FORM FormFactor Inc

FormFactor, Inc. (Nasdaq:FORM) today announced its financial results for the second quarter of fiscal 2006, ended July 1, 2006. Quarterly revenues were a record $92.4 million, up 14% from $81.3 million in the first quarter of fiscal 2006, and up 77% from $52.3 million for the second quarter of fiscal 2005. "FormFactor had another record quarter, as we continued to make significant progress in addressing our target markets," said Joseph Bronson, President of FormFactor. "We are very pleased with the performance of our manufacturing operations and continue to make ongoing productivity and efficiency improvements." Net income for the second quarter of fiscal 2006 was $15.3 million or $0.32 per share on a fully diluted basis, which included $2.8 million or $0.06 of incremental FAS 123R stock option expense net of tax. This compares to $10.8 million or $0.25 per share on a fully diluted basis for the first quarter of fiscal 2006, which included $2.5 million or $0.05 of incremental FAS 123R stock option expense net of tax. Net income for the second quarter of fiscal 2005 was $5.0 million or $0.12 per share on a fully diluted basis, which excluded incremental stock-based compensation expense from the adoption of FAS 123R. Bookings of $96.5 million for the second quarter of fiscal 2006 also set a company record. Bookings for the first quarter of fiscal 2006 and second quarter of fiscal 2005 were $95.9 million and $58.0 million, respectively. "Key to our growth strategy is our ongoing focus on R&D, where our pipeline remains stronger than ever," said Igor Khandros, CEO of FormFactor. "Innovative new products, manufacturing execution and world-wide infrastructure put FormFactor in a unique position to enable the ongoing reduction in the cost of wafer test for our customers and for continuing long-term growth." 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 web cast of FormFactor's conference call on the Investor section of the company's website at www.formfactor.com. An audio replay of the conference call will also be made available approximately two hours after the conclusion of the call. The audio replay will remain available until July 29, 2006 at 6:30 p.m. PDT and can be accessed by dialing (888) 286-8010 or (617) 801-6888 and entering confirmation code 57967229. About FormFactor: Founded in 1993, FormFactor, Inc. (Nasdaq:FORM) is the leader in advanced wafer probe cards, which are used by semiconductor manufacturers to electrically test ICs. The company's wafer sort, burn-in and device performance testing products move IC testing upstream from post-packaging to the wafer level, enabling semiconductor manufacturers to lower their overall production costs, improve yields, and bring next-generation devices to market. 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 MicroSpring are registered trademarks of FormFactor, Inc. All other product, trademark, company or service names mentioned herein are the property of their respective owners. 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 business momentum, operations, demand for our products and future growth. 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: the demand for certain semiconductor devices; the rate at which semiconductor manufacturers implement manufacturing capability changes, make the transition to smaller nanometer technology nodes and implement tooling cycles; the company's ability to add manufacturing capacity, ramp production volume and expand globally, including to execute on its global manufacturing roadmap; the company's ability to develop and deliver innovative technologies, and to enforce its intellectual property rights; and the company's ability to implement and execute processes and structures for increasing productivity and supporting growth. 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 period ended December 31, 2005 and the company's Form 10-Q for the quarterly period ended April 1, 2006, filed with the Securities and Exchange Commission ("SEC"), and subsequent SEC filings. 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. -0- *T FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) Three Months Ended Six Months Ended July 1, 2006 June 25, 2005 July 1, 2006 June 25, 2005 --------------------------- --------------------------- Revenues $ 92,433 $ 52,337 $ 173,763 $ 103,302 Cost of revenues 43,707 30,561 84,207 59,396 --------------------------- --------------------------- Gross margin 48,726 21,776 89,556 43,906 --------------------------- --------------------------- Operating expenses: Research and development 11,627 5,701 21,403 11,580 Selling, general and administrative 17,965 9,817 33,713 19,412 --------------------------- --------------------------- Total operating expenses 29,592 15,518 55,116 30,992 --------------------------- --------------------------- Operating income 19,134 6,258 34,440 12,914 Interest income 3,889 980 5,711 1,796 Other income (expense), net 327 (112) (14) (25) --------------------------- --------------------------- 4,216 868 5,697 1,771 Income before income taxes 23,350 7,126 40,137 14,685 Provision for income taxes 8,069 2,114 14,088 4,762 --------------------------- --------------------------- Net income $ 15,281 $ 5,012 $ 26,049 $ 9,923 =========================== =========================== Net income per share: Basic $ 0.33 $ 0.13 $ 0.60 $ 0.25 =========================== =========================== Diluted $ 0.32 $ 0.12 $ 0.57 $ 0.24 =========================== =========================== Weighted-average number of shares used in per share calculations: Basic 45,920 39,274 43,730 39,146 =========================== =========================== Diluted 48,165 41,497 45,792 41,355 =========================== =========================== FORMFACTOR, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) July 1, December 31, 2006 2005 ASSETS Current assets: Cash and cash equivalents $270,338 $ 31,217 Marketable securities 160,306 180,391 Accounts receivable, net of allowance for doubtful accounts of $74 as of July 1, 2006 and December 31, 2005 44,884 43,967 Inventories 24,057 18,404 Deferred tax assets 11,339 11,396 Prepaid expenses and other current assets 11,771 7,169 ----------------------- Total current assets 522,695 292,544 Restricted cash 2,250 2,250 Property and equipment, net 88,586 81,588 Deferred tax assets 6,524 4,518 Other assets 739 461 ----------------------- Total assets $620,794 $381,361 ======================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 29,034 $ 26,369 Accrued liabilities 23,214 20,467 Income tax payable 9,016 9,697 Deferred rent 313 313 Deferred revenue and customer advances 5,186 3,588 ----------------------- Total current liabilities 66,763 60,434 Deferred rent and other long term liabilities 3,652 3,138 ----------------------- Total liabilities 70,415 63,572 ----------------------- Stockholders' equity: Common stock, $0.001 par value 47 40 Additional paid in capital 472,778 268,291 Deferred stock-based compensation - (2,495) Accumulated other comprehensive loss (807) (359) Retained Earnings 78,361 52,312 ----------------------- Total stockholders' equity 550,379 317,789 Total liabilities and stockholders' equity $620,794 $381,361 ======================= *T