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FormFactor, Inc. Reports First Quarter Results

LIVERMORE, CA -- (Marketwired) -- Apr 29, 2015 -- FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the first quarter of fiscal 2015 that ended on March 28, 2015. Quarterly revenues were $70.8 million, down 1% from $71.3 million in the fourth quarter of fiscal 2014, and up 27% from $56.0 million in the first quarter of fiscal 2014.

On a GAAP basis, net income for the first quarter of fiscal 2015 was $0.8 million, or $0.01 per fully-diluted share, compared to a net loss for the fourth quarter of fiscal 2014 of $(1.9) million, or $(0.03) per fully-diluted share, and a net loss for the first quarter of fiscal 2014 of $(12.7) million, or $(0.23) per fully-diluted share.

On a non-GAAP basis, net income for the first quarter of fiscal 2015 was $5.9 million, or $0.10 per fully-diluted share, compared to a net income for the fourth quarter of fiscal 2014 of $6.5 million, or $0.11 per fully-diluted share, and a net loss for the first quarter of fiscal 2014 of $(2.3) million, or $(0.04) per fully-diluted share. A reconciliation of GAAP to non-GAAP net income (loss) and net income (loss) per share is provided in the schedules included below.

Cash generation for the first quarter of fiscal 2015 was $7.8 million, compared to cash generation of $9.5 million for the fourth quarter of fiscal 2014 and cash usage of $(7.1) million for the first quarter of fiscal 2014.

"The first quarter of 2015 marked our fourth consecutive quarter of non-GAAP profitability and cash generation," said Mike Slessor, Chief Executive Officer of FormFactor, Inc. "As we enter a period with historically strong seasonal demand, we continue to pair improved operational execution with market share gains, and are optimistic about our future growth opportunities."

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 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 1, 2015, 9:00 p.m. PDT, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 21634739. 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) helps semiconductor manufacturers test the integrated circuits (ICs) that power consumer mobile devices, as well as computing, automotive and other applications. The company is one of the world's leading providers of essential wafer test technologies and expertise, with an extensive portfolio of high-performance probe cards for DRAM, Flash and SoC devices. Customers use FormFactor's products and services to lower overall production costs, improve their yields and enable complex next-generation ICs. Headquartered in Livermore, California, the company services its customers from a network of facilities 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; changes in historical demands on a seasonal basis; risks in the company's ability to pair improved operational execution with market share gains; risks of the company's ability to realize sustainable profitability, to achieve its growth objectives, and to meet customer demand for the company's DRAM, Flash Memory and SoC products; 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 27, 2014, as filed with the SEC, and subsequent SEC filings. Copies of the company's SEC filings are available at http://investors.formfactor.com/sec.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   
                                                   -------------------------
                                                     March 28,    March 29, 
                                                       2015         2014    
                                                   ------------ ------------
Revenues                                           $    70,829  $    55,959 
Cost of revenues                                        48,040       43,634 
                                                   ------------ ------------
Gross profit                                            22,789       12,325 
                                                   ------------ ------------
Operating expenses:                                                         
  Research and development                              11,086        9,747 
  Selling, general and administrative                   11,882       12,254 
  Restructuring charges, net                               503        1,997 
  Impairment of long-lived assets                            -          743 
                                                   ------------ ------------
    Total operating expenses                            23,471       24,741 
                                                   ------------ ------------
Operating loss                                            (682)     (12,416)
Interest income, net                                        85           79 
Other income (expense), net                              1,501          (66)
                                                   ------------ ------------
Income (loss) before income taxes                          904      (12,403)
Provision for income taxes                                 121          308 
                                                   ------------ ------------
Net income (loss)                                  $       783  $   (12,711)
                                                   ============ ============
Net income (loss) per share:                                                
  Basic                                            $      0.01  $     (0.23)
                                                   ============ ============
  Diluted                                          $      0.01  $     (0.23)
                                                   ============ ============
Weighted-average number of shares used in per                               
 share calculations:                                                        
  Basic                                                 56,954       55,050 
                                                   ============ ============
  Diluted                                               58,838       55,050 
                                                   ============ ============
                                                                            
                                                                            
                                                                            
                              FORMFACTOR, INC.                              
                RECONCILIATION OF NON-GAAP NET INCOME (LOSS)                
                  (In thousands, except per share amounts)                  
                                 (Unaudited)                                
                                                                            
                                                       Three Months Ended   
                                                   -------------------------
                                                     March 28,    March 29, 
                                                       2015         2014    
                                                   ------------ ------------
GAAP net income (loss)                             $       783  $   (12,711)
Stock-based compensation                                 2,909        2,570 
Restructuring charges, net                                 503        1,997 
Acquisition and integration related expenses               (90)          41 
Amortization of intangibles, inventory and fixed                            
 assets fair value adjustment due to acquisition         3,291        4,949 
Impairment of long-lived assets                              -          743 
Loss contingency                                             -          133 
Business interruption insurance claim recovery          (1,484)           - 
                                                   ------------ ------------
Non-GAAP net income (loss)                         $     5,912  $    (2,278)
                                                   ============ ============
                                                                            
Non-GAAP net income (loss) per share:                                       
Basic                                              $      0.10  $     (0.04)
                                                   ============ ============
Diluted                                            $      0.10  $     (0.04)
                                                   ============ ============
                                                                            
Weighted-average number of shares used in per                               
 share calculations:                                                        
Basic                                                   56,954       55,050 
                                                   ============ ============
Diluted                                                 58,838       55,050 
                                                   ============ ============
                                                                            
                                                                            
                                                                            
                              FORMFACTOR, INC.                              
                    CONDENSED CONSOLIDATED BALANCE SHEETS                   
                               (In thousands)                               
                                 (Unaudited)                                
                                                                            
                                                    March 28,   December 27,
                                                      2015          2014    
                                                  ------------ -------------
ASSETS                                                                      
Current assets:                                                             
Cash and cash equivalents                         $   125,993  $    113,940 
Marketable securities                                  45,660        49,897 
Accounts receivable, net                               41,055        45,152 
Inventories, net                                       24,571        25,548 
Deferred tax assets                                     2,031         2,036 
Refundable income taxes                                     -           782 
Prepaid expenses and other current assets               6,154         6,919 
                                                  ------------ -------------
  Total current assets                                245,464       244,274 
Restricted cash                                           435           435 
Property, plant and equipment, net                     25,077        25,498 
Goodwill                                               30,731        30,731 
Intangibles, net                                       35,504        38,689 
Deferred tax assets                                     3,477         3,466 
Other assets                                              831         1,150 
                                                  ------------ -------------
  Total assets                                    $   341,519  $    344,243 
                                                  ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Current liabilities:                                                        
Accounts payable                                  $    16,143  $     20,274 
Accrued liabilities                                    17,033        21,217 
Income taxes payable                                      158            68 
Deferred revenue                                        5,962         6,303 
                                                  ------------ -------------
  Total current liabilities                            39,296        47,862 
Long-term income taxes payable                          1,025         1,094 
Deferred tax liabilities                                2,208         2,208 
Deferred rent and other liabilities                     3,621         3,643 
                                                  ------------ -------------
  Total liabilities                                    46,150        54,807 
                                                  ------------ -------------
Commitments and contingencies                                               
Stockholders' equity:                                                       
Common stock and capital in excess of par value       716,819       711,733 
Accumulated other comprehensive loss                   (1,697)       (1,761)
Accumulated deficit                                  (419,753)     (420,536)
                                                  ------------ -------------
  Total stockholders' equity                          295,369       289,436 
                                                  ------------ -------------
  Total liabilities and stockholders' equity      $   341,519  $    344,243 
                                                  ============ =============
                                                                            

Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4321

ir@formfactor.com