November 01, 2012 at 16:05 PM EDT
FormFactor, Inc. Reports Third Quarter Results

LIVERMORE, CA -- (Marketwire) -- 11/01/12 -- 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 16th."

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     September     September     September
                          29,           24,           29,           24,
                         2012          2011          2012          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     September     September     September
                          29,           24,           29,           24,
                         2012          2011          2012          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,   December 31,
                                                  2012            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
                                             ==============  ==============


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