.40
)
 
$
(0.71
)
 
 
 
 
 
 
 
 
Weighted-average number of shares used in per share calculations:
 
 
 
 
 
 
 
Basic
54,608

 
52,745

 
54,204

 
50,551

Diluted
54,608

 
52,745

 
54,204

 
50,551



 






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

 
December 28,
2013
 
December 29,
2012
ASSETS
 

 
 

Current assets:
 

 
 

Cash and cash equivalents
$
59,196

 
$
72,243

Marketable securities
91,895

 
93,545

Accounts receivable, net
30,189

 
28,919

Inventories, net
20,707

 
23,616

Deferred tax assets
2,776

 
4,613

Refundable income taxes
782

 
5,667

Prepaid expenses and other current assets
6,106

 
10,569

Total current assets
211,651

 
239,172

Restricted cash
435

 
318

Property, plant and equipment, net
35,190

 
45,515

Goodwill
30,731

 
30,994

Intangibles, net
57,470

 
74,276

Deferred tax assets
3,960

 
4,207

Other assets
1,271

 
1,200

Total assets
$
340,708

 
$
395,682

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 

 
 

Current liabilities:
 

 
 

Accounts payable
$
16,313

 
$
21,015

Accrued liabilities
13,985

 
17,270

Capital leases, current portion
270

 
573

Income taxes payable
172

 
—

Deferred revenue
7,030

 
6,189

Total current liabilities
37,770

 
45,047

Long-term income taxes payable
2,497

 
3,028

Capital leases, net of current portion
—

 
340

Deferred rent and other liabilities
6,355

 
8,009

Total liabilities
46,622

 
56,424

Stockholders’ equity:
 
 
 
Common stock and capital in excess of par value
695,686

 
681,211

Accumulated other comprehensive income (loss)
(249
)
 
1,715

Accumulated deficit
(401,351
)
 
(343,668
)
Total stockholders’ equity
294,086

 
339,258

Total liabilities and stockholders’ equity
$
340,708

 
$
395,682


 


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