FormFactor, Inc. Reports Fourth Quarter and Annual Results

LIVERMORE, Calif., Feb. 08, 2017 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq:FORM) today announced its financial results for the fourth quarter of fiscal 2016 ended December 31, 2016. Revenues were $123.9 million, up 0.5% from $123.3 million reported in the third quarter and up 73% from the fourth quarter of 2015. 

For fiscal 2016, FormFactor posted revenues of $383.9 million, up 36% from $282.4 million in fiscal 2015.

"FormFactor delivered solid growth fueled by our transformative acquisition of Cascade Microtech, which provided significant product and market diversification, as well as growth in our core probe card business as we doubled capacity for our largest foundry and logic customer,” said Mike Slessor, CEO of FormFactor, Inc. “In addition, we are pleased to have extended our leadership position, supported the advancement of our customers’ product roadmaps and accelerated our earnings performance.”

Fourth Quarter Highlights

On a GAAP basis, net loss for the fourth quarter of fiscal 2016 was $15.4 million, or $0.22 per fully-diluted share, compared to a net loss for the third quarter of fiscal 2016 of $14.2 million, or $0.20 per fully-diluted share, and a net loss for the fourth quarter of fiscal 2015 of $0.6 million, or $0.01 per fully-diluted share. Net loss for fiscal 2016 was $6.6 million or $0.10 per fully-diluted share, compared to a net loss of $1.5 million, or $0.03, per fully-diluted share for fiscal 2015.

On a non-GAAP basis, net income for the fourth quarter of fiscal 2016 was $14.4 million, or $0.20 per fully-diluted share, compared to net income for the third quarter of fiscal 2016 of $15.9 million, or $0.22 per fully-diluted share, and net income for the fourth quarter of fiscal 2015 of $5.8 million, or $0.10 per fully-diluted share. On a non-GAAP basis, net income for fiscal 2016 was $32.0 million, or $0.49 per fully-diluted share, compared to net income of $21.8 million, or $0.37 per fully-diluted share for fiscal 2015. A reconciliation of GAAP to non-GAAP net income and net income per share is provided in the schedules included below.

Cash generation in the fourth quarter of fiscal 2016 was $2.1 million, compared to cash usage in the third quarter of fiscal 2016 of $10.8 million and cash generation of $3.8 million for the fourth quarter of fiscal 2015. Excluding cash attributable to the acquisition of Cascade Microtech, free cash flow generation for the fourth quarter of fiscal 2016 was $15.2 million. A reconciliation of net cash provided from operating activities to free cash flow generation is provided in the schedules included below.

The Company's Board of Directors has authorized a $25 million share repurchase program to offset potential dilution from sales of common stock under the Company's employee stock purchase plan and exercises of Company stock options. The Company intends to use the proceeds it receives from these sales and exercises to buy back shares in the open market. The share repurchase program will expire on February 1, 2020.

Outlook

Dr. Slessor added, “With our diversified end market exposure amplified by some key customer wins, we are experiencing a strong start to 2017. Although our visibility remains limited into the second half, as long as these market conditions continue, we expect to deliver between $480 and $500 million of revenue in fiscal 2017, driven by line of sight growth opportunities in each of our target markets.”

The Company currently expects first quarter 2017 revenue to be between $120 million to $128 million. Within the business segments, revenue levels of both the Probe Cards and Systems segments are expected to approximate Q4 2016 levels.

For the first quarter ending on April 1, 2017, FormFactor is providing the following guidance*:

  U.S. GAAP  Reconciling
Items**
  Non-GAAP
Revenue$120 million to $128 million —  $120 million to $128 million
Gross Margin34% to 37% $8 million   41% to 44%
Net income (loss) per diluted share$0.00 to $0.06  $0.17 $0.17 to $0.23

*This guidance assumes consistent foreign currency rates
**Reconciling items are stock based compensation and amortization of intangibles

Free cash flow generation for the first quarter ending on April 1, 2017, is forecasted to be $13 million to $15 million excluding acquisition related payments.

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 Investor Relations 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 February 10, 2017, 7:30 p.m. PST, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 56854612. The recording will also be available on the Investor Relations section of the Company's website.

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 months and fiscal year ended December 31, 2016 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), is a worldwide leader in essential test technologies and expertise, including a broad portfolio of high-performance probe cards, engineering probes, probe stations and reliability test systems. For semiconductor companies and scientific institutions, FormFactor delivers access to electrical information from wafers, integrated circuits (ICs), IC packages, optical devices, and more. Customers use FormFactor’s products and services to lower overall production costs, improve their yields, and enable complex next-generation ICs. The Company services customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including with respect to the Company’s future financial and operating results, the Company’s plans, strategies and objectives for future operations, the anticipated results of the acquisition of Cascade Microtech and anticipated stock repurchases. These statements are based on management’s current expectations and beliefs as of the date hereof, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, expected financial synergies, gross margins, profitability and earnings accretion; future financial and operating results; benefits of the acquisition of Cascade Microtech; potential synergies and cost savings; the ability of the Company to drive growth and expand customer and partner relationships; the plans, strategies and objectives of the Company for future operations; the expected development, performance, market share or competitive performance relating to the Company’s products and services; anticipated stock repurchases; and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: failure of the Company to realize the anticipated benefits of the acquisition of Cascade Microtech; the Company’s ability to remain in compliance with the terms of its debt financing; changes in demand for the Company’s products; industry seasonality; risks to the Company’s ability to realize operational efficiencies; changes in the market, macro-economic environments, and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. No assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.

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