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FormFactor, Inc. Reports 2022 Second Quarter Results
来源: Nasdaq GlobeNewswire / 27 7月 2022 16:01:00 America/New_York
LIVERMORE, Calif., July 27, 2022 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the second quarter of fiscal 2022 ended June 25, 2022. Quarterly revenues were $203.9 million, an increase of 3.4% compared to $197.2 million in the first quarter of fiscal 2022, and an increase of 8.4% from $188.1 million in the second quarter of fiscal 2021.
- Delivered the second highest quarterly revenue in company’s history, and Earnings Per Share at the high end of outlook ranges
- Acquired dilution refrigerator product line of JanisULT, making FormFactor the largest supplier in the United States and strengthening the Company’s capabilities as a key supplier to the emerging quantum computing market
- Continued to execute previously announced capacity expansions to support long-term growth strategy
“FormFactor again posted strong results in the second quarter, delivering the second highest quarterly revenue in company history and exceeding our target financial model’s non-GAAP gross margin for the second consecutive quarter,” said Mike Slessor, CEO of FormFactor, Inc. “Together with good operating expense control in the current inflationary environment, this produced earnings-per-share at the high end of our outlook range.”
Second Quarter Highlights
On a GAAP basis, net income for the second quarter of fiscal 2022 was $30.2 million, or $0.38 per fully-diluted share, compared to net income for the first quarter of fiscal 2022 of $29.9 million, or $0.38 per fully-diluted share, and net income for the second quarter of fiscal 2021 of $17.9 million, or $0.23 per fully-diluted share. Gross margin for the second quarter of fiscal 2022 was 46.3%, compared with 47.8% in the first quarter of fiscal 2022, and 40.6% in the second quarter of fiscal 2021.
On a non-GAAP basis, net income for the second quarter of fiscal 2022 was $36.8 million, or $0.46 per fully-diluted share, compared to net income for the first quarter of fiscal 2022 of $38.7 million, or $0.49 per fully-diluted share, and net income for the second quarter of fiscal 2021 of $28.4 million, or $0.36 per fully-diluted share. On a non-GAAP basis, gross margin for the second quarter of fiscal 2022 was 47.4%, compared with 49.0% in the first quarter of fiscal 2022, and 44.4% in the second quarter of fiscal 2021.
A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.
GAAP net cash provided by operating activities for the second quarter of fiscal 2022 was $42.6 million, compared to $44.2 million for the first quarter of fiscal 2022, and $33.8 million for the second quarter of fiscal 2021. Free cash flow for the second quarter of fiscal 2022 was $28.3 million, compared to free cash flow for the first quarter of fiscal 2022 of $28.7 million, and free cash flow for the second quarter of 2021 of $16.2 million. A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below.
Outlook
Dr. Slessor added, “Our sequentially weaker outlook is due primarily to reduced demand for Foundry & Logic probe cards from several major customers in both mobile and compute applications. We view this reduction in demand as a short-term response by our customers to changing conditions in their end markets, and not a structural change in our business.”
For the third quarter ending September 24, 2022, FormFactor is providing the following outlook*:
GAAP Reconciling Items** Non-GAAP Revenue $183 million +/- $6 million — $183 million +/- $6 million Gross Margin 37.5% +/- 1.5% $3 million 39.0% +/- 1.5% Net income per diluted share $0.08 +/- $0.04 $0.13 $0.21 +/- $0.04 *This outlook assumes consistent foreign currency rates.
**Reconciling items are stock-based compensation, restructuring charges, and amortization of intangibles and fixed asset fair value adjustments due to acquisitions.We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PDT, or 4:25 p.m. EDT, today.
The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our 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 replay will be available on the Investor Relations 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, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses and non-GAAP operating income, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and six months ended June 25, 2022, and for outlook provided before, as well as for the comparable periods of fiscal 2021, are provided below, and on the Investor Relations section of our website at www.formfactor.com. 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 Financial Measures” following the tables below.
About FormFactor:
FormFactor, Inc. (Nasdaq: FORM), is a leading provider of essential test and measurement technologies along the full IC life cycle - from metrology and inspection, characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.
Forward-looking Statements:
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited, to statements regarding future financial and operating results, customer demand, conditions in the semiconductor industry, and growth opportunities, and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as infectious diseases and pandemics (including the current COVID-19 pandemic), military conflicts, political volatility and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. We are operating in an environment with especially substantial uncertainties arising from the COVID-19 pandemic, including with respect to its current and future impact on our operations, workforce, manufacturing capacity, customer demand, supply chain, macroeconomic environment and other important aspects of our business. In addition, there are varying barriers to international trade, including restrictive trade and export regulations, dynamic tariffs, trade disputes between the U.S. and other countries, including China, and national security developments or tensions, that may substantially restrict or condition our sales certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)Three Months Ended Six Months Ended June 25,
2022March 26,
2022June 26,
2021June 25,
2022June 26,
2021Revenues $ 203,907 $ 197,174 $ 188,076 $ 401,081 $ 374,712 Cost of revenues 109,538 102,950 111,793 212,488 221,723 Gross profit 94,369 94,224 76,283 188,593 152,989 Operating expenses: Research and development 28,317 27,134 25,454 55,451 49,500 Selling, general and administrative 33,406 32,906 30,479 66,312 60,494 Total operating expenses 61,723 60,040 55,933 121,763 109,994 Operating income 32,646 34,184 20,350 66,830 42,995 Interest income 300 138 148 438 342 Interest expense (119 ) (192 ) (116 ) (311 ) (296 ) Other income (expense), net 551 192 (194 ) 743 (22 ) Income before income taxes 33,378 34,322 20,188 67,700 43,019 Provision for income taxes 3,136 4,450 2,283 7,586 5,489 Net income $ 30,242 $ 29,872 $ 17,905 $ 60,114 $ 37,530 Net income per share: Basic $ 0.39 $ 0.38 $ 0.23 $ 0.77 $ 0.48 Diluted $ 0.38 $ 0.38 $ 0.23 $ 0.76 $ 0.47 Weighted-average number of shares used in per share calculations: Basic 77,897 78,246 77,463 78,071 77,530 Diluted 79,210 79,468 79,466 79,423 79,621 FORMFACTOR, INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)Three Months Ended Six Months Ended June 25,
2022March 26,
2022June 26,
2021June 25,
2022June 26,
2021GAAP Revenue $ 203,907 $ 197,174 $ 188,076 $ 401,081 $ 374,712 Adjustments: Amortization of deferred revenue fair value adjustments due to acquisitions — — 78 — 203 Non-GAAP Revenue $ 203,907 $ 197,174 $ 188,154 $ 401,081 $ 374,915 GAAP Gross Profit $ 94,369 $ 94,224 $ 76,283 $ 188,593 $ 152,989 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 1,139 1,168 6,055 2,307 12,053 Stock-based compensation 734 1,078 1,079 1,812 2,414 Restructuring charges 454 139 168 593 168 Non-GAAP Gross Profit $ 96,696 $ 96,609 $ 83,585 $ 193,305 $ 167,624 GAAP Gross Margin 46.3 % 47.8 % 40.6 % 47.0 % 40.8 % Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 0.5 % 0.6 % 3.1 % 0.6 % 3.3 % Stock-based compensation 0.4 % 0.5 % 0.6 % 0.5 % 0.6 % Restructuring charges 0.2 % 0.1 % 0.1 % 0.1 % — % Non-GAAP Gross Margin 47.4 % 49.0 % 44.4 % 48.2 % 44.7 % GAAP operating expenses $ 61,723 $ 60,040 $ 55,933 $ 121,763 $ 109,994 Adjustments: Amortization of intangibles (1,526 ) (1,561 ) (1,590 ) (3,087 ) (3,305 ) Stock-based compensation (5,624 ) (6,442 ) (5,509 ) (12,066 ) (11,251 ) Restructuring charges (127 ) (174 ) (466 ) (301 ) (466 ) Gain on contingent consideration — — 95 — 95 Acquisition related expenses — — (43 ) — (209 ) Non-GAAP operating expenses $ 54,446 $ 51,863 $ 48,420 $ 106,309 $ 94,858 GAAP operating income $ 32,646 $ 34,184 $ 20,350 $ 66,830 $ 42,995 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 2,665 2,729 7,645 5,394 15,358 Stock-based compensation 6,358 7,520 6,588 13,878 13,665 Restructuring charges 581 313 634 894 634 Gain on contingent consideration — — (95 ) — (95 ) Acquisition related expenses — — 43 — 209 Non-GAAP operating income $ 42,250 $ 44,746 $ 35,165 $ 86,996 $ 72,766 FORMFACTOR, INC.
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)Three Months Ended Six Months Ended June 25,
2022March 26,
2022June 26,
2021June 25,
2022June 26,
2021GAAP net income $ 30,242 $ 29,872 $ 17,905 $ 60,114 $ 37,530 Adjustments: Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 2,665 2,729 7,645 5,394 15,358 Stock-based compensation 6,358 7,520 6,588 13,878 13,665 Restructuring charges 581 313 634 894 634 Gain on contingent consideration — — (95 ) — (95 ) Acquisition related expenses — — 43 — 209 Income tax effect of non-GAAP adjustments (3,071 ) (1,725 ) (4,273 ) (4,796 ) (8,079 ) Non-GAAP net income $ 36,775 $ 38,709 $ 28,447 $ 75,484 $ 59,222 GAAP net income per share: Basic $ 0.39 $ 0.38 $ 0.23 $ 0.77 $ 0.48 Diluted $ 0.38 $ 0.38 $ 0.23 $ 0.76 $ 0.47 Non-GAAP net income per share: Basic $ 0.47 $ 0.49 $ 0.37 $ 0.97 $ 0.76 Diluted $ 0.46 $ 0.49 $ 0.36 $ 0.95 $ 0.74 FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)Six Months Ended June 25,
2022June 26,
2021Cash flows from operating activities: Net income $ 60,114 $ 37,530 Selected adjustments to reconcile net income to net cash provided by operating activities: Depreciation 14,146 12,678 Amortization 4,702 13,900 Stock-based compensation expense 13,878 13,665 Provision for excess and obsolete inventories 4,726 6,898 Non-cash restructuring charges 710 — Gain on contingent consideration — (95 ) Other activity impacting operating cash flows (11,475 ) (18,421 ) Net cash provided by operating activities 86,801 66,155 Cash flows from investing activities: Acquisition of property, plant and equipment (30,116 ) (31,322 ) Acquisition of business (3,121 ) — Purchase of promissory note receivable (1,000 ) — Purchases of marketable securities, net (6,874 ) (28,491 ) Net cash used in investing activities (41,111 ) (59,813 ) Cash flows from financing activities: Purchase of common stock through stock repurchase program (54,328 ) (23,951 ) Proceeds from issuances of common stock 5,687 5,909 Tax withholdings related to net share settlements of equity awards (4,243 ) (5,261 ) Payment of contingent consideration — (3,873 ) Principal repayments on term loans (4,379 ) (4,740 ) Net cash used in financing activities (57,263 ) (31,916 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (3,470 ) (1,558 ) Net decrease in cash, cash equivalents and restricted cash (15,043 ) (27,132 ) Cash, cash equivalents and restricted cash, beginning of period 155,342 191,098 Cash, cash equivalents and restricted cash, end of period $ 140,299 $ 163,966 FORMFACTOR, INC.
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
(In thousands)
(Unaudited)Three Months Ended Six Months Ended June 25,
2022March 26,
2022June 26,
2021June 25,
2022June 26,
2021Net cash provided by operating activities $ 42,646 $ 44,155 $ 33,799 $ 86,801 $ 66,155 Adjustments: Cash paid for interest 131 163 166 294 339 Acquisition related payments in working capital — — 43 — 209 Capital expenditures (14,510 ) (15,606 ) (17,852 ) (30,116 ) (31,322 ) Free cash flow $ 28,267 $ 28,712 $ 16,156 $ 56,979 $ 35,381 FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)June 25,
2022March 26,
2022December 25,
2021ASSETS Current assets: Cash and cash equivalents $ 136,395 $ 167,182 $ 151,010 Marketable securities 129,919 129,174 125,055 Accounts receivable, net of allowance for credit losses 107,726 113,505 115,541 Inventories, net 143,475 125,590 111,548 Restricted cash 2,102 2,026 2,233 Prepaid expenses and other current assets 17,447 18,671 18,652 Total current assets 537,064 556,148 524,039 Restricted cash 1,802 2,053 2,099 Operating lease, right-of-use-assets 33,499 35,764 35,210 Property, plant and equipment, net of accumulated depreciation 157,814 152,179 146,555 Goodwill 212,357 211,553 212,299 Intangibles, net 30,872 33,638 36,342 Deferred tax assets 65,059 62,746 61,995 Other assets 3,980 2,799 1,981 Total assets $ 1,042,447 $ 1,056,880 $ 1,020,520 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 60,927 $ 65,378 $ 57,862 Accrued liabilities 54,835 47,438 50,836 Current portion of term loans, net of unamortized issuance costs 4,725 6,790 8,931 Deferred revenue 31,255 27,002 23,224 Operating lease liabilities 7,843 8,049 7,901 Total current liabilities 159,585 154,657 148,754 Term loans, less current portion, net of unamortized issuance costs 14,915 15,175 15,434 Deferred tax liabilities 2,909 3,131 3,623 Long-term operating lease liabilities 29,511 31,366 31,009 Other liabilities 5,542 5,878 5,920 Total liabilities 212,462 210,207 204,740 Stockholders’ equity: Common stock 77 78 78 Additional paid-in capital 860,584 902,994 898,945 Accumulated other comprehensive loss (8,996 ) (4,477 ) (1,449 ) Accumulated deficit (21,680 ) (51,922 ) (81,794 ) Total stockholders’ equity 829,985 846,673 815,780 Total liabilities and stockholders’ equity $ 1,042,447 $ 1,056,880 $ 1,020,520 About our Non-GAAP Financial Measures:
We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP revenue, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, revenue, gross profit, gross margin, operating expenses, or operating income in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP revenue, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations" and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release.
Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4321
ir@formfactor.comSource: FormFactor, Inc.
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