FormFactor, Inc. (NASDAQ:FORM) today announced its financial results for the third quarter of fiscal 2016 ended September 24, 2016. Revenues were $123.3 million, up 48% from $83.1 millionreported in the second quarter and up 87% for the third quarter year-over-year.
“In our initial quarter following the Cascade Microtech acquisition we delivered strong results,” said Mike Slessor, CEO of FormFactor, Inc. “These results are the product of continued strength in FormFactor’s core probe card business, combined with the growing probe card and engineering systems businesses from Cascade Microtech. These results also demonstrate the accelerated earnings growth provided by the scale and diversification of the FormFactor-Cascade combination.”
Third Quarter Highlights
On a GAAP basis, net loss for the third quarter of fiscal 2016 was $(14.2) million, or $(0.20) per fully-diluted share, compared to a net income for the second quarter of fiscal 2016 of $36.9 million, or $0.61 per fully-diluted share, and a net loss for the third quarter of fiscal 2015 of $(2.5) million, or $(0.04) per fully-diluted share.
On a non-GAAP basis, net income for the third quarter of fiscal 2016 was $15.9 million, or $0.22 per fully-diluted share, compared to a net income for the second quarter of fiscal 2016 of $8.0 million, or $0.13 per fully-diluted share, and net income for the third quarter of fiscal 2015 of $3.3 million, or $0.06 per fully-diluted share. A reconciliation of GAAP to non-GAAP net income and net income per share is provided in the schedules included below.
Cash usage in the third quarter of fiscal 2016 was $10.8 million, compared to cash usage in the second quarter of fiscal 2016 of $68.8 million and cash generation of $5.1 million for the third quarter of fiscal 2015. Excluding cash attributable to the acquisition of Cascade Microtech, free cash flow generation for the third quarter was $16.0 million.
Outlook
The Company currently expects fourth quarter 2016 revenue to be slightly below that of the third quarter. Within the business segments, Probe Card revenues are forecasted to decline slightly as demand from FormFactor’s significant microprocessor customer normalizes to double the 2015 level, and Systems segment demand is expected to remain steady and benefit from the recent strong order flow.
For the fourth quarter ending on December 31, 2016, FormFactor is providing the following guidance*:
| U.S. GAAP | Reconciling Items** | Non-GAAP | |||
| Revenue | $116 million to $124 million | — | $116 million to $124 million | ||
| Gross Margin | 29% to 33% | $14 million | 41% to 45% | ||
| Net income (loss) per diluted share | ($0.11) to ($0.05) | $0.26 | $0.15 to $0.21 | ||
*This guidance assumes consistent foreign currency rates
**Reconciling items are stock based compensation, tax and amortization of intangibles
Free cash flow is forecasted to be positive $11 million to $13 million excluding acquisition related payments.
“Our near-term emphasis remains on execution and continuity, and we are increasingly excited about the growth prospects for the combined businesses as we leverage the technology and channel assets across our expanded opportunity set. We believe that FormFactor’s test and measurement solutions are well positioned to capitalize on overall market trends and will enable us to grow faster than the market,” concluded Mike Slessor.
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 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 October 29, 2016, 8:30 p.m. PDT, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 95363780. The recording will also be available on the Investors 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 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 and nine months ended September 24, 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.