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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-3711155
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Large Accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Emerging growth company
o
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FORMFACTOR, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2018
INDEX
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FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
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|||||||
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March 31,
2018 |
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December 30, 2017
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||||
ASSETS
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|
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Current assets:
|
|
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Cash and cash equivalents
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$
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93,699
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$
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91,184
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Marketable securities
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48,370
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48,988
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Accounts receivable, net of allowance for doubtful accounts of $200 and $200
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78,524
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81,515
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Inventories, net
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73,780
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67,848
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Restricted cash
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663
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372
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Refundable income taxes
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2,307
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2,242
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Prepaid expenses and other current assets
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14,452
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13,705
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Total current assets
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311,795
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305,854
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Restricted cash
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1,020
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1,170
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Property, plant and equipment, net of accumulated depreciation and amortization of $259,608 and $255,755
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47,851
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46,754
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Goodwill
|
190,367
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189,920
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Intangibles, net
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90,649
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97,484
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|
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Deferred tax assets
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3,145
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|
3,133
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|
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Other assets
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1,361
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|
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2,259
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Total assets
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$
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646,188
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$
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646,574
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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Current liabilities:
|
|
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|
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Accounts payable
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$
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38,889
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$
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35,046
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Accrued liabilities
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23,496
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33,694
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Current portion of term loan, net of unamortized issuance cost of $270 and $307
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29,730
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|
18,443
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Deferred revenue
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4,515
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4,978
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Total current liabilities
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96,630
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|
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92,161
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Term loan, less current portion, net of unamortized issuance cost of $185 and $272
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67,315
|
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87,228
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Deferred tax liabilities
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3,487
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3,379
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Deferred rent and other liabilities
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7,746
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5,169
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Total liabilities
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175,178
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187,937
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Stockholders’ equity:
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Preferred stock, $0.001 par value:
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10,000,000 shares authorized; no shares issued and outstanding
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—
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—
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Common stock, $0.001 par value:
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250,000,000 shares authorized; 73,013,842 and 72,532,176 shares issued and outstanding
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74
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73
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|
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Additional paid-in capital
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851,249
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843,116
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|
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Accumulated other comprehensive income
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5,185
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|
|
3,021
|
|
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Accumulated deficit
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(385,498
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)
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(387,573
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)
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Total stockholders’ equity
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471,010
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458,637
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Total liabilities and stockholders’ equity
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$
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646,188
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$
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646,574
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FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
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|||||||
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Three Months Ended
|
||||||
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March 31,
2018 |
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April 1,
2017 |
||||
Revenues
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$
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118,290
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$
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128,829
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Cost of revenues
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73,161
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81,258
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Gross profit
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45,129
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47,571
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Operating expenses:
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Research and development
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18,046
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17,414
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Selling, general and administrative
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23,449
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22,829
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Restructuring and impairment charges
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—
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269
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Total operating expenses
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41,495
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40,512
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Operating income
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3,634
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7,059
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Interest income
|
257
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67
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|
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Interest expense
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(967
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)
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(1,174
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)
|
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Other expense, net
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(512
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)
|
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(400
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)
|
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Income before income taxes
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2,412
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|
|
5,552
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Provision for income taxes
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287
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|
|
367
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Net income
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$
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2,125
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$
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5,185
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Net income per share:
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Basic
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$
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0.03
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$
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0.07
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Diluted
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$
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0.03
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$
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0.07
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Weighted-average number of shares used in per share calculations:
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Basic
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72,826
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71,423
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Diluted
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74,342
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72,922
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FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
|
|||||||
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Three Months Ended
|
||||||
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March 31,
2018 |
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April 1,
2017 |
||||
Net income
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$
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2,125
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$
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5,185
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Other comprehensive income, net of tax:
|
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Foreign currency translation adjustments
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2,166
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1,447
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|
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Unrealized losses on available-for-sale marketable securities
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(174
|
)
|
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—
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Unrealized gains on derivative instruments
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172
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157
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|
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Other comprehensive income, net of tax
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2,164
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|
1,604
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Comprehensive income
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$
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4,289
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$
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6,789
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FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|||||||
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Three Months Ended
|
||||||
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March 31,
2018 |
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April 1,
2017 |
||||
Cash flows from operating activities:
|
|
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|
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Net income
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$
|
2,125
|
|
|
$
|
5,185
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
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|
|
|
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Depreciation
|
3,525
|
|
|
3,162
|
|
||
Amortization
|
7,194
|
|
|
8,349
|
|
||
Accretion of discount on investments
|
23
|
|
|
—
|
|
||
Stock-based compensation expense
|
3,756
|
|
|
3,302
|
|
||
Amortization of debt issuance costs
|
123
|
|
|
171
|
|
||
Deferred income tax provision
|
59
|
|
|
81
|
|
||
Provision for excess and obsolete inventories
|
2,045
|
|
|
2,797
|
|
||
Acquired inventory step-up amortization
|
—
|
|
|
190
|
|
||
Loss on disposal of long-lived assets
|
15
|
|
|
22
|
|
||
Gain on derivative instruments
|
—
|
|
|
(65
|
)
|
||
Foreign currency transaction gains
|
(561
|
)
|
|
(729
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
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|
||
Accounts receivable
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3,354
|
|
|
(8,888
|
)
|
||
Inventories
|
(7,408
|
)
|
|
(3,345
|
)
|
||
Prepaid expenses and other current assets
|
(247
|
)
|
|
3,068
|
|
||
Refundable income taxes
|
(52
|
)
|
|
286
|
|
||
Other assets
|
662
|
|
|
615
|
|
||
Accounts payable
|
2,988
|
|
|
7,220
|
|
||
Accrued liabilities
|
(9,521
|
)
|
|
(4,780
|
)
|
||
Income tax payable
|
(829
|
)
|
|
(419
|
)
|
||
Deferred rent and other liabilities
|
2,515
|
|
|
71
|
|
||
Deferred revenues
|
(444
|
)
|
|
1,510
|
|
||
Net Cash provided by operating activities
|
9,322
|
|
|
17,803
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Acquisition of property, plant and equipment
|
(3,831
|
)
|
|
(3,465
|
)
|
||
Proceeds from sale of a subsidiary
|
20
|
|
|
14
|
|
||
Purchases of marketable securities
|
(3,587
|
)
|
|
—
|
|
||
Proceeds from maturities of marketable securities
|
4,007
|
|
|
—
|
|
||
Net cash used in investing activities
|
(3,391
|
)
|
|
(3,451
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Proceeds from issuances of common stock
|
4,754
|
|
|
7,437
|
|
||
Purchase and retirement of common stock
|
—
|
|
|
(2,733
|
)
|
||
Tax withholdings related to net share settlements of equity awards
|
(357
|
)
|
|
(480
|
)
|
||
Principal repayments on term loan
|
(8,750
|
)
|
|
(6,875
|
)
|
||
Net cash used in financing activities
|
(4,353
|
)
|
|
(2,651
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
1,078
|
|
|
1,260
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
2,656
|
|
|
12,961
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
92,726
|
|
|
102,596
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
95,382
|
|
|
$
|
115,557
|
|
|
|
|
|
||||
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||
Change in accounts payable and accrued liabilities related to property, plant and equipment purchases
|
$
|
601
|
|
|
$
|
2,035
|
|
|
|
|
|
||||
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Cash paid for income taxes, net
|
$
|
771
|
|
|
$
|
338
|
|
Cash paid for interest
|
$
|
826
|
|
|
$
|
1,016
|
|
|
December 30, 2017
|
|
April 1, 2017
|
|
December 31, 2016
|
||||||
Cash, cash equivalents as previously reported in the Condensed Consolidated Statements of Cash Flows
|
$
|
91,184
|
|
|
$
|
114,437
|
|
|
$
|
101,408
|
|
Current assets - Restricted cash
|
372
|
|
|
4
|
|
|
106
|
|
|||
Restricted cash
|
1,170
|
|
|
1,116
|
|
|
1,082
|
|
|||
Cash, cash equivalents and restricted cash as currently reported in the Condensed Consolidated Statements of Cash Flows
|
$
|
92,726
|
|
|
$
|
115,557
|
|
|
$
|
102,596
|
|
|
Three Months Ended
|
||||
|
March 31, 2018
|
|
April 1, 2017
|
||
Intel
|
14.0
|
%
|
|
26.7
|
%
|
SK Hynix
|
10.1
|
|
|
—
|
|
Samsung
|
—
|
|
|
10.3
|
|
Total revenues attributable to 10% or greater customers
|
24.1
|
%
|
|
37.0
|
%
|
|
March 31,
2018 |
|
December 30,
2017 |
||||
Raw materials
|
$
|
37,156
|
|
|
$
|
33,101
|
|
Work-in-progress
|
21,719
|
|
|
20,134
|
|
||
Finished goods
|
14,905
|
|
|
14,613
|
|
||
|
$
|
73,780
|
|
|
$
|
67,848
|
|
|
|
Probe Cards
|
|
Systems
|
|
Total
|
||||||
Goodwill, gross, as of December 31, 2016
|
|
$
|
172,482
|
|
|
$
|
15,528
|
|
|
$
|
188,010
|
|
Foreign currency translation
|
|
—
|
|
|
1,910
|
|
|
1,910
|
|
|||
Goodwill, gross, as of December 30, 2017
|
|
172,482
|
|
|
17,438
|
|
|
189,920
|
|
|||
Foreign currency translation
|
|
—
|
|
|
447
|
|
|
447
|
|
|||
Goodwill, gross, as of March 31, 2018
|
|
$
|
172,482
|
|
|
$
|
17,885
|
|
|
$
|
190,367
|
|
|
|
March 31, 2018
|
|
December 30, 2017
|
||||||||||||||||||||
Other Intangible Assets
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Existing developed technologies
|
|
$
|
144,319
|
|
|
$
|
82,091
|
|
|
$
|
62,228
|
|
|
$
|
143,966
|
|
|
$
|
76,826
|
|
|
$
|
67,140
|
|
Trade name
|
|
12,126
|
|
|
6,430
|
|
|
5,696
|
|
|
12,086
|
|
|
5,735
|
|
|
6,351
|
|
||||||
Customer relationships
|
|
40,419
|
|
|
17,694
|
|
|
22,725
|
|
|
40,313
|
|
|
16,320
|
|
|
23,993
|
|
||||||
Backlog
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,811
|
|
|
15,811
|
|
|
—
|
|
||||||
|
|
$
|
196,864
|
|
|
$
|
106,215
|
|
|
$
|
90,649
|
|
|
$
|
212,176
|
|
|
$
|
114,692
|
|
|
$
|
97,484
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Cost of revenues
|
$
|
5,157
|
|
|
$
|
6,324
|
|
Selling, general and administrative
|
2,037
|
|
|
2,025
|
|
||
|
$
|
7,194
|
|
|
$
|
8,349
|
|
Fiscal Year
|
|
Amount
|
||
Remainder of 2018
|
|
$
|
21,590
|
|
2019
|
|
26,122
|
|
|
2020
|
|
24,052
|
|
|
2021
|
|
13,212
|
|
|
2022
|
|
3,602
|
|
|
Thereafter
|
|
2,071
|
|
|
|
|
$
|
90,649
|
|
|
March 31, 2018
|
|
December 30, 2017
|
||||
Accrued compensation and benefits
|
$
|
11,344
|
|
|
$
|
18,141
|
|
Accrued warranty
|
2,839
|
|
|
3,662
|
|
||
Accrued withholding for employee stock purchase plan
|
1,298
|
|
|
3,279
|
|
||
Accrued income and other taxes
|
1,877
|
|
|
3,965
|
|
||
Other accrued expenses
|
6,138
|
|
|
4,647
|
|
||
|
$
|
23,496
|
|
|
$
|
33,694
|
|
|
Employee Severance and Benefits
|
|
Contract Termination and Other Costs
|
|
Total
|
||||||
Accrual at December 30, 2017
|
$
|
398
|
|
|
$
|
1
|
|
|
$
|
399
|
|
Cash payments
|
(398
|
)
|
|
(1
|
)
|
|
(399
|
)
|
|||
Accrual at March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Level 1 valuations are obtained from real-time quotes for transactions in active exchange markets involving identical securities;
|
•
|
Level 2 valuations utilize significant observable inputs, such as quoted prices for similar assets or liabilities, quoted prices near the reporting date in markets that are less active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
|
•
|
Level 3 valuations utilize unobservable inputs to the valuation methodology and include our own data about assumptions market participants would use in ricing the asset or liability based on the best information available under the circumstances.
|
March 31, 2018
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
2,422
|
|
|
$
|
—
|
|
|
$
|
2,422
|
|
Marketable securities:
|
|
|
|
|
|
|
||||||
U.S. Treasuries
|
|
4,473
|
|
|
—
|
|
|
4,473
|
|
|||
Certificates of deposit
|
|
—
|
|
|
955
|
|
|
955
|
|
|||
Agency securities
|
|
—
|
|
|
9,901
|
|
|
9,901
|
|
|||
Corporate bonds
|
|
—
|
|
|
31,544
|
|
|
31,544
|
|
|||
Commercial paper
|
|
—
|
|
|
1,497
|
|
|
1,497
|
|
|||
|
|
4,473
|
|
|
43,897
|
|
|
48,370
|
|
|||
Interest rate swap derivative contracts
|
|
—
|
|
|
1,170
|
|
|
1,170
|
|
|||
Total assets
|
|
$
|
6,895
|
|
|
$
|
45,067
|
|
|
$
|
51,962
|
|
Liabilities:
|
|
|
|
|
|
|
||||||
Foreign exchange derivative contracts
|
|
$
|
—
|
|
|
$
|
(327
|
)
|
|
$
|
(327
|
)
|
December 30, 2017
|
|
Level 1
|
|
Level 2
|
|
Total
|
||||||
Assets:
|
|
|
|
|
|
|
||||||
Cash equivalents:
|
|
|
|
|
|
|
||||||
Money market funds
|
|
$
|
1,064
|
|
|
$
|
—
|
|
|
$
|
1,064
|
|
Corporate bonds
|
|
—
|
|
|
774
|
|
|
774
|
|
|||
|
|
1,064
|
|
|
774
|
|
|
1,838
|
|
|||
Marketable securities:
|
|
|
|
|
|
|
||||||
U.S. Treasuries
|
|
3,963
|
|
|
—
|
|
|
3,963
|
|
|||
Certificates of deposit
|
|
—
|
|
|
957
|
|
|
957
|
|
|||
Agency securities
|
|
—
|
|
|
10,432
|
|
|
10,432
|
|
|||
Corporate bonds
|
|
—
|
|
|
30,636
|
|
|
30,636
|
|
|||
Commercial paper
|
|
—
|
|
|
3,000
|
|
|
3,000
|
|
|||
|
|
3,963
|
|
|
45,025
|
|
|
48,988
|
|
|||
Foreign exchange derivative contracts
|
|
—
|
|
|
31
|
|
|
31
|
|
|||
Interest rate swap derivative contracts
|
|
—
|
|
|
1,043
|
|
|
1,043
|
|
|||
Total
|
|
$
|
5,027
|
|
|
$
|
46,873
|
|
|
$
|
51,900
|
|
|
|
Amount of Gain or (Loss) Recognized in OCI on Derivative
|
|
Location of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
|
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income
|
||||
Three Months Ended March 31, 2018
|
|
$
|
255
|
|
|
Interest expense
|
|
$
|
132
|
|
Three Months Ended April 1, 2017
|
|
$
|
120
|
|
|
Interest expense
|
|
$
|
(37
|
)
|
|
|
|
|
Three Months Ended
|
||||||
Derivatives Not Designated as Hedging Instruments
|
|
Location of Loss Recognized on Derivatives
|
|
March 31, 2018
|
|
April 1, 2017
|
||||
Foreign exchange forward contracts
|
|
Other expense, net
|
|
$
|
862
|
|
|
$
|
886
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Balance at beginning of period
|
$
|
3,662
|
|
|
$
|
2,972
|
|
Accruals
|
1,025
|
|
|
1,127
|
|
||
Settlements
|
(1,848
|
)
|
|
(1,517
|
)
|
||
Balance at end of period
|
$
|
2,839
|
|
|
$
|
2,582
|
|
|
Units
|
|
Weighted Average Grant Date Fair Value
|
|||
RSUs at December 30, 2017
|
3,148,061
|
|
|
$
|
11.22
|
|
Awards granted
|
46,500
|
|
|
14.95
|
|
|
Awards vested
|
(59,246
|
)
|
|
6.73
|
|
|
Awards forfeited
|
(258,599
|
)
|
|
11.60
|
|
|
RSUs at March 31, 2018
|
2,876,716
|
|
|
$
|
11.34
|
|
|
|
Options Outstanding
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Life in Years
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding at December 30, 2017
|
|
659,334
|
|
|
$
|
8.12
|
|
|
|
|
|
||
Options exercised
|
|
(105,610
|
)
|
|
9.93
|
|
|
|
|
|
|||
Outstanding at March 31, 2018
|
|
553,724
|
|
$
|
7.77
|
|
|
4.06
|
|
$
|
3,253,558
|
|
|
Exercisable at March 31, 2018
|
|
429,270
|
|
|
$
|
7.66
|
|
|
4.04
|
|
$
|
2,572,312
|
|
|
|
Three Months Ended
|
||
|
|
March 31, 2018
|
||
Shares issued
|
|
341,670
|
|
|
Weighted average per share purchase price
|
|
$
|
10.84
|
|
Weighted average per share discount from the fair value of our common stock on the date of issuance
|
|
$
|
3.51
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Cost of revenues
|
$
|
920
|
|
|
$
|
854
|
|
Research and development
|
1,302
|
|
|
1,082
|
|
||
Selling, general and administrative
|
1,534
|
|
|
1,366
|
|
||
Total stock-based compensation
|
$
|
3,756
|
|
|
$
|
3,302
|
|
|
Unrecognized Expense
|
|
Average Expected Recognition Period in Years
|
||
Stock options
|
$
|
398
|
|
|
0.90
|
Restricted stock units
|
21,556
|
|
|
2.00
|
|
Employee stock purchase plan
|
691
|
|
|
0.30
|
|
Total unrecognized stock-based compensation expense
|
$
|
22,645
|
|
|
1.90
|
|
Three Months Ended
|
||||
|
March 31,
2018 |
|
April 1,
2017 |
||
Weighted-average shares used in computing basic net income per share
|
72,826
|
|
|
71,423
|
|
Add potentially dilutive securities
|
1,516
|
|
|
1,499
|
|
Weighted-average shares used in computing diluted net income per share
|
74,342
|
|
|
72,922
|
|
|
|
|
|
||
Securities not included as they would have been antidilutive
|
19
|
|
|
126
|
|
|
Three Months Ended
|
|||||||||||||||||||||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|||||||||||||||||||||||||||||
|
Probe Cards
|
|
Systems
|
|
Corporate and Other
|
|
Total
|
|
Probe Cards
|
|
Systems
|
|
Corporate and Other
|
|
Total
|
|||||||||||||||||
Revenues
|
$
|
94,928
|
|
|
$
|
23,362
|
|
|
$
|
—
|
|
|
$
|
118,290
|
|
|
$
|
106,496
|
|
|
$
|
22,333
|
|
|
$
|
—
|
|
|
$
|
128,829
|
|
|
Gross profit
|
$
|
40,071
|
|
|
$
|
11,135
|
|
|
$
|
(6,077
|
)
|
|
$
|
45,129
|
|
|
$
|
42,820
|
|
|
$
|
12,090
|
|
|
$
|
(7,339
|
)
|
|
$
|
47,571
|
|
|
Gross margin
|
42.2
|
%
|
|
47.7
|
%
|
|
—
|
%
|
|
38.2
|
%
|
|
40.2
|
%
|
|
54.1
|
%
|
|
—
|
%
|
|
36.9
|
%
|
|||||||||
Operating income (loss)
|
$
|
18,832
|
|
—
|
|
$
|
4,283
|
|
|
$
|
(19,481
|
)
|
|
$
|
3,634
|
|
|
$
|
21,742
|
|
|
$
|
5,122
|
|
|
$
|
(19,805
|
)
|
|
$
|
7,059
|
|
|
Three Months Ended
|
||||||||||||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||||||||||||||||||
|
Probe Cards
|
|
Systems
|
|
Total
|
|
Probe Cards
|
|
Systems
|
|
Total
|
||||||||||||
Type of good/ service:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foundry & Logic
|
$
|
58,439
|
|
|
$
|
—
|
|
|
$
|
58,439
|
|
|
$
|
74,310
|
|
|
$
|
—
|
|
|
$
|
74,310
|
|
DRAM
|
30,266
|
|
|
—
|
|
|
30,266
|
|
|
28,956
|
|
|
—
|
|
|
28,956
|
|
||||||
Flash
|
6,223
|
|
|
—
|
|
|
6,223
|
|
|
3,230
|
|
|
—
|
|
|
3,230
|
|
||||||
Systems
|
—
|
|
|
23,362
|
|
|
23,362
|
|
|
—
|
|
|
22,333
|
|
|
22,333
|
|
||||||
|
$
|
94,928
|
|
|
$
|
23,362
|
|
|
$
|
118,290
|
|
|
$
|
106,496
|
|
|
$
|
22,333
|
|
|
$
|
128,829
|
|
Timing of revenue recognition:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Products transferred at a point in time
|
$
|
94,434
|
|
|
$
|
22,521
|
|
|
$
|
116,955
|
|
|
$
|
106,049
|
|
|
$
|
21,543
|
|
|
$
|
127,592
|
|
Services transferred over time
|
494
|
|
|
841
|
|
|
1,335
|
|
|
447
|
|
|
790
|
|
|
1,237
|
|
||||||
|
$
|
94,928
|
|
|
$
|
23,362
|
|
|
$
|
118,290
|
|
|
$
|
106,496
|
|
|
$
|
22,333
|
|
|
$
|
128,829
|
|
Geographical region:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
26,557
|
|
|
$
|
6,375
|
|
|
$
|
32,932
|
|
|
$
|
32,687
|
|
|
$
|
7,154
|
|
|
$
|
39,841
|
|
Taiwan
|
25,897
|
|
|
1,751
|
|
|
27,648
|
|
|
18,153
|
|
|
1,392
|
|
|
19,545
|
|
||||||
South Korea
|
14,285
|
|
|
1,074
|
|
|
15,359
|
|
|
18,154
|
|
|
583
|
|
|
18,737
|
|
||||||
Asia-Pacific
1
|
12,154
|
|
|
4,572
|
|
|
16,726
|
|
|
21,371
|
|
|
4,635
|
|
|
26,006
|
|
||||||
Europe
|
5,573
|
|
|
5,929
|
|
|
11,502
|
|
|
4,503
|
|
|
4,246
|
|
|
8,749
|
|
||||||
Japan
|
10,132
|
|
|
3,540
|
|
|
13,672
|
|
|
11,195
|
|
|
4,038
|
|
|
15,233
|
|
||||||
Rest of the world
|
330
|
|
|
121
|
|
|
451
|
|
|
433
|
|
|
285
|
|
|
718
|
|
||||||
|
$
|
94,928
|
|
|
$
|
23,362
|
|
|
$
|
118,290
|
|
|
$
|
106,496
|
|
|
$
|
22,333
|
|
|
$
|
128,829
|
|
|
Three Months Ended
|
||||
|
March 31,
2018 |
|
April 1,
2017 |
||
Revenues
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenues
|
61.8
|
|
|
63.1
|
|
Gross profit
|
38.2
|
|
|
36.9
|
|
Operating expenses:
|
|
|
|
||
Research and development
|
15.3
|
|
|
13.5
|
|
Selling, general and administrative
|
19.8
|
|
|
17.7
|
|
Restructuring and impairment charges
|
—
|
|
|
0.2
|
|
Total operating expenses
|
35.1
|
|
|
31.4
|
|
Operating income
|
3.1
|
|
|
5.5
|
|
Interest income
|
0.2
|
|
|
—
|
|
Interest expense
|
(0.8
|
)
|
|
(0.9
|
)
|
Other expense, net
|
(0.5
|
)
|
|
(0.3
|
)
|
Income before income taxes
|
2.0
|
|
|
4.3
|
|
Provision for income taxes
|
0.2
|
|
|
0.3
|
|
Net income
|
1.8
|
%
|
|
4.0
|
%
|
|
Three Months Ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
|
(In thousands)
|
||||||
Probe Cards
|
$
|
94,928
|
|
|
$
|
106,496
|
|
Systems
|
23,362
|
|
|
22,333
|
|
||
|
$
|
118,290
|
|
|
$
|
128,829
|
|
|
Three Months Ended March 31, 2018
|
|
% of
|
|
Three Months Ended April 1, 2017
|
|
% of
|
|
Change
|
|||||||||||
|
|
Revenues
|
|
|
Revenues
|
|
$
|
|
%
|
|||||||||||
|
(In thousands, except percentages)
|
|||||||||||||||||||
Probe Cards Markets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Foundry & Logic
|
$
|
58,439
|
|
|
49.4
|
%
|
|
$
|
74,310
|
|
|
57.7
|
%
|
|
$
|
(15,871
|
)
|
|
(21.4
|
)%
|
DRAM
|
30,266
|
|
|
25.6
|
|
|
28,956
|
|
|
22.5
|
|
|
1,310
|
|
|
4.5
|
|
|||
Flash
|
6,223
|
|
|
5.3
|
|
|
3,230
|
|
|
2.5
|
|
|
2,993
|
|
|
92.7
|
|
|||
Systems Market:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Systems
|
23,362
|
|
|
19.7
|
|
|
22,333
|
|
|
17.3
|
|
|
1,029
|
|
|
4.6
|
|
|||
Total revenues
|
$
|
118,290
|
|
|
100.0
|
%
|
|
$
|
128,829
|
|
|
100.0
|
%
|
|
$
|
(10,539
|
)
|
|
(8.2
|
)%
|
|
Three Months Ended
|
||||||||||||
|
March 31,
2018 |
|
% of
Revenue |
|
April 1,
2017 |
|
% of
Revenue |
||||||
|
(Dollars in thousands)
|
||||||||||||
United States
|
$
|
32,932
|
|
|
27.8
|
%
|
|
$
|
39,841
|
|
|
30.9
|
%
|
Taiwan
|
27,648
|
|
|
23.4
|
|
|
19,545
|
|
|
15.2
|
|
||
South Korea
|
15,359
|
|
|
13.0
|
|
|
18,737
|
|
|
14.5
|
|
||
Asia-Pacific
(1)
|
16,726
|
|
|
14.1
|
|
|
26,006
|
|
|
20.2
|
|
||
Europe
|
11,502
|
|
|
9.7
|
|
|
8,749
|
|
|
6.8
|
|
||
Japan
|
13,672
|
|
|
11.6
|
|
|
15,233
|
|
|
11.8
|
|
||
Rest of the world
|
451
|
|
|
0.4
|
|
|
718
|
|
|
0.6
|
|
||
Total revenues
|
$
|
118,290
|
|
|
100.0
|
%
|
|
$
|
128,829
|
|
|
100.0
|
%
|
|
Three Months Ended
|
|||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
$ Change
|
|
% Change
|
|||||||
Gross profit
|
$
|
45,129
|
|
|
$
|
47,571
|
|
|
$
|
(2,442
|
)
|
|
(5.1
|
)%
|
Gross margin
|
38.2
|
%
|
|
36.9
|
%
|
|
|
|
|
|
Three Months Ended
|
||||||||||||||||||||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||||||||||||||||||||||||||
|
Probe Cards
|
|
Systems
|
|
Corporate and Other
|
|
Total
|
|
Probe Cards
|
|
Systems
|
|
Corporate and Other
|
|
Total
|
||||||||||||||||
Gross profit
|
$
|
40,071
|
|
|
$
|
11,135
|
|
|
$
|
(6,077
|
)
|
|
$
|
45,129
|
|
|
$
|
42,820
|
|
|
$
|
12,090
|
|
|
$
|
(7,339
|
)
|
|
$
|
47,571
|
|
Gross margin
|
42.2
|
%
|
|
47.7
|
%
|
|
—
|
%
|
|
38.2
|
%
|
|
40.2
|
%
|
|
54.1
|
%
|
|
—
|
%
|
|
36.9
|
%
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Stock-based compensation
|
$
|
920
|
|
|
$
|
854
|
|
|
Three Months Ended
|
|||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
$ Change
|
|
% Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Research and development
|
$
|
18,046
|
|
|
$
|
17,414
|
|
|
$
|
632
|
|
|
3.6
|
%
|
% of revenues
|
15.3
|
%
|
|
13.5
|
%
|
|
|
|
|
|
Three Months Ended March 31, 2018 compared to Three Months Ended April 1, 2017
|
||
|
|||
Stock-based compensation
|
$
|
220
|
|
Project material costs
|
233
|
|
|
Depreciation
|
93
|
|
|
Employee compensation and other general operations
|
86
|
|
|
|
$
|
632
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Stock-based compensation
|
$
|
1,302
|
|
|
$
|
1,082
|
|
|
Three Months Ended
|
|||||||||||||
|
March 31, 2018
|
|
April 1, 2017
|
|
$ Change
|
|
% Change
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Selling, general and administrative
|
$
|
23,449
|
|
|
$
|
22,829
|
|
|
$
|
620
|
|
|
2.7
|
%
|
% of revenues
|
19.8
|
%
|
|
17.7
|
%
|
|
|
|
|
|
Three Months Ended March 31, 2018 compared to Three Months Ended April 1, 2017
|
||
|
|||
Integration related
|
$
|
428
|
|
Consulting fees
|
279
|
|
|
Stock-based compensation
|
168
|
|
|
Travel related costs
|
(333
|
)
|
|
Employee compensation and other general operating costs
|
63
|
|
|
Depreciation and amortization
|
15
|
|
|
|
$
|
620
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Stock-based compensation
|
$
|
1,534
|
|
|
$
|
1,366
|
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
Restructuring charges, net
|
$
|
—
|
|
|
$
|
269
|
|
% of revenues
|
—
|
%
|
|
0.2
|
%
|
|
Three Months Ended
|
||||||
|
March 31,
2018 |
|
April 1,
2017 |
||||
|
(Dollars in thousands)
|
||||||
Interest income
|
$
|
257
|
|
|
$
|
67
|
|
Weighted average balance of cash and investments
|
$
|
133,634
|
|
|
$
|
111,808
|
|
Weighted average yield on cash and investments
|
1.50
|
%
|
|
0.48
|
%
|
||
|
|
|
|
||||
Interest expense
|
$
|
967
|
|
|
$
|
1,174
|
|
Average debt outstanding
|
$
|
106,058
|
|
|
$
|
139,224
|
|
Weighted average interest rate on debt
|
3.61
|
%
|
|
2.78
|
%
|
|
Three Months Ended
|
||||
|
March 31,
2018 |
|
April 1,
2017 |
||
|
(Dollars in thousands)
|
||||
Provision for income taxes
|
287
|
|
|
367
|
|
Effective income tax rate
|
11.9
|
%
|
|
6.6
|
%
|
|
Three Months Ended
|
||||||
|
March 31, 2018
|
|
April 1, 2017
|
||||
|
(In thousands)
|
||||||
Net Cash provided by operating activities
|
$
|
9,322
|
|
|
$
|
17,803
|
|
Net cash used in investing activities
|
$
|
(3,391
|
)
|
|
$
|
(3,451
|
)
|
Net cash used in financing activities
|
$
|
(4,353
|
)
|
|
$
|
(2,651
|
)
|
Exhibit
|
|
|
|
Incorporated by Reference
|
|
Filed
|
||||
Number
|
|
Exhibit Description
|
|
Form
|
|
Date
|
|
Number
|
|
Herewith
|
10.01+
|
|
|
|
|
|
|
|
|
X
|
|
31.01
|
|
|
|
|
|
|
|
|
X
|
|
31.02
|
|
|
|
|
|
|
|
|
X
|
|
32.01
|
|
|
|
|
|
|
|
|
*
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
|
|
|
*
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
|
|
|
FormFactor, Inc.
|
|
|
|
|
|
Date:
|
May 8, 2018
|
By:
|
/s/ SHAI SHAHAR
|
|
|
|
|
|
|
|
Shai Shahar
|
|
|
|
Chief Financial Officer
|
|
|
|
(Duly Authorized Officer, Principal Financial Officer, and Principal Accounting Officer)
|
•
|
Medical, Dental and Vision Insurance Benefits
|
•
|
Short-Term and Long-Term Disability Insurance Coverage
|
•
|
Group Life Insurance
|
•
|
Paid Time-Off
|
•
|
401(k) Plan and employer match
|
•
|
Section 125 Flex Spending Plan
|
•
|
Employee Assistance Program
|
•
|
Employee Stock Purchase Plan
|
Shai Shahar
|
|
Date
|
1.
|
I have reviewed the quarterly report on Form 10-Q of FormFactor, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in the quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 8, 2018
|
/s/ MICHAEL D. SLESSOR
|
|
|
Michael D. Slessor
Chief Executive Officer
(Principal Executive Officer and Director)
|
1.
|
I have reviewed the quarterly report on Form 10-Q of FormFactor, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in the quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
May 8, 2018
|
/s/ SHAI SHAHAR
|
|
|
Shai Shahar
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|
1.
|
The quarterly report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of FormFactor, Inc. for the periods presented therein.
|
Date:
|
May 8, 2018
|
/s/ MICHAEL D. SLESSOR
|
|
|
Michael D. Slessor
Chief Executive Officer
(Principal Executive Officer and Director)
|
Date:
|
May 8, 2018
|
/s/ SHAI SHAHAR
|
|
|
Shai Shahar
Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)
|