FORM FormFactor Inc

FormFactor, Inc. (Nasdaq:FORM) today announced its financial results for the third quarter of fiscal 2006, ended September 30, 2006. Quarterly revenues were $96.8 million, up 5% from $92.4 million in the second quarter of fiscal 2006, and up 55% from $62.4 million in the third quarter of fiscal 2005. �FormFactor had another record quarter as revenue, production and net income reached historical highs. Demand for advanced probe cards in the third quarter continued to reflect the ongoing trends in the market including customers� ramping production for memory and logic, the transition to advanced nodes, and the ongoing need for higher parallelism in wafer test,� said Joseph Bronson, President of FormFactor. �Factory capacity continued to ramp, as production efficiencies and yields increased in many segments of our manufacturing operations.� Net income for the third quarter of fiscal 2006 was $15.8 million or $0.33 per share on a fully diluted basis, which included $3.9 million or $0.08 per share of incremental FAS 123R stock option expense, net of tax. This compares to $15.3 million or $0.32 per share on a fully diluted basis for the second quarter of fiscal 2006, which included $2.8 million or $0.06 per share of incremental FAS 123R stock option expense, net of tax. Net income for the third quarter of fiscal 2005 was $9.8 million or $0.23 per share on a fully diluted basis, which was prior to the adoption of FAS 123R. Bookings for the third quarter of fiscal 2006 were $90.5 million. Bookings for the second quarter of fiscal 2006 and third quarter of fiscal 2005 were $96.5 million and $62.9 million, respectively. �We are pleased with our 63% revenue growth year-to-date,� said Igor Khandros, Chief Executive Officer of FormFactor. �We are encouraged by customers� interest in our new Harmony� NAND Flash product. We are confident in business growth opportunities in 2007 and beyond, driven by our robust product development pipeline, supporting multiple growth drivers in our customers� businesses.� 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 Investors 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 October 27, 2006 at 6:30 p.m. PDT and can be accessed by dialing (888) 286-8010 or (617) 801-6888 and entering confirmation code 19398524. 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 integrated circuits, or 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 continue to ramp its factory capacity and increase production efficiencies and yields in its manufacturing operations and to expand globally, including to execute on its global manufacturing roadmap; the company�s ability to develop and deliver innovative technologies, including its Harmony� NAND Flash product, and to enforce its intellectual property rights; and the company�s ability to drive its product development pipeline and support multiple growth drivers in its customers� businesses. 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 July 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. FORMFACTOR, INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) � Three Months Ended Nine Months Ended September 30, 2006 September 24, 2005 September 30, 2006 September 24, 2005 � Revenues $96,757� $62,374� $270,520� $165,676� Cost of revenues 46,492� 34,088� 130,699� 93,484� Gross margin 50,265� 28,286� 139,821� 72,192� � Operating expenses: Research and development 11,994� 7,881� 33,397� 19,461� Selling, general and administrative 19,321� 11,871� 53,034� 31,283� Total operating expenses 31,315� 19,752� 86,431� 50,744� Operating income 18,950� 8,534� 53,390� 21,448� � Interest income 4,485� 1,116� 10,196� 2,912� Other income (expense), net 59� (630) 45� (655) 4,544� 486� 10,241� 2,257� � Income before income taxes 23,494� 9,020� 63,631� 23,705� Benefit from (provision for) income taxes (7,675) 758� (21,763) (4,004) � Net income $15,819� $9,778� $41,868� $19,701� � Net income per share: Basic $0.34� $0.25� $0.94� $0.50� � Diluted $0.33� $0.23� $0.90� $0.47� � Weighted-average number of shares used in per share calculations: � Basic 46,417� 39,733� 44,625� 39,343� � Diluted 48,494� 41,762� 46,690� 41,492� FORMFACTOR, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) September 30, 2006 December 31, 2005 ASSETS Current assets: Cash and cash equivalents $276,365� $31,217� Marketable securities 181,128� 180,391� Accounts receivable, net of allowance for doubtful accounts of $74 as of September 30, 2006 and December 31, 2005 54,097� 43,967� Inventories 26,317� 18,404� � Deferred tax assets 11,233� 11,396� Prepaid expenses and other current assets 12,674� 7,169� Total current assets 561,814� 292,544� � Restricted cash 2,250� 2,250� � Property and equipment, net 87,398� 81,588� � Deferred tax assets 6,270� 4,518� Other assets 994� 461� � � Total assets $658,726� $381,361� � LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $27,346� $26,369� Accrued liabilities 21,850� 20,467� Income tax payable 7,653� 9,697� Deferred rent 353� 313� Deferred revenue and customer advances 6,556� 3,588� Total current liabilities 63,758� 60,434� � Deferred rent and other long term liabilities 4,559� 3,138� Total liabilities 68,317� 63,572� � Stockholders' equity: Common stock, $0.001 par value 47� 40� Additional paid in capital 496,296� 268,291� Deferred stock-based compensation -� (2,495) Accumulated other comprehensive loss (114) (359) Retained earnings 94,180� 52,312� Total stockholders' equity 590,409� 317,789� Total liabilities and stockholders' equity $658,726� $381,361� FormFactor, Inc. (Nasdaq:FORM) today announced its financial results for the third quarter of fiscal 2006, ended September 30, 2006. Quarterly revenues were $96.8 million, up 5% from $92.4 million in the second quarter of fiscal 2006, and up 55% from $62.4 million in the third quarter of fiscal 2005. "FormFactor had another record quarter as revenue, production and net income reached historical highs. Demand for advanced probe cards in the third quarter continued to reflect the ongoing trends in the market including customers' ramping production for memory and logic, the transition to advanced nodes, and the ongoing need for higher parallelism in wafer test," said Joseph Bronson, President of FormFactor. "Factory capacity continued to ramp, as production efficiencies and yields increased in many segments of our manufacturing operations." Net income for the third quarter of fiscal 2006 was $15.8 million or $0.33 per share on a fully diluted basis, which included $3.9 million or $0.08 per share of incremental FAS 123R stock option expense, net of tax. This compares to $15.3 million or $0.32 per share on a fully diluted basis for the second quarter of fiscal 2006, which included $2.8 million or $0.06 per share of incremental FAS 123R stock option expense, net of tax. Net income for the third quarter of fiscal 2005 was $9.8 million or $0.23 per share on a fully diluted basis, which was prior to the adoption of FAS 123R. Bookings for the third quarter of fiscal 2006 were $90.5 million. Bookings for the second quarter of fiscal 2006 and third quarter of fiscal 2005 were $96.5 million and $62.9 million, respectively. "We are pleased with our 63% revenue growth year-to-date," said Igor Khandros, Chief Executive Officer of FormFactor. "We are encouraged by customers' interest in our new Harmony(TM) NAND Flash product. We are confident in business growth opportunities in 2007 and beyond, driven by our robust product development pipeline, supporting multiple growth drivers in our customers' businesses." 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 Investors 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 October 27, 2006 at 6:30 p.m. PDT and can be accessed by dialing (888) 286-8010 or (617) 801-6888 and entering confirmation code 19398524. 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 integrated circuits, or 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 continue to ramp its factory capacity and increase production efficiencies and yields in its manufacturing operations and to expand globally, including to execute on its global manufacturing roadmap; the company's ability to develop and deliver innovative technologies, including its Harmony(TM) NAND Flash product, and to enforce its intellectual property rights; and the company's ability to drive its product development pipeline and support multiple growth drivers in its customers' businesses. 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 July 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 Nine Months Ended September September September September 30, 2006 24, 2005 30, 2006 24, 2005 --------- ---------- --------- --------- Revenues $96,757 $62,374 $270,520 $165,676 Cost of revenues 46,492 34,088 130,699 93,484 --------- ---------- --------- --------- Gross margin 50,265 28,286 139,821 72,192 --------- ---------- --------- --------- Operating expenses: Research and development 11,994 7,881 33,397 19,461 Selling, general and administrative 19,321 11,871 53,034 31,283 --------- ---------- --------- --------- Total operating expenses 31,315 19,752 86,431 50,744 --------- ---------- --------- --------- Operating income 18,950 8,534 53,390 21,448 Interest income 4,485 1,116 10,196 2,912 Other income (expense), net 59 (630) 45 (655) --------- ---------- --------- --------- 4,544 486 10,241 2,257 Income before income taxes 23,494 9,020 63,631 23,705 Benefit from (provision for) income taxes (7,675) 758 (21,763) (4,004) --------- ---------- --------- --------- Net income $15,819 $9,778 $41,868 $19,701 ========= ========== ========= ========= Net income per share: Basic $0.34 $0.25 $0.94 $0.50 ========= ========== ========= ========= Diluted $0.33 $0.23 $0.90 $0.47 ========= ========== ========= ========= Weighted-average number of shares used in per share calculations: Basic 46,417 39,733 44,625 39,343 ========= ========== ========= ========= Diluted 48,494 41,762 46,690 41,492 ========= ========== ========= ========= *T -0- *T FORMFACTOR, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) September December 30, 2006 31, 2005 --------- --------- ASSETS Current assets: Cash and cash equivalents $276,365 $31,217 Marketable securities 181,128 180,391 Accounts receivable, net of allowance for doubtful accounts of $74 as of September 30, 2006 and December 31, 2005 54,097 43,967 Inventories 26,317 18,404 Deferred tax assets 11,233 11,396 Prepaid expenses and other current assets 12,674 7,169 --------- --------- Total current assets 561,814 292,544 Restricted cash 2,250 2,250 Property and equipment, net 87,398 81,588 Deferred tax assets 6,270 4,518 Other assets 994 461 --------- --------- Total assets $658,726 $381,361 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $27,346 $26,369 Accrued liabilities 21,850 20,467 Income tax payable 7,653 9,697 Deferred rent 353 313 Deferred revenue and customer advances 6,556 3,588 --------- --------- Total current liabilities 63,758 60,434 Deferred rent and other long term liabilities 4,559 3,138 --------- --------- Total liabilities 68,317 63,572 Stockholders' equity: Common stock, $0.001 par value 47 40 Additional paid in capital 496,296 268,291 Deferred stock-based compensation - (2,495) Accumulated other comprehensive loss (114) (359) Retained earnings 94,180 52,312 --------- --------- Total stockholders' equity 590,409 317,789 --------- --------- Total liabilities and stockholders' equity $658,726 $381,361 ========= ========= *T