0001039399-21-000022 | 10-Q | XBRL Viewer

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Basis of Presentation and New Accounting Pronouncements (Policies)	3 Months Ended
	Mar. 27, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of PresentationThe accompanying condensed consolidated financial information of FormFactor, Inc. is unaudited and has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, such information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2020 Annual Report on Form 10-K filed with the SEC on February 22, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year.
Fiscal Year	Fiscal Year We operate on a 52/53 week fiscal year, whereby the fiscal year ends on the last Saturday of December. Fiscal 2021 and 2020 each contain 52 weeks and the three months ended March 27, 2021 and March 28, 2020 each contained 13 weeks. Fiscal 2021 will end on December 25, 2021.
Reclassifications	Reclassifications Certain immaterial reclassifications were made to the prior year financial statements to conform to the current year presentation.
New Accounting Pronouncements	New Accounting Pronouncements ASU 2019-12 In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted ASU 2019-12 on a prospective basis on December 27, 2020, the first day of fiscal 2021. The adoption did not have a material effect on our consolidated financial position, results of operations or cash flows. ASU 2020-04 In March 2020, the FASB issued ASU 2020-04, “Referenced Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company has not yet applied the relief afforded by these standard amendments and is currently assessing contracts that will require modification due to reference rate reform to which these standard amendments may be applied.
Fair Value	Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical securities or quoted market prices of similar securities from active markets. The three levels of inputs that may be used to measure fair value are as follows: •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 pricing the asset or liability based on the best information available under the circumstances. We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the three months ended March 27, 2021 or the year ended December 26, 2020. The carrying values of Cash, Accounts receivable, net, Restricted cash, Prepaid expenses and other current assets, Accounts payable, Accrued liabilities, and term loans, net of unamortized issuance costs, approximate fair value due to their short maturities. No changes were made to our valuation techniques during the first three months of fiscal 2021. Assets and Liabilities Measured at Fair Value on a Non-Recurring BasisWe measure and report our non-financial assets such as Property, plant and equipment, Goodwill and Intangible assets at fair value on a non-recurring basis if we determine these assets to be impaired or in the period when we make a business acquisition.

Fair Value and Derivative Instruments - Additional Information (Details) $ in Thousands, € in Millions	Oct. 09, 2019 EUR (€)	Mar. 27, 2021 USD ($)	Dec. 26, 2020 USD ($)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration \| $		$ 3,884	$ 4,012
FRT
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration, calculation amount, multiple of EBIT	150.00%
FRT \| Maximum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Contingent consideration \| €	€ 10.3

Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Finite-Lived Intangible Assets [Line Items]
Gross	$ 235,344	$ 239,542
Accumulated Amortization	186,558	180,395
Net	48,786	59,147
Developed technologies
Finite-Lived Intangible Assets [Line Items]
Gross	173,318	176,265
Accumulated Amortization	142,344	137,754
Net	30,974	38,511
Trade names
Finite-Lived Intangible Assets [Line Items]
Gross	8,100	8,162
Accumulated Amortization	7,418	7,363
Net	682	799
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross	51,557	52,488
Accumulated Amortization	34,899	33,378
Net	16,658	19,110
Order backlog
Finite-Lived Intangible Assets [Line Items]
Gross	1,969	2,227
Accumulated Amortization	1,897	1,900
Net	72	327
In-process research and development
Finite-Lived Intangible Assets [Line Items]
Gross	400	400
Accumulated Amortization	0	0
Net	$ 400	$ 400

Revenue	3 Months Ended
Revenue	Mar. 27, 2021
Revenue from Contract with Customer [Abstract]
Revenue	Revenue Transaction price allocated to the remaining performance obligations: On March 27, 2021, we had $6.3 million of remaining performance obligations, which were comprised of deferred service contracts and extended warranty contracts and contracts with overtime revenue recognition that are not yet delivered. We expect to recognize approximately 74.5% of our remaining performance obligations as revenue in the remainder of fiscal 2021, approximately 16.6% in fiscal 2022, and approximately 8.9% in fiscal 2023 and thereafter. The foregoing excludes the value of other remaining performance obligations as they have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation. Contract balances: The timing of revenue recognition may differ from the timing of invoicing to customers. Accounts receivable is recorded at the invoiced amount, net of an allowance for doubtful accounts. A receivable is recognized in the period we deliver goods or provide services or when our right to consideration is unconditional. A contract asset is recorded when we have performed under the contract but our right to consideration is conditional on something other than the passage of time. Contract assets as of March 27, 2021 and December 26, 2020 were $4.8 million and $3.7 million, respectively, and are reported on the Condensed Consolidated Balance Sheets as a component of Prepaid expenses and other current assets. Contract liabilities include payments received in advance of performance under a contract and are satisfied as the associated revenue is recognized. Contract liabilities are reported on the Condensed Consolidated Balance Sheets at the end of each reporting period as a component of Deferred revenue and Other liabilities. Contract liabilities as of March 27, 2021 and December 26, 2020 were $19.9 million and $22.2 million, respectively. During the three months ended March 27, 2021, we recognized $9.3 million of revenue, that was included in contract liabilities as of December 26, 2020. Costs to obtain a contract: We generally expense sales commissions when incurred as a component of Selling, general and administrative expense, as the amortization period is typically less than one year. Revenue by Category: Refer to Note 15, Operating Segments and Enterprise-Wide Information, for further details.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

+ Details

Property, Plant, and Equipment, net (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Property, Plant and Equipment [Line Items]
Sub-total	$ 368,883	$ 353,335
Less: Accumulated depreciation and amortization	(298,865)	(294,468)
Net, property, plant and equipment	70,018	58,867
Construction-in-process	42,294	45,236
Total	112,312	104,103
Land
Property, Plant and Equipment [Line Items]
Sub-total	4,751	4,751
Machinery and equipment
Property, Plant and Equipment [Line Items]
Sub-total	233,357	226,185
Computer equipment and software
Property, Plant and Equipment [Line Items]
Sub-total	43,839	36,361
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Sub-total	6,925	6,894
Leasehold improvements
Property, Plant and Equipment [Line Items]
Sub-total	$ 80,011	$ 79,144

Inventories, net (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 52,320	$ 48,122
Work-in-progress	35,466	30,806
Finished goods	16,941	20,301
Inventories	$ 104,727	$ 99,229

Stockholders’ Equity and Stock-Based Compensation

3 Months Ended

Mar. 27, 2021

Equity [Abstract]

Stockholders’ Equity and Stock-Based Compensation

Common Stock Repurchase Program

On October 26, 2020, our Board of Directors authorized a program to repurchase up to $50 million of outstanding common stock to offset potential dilution from issuances of common stock under our stock-based compensation plans. The share repurchase program will expire on October 28, 2022. During the three months ended March 27, 2021, we repurchased 136,402 shares of common stock for $5.7 million and, as of March 27, 2021, $44.3 million remained available for future repurchases.

Our policy related to repurchases of our common stock is to charge the excess of cost over par value to additional paid-in capital once the shares are retired. All repurchases were made in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended.

Restricted Stock Units

Restricted stock unit (“RSU”) activity under our equity incentive plan was as follows:


	Units	Weighted Average Grant Date Fair Value
RSUs at December 26, 2020	2,840,922	$	19.80
Awards granted	8,765	46.25
Awards vested	(67,635)	16.38
Awards forfeited	(11,140)	21.21
RSUs at March 27, 2021	2,770,912	19.96

Performance Restricted Stock Units

We may grant Performance RSUs (“PRSUs”) to certain executives, which vest based upon us achieving certain market performance criteria. There were no PRSUs granted during the three months ended March 27, 2021. PRSUs are included as part of the RSU activity above.

Stock Options

Stock option activity under our equity incentive plan was as follows:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at December 26, 2020	106,000	$	8.35

Options exercised	(50,000)	8.44

Outstanding at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820
Vested and expected to vest at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820
Exercisable at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820

Employee Stock Purchase Plan

Information related to activity under our Employee Stock Purchase Plan (“ESPP”) was as follows:


	Three Months Ended
	March 27, 2021
Shares issued	228,784
Weighted average per share purchase price	$	22.14
Weighted average per share discount from the fair value of our common stock on the date of issuance	$	(18.73)

Stock-Based Compensation

Stock-based compensation was included in our Condensed Consolidated Statements of Income as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Cost of revenues	$	1,335	$	937
Research and development	1,689		1,439
Selling, general and administrative	4,053		3,247
Total stock-based compensation	$	7,077	$	5,623

Unrecognized Compensation Costs

At March 27, 2021, the unrecognized stock-based compensation was as follows (dollars in thousands):


	Unrecognized Expense		Average Expected Recognition Period in Years

Restricted stock units	$	27,429	2.03
Performance restricted stock units	7,719		1.93
Employee stock purchase plan	973		0.86
Total unrecognized stock-based compensation expense	$	36,121	1.99

Operating Segments and Enterprise-Wide Information (Tables)

3 Months Ended

Mar. 27, 2021

Segment Reporting [Abstract]

Schedule of Operating Results by Segment

The following table summarizes the operating results by reportable segment (dollars in thousands):


	Three Months Ended
	March 27, 2021												March 28, 2020
	Probe Cards			Systems			Corporate and Other			Total			Probe Cards			Systems			Corporate and Other			Total
Revenues	$	158,898		$	27,738		$	—		$	186,636		$	134,715		$	26,038		$	—		$	160,753
Gross profit	$	70,315		$	13,599		$	(7,208)		$	76,706		$	60,743		$	13,334		$	(6,687)		$	67,390
Gross margin	44.3		%	49.0		%	—		%	41.1		%	45.1		%	51.2		%	—		%	41.9		%

Disaggregation of Revenue by Segment

Certain revenue category information by reportable segment was as follows (in thousands):


	Three Months Ended
	March 27, 2021						March 28, 2020
	Probe Cards		Systems		Total		Probe Cards		Systems		Total
Market:
Foundry & Logic	$	113,410	$	—	$	113,410	$	105,745	$	—	$	105,745
DRAM	33,898		—		33,898		24,696		—		24,696
Flash	11,590		—		11,590		4,274		—		4,274
Systems	—		27,738		27,738		—		26,038		26,038
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753
Timing of revenue recognition:
Products transferred at a point in time	$	158,476	$	24,671	$	183,147	$	134,069	$	24,858	$	158,927
Products and services transferred over time	422		3,067		3,489		646		1,180		1,826
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753
Geographical region:
Taiwan	$	44,734	$	846	$	45,580	$	30,439	$	1,341	$	31,780
China	37,831		4,794		42,625		37,280		6,362		43,642
United States	21,308		8,178		29,486		25,611		6,305		31,916
Asia-Pacific1	27,878		1,080		28,958		4,455		3,408		7,863
South Korea	18,001		1,084		19,085		13,692		396		14,088
Europe	2,833		7,166		9,999		16,210		4,833		21,043
Japan	5,249		4,072		9,321		5,535		2,835		8,370
Rest of the world	1,064		518		1,582		1,493		558		2,051
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753

1 Asia-Pacific includes all countries in the region except China, Japan, South Korea, and Taiwan, which are disclosed separately.

Fair Value and Derivative Instruments

3 Months Ended

Mar. 27, 2021

Fair Value Disclosures [Abstract]

Fair Value and Derivative Instruments

Whenever possible, the fair values of our financial assets and liabilities are determined using quoted market prices of identical securities or quoted market prices of similar securities from active markets. The three levels of inputs that may be used to measure fair value are as follows:

•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 pricing the asset or liability based on the best information available under the circumstances.

We did not have any transfers of assets or liabilities measured at fair value on a recurring basis to or from Level 1, Level 2 or Level 3 during the three months ended March 27, 2021 or the year ended December 26, 2020.

The carrying values of Cash, Accounts receivable, net, Restricted cash, Prepaid expenses and other current assets, Accounts payable, Accrued liabilities, and term loans, net of unamortized issuance costs, approximate fair value due to their short maturities.

No changes were made to our valuation techniques during the first three months of fiscal 2021.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):


March 27, 2021	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	34,254	$	—	$	—	$	34,254
Commercial paper	5,500		—		—		5,500

	39,754		—		—		39,754
Marketable securities:
U.S. treasuries	32,669		—		—		32,669
Certificates of deposit	—		1,212		—		1,212
U.S. agency securities	—		575		—		575
Corporate bonds	—		44,146		—		44,146
Commercial paper	—		15,491		—		15,491
	32,669		61,424		—		94,093
Foreign exchange derivative contracts (Designated)	—		144		—		144
Interest rate swap derivative contracts	—		745		—		745
Total assets	$	72,423	$	62,313	$	—	$	134,736
Liabilities:
Foreign exchange derivative contracts (Designated)	$	—	$	(100)	$	—	$	(100)
Interest rate swap derivative contracts	—		(113)		—		(113)
Contingent consideration	—		—		(3,884)		(3,884)
Total liabilities	$	—	$	(213)	$	(3,884)	$	(4,097)


December 26, 2020	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	43,019	$	—	$	—	$	43,019


Marketable securities:
U.S. treasuries	40,726		—		—		40,726
Certificates of deposit	—		2,179		—		2,179
U.S. agency securities	—		575		—		575
Corporate bonds	—		24,330		—		24,330

	40,726		27,084		—		67,810
Foreign exchange derivative contracts	—		1,057		—		1,057
Interest rate swap derivative contracts	—		57		—		57
Total assets	$	83,745	$	28,198	$	—	$	111,943
Liabilities:

Interest rate swap derivative contracts	$	—	$	(87)	$	—	$	(87)
Contingent consideration	—		—		(4,012)		(4,012)
Total liabilities	$	—	$	(87)	$	(4,012)	$	(4,099)

Cash Equivalents

The fair value of our cash equivalents is determined based on quoted market prices for similar or identical securities.

Marketable Securities

We classify our marketable securities as available-for-sale and value them utilizing a market approach. Our investments are priced by pricing vendors who provide observable inputs for their pricing without applying significant judgment. Broker pricing is used mainly when a quoted price is not available, the investment is not priced by our pricing vendors or when a broker price

is more reflective of fair value. Our broker-priced investments are categorized as Level 2 investments because fair value is based on similar assets without applying significant judgments. In addition, all investments have a sufficient trading volume to demonstrate that the fair value is appropriate.

Unrealized gains and losses were immaterial and were recorded as a component of Accumulated other comprehensive income in our Condensed Consolidated Balance Sheets. We did not have any other-than-temporary unrealized gains or losses at either period end included in these financial statements.

Contingent Consideration

Contingent consideration, arising from the acquisition of FRT, is a cash amount equal to 1.5x EBIT as defined in the purchase agreement, up to a maximum of €10.3 million, payable subject to the performance of the acquired business in calendar 2020. We estimated the fair value of contingent consideration using a probability weighted approach. Key assumptions in determining the fair value of contingent consideration included estimating EBIT levels that we believed as of the acquisition date were likely to be achieved during the performance period and discounting at an appropriate discount rate. Contingent consideration as of March 27, 2021 was estimated to be $3.9 million, with the change from December 26, 2020 resulting from foreign currency translation.

Interest Rate Swaps

The fair value of our interest rate swap contracts is determined at the end of each reporting period based on valuation models that use interest rate yield curves as inputs. For accounting purposes, our interest rate swap contracts qualify for, and are designated as, cash flow hedges. The cash flows associated with the interest rate swaps are reported in Net cash provided by operating activities in our Condensed Consolidated Statements of Cash Flows and the fair value of the interest rate swap contracts are recorded within Accrued liabilities and Other liabilities in our Condensed Consolidated Balance Sheets.

The impact of the interest rate swaps on our Condensed Consolidated Statements of Income was as follows (in thousands):


	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Three Months Ended March 27, 2021	$	624	Interest expense	$	(38)	Interest expense	$	—
Three Months Ended March 28, 2020	$	(96)	Interest expense	$	22	Interest expense	$	—

Foreign Exchange Derivative Contracts

We operate and sell our products in various global markets. As a result, we are exposed to changes in foreign currency exchange rates. We utilize foreign currency forward contracts to hedge against future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities and forecasted foreign currency revenue and expense transactions. Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts in order to mitigate the risks and volatility associated with foreign currency transaction gains or losses.

We do not use derivative financial instruments for speculative or trading purposes. For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Condensed Consolidated Balance Sheets with changes in fair value recorded within Other income (expense), net in our Condensed Consolidated Statement of Income for both realized and unrealized gains and losses. Certain of our foreign currency forward contracts are designated as cash flow hedges, and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Condensed Consolidated Balance Sheets with changes in fair value recorded as a component of Accumulated other comprehensive income and reclassified into earnings in the same period in which the hedged transaction affects earnings, and in the same line item on the Condensed Consolidated Statements of Income as the impact of the hedge transaction.

The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points. All of our foreign exchange derivative contracts outstanding at March 27, 2021 will mature by the first quarter of fiscal 2022.

The following table provides information about our foreign currency forward contracts outstanding as of March 27, 2021 (in thousands):


Currency	Contract Position	Contract Amount (Local Currency)	Contract Amount (U.S. Dollars)
Euro Dollar	Buy	(10,141)	$	(12,025)
Euro Dollar	Sell	11,043	13,026
Japanese Yen	Buy	(1,971,765)	(17,977)
Korean Won	Sell	3,129,743	2,767
Taiwan Dollar	Sell	7,972	279

Total USD notional amount of outstanding foreign exchange contracts			$	(13,930)

Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs.

The impact of foreign exchange derivative contracts not designated as cash flow hedges on our Condensed Consolidated Statements of Income was as follows (in thousands):

Amount of Gain (Loss) Recognized on Derivatives

Three Months Ended

Derivatives Not Designated as Hedging Instruments

Location of Gain (Loss) Recognized on Derivatives

March 27,
2021

March 28,
2020

Foreign exchange forward contracts

Other income (expense), net

1,288

(115)

The impact of foreign exchange derivative contracts designated as cash flow hedges on our Condensed Consolidated Statements of Income was as follows (in thousands):


	Amount of Gain (Loss) Recognized in Accumulated OCI on Derivative		Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Three Months Ended March 27, 2021	$	(526)	Cost of revenues	$	250
			Research and development	30
			Selling, general and administrative	82
				$	362

Three Months Ended March 28, 2020	$	(3)	Cost of revenues	$	(120)
			Research and development	(18)
			Selling, general and administrative	(43)
				$	(181)

Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

We measure and report our non-financial assets such as Property, plant and equipment, Goodwill and Intangible assets at fair value on a non-recurring basis if we determine these assets to be impaired or in the period when we make a business acquisition. Other than as discussed in Note 4, Acquisition, there were no assets or liabilities measured at fair value on a nonrecurring basis during the three months ended March 27, 2021 or March 28, 2020.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Revenue - Remaining Performance Obligation (Details)	Mar. 27, 2021
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-03-28
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	74.50%
Revenue, remaining performance obligation, expected timing of satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-12-26
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	16.60%
Revenue, remaining performance obligation, expected timing of satisfaction, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, percentage	8.90%
Revenue, remaining performance obligation, expected timing of satisfaction, period

Fair Value and Derivative Instruments (Tables)

3 Months Ended

Mar. 27, 2021

Fair Value Disclosures [Abstract]

Fair Value Assets Measured on Recurring Basis

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):


March 27, 2021	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	34,254	$	—	$	—	$	34,254
Commercial paper	5,500		—		—		5,500

	39,754		—		—		39,754
Marketable securities:
U.S. treasuries	32,669		—		—		32,669
Certificates of deposit	—		1,212		—		1,212
U.S. agency securities	—		575		—		575
Corporate bonds	—		44,146		—		44,146
Commercial paper	—		15,491		—		15,491
	32,669		61,424		—		94,093
Foreign exchange derivative contracts (Designated)	—		144		—		144
Interest rate swap derivative contracts	—		745		—		745
Total assets	$	72,423	$	62,313	$	—	$	134,736
Liabilities:
Foreign exchange derivative contracts (Designated)	$	—	$	(100)	$	—	$	(100)
Interest rate swap derivative contracts	—		(113)		—		(113)
Contingent consideration	—		—		(3,884)		(3,884)
Total liabilities	$	—	$	(213)	$	(3,884)	$	(4,097)


December 26, 2020	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	43,019	$	—	$	—	$	43,019


Marketable securities:
U.S. treasuries	40,726		—		—		40,726
Certificates of deposit	—		2,179		—		2,179
U.S. agency securities	—		575		—		575
Corporate bonds	—		24,330		—		24,330

	40,726		27,084		—		67,810
Foreign exchange derivative contracts	—		1,057		—		1,057
Interest rate swap derivative contracts	—		57		—		57
Total assets	$	83,745	$	28,198	$	—	$	111,943
Liabilities:

Interest rate swap derivative contracts	$	—	$	(87)	$	—	$	(87)
Contingent consideration	—		—		(4,012)		(4,012)
Total liabilities	$	—	$	(87)	$	(4,012)	$	(4,099)

Schedule of the Impact of Cash Flow Hedges on Consolidated Financial Statements

The impact of the interest rate swaps on our Condensed Consolidated Statements of Income was as follows (in thousands):


	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)		Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion)
Three Months Ended March 27, 2021	$	624	Interest expense	$	(38)	Interest expense	$	—
Three Months Ended March 28, 2020	$	(96)	Interest expense	$	22	Interest expense	$	—

Schedule of Foreign Currency Forward Contracts

The following table provides information about our foreign currency forward contracts outstanding as of March 27, 2021 (in thousands):


Currency	Contract Position	Contract Amount (Local Currency)	Contract Amount (U.S. Dollars)
Euro Dollar	Buy	(10,141)	$	(12,025)
Euro Dollar	Sell	11,043	13,026
Japanese Yen	Buy	(1,971,765)	(17,977)
Korean Won	Sell	3,129,743	2,767
Taiwan Dollar	Sell	7,972	279

Total USD notional amount of outstanding foreign exchange contracts			$	(13,930)

The impact of foreign exchange derivative contracts designated as cash flow hedges on our Condensed Consolidated Statements of Income was as follows (in thousands):


	Amount of Gain (Loss) Recognized in Accumulated OCI on Derivative		Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
Three Months Ended March 27, 2021	$	(526)	Cost of revenues	$	250
			Research and development	30
			Selling, general and administrative	82
				$	362

Three Months Ended March 28, 2020	$	(3)	Cost of revenues	$	(120)
			Research and development	(18)
			Selling, general and administrative	(43)
				$	(181)

Schedule of Gains and Losses Related to Non-designated Derivative Instruments

The impact of foreign exchange derivative contracts not designated as cash flow hedges on our Condensed Consolidated Statements of Income was as follows (in thousands):

Amount of Gain (Loss) Recognized on Derivatives

Three Months Ended

Derivatives Not Designated as Hedging Instruments

Location of Gain (Loss) Recognized on Derivatives

March 27,
2021

March 28,
2020

Foreign exchange forward contracts

Other income (expense), net

1,288

(115)

Fair Value and Derivative Instruments - Fair Value Assets Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	$ 39,754
Marketable securities	94,093	$ 67,810
Total assets	134,736	111,943
Contingent consideration	(3,884)	(4,012)
Total liabilities	(4,097)	(4,099)
Foreign exchange derivative contracts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	(100)
Foreign exchange derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	144	1,057
Interest rate swap derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	745	57
Derivative liability	(113)	(87)
Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	34,254	43,019
Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	5,500
Marketable securities	15,491
U.S. treasuries
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	32,669	40,726
Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	1,212	2,179
U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	575	575
Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	44,146	24,330
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	39,754
Marketable securities	32,669	40,726
Total assets	72,423	83,745
Contingent consideration	0	0
Total liabilities	0	0
Level 1 \| Foreign exchange derivative contracts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	0
Level 1 \| Foreign exchange derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	0	0
Level 1 \| Interest rate swap derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	0	0
Derivative liability	0	0
Level 1 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	34,254	43,019
Level 1 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	5,500
Marketable securities	0
Level 1 \| U.S. treasuries
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	32,669	40,726
Level 1 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 1 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 1 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0
Marketable securities	61,424	27,084
Total assets	62,313	28,198
Contingent consideration	0	0
Total liabilities	(213)	(87)
Level 2 \| Foreign exchange derivative contracts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	(100)
Level 2 \| Foreign exchange derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	144	1,057
Level 2 \| Interest rate swap derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	745	57
Derivative liability	(113)	(87)
Level 2 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 2 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0
Marketable securities	15,491
Level 2 \| U.S. treasuries
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 2 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	1,212	2,179
Level 2 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	575	575
Level 2 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	44,146	24,330
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0
Marketable securities	0	0
Total assets	0	0
Contingent consideration	(3,884)	(4,012)
Total liabilities	(3,884)	(4,012)
Level 3 \| Foreign exchange derivative contracts
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative liability	0
Level 3 \| Foreign exchange derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	0	0
Level 3 \| Interest rate swap derivative contracts \| Designated as hedging instrument
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Derivative contracts	0	0
Derivative liability	0	0
Level 3 \| Money market funds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0	0
Level 3 \| Commercial paper
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash equivalents	0
Marketable securities	0
Level 3 \| U.S. treasuries
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 3 \| Certificates of deposit
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 3 \| U.S. agency securities
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	0	0
Level 3 \| Corporate bonds
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Marketable securities	$ 0	$ 0

Acquisition

3 Months Ended

Mar. 27, 2021

Business Combinations [Abstract]

Acquisition

High Precision Devices, Inc. Acquisition

On October 19, 2020, we acquired 100% of the shares of HPD for total consideration of $16.9 million, net of cash acquired of $1.7 million, which included an estimated adjustment for changes in working capital, which is not yet finalized. This acquisition brings highly specialized skills and know-how to address the unique test challenges within the emerging quantum computing, superconducting computing, and ultra-sensitive sensor markets which operate at temperatures as low as 30 millikelvin.

The acquisition was accounted for using the acquisition method of accounting, with FormFactor treated as the acquirer. The acquired assets and liabilities of HPD were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

Our Condensed Consolidated Statements of Income include the financial results of HPD subsequent to the acquisition date of October 19, 2020. Revenue in fiscal 2020 related to HPD subsequent to the acquisition date that was included in our Condensed Consolidated Statements of Income was not material.

The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values. The fair values assigned to assets acquired and liabilities assumed were based on management’s assumptions as of the reporting date.

We estimated the acquisition price and the allocation of fair value to assets acquired and liabilities assumed as of the acquisition date, October 19, 2020. We subsequently made certain immaterial adjustments within the measurement period to the preliminary acquisition price allocation. See Note 5, Goodwill and Intangible Assets, for changes in identified intangible values and goodwill. Our purchase accounting remains open at March 27, 2021, subject to finalization of the fair value of

consideration and certain deferred tax items. The estimated fair value of assets acquired, including goodwill and intangibles, and liabilities assumed is as follows (in thousands):


	Amount
Cash and cash equivalents	$	1,680
Accounts receivable	1,017
Inventory	3,047
Property, plant and equipment	669
Operating lease, right of use assets	2,554
Prepaid expenses and other current assets	599
Tangible assets acquired	9,566
Deferred revenue	(2,529)
Accounts payable and accrued liabilities	(1,268)
Operating lease liabilities	(2,554)
Deferred tax liabilities	(2,840)
Total tangible assets acquired and liabilities assumed	375
Intangible assets	11,520
Goodwill	6,665
Net Assets Acquired	$	18,560

The intangible assets as of the closing date of the acquisition included (in thousands):


	Amount		Weighted Average Useful Life (in years)
Developed technologies	$	7,500	10.0
Customer relationships	3,600		5.0
Order backlog	200		0.5
Trade names	220		5.0
Total intangible assets	$	11,520	8.2

The fair value of the intangible assets acquired in connection with the acquisition was determined using either the income, market or replacement cost methodologies. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized.

Identifiable Intangible Assets

Valuation of intangible assets involves multiple assumptions. The key assumptions are described below.

Developed technology acquired primarily consists of existing technology related to cryogenic probe stations, Adiabatic Demagnetization Refrigerator (“ADR”), and continuous ADR cryostats and similar tools, and technology related to other cryogenic applications. We valued the developed technology using the multi-period excess earnings method under the income approach. Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return.

The value of customer relationships represents the fair value of future projected revenues that will be derived from the sale of products to HPD's existing customers. We valued customer relationships using the incremental cash flow method. This method estimates value based on the incremental cash flow afforded by having the customers relationships in place on the acquisition date versus having no relationships in place and needing to replicate or replace those relationships. The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.

Order backlog represents the value of future sales under existing contracts as of the acquisition date. Expected cash flow from order backlog was valued on a discounted direct cash flow basis, net of returns on contributory assets such as working capital, property and equipment, trade name and assembled workforce.

The identified trade names intangibles relate to the estimated fair value of future cash flows related to the HPD brand. We valued trade names by applying the relief-from-royalty method under the income approach. This method is based on the application of a royalty rate to forecasted revenue under the trade name.

Goodwill

The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the acquisition. We believe the factors that contributed to goodwill include synergies that are specific to our consolidated business, such as cost savings and operational efficiencies, and the acquisition of a talented workforce that expands our expertise in business development and commercializing semiconductor test products, none of which qualify for recognition as a separate intangible asset. We do not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment.

The goodwill arising from the acquisition was allocated to the HPD reporting unit within the Systems reportable segment.

We have not presented unaudited combined pro forma financial information as the HPD acquisition was not significant to our consolidated results of operations and financial position.

Baldwin Park Acquisition

On July 30, 2020, we acquired the probe card assets of Advantest Corporation for total cash consideration of $35.0 million. This acquisition brings important enabling technologies and capabilities for designing and manufacturing advanced probe cards, and adds a complementary 3D-NAND Flash probe-card product that is qualified and in production at one of the world's leading NAND Flash manufacturers.

The acquisition was accounted for using the acquisition method of accounting, with FormFactor treated as the acquirer. The acquired assets and liabilities of Baldwin Park were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.

Our Condensed Consolidated Statements of Income include the financial results of Baldwin Park subsequent to the acquisition date of July 30, 2020. Revenue related to Baldwin Park since the acquisition date that was included in our Condensed Consolidated Statements of Income for fiscal 2020 was not material.

We estimated the acquisition price and the allocation of fair value to assets acquired and liabilities assumed as of the acquisition date, July 30, 2020. We subsequently made certain immaterial adjustments within the measurement period to the acquisition price allocation as a result of finalization of our valuation of identifiable assets and liabilities. See Note 5, Goodwill and Intangible Assets, for changes in identified intangible values and goodwill. In the current quarter ended March 27, 2021, we finalized our allocation of the assets acquired, including goodwill and intangibles, and liabilities assumed for the purchase as follows (in thousands):


	Amount
Accounts receivable	$	4,365
Inventory	2,727
Property, plant and equipment	9,053
Operating lease, right of use assets	519
Prepaid expenses and other current assets	56
Tangible assets acquired	16,720
Accounts payable and accrued liabilities	(743)
Operating lease liabilities	(519)
Total net tangible assets acquired and liabilities assumed	15,458
Intangible assets	13,600
Goodwill	5,942
Net assets acquired	$	35,000

The intangible assets as of July 30, 2020 included (in thousands):


	Amount		Weighted Average Useful Life (in years)
Developed technologies	$	8,800	10.0
Customer relationships	4,400		3.0
In-process research and development	400		N/A
Total intangible assets	$	13,600	7.7

Indications of fair value of the intangible assets acquired in connection with the acquisition were determined using either the income, market or replacement cost methodologies. The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized.

Identifiable Intangible Assets

Valuation of intangible assets involves multiple assumptions. The key assumptions are described below.

Developed technology acquired consists of existing technology related to 3D NAND Flash probe cards and the value expected to be derived from interconnect technology. We valued the developed technology related to 3D NAND Flash using the multi-period excess earnings method under the income approach. Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return. We valued the interconnect developed technology asset using the incremental cash flow method. This method estimates value based on the incremental cash flow afforded by having the interconnect capability in place on the acquisition date versus having no capability in place and needing to replicate or replace that capability. The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.

In-process research and development (“IPR&D”) acquired primarily consists of research and development projects that were in process at the time of acquisition related to technologies used in DRAM probe cards. Once these projects are complete they will be amortized over their useful life. We valued the IPR&D using the multi-period excess earnings method under the income approach. Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return.

The value of customer relationships represents the fair value of future projected revenues that will be derived from the sale of products to Baldwin Park's existing customers. We valued customer relationships using the incremental cash flow method. This method estimates value based on the incremental cash flow afforded by having the customers relationships in place on the acquisition date versus having no relationships in place and needing to replicate or replace those relationships. The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.

Goodwill

The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the acquisition. We believe the factors that contributed to goodwill include synergies that are specific to our consolidated business, such as cost savings and operational efficiencies, and the acquisition of a talented workforce that expands our expertise in business development, none of which qualify for recognition as a separate intangible asset. We expect this goodwill to be deductible for tax purposes. The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment.

The goodwill arising from the acquisition was allocated to the Probe Cards reporting unit within the Probe Cards reportable segment.

We have not presented unaudited combined pro forma financial information as the Baldwin Park acquisition was not significant to our consolidated results of operations and financial position.

Property, Plant, and Equipment, net (Tables)

3 Months Ended

Mar. 27, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, plant and equipment, net consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Land	$	4,751	$	4,751
Machinery and equipment	233,357		226,185
Computer equipment and software	43,839		36,361
Furniture and fixtures	6,925		6,894
Leasehold improvements	80,011		79,144
Sub-total	368,883		353,335
Less: Accumulated depreciation and amortization	(298,865)		(294,468)
Net, property, plant and equipment	70,018		58,867
Construction-in-process	42,294		45,236
Total	$	112,312	$	104,103

Leases (Tables)

3 Months Ended

Mar. 27, 2021

Leases [Abstract]

Components of Lease Expense

The components of lease expense were as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Lease expense:
Operating lease expense	$	2,123	$	1,924
Short-term lease expense	37		40
Variable lease expense	537		383
	$	2,697	$	2,347

Schedule of Future Minimum Payments Under Leases

Future minimum payments under our non-cancelable operating leases were as follows as of March 27, 2021 (in thousands):


Fiscal Year	Amount
Remainder of 2021	$	6,747
2022	8,040
2023	6,710
2024	6,297
2025	7,814
Thereafter	14,416
Total minimum lease payments	50,024
Less: interest	(8,982)
Present value of net minimum lease payments	41,042
Less: current portion	(7,557)
Total long-term operating lease liabilities	$	33,485

Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 27, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill by Reportable Segments

Goodwill by reportable segment was as follows (in thousands):


	Probe Cards		Systems		Total
Goodwill, gross, as of December 28, 2019	$	172,482	$	26,714	$	199,196
Addition - FRT GmbH Acquisition	—		975		975
Addition - Baldwin Park Acquisition	5,590		—		5,590
Addition - HPD Acquisition	—		4,654		4,654
Foreign currency translation	—		2,346		2,346
Goodwill, gross, as of December 26, 2020	178,072		34,689		212,761
Addition - Baldwin Park Acquisition	352				352
Addition - HPD Acquisition	—		2,011		2,011
Foreign currency translation	—		(906)		(906)
Goodwill, gross, as of March 27, 2021	$	178,424	$	35,794	$	214,218

Schedule of Intangible Assets

Intangible assets were as follows (in thousands):


	March 27, 2021						December 26, 2020
Intangible Assets	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Developed technologies	$	173,318	$	142,344	$	30,974	$	176,265	$	137,754	$	38,511
Trade names	8,100		7,418		682		8,162		7,363		799
Customer relationships	51,557		34,899		16,658		52,488		33,378		19,110
Backlog	1,969		1,897		72		2,227		1,900		327
In-process research and development	400		—		400		400		—		400
	$	235,344	$	186,558	$	48,786	$	239,542	$	180,395	$	59,147

Schedule of Amortization Expense

Amortization expense was included in our Condensed Consolidated Statements of Income as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Cost of revenues	$	5,090	$	5,750
Selling, general and administrative	1,715		1,513
	$	6,805	$	7,263

Schedule of Estimated Amortization of Intangible Assets

The estimated future amortization of definite-lived intangible assets, excluding in-process research and development, is as follows (in thousands):


Fiscal Year	Amount
Remainder of 2021	$	11,933
2022	9,591
2023	7,240
2024	4,625
2025	4,364
Thereafter	10,633
	$	48,386

Leases - Schedule of Future Minimum Payments Under Leases (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Leases [Abstract]
Remainder of 2021	$ 6,747
2022	8,040
2023	6,710
2024	6,297
2025	7,814
Thereafter	14,416
Total minimum lease payments	50,024
Less: interest	(8,982)
Present value of net minimum lease payments	41,042
Less: current portion	(7,557)	$ (6,704)
Long-term operating lease liabilities	$ 33,485	$ 27,996

Inventories, net

3 Months Ended

Mar. 27, 2021

Inventory Disclosure [Abstract]

Inventories, net

Inventories are stated at the lower of cost (principally standard cost, which approximates actual cost on a first in, first out basis) or net realizable value.

Inventories, net, consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Raw materials	$	52,320	$	48,122
Work-in-progress	35,466		30,806
Finished goods	16,941		20,301
	$	104,727	$	99,229

Operating Segments and Enterprise-Wide Information

3 Months Ended

Mar. 27, 2021

Segment Reporting [Abstract]

Operating Segments and Enterprise-Wide Information

Our chief operating decision maker (“CODM”) is our Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. We operate in two reportable segments consisting of the Probe Cards segment and the Systems segment. The following table summarizes the operating results by reportable segment (dollars in thousands):


	Three Months Ended
	March 27, 2021												March 28, 2020
	Probe Cards			Systems			Corporate and Other			Total			Probe Cards			Systems			Corporate and Other			Total
Revenues	$	158,898		$	27,738		$	—		$	186,636		$	134,715		$	26,038		$	—		$	160,753
Gross profit	$	70,315		$	13,599		$	(7,208)		$	76,706		$	60,743		$	13,334		$	(6,687)		$	67,390
Gross margin	44.3		%	49.0		%	—		%	41.1		%	45.1		%	51.2		%	—		%	41.9		%

Operating results provide useful information to our management for assessment of our performance and results of operations. Certain components of our operating results are utilized to determine executive compensation along with other measures.

Corporate and Other includes unallocated expenses relating to amortization of intangible assets, inventory and fixed asset fair value adjustments due to acquisitions and share-based compensation, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.

Certain revenue category information by reportable segment was as follows (in thousands):


	Three Months Ended
	March 27, 2021						March 28, 2020
	Probe Cards		Systems		Total		Probe Cards		Systems		Total
Market:
Foundry & Logic	$	113,410	$	—	$	113,410	$	105,745	$	—	$	105,745
DRAM	33,898		—		33,898		24,696		—		24,696
Flash	11,590		—		11,590		4,274		—		4,274
Systems	—		27,738		27,738		—		26,038		26,038
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753
Timing of revenue recognition:
Products transferred at a point in time	$	158,476	$	24,671	$	183,147	$	134,069	$	24,858	$	158,927
Products and services transferred over time	422		3,067		3,489		646		1,180		1,826
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753
Geographical region:
Taiwan	$	44,734	$	846	$	45,580	$	30,439	$	1,341	$	31,780
China	37,831		4,794		42,625		37,280		6,362		43,642
United States	21,308		8,178		29,486		25,611		6,305		31,916
Asia-Pacific1	27,878		1,080		28,958		4,455		3,408		7,863
South Korea	18,001		1,084		19,085		13,692		396		14,088
Europe	2,833		7,166		9,999		16,210		4,833		21,043
Japan	5,249		4,072		9,321		5,535		2,835		8,370
Rest of the world	1,064		518		1,582		1,493		558		2,051
Total	$	158,898	$	27,738	$	186,636	$	134,715	$	26,038	$	160,753

1 Asia-Pacific includes all countries in the region except China, Japan, South Korea, and Taiwan, which are disclosed separately.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Revenue - Additional Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 27, 2021	Dec. 26, 2020
Revenue from Contract with Customer [Abstract]
Performance obligations	$ 6.3
Contract assets	4.8	$ 3.7
Contract liabilities	19.9	$ 22.2
Revenue recognized included in contracts	$ 9.3

Stockholders’ Equity and Stock-Based Compensation - Stock Option Activity (Details) - Equity Incentive Plan $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 27, 2021 USD ($) $ / shares shares
Options Outstanding
Outstanding, beginning of period (in shares) \| shares	106,000
Options exercised (in shares) \| shares	(50,000)
Outstanding, end of period (in shares) \| shares	56,000
Vested and expected to vest (in shares) \| shares	56,000
Exercisable (in shares) \| shares	56,000
Weighted Average Exercise Price
Outstanding, beginning of period (in dollars per share) \| $ / shares	$ 8.35
Options exercised (in dollars per share) \| $ / shares	8.44
Outstanding, end of period (in dollars per share) \| $ / shares	8.28
Vested and expected to vest (in dollars per share) \| $ / shares	8.28
Exercisable (in dollars per share) \| $ / shares	$ 8.28
Additional Disclosures
Outstanding, weighted average remaining contractual life	11 months 1 day
Vested and expected to vest, weighted average remaining contractual life	11 months 1 day
Exercisable, weighted average remaining contractual life	11 months 1 day
Outstanding, aggregate intrinsic value \| $	$ 2,078,820
Vested end expected to vest, aggregate intrinsic value \| $	2,078,820
Exercisable, aggregate intrinsic value \| $	$ 2,078,820

Acquisition - Additional Information (Details) $ in Thousands	Oct. 19, 2020 USD ($) millikelvin	Jul. 30, 2020 USD ($)
Baldwin Park
Business Acquisition [Line Items]
Consideration transferred		$ 35,000
High Precision Devices, Inc.
Business Acquisition [Line Items]
Business acquisition, percentage acquired	100.00%
Consideration transferred	$ 16,900
Cash and cash equivalents	$ 1,680
High Precision Devices, Inc. \| Minimum
Business Acquisition [Line Items]
Sensor markets, operating temperature \| millikelvin	30

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Current assets:
Cash and cash equivalents	$ 173,616	$ 187,225
Marketable securities	94,093	67,810
Accounts receivable, net of allowance for doubtful accounts of $232 and $248	103,500	107,603
Inventories, net	104,727	99,229
Restricted cash	2,798	1,904
Prepaid expenses and other current assets	19,371	23,303
Total current assets	498,105	487,074
Restricted cash	1,894	1,969
Operating lease, right-of-use-assets	37,208	30,756
Property, plant and equipment, net of accumulated depreciation	112,312	104,103
Goodwill	214,218	212,761
Intangibles, net	48,786	59,147
Deferred tax assets	65,821	66,242
Other assets	1,867	1,165
Total assets	980,211	963,217
Current liabilities:
Accounts payable	67,720	62,045
Accrued liabilities	43,468	55,342
Current portion of term loans, net of unamortized issuance costs	9,260	9,516
Deferred revenue	18,644	20,964
Operating lease liabilities	7,557	6,704
Total current liabilities	146,649	154,571
Term loans, less current portion, net of unamortized issuance costs	22,390	24,978
Deferred tax liabilities	4,965	5,346
Long-term operating lease liabilities	33,485	27,996
Other liabilities	6,189	6,242
Total liabilities	213,678	219,133
Stockholders’ equity:
Common stock, $0.001 par value	78	78
Treasury stock, at cost, 136,402 and — shares	(5,738)	0
Additional paid-in capital	915,136	903,838
Accumulated other comprehensive income	3,150	5,886
Accumulated deficit	(146,093)	(165,718)
Total stockholders’ equity	766,533	744,084
Total liabilities and stockholders’ equity	$ 980,211	$ 963,217
Common stock, shares outstanding (in shares)	77,758,530	77,437,997

Acquisition - Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020	Oct. 19, 2020	Jul. 30, 2020	Dec. 28, 2019
Business Acquisition [Line Items]
Goodwill	$ 214,218	$ 212,761			$ 199,196
Baldwin Park
Business Acquisition [Line Items]
Accounts receivable				$ 4,365
Inventory				2,727
Property, plant and equipment				9,053
Operating lease, right of use assets				519
Prepaid expenses and other current assets				56
Tangible assets acquired				16,720
Accounts payable and accrued liabilities				(743)
Operating lease liabilities				(519)
Total tangible assets acquired and liabilities assumed				15,458
Intangible assets				13,600
Goodwill				5,942
Net Assets Acquired				$ 35,000
High Precision Devices, Inc.
Business Acquisition [Line Items]
Cash and cash equivalents			$ 1,680
Accounts receivable			1,017
Inventory			3,047
Property, plant and equipment			669
Operating lease, right of use assets			2,554
Prepaid expenses and other current assets			599
Tangible assets acquired			9,566
Deferred revenue			(2,529)
Accounts payable and accrued liabilities			(1,268)
Operating lease liabilities			(2,554)
Deferred tax liabilities			(2,840)
Total tangible assets acquired and liabilities assumed			375
Intangible assets			11,520
Goodwill			6,665
Net Assets Acquired			$ 18,560

Net Income per Share (Tables)

3 Months Ended

Mar. 27, 2021

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands):


	Three Months Ended
	March 27, 2021	March 28, 2020



Weighted-average shares used in computing basic net income per share	77,598	76,005
Add potentially dilutive securities	2,390	2,505
Weighted-average shares used in computing diluted net income per share	79,988	78,510

Securities not included as they would have been antidilutive	3	9

Fair Value and Derivative Instruments - Assets Measured at Fair Value on a Non-Recurring Basis (Details) - USD ($)	Mar. 27, 2021	Dec. 26, 2020	Mar. 28, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring basis	$ 134,736,000	$ 111,943,000
Liabilities measured at fair value on non-recurring basis	4,097,000	$ 4,099,000
Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value on non-recurring basis	0		$ 0
Liabilities measured at fair value on non-recurring basis	$ 0		$ 0

Stockholders’ Equity and Stock-Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 27, 2021	Oct. 26, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase of common stock through repurchase program	$ (5,738,000)
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock repurchase program authorized amount		$ 50,000,000
Purchase of common stock through repurchase program (in shares)	(136,402)
Amount remaining for future repurchases	$ 44,300,000
Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted (in shares)	0

Leases

3 Months Ended

Mar. 27, 2021

Leases [Abstract]

Leases

LeasesWe lease real estate space under non-cancelable operating lease agreements for commercial and industrial space, as well as for our corporate headquarters located in Livermore, California. Our leases have remaining terms of 1 to 8 years, and some leases include options to extend up to 20 years. We also have operating leases for automobiles with remaining lease terms of 1 to 4 years. We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time. The weighted-average remaining lease term for our operating leases was 6 years as of March 27, 2021 and the weighted-average discount rate was 3.85%.

The components of lease expense were as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Lease expense:
Operating lease expense	$	2,123	$	1,924
Short-term lease expense	37		40
Variable lease expense	537		383
	$	2,697	$	2,347

Future minimum payments under our non-cancelable operating leases were as follows as of March 27, 2021 (in thousands):


Fiscal Year	Amount
Remainder of 2021	$	6,747
2022	8,040
2023	6,710
2024	6,297
2025	7,814
Thereafter	14,416
Total minimum lease payments	50,024
Less: interest	(8,982)
Present value of net minimum lease payments	41,042
Less: current portion	(7,557)
Total long-term operating lease liabilities	$	33,485

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 19,625	$ 15,890
Other comprehensive loss, net of tax:
Translation adjustments and other	(2,379)	(399)
Unrealized losses on available-for-sale marketable securities	(131)	(27)
Unrealized gains (losses) on derivative instruments	(226)	176
Other comprehensive loss, net of tax	(2,736)	(250)
Comprehensive income	$ 16,889	$ 15,640

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

+ Details

Goodwill and Intangible Assets - Additional information (Details)	3 Months Ended
	Mar. 27, 2021 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill, impairment loss	$ 0

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 232	$ 248
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	77,758,530	77,437,997
Common stock, shares outstanding (in shares)	77,758,530	77,437,997
Treasury stock (in shares)	136,402	0

Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 27, 2021	Apr. 30, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 27, 2021
Document Transition Report	false
Entity File Number	000-50307
Entity Registrant Name	FormFactor, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	13-3711155
Entity Address, Address Line One	7005 Southfront Road
Entity Address, City or Town	Livermore
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94551
City Area Code	925
Local Phone Number	290-4000
Title of 12(b) Security	Common stock, $0.001 par value
Trading Symbol	FORM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		77,622,717
Amendment Flag	false
Entity Central Index Key	0001039399
Current Fiscal Year End Date	--12-25
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1

Fair Value and Derivative Instruments - Gains and Losses Related to Non-designated Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Derivatives Not Designated as Hedging Instruments \| Foreign exchange forward contracts \| Location of Gain (Loss) Recognized on Derivatives
Derivatives, Fair Value [Line Items]
Derivatives Not Designated as Hedging Instruments	$ 1,288	$ (115)

Accrued Liabilities

3 Months Ended

Mar. 27, 2021

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Accrued compensation and benefits	$	28,092	$	33,110
Accrued income and other taxes	3,008		6,976
Accrued warranty	3,719		3,918
Employee stock purchase plan contributions withheld	2,109		4,240
Accrued contingent consideration	3,884		4,012
Other accrued expenses	2,656		3,086
	$	43,468	$	55,342

Warranty (Tables)

3 Months Ended

Mar. 27, 2021

Product Warranties Disclosures [Abstract]

Reconciliation of Changes in Warranty Liability

Changes in our warranty liability were as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Balance at beginning of period	$	3,918	$	1,942
Accruals	1,374		660
Settlements	(1,573)		(684)
Balance at end of period	$	3,719	$	1,918

Operating Segments and Enterprise-Wide Information - Additional Information (Details)	3 Months Ended
	Mar. 27, 2021 segment
Segment Reporting [Abstract]
Number of reportable segments	2

Property, Plant, and Equipment, net

3 Months Ended

Mar. 27, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment, net

Property, plant and equipment, net consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Land	$	4,751	$	4,751
Machinery and equipment	233,357		226,185
Computer equipment and software	43,839		36,361
Furniture and fixtures	6,925		6,894
Leasehold improvements	80,011		79,144
Sub-total	368,883		353,335
Less: Accumulated depreciation and amortization	(298,865)		(294,468)
Net, property, plant and equipment	70,018		58,867
Construction-in-process	42,294		45,236
Total	$	112,312	$	104,103

Fair Value and Derivative Instruments - Impact of Foreign Exchange Derivattive Contracts Designated as Cash Flow Hedges (Details) - Foreign exchange forward contracts - Designated as hedging instrument - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Recognized in Accumulated OCI on Derivative	$ (526)	$ (3)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	362	(181)
Cost of revenues
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	250	(120)
Research and development
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	30	(18)
Selling, general and administrative
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income	$ 82	$ (43)

Net Income per Share (Details) - shares shares in Thousands	3 Months Ended
Net Income per Share (Details) - shares shares in Thousands	Mar. 27, 2021	Mar. 28, 2020
Earnings Per Share [Abstract]
Weighted-average shares used in computing basic net income per share (in shares)	77,598	76,005
Add potentially dilutive securities (in shares)	2,390	2,505
Weighted-average shares used in computing diluted net income per share (in shares)	79,988	78,510
Securities not included as they would have been antidilutive (in shares)	3	9

Acquisition (Tables)

3 Months Ended

Mar. 27, 2021

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The estimated fair value of assets acquired, including goodwill and intangibles, and liabilities assumed is as follows (in thousands):


	Amount
Cash and cash equivalents	$	1,680
Accounts receivable	1,017
Inventory	3,047
Property, plant and equipment	669
Operating lease, right of use assets	2,554
Prepaid expenses and other current assets	599
Tangible assets acquired	9,566
Deferred revenue	(2,529)
Accounts payable and accrued liabilities	(1,268)
Operating lease liabilities	(2,554)
Deferred tax liabilities	(2,840)
Total tangible assets acquired and liabilities assumed	375
Intangible assets	11,520
Goodwill	6,665
Net Assets Acquired	$	18,560


	Amount
Accounts receivable	$	4,365
Inventory	2,727
Property, plant and equipment	9,053
Operating lease, right of use assets	519
Prepaid expenses and other current assets	56
Tangible assets acquired	16,720
Accounts payable and accrued liabilities	(743)
Operating lease liabilities	(519)
Total net tangible assets acquired and liabilities assumed	15,458
Intangible assets	13,600
Goodwill	5,942
Net assets acquired	$	35,000

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The intangible assets as of the closing date of the acquisition included (in thousands):


	Amount		Weighted Average Useful Life (in years)
Developed technologies	$	7,500	10.0
Customer relationships	3,600		5.0
Order backlog	200		0.5
Trade names	220		5.0
Total intangible assets	$	11,520	8.2

The intangible assets as of July 30, 2020 included (in thousands):


	Amount		Weighted Average Useful Life (in years)
Developed technologies	$	8,800	10.0
Customer relationships	4,400		3.0
In-process research and development	400		N/A
Total intangible assets	$	13,600	7.7

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 27, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Leases See Note 13, Leases. Contractual Obligations and Commitments Our contractual obligations and commitments have not materially changed as of March 27, 2021 from those disclosed in our Annual Report on Form 10-K for the year ended December 26, 2020. Legal Matters From time to time, we may be subject to legal proceedings and claims in the ordinary course of business. As of March 27, 2021, and as of the filing of this Quarterly Report on Form 10-Q, we were not involved in any material legal proceedings.

Inventories, net (Tables)

3 Months Ended

Mar. 27, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory Components

Inventories, net, consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Raw materials	$	52,320	$	48,122
Work-in-progress	35,466		30,806
Finished goods	16,941		20,301
	$	104,727	$	99,229

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Income Statement [Abstract]
Revenues	$ 186,636	$ 160,753
Cost of revenues	109,930	93,363
Gross profit	76,706	67,390
Operating expenses:
Research and development	24,046	21,267
Selling, general and administrative	30,015	27,693
Total operating expenses	54,061	48,960
Operating income	22,645	18,430
Interest income	194	685
Interest expense	(180)	(318)
Other income (expense), net	172	(91)
Income before income taxes	22,831	18,706
Provision for income taxes	3,206	2,816
Net income	$ 19,625	$ 15,890
Net income per share:
Basic (In dollars per share)	$ 0.25	$ 0.21
Diluted (In dollars per share)	$ 0.25	$ 0.20
Weighted-average number of shares used in per share calculations:
Basic (in shares)	77,598	76,005
Diluted (in shares)	79,988	78,510

Leases - Narrative (Details)	Mar. 27, 2021
Lessee, Lease, Description [Line Items]
Operating lease, renewal term	20 years
Operating lease, weighted average remaining lease term	6 years
Operating lease, weighted average discount rate	3.85%
Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	8 years
Automobiles \| Minimum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	1 year
Automobiles \| Maximum
Lessee, Lease, Description [Line Items]
Operating lease, term of contract	4 years

Stockholders’ Equity and Stock-Based Compensation - Restricted Stock Unit Activity (Details) - Equity Incentive Plan	3 Months Ended
	Mar. 27, 2021 $ / shares shares
Units
Awards granted (in shares)	0
Restricted Stock Units
Units
Beginning balance (in shares)	2,840,922
Awards granted (in shares)	8,765
Awards vested (in shares)	(67,635)
Awards canceled (in shares)	(11,140)
Ending balance (in shares)	2,770,912
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 19.80
Awards granted (in dollars per share) \| $ / shares	46.25
Awards vested (in dollars per share) \| $ / shares	16.38
Awards canceled (in dollars per share) \| $ / shares	21.21
Ending balance (in dollars per share) \| $ / shares	$ 19.96

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Cash flows from operating activities:
Net income	$ 19,625	$ 15,890
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	6,130	4,561
Amortization	6,805	7,263
Reduction in the carrying amount of right-of-use assets	1,811	1,511
Stock-based compensation expense	7,077	5,623
Provision for excess and obsolete inventories	3,394	3,287
Other adjustments to reconcile net income to net cash provided by operating activities	2,140	407
Changes in assets and liabilities:
Accounts receivable	3,576	7,803
Inventories	(9,911)	928
Prepaid expenses and other current assets	3,011	(240)
Other assets	(50)	194
Accounts payable	5,722	763
Accrued liabilities	(12,732)	(6,970)
Other liabilities	114	33
Deferred revenues	(2,411)	(123)
Operating lease liabilities	(1,945)	(1,591)
Net cash provided by operating activities	32,356	39,339
Cash flows from investing activities:
Acquisition of property, plant and equipment	(13,470)	(12,050)
Proceeds from sale of a subsidiary	0	40
Purchases of marketable securities	(41,062)	(16,441)
Proceeds from maturities and sales of marketable securities	14,610	23,009
Net cash used in investing activities	(39,922)	(5,442)
Cash flows from financing activities:
Proceeds from issuances of common stock	5,487	4,513
Purchase of common stock through stock repurchase program	(5,738)	0
Tax withholdings related to net share settlements of equity awards	(1,141)	(385)
Principal repayments on term loans	(2,376)	(13,199)
Net cash used in financing activities	(3,768)	(9,071)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,456)	312
Net increase (decrease) in cash, cash equivalents and restricted cash	(12,790)	25,138
Cash, cash equivalents and restricted cash, beginning of period	191,098	147,937
Cash, cash equivalents and restricted cash, end of period	178,308	173,075
Non-cash investing and financing activities:
Change in accounts payable and accrued liabilities related to property, plant and equipment purchases	1,087	(2,116)
Operating lease, right-of-use assets obtained in exchange for lease obligations	8,572	6,307
Supplemental disclosure of cash flow information:
Cash paid for income taxes, net	1,034	2,419
Cash paid for interest	173	291
Reconciliation of cash, cash equivalents and restricted cash:
Total cash, cash equivalents and restricted cash	$ 178,308	$ 173,075

Fair Value and Derivative Instruments - Impact of Cash Flow Hedges and Derivatives (Details) - Designated as hedging instrument - Interest rate contracts - Cash flow hedging - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)	$ 624	$ (96)
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	$ (38)	$ 22

Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 27, 2021	Dec. 26, 2020
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 212,761	$ 199,196
Foreign currency translation	(906)	2,346
Goodwill, ending balance	214,218	212,761
FRT GmbH
Goodwill [Roll Forward]
Goodwill, acquired during period		975
Baldwin Park
Goodwill [Roll Forward]
Goodwill, acquired during period	352	5,590
High Precision Devices, Inc.
Goodwill [Roll Forward]
Goodwill, acquired during period	2,011	4,654
Probe Cards
Goodwill [Roll Forward]
Goodwill, beginning balance	178,072	172,482
Foreign currency translation	0	0
Goodwill, ending balance	178,424	178,072
Probe Cards \| FRT GmbH
Goodwill [Roll Forward]
Goodwill, acquired during period		0
Probe Cards \| Baldwin Park
Goodwill [Roll Forward]
Goodwill, acquired during period	352	5,590
Probe Cards \| High Precision Devices, Inc.
Goodwill [Roll Forward]
Goodwill, acquired during period	0	0
Systems
Goodwill [Roll Forward]
Goodwill, beginning balance	34,689	26,714
Foreign currency translation	(906)	2,346
Goodwill, ending balance	35,794	34,689
Systems \| FRT GmbH
Goodwill [Roll Forward]
Goodwill, acquired during period		975
Systems \| Baldwin Park
Goodwill [Roll Forward]
Goodwill, acquired during period		0
Systems \| High Precision Devices, Inc.
Goodwill [Roll Forward]
Goodwill, acquired during period	$ 2,011	$ 4,654

Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
Warranty (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Mar. 28, 2020
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Balance at beginning of period	$ 3,918	$ 1,942
Accruals	1,374	660
Settlements	(1,573)	(684)
Balance at end of period	$ 3,719	$ 1,918

Goodwill and Intangible Assets

3 Months Ended

Mar. 27, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill by reportable segment was as follows (in thousands):


	Probe Cards		Systems		Total
Goodwill, gross, as of December 28, 2019	$	172,482	$	26,714	$	199,196
Addition - FRT GmbH Acquisition	—		975		975
Addition - Baldwin Park Acquisition	5,590		—		5,590
Addition - HPD Acquisition	—		4,654		4,654
Foreign currency translation	—		2,346		2,346
Goodwill, gross, as of December 26, 2020	178,072		34,689		212,761
Addition - Baldwin Park Acquisition	352				352
Addition - HPD Acquisition	—		2,011		2,011
Foreign currency translation	—		(906)		(906)
Goodwill, gross, as of March 27, 2021	$	178,424	$	35,794	$	214,218

We have not recorded goodwill impairments for the three months ended March 27, 2021.

Intangible assets were as follows (in thousands):


	March 27, 2021						December 26, 2020
Intangible Assets	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Developed technologies	$	173,318	$	142,344	$	30,974	$	176,265	$	137,754	$	38,511
Trade names	8,100		7,418		682		8,162		7,363		799
Customer relationships	51,557		34,899		16,658		52,488		33,378		19,110
Backlog	1,969		1,897		72		2,227		1,900		327
In-process research and development	400		—		400		400		—		400
	$	235,344	$	186,558	$	48,786	$	239,542	$	180,395	$	59,147

Amortization expense was included in our Condensed Consolidated Statements of Income as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Cost of revenues	$	5,090	$	5,750
Selling, general and administrative	1,715		1,513
	$	6,805	$	7,263

The estimated future amortization of definite-lived intangible assets, excluding in-process research and development, is as follows (in thousands):


Fiscal Year	Amount
Remainder of 2021	$	11,933
2022	9,591
2023	7,240
2024	4,625
2025	4,364
Thereafter	10,633
	$	48,386

Basis of Presentation and New Accounting Pronouncements	3 Months Ended
Basis of Presentation and New Accounting Pronouncements	Mar. 27, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and New Accounting Pronouncements	Basis of Presentation and New Accounting Pronouncements Basis of Presentation The accompanying condensed consolidated financial information of FormFactor, Inc. is unaudited and has been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). However, such information reflects all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and the notes thereto included in our 2020 Annual Report on Form 10-K filed with the SEC on February 22, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Fiscal Year We operate on a 52/53 week fiscal year, whereby the fiscal year ends on the last Saturday of December. Fiscal 2021 and 2020 each contain 52 weeks and the three months ended March 27, 2021 and March 28, 2020 each contained 13 weeks. Fiscal 2021 will end on December 25, 2021. Significant Accounting Policies Our significant accounting policies have not changed during the three months ended March 27, 2021 from those disclosed in our Annual Report on Form 10-K for the year ended December 26, 2020. Reclassifications Certain immaterial reclassifications were made to the prior year financial statements to conform to the current year presentation. New Accounting Pronouncements ASU 2019-12 In December 2019, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, “Income Taxes (Topic 740),” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. We adopted ASU 2019-12 on a prospective basis on December 27, 2020, the first day of fiscal 2021. The adoption did not have a material effect on our consolidated financial position, results of operations or cash flows. ASU 2020-04 In March 2020, the FASB issued ASU 2020-04, “Referenced Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848),” which permits entities to apply optional expedients in Topic 848 to derivative instruments modified because of discounting transition resulting from reference rate reform. ASU 2020-04 became effective upon issuance and may be applied prospectively to contract modifications made on or before December 31, 2022. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company has not yet applied the relief afforded by these standard amendments and is currently assessing contracts that will require modification due to reference rate reform to which these standard amendments may be applied.

Warranty

3 Months Ended

Mar. 27, 2021

Product Warranties Disclosures [Abstract]

Warranty

We offer warranties on certain products and record a liability for the estimated future costs associated with warranty claims at the time revenue is recognized. The warranty liability is based upon historical experience and our estimate of the level of future costs. While we engage in product quality programs and processes, our warranty obligation is affected by product failure rates,

material usage and service delivery costs. We continuously monitor product returns for warranty and maintain a reserve for the related expenses based upon our historical experience and any specifically identified failures. As we sell new products to our customers, we must exercise considerable judgment in estimating the expected failure rates. This estimating process is based on historical experience of similar products, as well as various other assumptions that we believe to be reasonable under the circumstances. We provide for the estimated cost of product warranties at the time revenue is recognized as a component of Cost of revenues in our Condensed Consolidated Statement of Income.

Changes in our warranty liability were as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Balance at beginning of period	$	3,918	$	1,942
Accruals	1,374		660
Settlements	(1,573)		(684)
Balance at end of period	$	3,719	$	1,918

Label	Element	Value
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	$ 2,798,000
Restricted Cash, Current	us-gaap_RestrictedCashCurrent	2,107,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	1,894,000
Restricted Cash, Noncurrent	us-gaap_RestrictedCashNoncurrent	$ 1,361,000

Concentration of Credit and Other Risks

3 Months Ended

Mar. 27, 2021

Risks and Uncertainties [Abstract]

Concentration of Credit and Other Risks

Each of the following customers accounted for 10% or more of our revenues for the periods indicated:


	Three Months Ended
	March 27, 2021		March 28, 2020
Intel Corporation	28.1	%	36.2	%
Taiwan Semiconductor Manufacturing Co., LTD.	11.5	%	*



	39.6	%	36.2	%

*Represents less than 10% of total revenues.

At March 27, 2021, one customer accounted for 22.8% of gross accounts receivable. At December 26, 2020, two customers accounted for 15.3% and 13.7% of gross accounts receivable, respectively.

Stockholders’ Equity and Stock-Based Compensation - ESPP Activity (Details) - Employee stock purchase plan	3 Months Ended
	Mar. 27, 2021 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued (in shares) \| shares	228,784
Weighted average per share purchase price (in dollars per share)	$ 22.14
Weighted average per share discount from the fair value of our common stock on the date of issuance (in dollars per share)	$ (18.73)

Acquisition - Intangible Assets Acquired (Details) - USD ($) $ in Thousands	Oct. 19, 2020	Jul. 30, 2020
High Precision Devices, Inc.
Business Acquisition [Line Items]
Amount	$ 11,520
Weighted Average Useful Life (in years)	8 years 2 months 12 days
Baldwin Park
Business Acquisition [Line Items]
Amount		$ 13,600
Weighted Average Useful Life (in years)		7 years 8 months 12 days
Baldwin Park \| In-process research and development
Business Acquisition [Line Items]
Amount		$ 400
Developed technologies \| High Precision Devices, Inc.
Business Acquisition [Line Items]
Amount	$ 7,500
Weighted Average Useful Life (in years)	10 years
Developed technologies \| Baldwin Park
Business Acquisition [Line Items]
Amount		$ 8,800
Weighted Average Useful Life (in years)		10 years
Customer relationships \| High Precision Devices, Inc.
Business Acquisition [Line Items]
Amount	$ 3,600
Weighted Average Useful Life (in years)	5 years
Customer relationships \| Baldwin Park
Business Acquisition [Line Items]
Amount		$ 4,400
Weighted Average Useful Life (in years)		3 years
Order backlog \| High Precision Devices, Inc.
Business Acquisition [Line Items]
Amount	$ 200
Weighted Average Useful Life (in years)	6 months
Trade names \| High Precision Devices, Inc.
Business Acquisition [Line Items]
Amount	$ 220
Weighted Average Useful Life (in years)	5 years

Fair Value and Derivative Instruments - Foreign Currency Forward Contracts (Details) - Mar. 27, 2021 - Foreign exchange forward contracts € in Thousands, ₩ in Thousands, ¥ in Thousands, $ in Thousands, $ in Thousands	USD ($)	EUR (€)	JPY (¥)	KRW (₩)	TWD ($)
Derivative [Line Items]
Derivative, notional amount	$ (13,930)
Buy \| Euro Dollar
Derivative [Line Items]
Derivative, notional amount	(12,025)	€ (10,141)
Buy \| Japanese Yen
Derivative [Line Items]
Derivative, notional amount	(17,977)		¥ (1,971,765)
Sell \| Euro Dollar
Derivative [Line Items]
Derivative, notional amount	(13,026)	€ (11,043)
Sell \| Korean Won
Derivative [Line Items]
Derivative, notional amount	(2,767)			₩ (3,129,743)
Sell \| Taiwan Dollar
Derivative [Line Items]
Derivative, notional amount	$ (279)				$ (7,972)

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 28, 2019		75,764,990	0
Beginning balance at Dec. 28, 2019	$ 640,997	$ 76	$ 0	$ 885,821	$ (659)	$ (244,241)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		311,591
Issuance of common stock under the Employee Stock Purchase Plan	4,066			4,066
Issuance of common stock pursuant to exercise of options (in shares)		55,769
Issuance of common stock pursuant to exercise of options	447	$ 1		446
Issuance of common stock pursuant to vesting of restricted stock units (in shares)		25,901
Issuance of common stock pursuant to exercise of options	(385)	$ 0		(385)
Stock-based compensation	5,652			5,652
Other comprehensive loss	(250)				(250)
Net income	15,890					15,890
Ending balance (in shares) at Mar. 28, 2020		76,158,251	0
Ending balance at Mar. 28, 2020	666,417	$ 77	$ 0	895,600	(909)	(228,351)
Beginning balance (in shares) at Dec. 26, 2020		77,437,997	0
Beginning balance at Dec. 26, 2020	744,084	$ 78	$ 0	903,838	5,886	(165,718)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock under the Employee Stock Purchase Plan (in shares)		228,784
Issuance of common stock under the Employee Stock Purchase Plan	5,065			5,065
Issuance of common stock pursuant to exercise of options (in shares)		50,000
Issuance of common stock pursuant to exercise of options	422	$ 0		422
Issuance of common stock pursuant to vesting of restricted stock units (in shares)		41,749
Issuance of common stock pursuant to exercise of options	(1,141)	$ 0		(1,141)
Purchase of common stock through repurchase program (in shares)			(136,402)
Purchase of common stock through repurchase program	(5,738)		$ (5,738)
Stock-based compensation	6,952			6,952
Other comprehensive loss	(2,736)				(2,736)
Net income	19,625					19,625
Ending balance (in shares) at Mar. 27, 2021		77,758,530	(136,402)
Ending balance at Mar. 27, 2021	$ 766,533	$ 78	$ (5,738)	$ 915,136	$ 3,150	$ (146,093)

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Leases [Abstract]
Operating lease expense	$ 2,123	$ 1,924
Short-term lease expense	37	40
Variable lease expense	537	383
Total lease expense	$ 2,697	$ 2,347

Accrued Liabilities (Tables)

3 Months Ended

Mar. 27, 2021

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	March 27, 2021		December 26, 2020
Accrued compensation and benefits	$	28,092	$	33,110
Accrued income and other taxes	3,008		6,976
Accrued warranty	3,719		3,918
Employee stock purchase plan contributions withheld	2,109		4,240
Accrued contingent consideration	3,884		4,012
Other accrued expenses	2,656		3,086
	$	43,468	$	55,342

Concentration of Credit and Other Risks (Tables)

3 Months Ended

Mar. 27, 2021

Risks and Uncertainties [Abstract]

Schedule of Customer Percentage of Revenue

Each of the following customers accounted for 10% or more of our revenues for the periods indicated:


	Three Months Ended
	March 27, 2021		March 28, 2020
Intel Corporation	28.1	%	36.2	%
Taiwan Semiconductor Manufacturing Co., LTD.	11.5	%	*



	39.6	%	36.2	%

*Represents less than 10% of total revenues.

Stockholders’ Equity and Stock-Based Compensation - Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 7,077	$ 5,623
Cost of revenues
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	1,335	937
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	1,689	1,439
Selling, general and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total stock-based compensation	$ 4,053	$ 3,247

Stockholders’ Equity and Stock-Based Compensation - Unrecognized Compensation Costs (Details) $ in Thousands	3 Months Ended
	Mar. 27, 2021 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Expense	$ 36,121
Average Expected Recognition Period in Years	1 year 11 months 26 days
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Expense	$ 27,429
Average Expected Recognition Period in Years	2 years 10 days
Performance restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Expense	$ 7,719
Average Expected Recognition Period in Years	1 year 11 months 4 days
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized Expense	$ 973
Average Expected Recognition Period in Years	10 months 9 days

Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Property, Plant and Equipment [Line Items]
Amortization of intangible assets	$ 6,805	$ 7,263
Finite-Lived Intangible Assets, Net, Amortization Expense, Rolling Maturity [Abstract]
Remainder of 2021	11,933
2022	9,591
2023	7,240
2024	4,625
2025	4,364
Thereafter	10,633
Net	48,386
Cost of revenues
Property, Plant and Equipment [Line Items]
Amortization of intangible assets	5,090	5,750
Selling, general and administrative
Property, Plant and Equipment [Line Items]
Amortization of intangible assets	$ 1,715	$ 1,513

Operating Segments and Enterprise-Wide Information - Operating Results by Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Segment Reporting Information [Line Items]
Revenues	$ 186,636	$ 160,753
Gross profit	$ 76,706	$ 67,390
Gross margin	41.10%	41.90%
Probe Cards
Segment Reporting Information [Line Items]
Revenues	$ 158,898	$ 134,715
Systems
Segment Reporting Information [Line Items]
Revenues	27,738	26,038
Operating segments \| Probe Cards
Segment Reporting Information [Line Items]
Revenues	158,898	134,715
Gross profit	$ 70,315	$ 60,743
Gross margin	44.30%	45.10%
Operating segments \| Systems
Segment Reporting Information [Line Items]
Revenues	$ 27,738	$ 26,038
Gross profit	$ 13,599	$ 13,334
Gross margin	49.00%	51.20%
Operating segments \| Corporate and Other
Segment Reporting Information [Line Items]
Revenues	$ 0	$ 0
Gross profit	$ (7,208)	$ (6,687)
Gross margin	0.00%	0.00%

- Definition

Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity.

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- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 27, 2021	Dec. 26, 2020
Payables and Accruals [Abstract]
Accrued compensation and benefits	$ 28,092	$ 33,110
Accrued income and other taxes	3,008	6,976
Accrued warranty	3,719	3,918
Employee stock purchase plan contributions withheld	2,109	4,240
Accrued contingent consideration	3,884	4,012
Other accrued expenses	2,656	3,086
Accrued liabilities	$ 43,468	$ 55,342

Operating Segments and Enterprise-Wide Information - Revenue by Segment, Recognition Type, and Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 27, 2021	Mar. 28, 2020
Disaggregation of Revenue [Line Items]
Revenues	$ 186,636	$ 160,753
Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	158,898	134,715
Systems
Disaggregation of Revenue [Line Items]
Revenues	27,738	26,038
Taiwan
Disaggregation of Revenue [Line Items]
Revenues	45,580	31,780
Taiwan \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	44,734	30,439
Taiwan \| Systems
Disaggregation of Revenue [Line Items]
Revenues	846	1,341
China
Disaggregation of Revenue [Line Items]
Revenues	42,625	43,642
China \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	37,831	37,280
China \| Systems
Disaggregation of Revenue [Line Items]
Revenues	4,794	6,362
United States
Disaggregation of Revenue [Line Items]
Revenues	29,486	31,916
United States \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	21,308	25,611
United States \| Systems
Disaggregation of Revenue [Line Items]
Revenues	8,178	6,305
Asia-Pacific
Disaggregation of Revenue [Line Items]
Revenues	28,958	7,863
Asia-Pacific \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	27,878	4,455
Asia-Pacific \| Systems
Disaggregation of Revenue [Line Items]
Revenues	1,080	3,408
South Korea
Disaggregation of Revenue [Line Items]
Revenues	19,085	14,088
South Korea \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	18,001	13,692
South Korea \| Systems
Disaggregation of Revenue [Line Items]
Revenues	1,084	396
Europe
Disaggregation of Revenue [Line Items]
Revenues	9,999	21,043
Europe \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	2,833	16,210
Europe \| Systems
Disaggregation of Revenue [Line Items]
Revenues	7,166	4,833
Japan
Disaggregation of Revenue [Line Items]
Revenues	9,321	8,370
Japan \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	5,249	5,535
Japan \| Systems
Disaggregation of Revenue [Line Items]
Revenues	4,072	2,835
Rest of the world
Disaggregation of Revenue [Line Items]
Revenues	1,582	2,051
Rest of the world \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	1,064	1,493
Rest of the world \| Systems
Disaggregation of Revenue [Line Items]
Revenues	518	558
Products transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	183,147	158,927
Products transferred at a point in time \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	158,476	134,069
Products transferred at a point in time \| Systems
Disaggregation of Revenue [Line Items]
Revenues	24,671	24,858
Products and services transferred over time
Disaggregation of Revenue [Line Items]
Revenues	3,489	1,826
Products and services transferred over time \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	422	646
Products and services transferred over time \| Systems
Disaggregation of Revenue [Line Items]
Revenues	3,067	1,180
Foundry & Logic
Disaggregation of Revenue [Line Items]
Revenues	113,410	105,745
Foundry & Logic \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	113,410	105,745
Foundry & Logic \| Systems
Disaggregation of Revenue [Line Items]
Revenues	0	0
DRAM
Disaggregation of Revenue [Line Items]
Revenues	33,898	24,696
DRAM \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	33,898	24,696
DRAM \| Systems
Disaggregation of Revenue [Line Items]
Revenues	0	0
Flash
Disaggregation of Revenue [Line Items]
Revenues	11,590	4,274
Flash \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	11,590	4,274
Flash \| Systems
Disaggregation of Revenue [Line Items]
Revenues	0	0
Systems
Disaggregation of Revenue [Line Items]
Revenues	27,738	26,038
Systems \| Probe Cards
Disaggregation of Revenue [Line Items]
Revenues	0	0
Systems \| Systems
Disaggregation of Revenue [Line Items]
Revenues	$ 27,738	$ 26,038

Net Income per Share

3 Months Ended

Mar. 27, 2021

Earnings Per Share [Abstract]

Net Income per Share

The following table reconciles the shares used in calculating basic net income per share and diluted net income per share (in thousands):


	Three Months Ended
	March 27, 2021	March 28, 2020



Weighted-average shares used in computing basic net income per share	77,598	76,005
Add potentially dilutive securities	2,390	2,505
Weighted-average shares used in computing diluted net income per share	79,988	78,510

Securities not included as they would have been antidilutive	3	9

Stockholders’ Equity and Stock-Based Compensation (Tables)

3 Months Ended

Mar. 27, 2021

Equity [Abstract]

Schedule of Restricted Stock Unit Activity

Restricted stock unit (“RSU”) activity under our equity incentive plan was as follows:


	Units	Weighted Average Grant Date Fair Value
RSUs at December 26, 2020	2,840,922	$	19.80
Awards granted	8,765	46.25
Awards vested	(67,635)	16.38
Awards forfeited	(11,140)	21.21
RSUs at March 27, 2021	2,770,912	19.96

Schedule of Stock Option Activity

Stock option activity under our equity incentive plan was as follows:


	Options Outstanding	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
Outstanding at December 26, 2020	106,000	$	8.35

Options exercised	(50,000)	8.44

Outstanding at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820
Vested and expected to vest at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820
Exercisable at March 27, 2021	56,000	$	8.28	0.92	$	2,078,820

Schedule of ESPP Activity

Information related to activity under our Employee Stock Purchase Plan (“ESPP”) was as follows:


	Three Months Ended
	March 27, 2021
Shares issued	228,784
Weighted average per share purchase price	$	22.14
Weighted average per share discount from the fair value of our common stock on the date of issuance	$	(18.73)

Schedule of Stock-based Compensation

Stock-based compensation was included in our Condensed Consolidated Statements of Income as follows (in thousands):


	Three Months Ended
	March 27, 2021		March 28, 2020
Cost of revenues	$	1,335	$	937
Research and development	1,689		1,439
Selling, general and administrative	4,053		3,247
Total stock-based compensation	$	7,077	$	5,623

Schedule of Unrecognized Stock-based Compensation

At March 27, 2021, the unrecognized stock-based compensation was as follows (dollars in thousands):


	Unrecognized Expense		Average Expected Recognition Period in Years

Restricted stock units	$	27,429	2.03
Performance restricted stock units	7,719		1.93
Employee stock purchase plan	973		0.86
Total unrecognized stock-based compensation expense	$	36,121	1.99

Concentration of Credit and Other Risks (Details) - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 27, 2021	Mar. 28, 2020	Dec. 26, 2020
Revenue from Contract with Customer Benchmark
Concentration Risk [Line Items]
Concentration risk percentage	39.60%	36.20%
Revenue from Contract with Customer Benchmark \| Intel Corporation
Concentration Risk [Line Items]
Concentration risk percentage	28.10%	36.20%
Revenue from Contract with Customer Benchmark \| Taiwan Semiconductor Manufacturing Co., LTD.
Concentration Risk [Line Items]
Concentration risk percentage	11.50%
Accounts Receivable \| Major Customer 1
Concentration Risk [Line Items]
Concentration risk percentage	22.80%		15.30%
Accounts Receivable \| Major Customer 2
Concentration Risk [Line Items]
Concentration risk percentage			13.70%