LIVERMORE, Calif., Aug. 02, 2023 (GLOBE NEWSWIRE) -- FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the second quarter of fiscal 2023 ended July 1, 2023. Quarterly revenues were $155.9 million, a decrease of 6.9% compared to $167.4 million in the first quarter of fiscal 2023, and a decrease of 23.5% from $203.9 million in the second quarter of fiscal 2022.
- Higher than expected gross margin and good operating expense control produced non-GAAP EPS at the top end of the range despite revenue below the outlook range due to shipment pushouts.
- Continued strong Systems segment results, with revenue at near-record levels.
- Adoption of generative Artificial Intelligence technologies driving strong demand for DDR5 and High Bandwidth Memory probe cards.
“As we navigate the current cyclical downturn, we continue to benefit from FormFactor’s diversification strategy and broad Lab-to-Fab product portfolio, which differentiate us from our direct competitors,” said Mike Slessor, CEO of FormFactor, Inc. “We are carefully balancing short-term results and long-term investments, with disciplined cost control that maximizes quarterly profitability and protects our strong balance sheet. These investments are designed to produce market-share gains and above-industry revenue and profit growth when we emerge from the current cyclical trough.”
Second Quarter Highlights
On a GAAP basis, net income for the second quarter of fiscal 2023 was $0.8 million, or $0.01 per fully-diluted share, compared to net income for the first quarter of fiscal 2023 of $1.3 million, or $0.02 per fully-diluted share, and net income for the second quarter of fiscal 2022 of $30.2 million, or $0.38 per fully-diluted share. Gross margin for the second quarter of fiscal 2023 was 38.7%, compared with 36.5% in the first quarter of fiscal 2023, and 46.3% in the second quarter of fiscal 2022.
On a non-GAAP basis, net income for the second quarter of fiscal 2023 was $11.2 million, or $0.14 per fully-diluted share, compared to net income for the first quarter of fiscal 2023 of $12.5 million, or $0.16 per fully-diluted share, and net income for the second quarter of fiscal 2022 of $36.8 million, or $0.46 per fully-diluted share. On a non-GAAP basis, gross margin for the second quarter of fiscal 2023 was 40.6%, compared with 38.4% in the first quarter of fiscal 2023, and 47.4% in the second quarter of fiscal 2022.
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 2023 was $22.5 million, compared to $12.3 million for the first quarter of fiscal 2023, and $42.6 million for the second quarter of fiscal 2022. Free cash flow for the second quarter of fiscal 2023 was $2.1 million, compared to free cash flow for the first quarter of fiscal 2023 of negative $7.3 million, and free cash flow for the second quarter of 2022 of $28.3 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, “In the short-term, we continue to operate in an overall demand environment that remains relatively steady, as is evident from our third-quarter outlook, and are encouraged by the stabilization of demand across our diversified product and technology portfolio.”
For the third quarter ending September 30, 2023, FormFactor is providing the following outlook*:
| GAAP | Reconciling Items** | Non-GAAP | |||
| Revenue | $167 million +/- $5 million | — | $167 million +/- $5 million | ||
| Gross Margin | 38% +/- 1.5% | $3 million | 40% +/- 1.5% | ||
| Net income (loss) per diluted share | $0.05 +/- $0.04 | $0.12 | $0.17 +/- $0.04 |
*This outlook assumes consistent foreign currency rates.
**Reconciling items are stock-based compensation, restructuring charges, and amortization of intangibles, inventory, and fixed asset fair value adjustments due to acquisitions, net of applicable income tax impacts.
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 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 July 1, 2023, and for outlook provided before, as well as for the comparable periods of fiscal 2022, 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 semiconductor product 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, 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 continue to operate in an environment with substantial uncertainties arising from global, regional and national health crises such as the COVID-19 pandemic, including with respect to their impact on our operations, capacity, customer demand, and supply chain, as well as the macroeconomic environment. 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, such as the recent US-China restrictions, and national security developments or tensions, that may substantially restrict or condition our sales to or in 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.
