Press Release

LIVERMORE, CA -- (Marketwired) -- 07/31/13 -- FormFactor, Inc. (NASDAQ: FORM) today announced its financial results for the second quarter of fiscal 2013 that ended on June 29, 2013. Quarterly revenues were $62.7 million, up 19% from $52.6 million in the first quarter of fiscal 2013, and up 14% from $54.8 million in the second quarter of fiscal 2012.

On a GAAP basis, net loss for the second quarter of fiscal 2013 was $8.4 million or $(0.16) per fully-diluted share, compared to a net loss for the first quarter of fiscal 2013 of $19.8 million or $(0.37) per fully-diluted share, and a net loss for the second quarter of fiscal 2012 of $4.2 million or $(0.08) per fully-diluted share.

On a Non-GAAP basis, net loss for the second quarter of fiscal 2013 was $0.3 million, or $(0.01) per fully-diluted share, compared to a net loss for the first quarter of fiscal 2013 of $6.9 million or $(0.13) per fully-diluted share, and a net loss for the second quarter of fiscal 2012 of $0.5 million or $(0.01) per fully-diluted share. A reconciliation of GAAP to non-GAAP net loss and net loss per share is provided in the schedules included below.

Cash generation for the second quarter of fiscal 2013 was $1.0 million, compared to cash usage of $12.1 million for the first quarter of fiscal 2013 and cash usage of $2.6 million for the second quarter of fiscal 2012.

"Q2 marked an important step in the company's turnaround as we generated our first quarter of positive cash flow since Q4'07," said Tom St. Dennis, CEO of FormFactor. "Revenue in Q2 showed nice improvement over Q1 in all markets, and our overall results benefited from our continuing focus on the gross margins and operating expenses of the combined FormFactor/MicroProbe 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 webcast of FormFactor's conference call on the Investors section of the company's 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 through August 2, 2013, 9:00 p.m. Pacific Daylight Time, and can be accessed by dialing (855) 859-2056 (domestic) or (404) 537-3406 (international) and entering confirmation code 13038714. Additionally, the replay will be available on the Investors section of our website, www.formfactor.com.

Non-GAAP Financial Measures:
This press release highlights the company's financial results on both a GAAP and a non-GAAP basis. The GAAP results include certain charges that are excluded from non-GAAP results. By publishing the non-GAAP measures, management intends to provide investors with additional information to further analyze the company's performance, core results and underlying trends. FormFactor's management evaluates results and makes operating decisions using both GAAP and non-GAAP measures included in this press release. Non-GAAP results are not prepared in accordance with GAAP, and non-GAAP information should be considered a supplement to, and not a substitute for, financial statements prepared in accordance with GAAP. Investors and potential investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP measures attached to this press release.

About FormFactor:
FormFactor, Inc. (NASDAQ: FORM) is a leader in advanced wafer test solutions. The company's advanced wafer probe cards enable semiconductor manufacturers to lower their overall production costs, improve yields, and bring next-generation devices to market. FormFactor's acquisition of MicroProbe creates the leading wafer test solution provider for both memory and non-memory semiconductor manufacturers. 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, MicroProbe, and the FormFactor and MicroProbe logos are registered or unregistered trademarks of FormFactor, Inc. All other product, trademark, company or service names mentioned herein are the property of their respective owners.

Forward-looking Statements:
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 anticipated results, market conditions or trends, expectations and operating plans. 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: our ability to successfully integrate and realize the anticipated benefits of the Astria Semiconductor Holdings, Inc. acquisition, including MicroProbe Incorporated; risks of the company's ability to meet customers' test roadmaps; risks of the company's ability to realize further operational efficiencies and achieve synergies through the MicroProbe integration; and changes in the market and macro-economic environments. 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 year ended December 29, 2012, as filed with the SEC, and subsequent SEC filings, including the company's Quarterly Reports on Forms 10-Q. 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.

FORM-F

FORMFACTOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

				Three Months Ended								Year to Date
				June 29				June 30				June 29				June 30
				2013				2012				2013				2012
Revenues				$	62,733			$	54,813			$	115,353			$	89,619
Cost of revenues					46,328				38,646				89,873				69,296
Gross profit					16,405				16,167				25,480				20,323
Operating expenses:
	Research and development				10,915				10,935				21,844				21,782
	Selling, general and administrative				13,487				11,531				28,105				22,679
	Restructuring charges, net				92				136				4,072				103
	Loss on sale of subsidiary				300				-				300				-
	Impairment of long-lived assets				121				61				179				229
		Total operating expenses			24,915				22,663				54,500				44,793
Operating loss					(8,510	)			(6,496	)			(29,020	)			(24,470	)
Interest income, net					96				182				203				394
Other income, net					209				546				632				956
Loss before income taxes					(8,205	)			(5,768	)			(28,185	)			(23,120	)
Provision for (benefit from) income taxes					202				(1,551	)			(5	)			(1,449	)
Net loss				$	(8,407	)		$	(4,217	)		$	(28,180	)		$	(21,671	)
Net loss per share:
	Basic and Diluted			$	(0.16	)		$	(0.08	)		$	(0.52	)		$	(0.44	)
Weighted-average number of shares used in per share calculations:
	Basic and Diluted				54,105				49,817				53,886				49,652

Reconciliation of Non-GAAP Loss:
			Three Months Ended								Year to Date
			June 29				June 30				June 29				June 30
			2013				2012				2013				2012
GAAP net loss			$	(8,407	)		$	(4,217	)		$	(28,180	)		$	(21,671	)
Stock-based compensation				3,132				3,478				6,166				6,521
Restructuring charges, net				92				136				4,072				103
Acquisition and integration related expenses				282				-				1,194				-
Amortization of intangibles, inventory and fixed assets fair value adjustment due to acquisition				4,206				-				8,992				-
Impairment of long-lived assets and loss on sale of subsidiary				421				61				479				229
Income tax valuation allowance				-				-				150				-
Non-GAAP net loss			$	(274	)		$	(542	)		$	(7,127	)		$	(14,818	)
Non-GAAP net loss per share:
	Basic and Diluted		$	(0.01	)		$	(0.01	)		$	(0.13	)		$	(0.30	)
Weighted-average number of shares used in per share calculations:
	Basic and Diluted			54,105				49,817				53,886				49,652

FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
				June 29,				December 29,
				2013				2012
ASSETS
Current assets:
	Cash and cash equivalents			$	57,160			$	72,243
	Marketable securities				97,362				93,545
	Accounts receivable, net				38,964				28,919
	Inventories, net				26,130				23,616
	Deferred tax assets				4,204				4,613
	Refundable income taxes				1,568				5,667
	Prepaid expenses and other current assets				6,191				10,569
		Total current assets			231,579				239,172
Restricted cash					421				318
Property, plant and equipment, net					39,630				45,515
Goodwill					29,958				30,994
Intangibles, net					65,625				74,276
Deferred tax assets					4,076				4,207
Other assets					989				1,200
		Total assets		$	372,278			$	395,682
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable			$	24,181			$	21,015
	Accrued liabilities				13,808				17,270
	Capital leases, current portion				503				573
	Income taxes payable				446				-
	Deferred revenue				6,113				6,189
		Total current liabilities			45,051				45,047
Long-term income taxes payable					2,786				3,028
Capital leases, net of current portion					39				340
Deferred rent and other liabilities					7,521				8,009
		Total liabilities			55,397				56,424
Stockholders' equity:
	Common stock and capital in excess of par value				688,701				681,211
	Accumulated other comprehensive income				28				1,715
	Accumulated deficit				(371,848	)			(343,668	)
		Total stockholders' equity			316,881				339,258
		Total liabilities and stockholders' equity		$	372,278			$	395,682

Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4321
Email Contact

Source: FormFactor, Inc.

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