FormFactor, Inc. Reports 2020 First Quarter Results

LIVERMORE, Calif., May 06, 2020 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the first quarter of fiscal 2020 ended March 28, 2020. Quarterly revenues were $160.8 million, down 10.0% from $178.6 million in the fourth quarter of fiscal 2019, and up 21.6% from $132.2 million in the first quarter of fiscal 2019.

  • Strong performance driven by strong Foundry and Logic probe card demand during the first 11 weeks of the quarter
  • Second consecutive quarter of results validating target financial model
  • Liquidity, balance sheet and cost structure provide resilience to weather an economic downturn

“During these unprecedented times, our priority has been to safeguard the health and safety of our employees while working closely with our customers to ensure their products are prioritized and quickly delivered,” said Mike Slessor, CEO of FormFactor, Inc. “Despite significant operational challenges related to COVID-19, our employees’ extraordinary efforts, dedication, and perseverance enabled us to deliver these excellent results.”

First Quarter Highlights

On a GAAP basis, net income for the first quarter of fiscal 2020 was $15.9 million, or $0.20 per fully-diluted share, compared to net income for the fourth quarter of fiscal 2019 of $18.6 million, or $0.24 per fully-diluted share, and net income for the first quarter of fiscal 2019 of $5.5 million, or $0.07 per fully-diluted share. Gross margin for the first quarter of 2020 was 41.9%, compared with 41.6% in the fourth quarter of 2019, and 39.7% in the first quarter of 2019.

On a non-GAAP basis, net income for the first quarter of fiscal 2020 was $26.1 million, or $0.33 per fully-diluted share, compared to net income for the fourth quarter of fiscal 2019 of $32.0 million, or $0.41 per fully-diluted share, and net income for the first quarter of fiscal 2019 of $15.2 million, or $0.20 per fully-diluted share. On a non-GAAP basis, gross margin for the first quarter of 2020 was 46.1%, compared with 45.7% in the fourth quarter of 2019, and 44.1% in the first quarter of 2019.

A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.

Free cash flow for the first quarter of fiscal 2020 was $27.6 million, compared to free cash flow for the fourth quarter of fiscal 2019 of $31.6 million, and free cash flow for the first quarter of 2019 of $14.9 million. A reconciliation of net cash provided by operating activities to free cash flow is provided in the schedules included below.

Outlook

Dr. Slessor added, “Given COVID-19 related uncertainties, we are not providing a formal outlook range for revenue, gross margin or EPS for the second quarter. Although our visibility is even more limited than usual, demand for FormFactor’s products remains strong. We are, however, output constrained, as our factories are now operating with limited production due to social distancing requirements. We anticipate these manufacturing constraints will keep second quarter factory output approximately ten percent below the level achieved during the first quarter. Absent these constraints, we anticipate we would have generated sequential revenue growth in the second quarter.”

We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We 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 Investor Relations section of our 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 May 13, 7:30 p.m. Pacific Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 5543718. Additionally, the replay will be available on the Investor Relations 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, non-GAAP earnings per fully-diluted share, non-GAAP gross margin, non-GAAP operating expenses and non-GAAP operating income, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three months ended March 28, 2020 and for outlook provided before, as well as for the comparable periods of fiscal 2019, are provided below, and on the Investor Relations section of our website at www.formfactor.com. 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 Financial Measures” following the tables below.

About FormFactor:

FormFactor, Inc. (Nasdaq:FORM), is a leading provider of essential test and measurement technologies along the full IC life cycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves 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 federal securities laws, including with respect to the Company’s future financial and operating results, the Company’s plans, strategies and objectives for future operations. 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 statements regarding future financial and operating results, customer demand, conditions in the semiconductor industry, and growth opportunities, 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: changes in demand for the Company’s products; customer-specific demand; the speed of customer implementation of new technologies; industry seasonality; risks to the Company’s ability to realize operational efficiencies; changes macro-economic environments; events affecting global and regional economic stability such as Brexit, infectious diseases and pandemics (such as the current COVID-19 pandemic), military conflicts, political volatility and similar factors, operating separately or in combination; 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. We are operating in an environment with especially substantial uncertainties arising from the COVID-19 pandemic, including with respect to its current and future impact on our operations, workforce, manufacturing capacity, customer demand, supply chain, macroeconomic environment and other important aspects of our business. In addition, there are increasingly restrictive export regulations being adopted in the U.S., including recently published amendments to export regulations that may substantially restrict or condition our sales in China with considerable uncertainty regarding the ultimate interpretation and implementation of these rules. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release 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.


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

  Three Months Ended
  March 28,
2020
  March 30,
2019
Revenues $ 160,753     $ 132,213  
Cost of revenues 93,363     79,692  
Gross profit 67,390     52,521  
Operating expenses:      
Research and development 21,267     19,723  
Selling, general and administrative 27,693     25,184  
Total operating expenses 48,960     44,907  
Operating income 18,430     7,614  
Interest income 685     580  
Interest expense (318 )   (595 )
Other income (expense), net (91 )   (84 )
Income before income taxes 18,706     7,515  
Provision for income taxes 2,816     2,032  
Net income $ 15,890     $ 5,483  
Net income per share:      
Basic $ 0.21     $ 0.07  
Diluted $ 0.20     $ 0.07  
Weighted-average number of shares used in per share calculations:      
Basic 76,005     74,362  
Diluted 78,510     76,009  

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