LIVERMORE, Calif., Feb. 06, 2019 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the fourth quarter of fiscal 2018 ended December 29, 2018. Quarterly revenues were $140.9 million, up 4.4% from $135.0 million reported in the third quarter of fiscal 2018, and up 6.8% from $131.9 million in the fourth quarter of fiscal 2017. For fiscal 2018, FormFactor posted revenues of $529.7 million, down 3.4% from $548.4 million in fiscal 2017, and achieved the following:
- Delivered the strongest financial performance of the year in the fourth quarter
- Demonstrated resilient business model in a challenging industry environment
- Strengthened key customer relationships with world’s top logic, memory and foundry manufacturers as three 10% customers in Q4
“Our Q4’18 results demonstrated the strength and leadership we have in our served markets," said Mike Slessor, CEO of FormFactor, Inc. “Despite a very dynamic industry environment and several customer node transition delays, we delivered solid financial and operational results by capitalizing on our broad and diverse opportunity set in advanced probe cards and engineering systems.”
Fourth Quarter Highlights
On a GAAP basis, net income for the fourth quarter of fiscal 2018 was $85.1 million, or $1.13 per fully-diluted share, compared to net income for the third quarter of fiscal 2018 of $7.7 million, or $0.10 per fully-diluted share, and net income for the fourth quarter of fiscal 2017 of $5.6 million, or $0.07 per fully-diluted share. Net income for fiscal 2018 was $104.0 million or $1.38 per fully-diluted share, compared to net income of $40.9 million, or $0.55 per fully-diluted share for fiscal 2017. GAAP net income includes a release of $75.8 million dollars of the valuation allowance which was previously recorded against the majority of our deferred tax assets.
On a non-GAAP basis, net income for the fourth quarter of fiscal 2018 was $23.4 million, or $0.31 per fully-diluted share, compared to net income for the third quarter of fiscal 2018 of $19.6 million, or $0.26 per fully-diluted share, and net income for the fourth quarter of fiscal 2017 of $18.0 million, or $0.24 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. On a non-GAAP basis, net income for fiscal 2018 was $76.1 million, or $1.01 per fully-diluted share, compared to net income of $89.5 million, or $1.21 per fully-diluted share for fiscal 2017.
Free cash flow for the fourth quarter of fiscal 2018 was $15.8 million, compared to free cash flow for the third quarter of 2018 of $13.0 million, and free cash flow for the fourth quarter of fiscal 2017 of $23.5 million. Free cash flow for fiscal 2018 was $51.9 million, compared to free cash flow of $72.4 million for fiscal 2017. A reconciliation of net cash provided by operating activities to free cash flow generation is provided in the schedules included below.
Outlook
“With all major customers innovating on existing nodes and utilizing existing capacity, the design-specific consumable nature of our products is significant, and we are continuing to experience solid new-design flow in the beginning of 2019. Along with the rest of the industry, our visibility is very limited at present, however, we expect these general trends to continue through the balance of this quarter,” concluded Dr. Slessor.
For the first quarter ending on March 30, 2019, FormFactor is providing the following outlook including the impact of deferred tax expenses:
| GAAP | Reconciling Items2 | Non-GAAP1 | ||||
| Revenue | $127 million to $135 million | — | $127 million to $135 million | |||
| Gross Margin | 37% to 40% | $6 million | 41% to 44% | |||
| Net income per diluted share | $0.02 to $0.08 | $0.13 | $0.15 to $0.21 | |||
1Inclusion of deferred tax expenses reduces Q1 outlook for non-GAAP diluted earnings per share by approximately 4 cents.
2Reconciling items are stock-based compensation and amortization of intangibles.
We have posted our revenue breakdown by region and market segment on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:30 p.m. PST, or 4:30 p.m. EST, 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 telephone replay will be available by telephone through February 8, 2019, 7:30 p.m. Pacific Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 6384939. Additionally, the replay will also 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 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 twelve months ended December 29, 2018, as well as for the comparable periods of fiscal 2017, 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 leading provider of essential test and measurement technologies along the full IC life cycle - from 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 hereof, 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, progress towards the Company’s long-term financial model, 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; the timing of customers’ transitions to new technologies; the Company’s ability to capitalize on market and customer opportunities; industry seasonality; risks to the Company’s ability to realize operational efficiencies; changes in the market, macro-economic environments; failure of the Company to realize the anticipated benefits of acquisitions; 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. No assurances can be given that any of the events anticipated by the forward-looking statements 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.
