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FormFactor, Inc. Reports Fourth Quarter and Annual Results

LIVERMORE, CA -- (Marketwired) -- Feb 05, 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     December     December     December  
                           28, 2013     29, 2012     28, 2013     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     December     December     December  
                           28, 2013     29, 2012     28, 2013     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,   December 29, 
                                                    2013           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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Investor Contact:
Stan Finkelstein
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(925) 290-4321

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