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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 25, 2021
Or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 000-50307
FormFactor, Inc.
(Exact name of registrant as specified in its charter) | | | | | | | | |
Delaware | | 13-3711155 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) |
7005 Southfront Road, Livermore, California 94551
(Address of principal executive offices, including zip code)
(925) 290-4000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section12(b) of the Act: | | | | | | | | | | | | | | | | | | | | |
| Title of each class | | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common stock, $0.001 par value | | | FORM | | Nasdaq Global Market |
______________________________________
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): | | | | | | | | | | | |
Large Accelerated Filer | ☒ | Accelerated Filer | ☐ |
| | | |
Non-accelerated Filer | ☐ | Smaller Reporting Company | ☐ |
| |
Emerging Growth Company | ☐ | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 28, 2021, 78,207,417 shares of the registrant’s common stock, par value $0.001 per share, were outstanding.
FORMFACTOR, INC.
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 25, 2021
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited) | | | | | | | | | | | |
| September 25, 2021 | | December 26, 2020 |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 153,781 | | | $ | 187,225 | |
Marketable securities | 110,898 | | | 67,810 | |
Accounts receivable, net of allowance for doubtful accounts of $214 and $248 | 105,807 | | | 107,603 | |
Inventories, net | 115,104 | | | 99,229 | |
Restricted cash | 2,019 | | | 1,904 | |
Prepaid expenses and other current assets | 18,892 | | | 23,303 | |
Total current assets | 506,501 | | | 487,074 | |
Restricted cash | 1,674 | | | 1,969 | |
Operating lease, right-of-use-assets | 36,669 | | | 30,756 | |
Property, plant and equipment, net of accumulated depreciation | 140,098 | | | 104,103 | |
Goodwill | 213,293 | | | 212,761 | |
Intangibles, net | 39,195 | | | 59,147 | |
Deferred tax assets | 67,231 | | | 66,242 | |
Other assets | 1,930 | | | 1,165 | |
Total assets | $ | 1,006,591 | | | $ | 963,217 | |
| | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 64,925 | | | $ | 62,045 | |
Accrued liabilities | 54,625 | | | 55,342 | |
Current portion of term loans, net of unamortized issuance costs | 9,213 | | | 9,516 | |
Deferred revenue | 23,275 | | | 20,964 | |
Operating lease liabilities | 7,962 | | | 6,704 | |
Total current liabilities | 160,000 | | | 154,571 | |
Term loans, less current portion, net of unamortized issuance costs | 17,742 | | | 24,978 | |
Deferred tax liabilities | 4,264 | | | 5,346 | |
Long-term operating lease liabilities | 32,401 | | | 27,996 | |
Other liabilities | 5,794 | | | 6,242 | |
Total liabilities | 220,201 | | | 219,133 | |
| | | |
Stockholders’ equity: | | | |
| | | |
| | | |
Common stock, $0.001 par value: | | | |
250,000,000 shares authorized; 78,207,219 and 77,437,997 shares issued and outstanding | 78 | | | 78 | |
| | | |
Additional paid-in capital | 892,303 | | | 903,838 | |
Accumulated other comprehensive income | 1,700 | | | 5,886 | |
Accumulated deficit | (107,691) | | | (165,718) | |
Total stockholders’ equity | 786,390 | | | 744,084 | |
Total liabilities and stockholders’ equity | $ | 1,006,591 | | | $ | 963,217 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 25, 2021 | | September 26, 2020 | | September 25, 2021 | | September 26, 2020 |
Revenues | $ | 189,964 | | | $ | 177,996 | | | $ | 564,676 | | | $ | 496,573 | |
Cost of revenues | 109,745 | | | 101,247 | | | 331,468 | | | 286,267 | |
Gross profit | 80,219 | | | 76,749 | | | 233,208 | | | 210,306 | |
Operating expenses: | | | | | | | |
Research and development | 26,026 | | | 22,878 | | | 75,526 | | | 65,064 | |
Selling, general and administrative | 30,940 | | | 31,834 | | | 91,434 | | | 82,282 | |
Total operating expenses | 56,966 | | | 54,712 | | | 166,960 | | | 147,346 | |
Operating income | 23,253 | | | 22,037 | | | 66,248 | | | 62,960 | |
Interest income | 121 | | | 249 | | | 463 | | | 1,310 | |
Interest expense | (151) | | | (193) | | | (447) | | | (682) | |
Other expense, net | 58 | | | 299 | | | 36 | | | 141 | |
Income before income taxes | 23,281 | | | 22,392 | | | 66,300 | | | 63,729 | |
Provision (benefit) for income taxes | 2,784 | | | (499) | | | 8,273 | | | 4,479 | |
Net income | $ | 20,497 | | | $ | 22,891 | | | $ | 58,027 | | | $ | 59,250 | |
Net income per share: | | | | | | | |
Basic | $ | 0.26 | | | $ | 0.30 | | | $ | 0.75 | | | $ | 0.78 | |
Diluted | $ | 0.26 | | | $ | 0.29 | | | $ | 0.73 | | | $ | 0.75 | |
Weighted-average number of shares used in per share calculations: | | | | | | | |
Basic | 77,869 | | | 77,029 | | | 77,643 | | | 76,436 | |
Diluted | 79,029 | | | 78,809 | | | 79,190 | | | 78,534 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 25, 2021 | | September 26, 2020 | | September 25, 2021 | | September 26, 2020 |
Net income | $ | 20,497 | | | $ | 22,891 | | | $ | 58,027 | | | $ | 59,250 | |
Other comprehensive income (loss), net of tax: | | | | | | | |
Translation adjustments and other | (1,511) | | | 1,867 | | | (3,258) | | | 2,231 | |
Unrealized gains (losses) on available-for-sale marketable securities | (62) | | | (148) | | | (290) | | | 349 | |
Unrealized gains (losses) on derivative instruments | (323) | | | 302 | | | (638) | | | 558 | |
Other comprehensive income (loss), net of tax | (1,896) | | | 2,021 | | | (4,186) | | | 3,138 | |
Comprehensive income | $ | 18,601 | | | $ | 24,912 | | | $ | 53,841 | | | $ | 62,388 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except shares)
(Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares of Common Stock | | Common Stock | | | | | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 25, 2021 |
Balances, December 26, 2020 | 77,437,997 | | | $ | 78 | | | | | | | $ | 903,838 | | | $ | 5,886 | | | $ | (165,718) | | | $ | 744,084 | |
Issuance of common stock under the Employee Stock Purchase Plan | 378,584 | | | — | | | | | | | 9,809 | | | — | | | — | | | 9,809 | |
Issuance of common stock pursuant to exercise of options | 100,000 | | | — | | | | | | | 844 | | | — | | | — | | | 844 | |
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax | 910,838 | | | 1 | | | | | | | (19,602) | | | — | | | — | | | (19,601) | |
Purchase and retirement of common stock through repurchase program | (620,200) | | | (1) | | | | | | | (23,950) | | | — | | | — | | | (23,951) | |
Stock-based compensation | — | | | — | | | | | | | 21,364 | | | — | | | — | | | 21,364 | |
Other comprehensive loss | — | | | — | | | | | | | — | | | (4,186) | | | — | | | (4,186) | |
Net income | — | | | — | | | | | | | — | | | — | | | 58,027 | | | 58,027 | |
Balances, September 25, 2021 | 78,207,219 | | | $ | 78 | | | | | | | $ | 892,303 | | | $ | 1,700 | | | $ | (107,691) | | | $ | 786,390 | |
| | | | | | | | | | | | | | | |
| Three Months Ended September 25, 2021 |
Balances, June 26, 2021 | 77,454,800 | | | $ | 77 | | | | | | | $ | 894,062 | | | $ | 3,596 | | | $ | (128,188) | | | $ | 769,547 | |
Issuance of common stock under the Employee Stock Purchase Plan | 149,800 | | | — | | | | | | | 4,744 | | | — | | | — | | | 4,744 | |
| | | | | | | | | | | | | | | |
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax | 602,619 | | | 1 | | | | | | | (14,341) | | | — | | | — | | | (14,340) | |
| | | | | | | | | | | | | | | |
Stock-based compensation | — | | | — | | | | | | | 7,838 | | | — | | | — | | | 7,838 | |
Other comprehensive loss | — | | | — | | | | | | | — | | | (1,896) | | | — | | | (1,896) | |
Net income | — | | | — | | | | | | | — | | | — | | | 20,497 | | | 20,497 | |
Balances, September 25, 2021 | 78,207,219 | | | $ | 78 | | | | | | | $ | 892,303 | | | $ | 1,700 | | | $ | (107,691) | | | $ | 786,390 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands, except shares)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Shares of Common Stock | | Common Stock | | | | | | Additional Paid-in Capital | | Accumulated Other Comprehensive Income (Loss) | | Accumulated Deficit | | Total |
| | | | | | | | | | | | | | | |
| Nine Months Ended September 26, 2020 |
Balances, December 28, 2019 | 75,764,990 | | | $ | 76 | | | | | | | $ | 885,821 | | | $ | (659) | | | $ | (244,241) | | | $ | 640,997 | |
Issuance of common stock under the Employee Stock Purchase Plan | 485,566 | | | — | | | | | | | 7,875 | | | — | | | — | | | 7,875 | |
Issuance of common stock pursuant to exercise of options | 205,769 | | | 1 | | | | | | | 1,712 | | | — | | | — | | | 1,713 | |
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax | 927,169 | | | 1 | | | | | | | (15,383) | | | — | | | — | | | (15,382) | |
| | | | | | | | | | | | | | | |
Stock-based compensation | — | | | — | | | | | | | 16,551 | | | — | | | — | | | 16,551 | |
Other comprehensive income | — | | | — | | | | | | | — | | | 3,138 | | | — | | | 3,138 | |
Net income | — | | | — | | | | | | | — | | | — | | | 59,250 | | | 59,250 | |
Balances, September 26, 2020 | 77,383,494 | | | $ | 78 | | | | | | | $ | 896,576 | | | $ | 2,479 | | | $ | (184,991) | | | $ | 714,142 | |
| | | | | | | | | | | | | | | |
| Three Months Ended September 26, 2020 |
Balances, June 27, 2020 | 76,501,459 | | | $ | 77 | | | | | | | $ | 898,069 | | | $ | 458 | | | $ | (207,882) | | | $ | 690,722 | |
Issuance of common stock under the Employee Stock Purchase Plan | 173,975 | | | — | | | | | | | 3,809 | | | — | | | — | | | 3,809 | |
Issuance of common stock pursuant to exercise of options | 100,000 | | | — | | | | | | | 844 | | | — | | | — | | | 844 | |
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax | 608,060 | | | 1 | | | | | | | (11,583) | | | — | | | — | | | (11,582) | |
| | | | | | | | | | | | | | | |
Stock-based compensation | — | | | — | | | | | | | 5,437 | | | — | | | — | | | 5,437 | |
Other comprehensive income | — | | | — | | | | | | | — | | | 2,021 | | | — | | | 2,021 | |
Net income | — | | | — | | | | | | | — | | | — | | | 22,891 | | | 22,891 | |
Balances, September 26, 2020 | 77,383,494 | | | $ | 78 | | | | | | | $ | 896,576 | | | $ | 2,479 | | | $ | (184,991) | | | $ | 714,142 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) | | | | | | | | | | | |
| Nine Months Ended |
| September 25, 2021 | | September 26, 2020 |
Cash flows from operating activities: | | | |
Net income | $ | 58,027 | | | $ | 59,250 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | |
Depreciation | 19,256 | | | 14,491 | |
Amortization | 16,362 | | | 20,249 | |
| | | |
Reduction in the carrying amount of right-of-use assets | 5,412 | | | 4,294 | |
Stock-based compensation expense | 21,585 | | | 16,774 | |
| | | |
| | | |
Provision for excess and obsolete inventories | 11,621 | | | 9,763 | |
Non-cash restructuring charges | 1,592 | | | — | |
| | | |
Gain on contingent consideration | (95) | | | (3,771) | |
Other adjustments to reconcile net income to net cash provided by operating activities | 1,627 | | | (977) | |
Changes in assets and liabilities: | | | |
Accounts receivable | 1,157 | | | 5,712 | |
Inventories | (30,335) | | | (18,566) | |
Prepaid expenses and other current assets | 3,631 | | | (5,619) | |
| | | |
Other assets | (333) | | | 219 | |
Accounts payable | 1,488 | | | 18,054 | |
Accrued liabilities | (6,951) | | | 4,754 | |
Other liabilities | 47 | | | 272 | |
Deferred revenues | 2,000 | | | 3,806 | |
Operating lease liabilities | (5,654) | | | (4,496) | |
Net cash provided by operating activities | 100,437 | | | 124,209 | |
Cash flows from investing activities: | | | |
Acquisition of property, plant and equipment | (51,353) | | | (41,887) | |
Acquisition of business, net of cash acquired | — | | | (34,999) | |
Proceeds from sale of a subsidiary | — | | | 82 | |
| | | |
Purchases of marketable securities | (114,898) | | | (29,721) | |
Proceeds from maturities and sales of marketable securities | 71,275 | | | 50,330 | |
Net cash used in investing activities | (94,976) | | | (56,195) | |
Cash flows from financing activities: | | | |
Proceeds from issuances of common stock | 10,647 | | | 9,588 | |
Purchase of common stock through stock repurchase program | (23,951) | | | — | |
Tax withholdings related to net share settlements of equity awards | (12,643) | | | (15,382) | |
Payment of contingent consideration | (3,873) | | | — | |
Proceeds from term loan | — | | | 18,000 | |
Principal repayments on term loans | (7,049) | | | (41,098) | |
Payment of term loan debt issuance costs | — | | | (78) | |
Net cash used in financing activities | (36,869) | | | (28,970) | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,216) | | | 1,262 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (33,624) | | | 40,306 | |
Cash, cash equivalents and restricted cash, beginning of period | 191,098 | | | 147,937 | |
Cash, cash equivalents and restricted cash, end of period | $ | 157,474 | | | $ | 188,243 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) | | | | | | | | | | | |
| Nine Months Ended |
| September 25, 2021 | | September 26, 2020 |
Non-cash investing and financing activities: | | | |
Increase in accounts payable and accrued liabilities related to property, plant and equipment purchases | $ | 4,684 | | | $ | 3,041 | |
Increase in accrued liabilities related to tax withholdings related to net share settlements of equity awards | 6,952 | | | — | |
Operating lease, right-of-use assets obtained in exchange for lease obligations | 11,699 | | | 1,549 | |
| | | |
Supplemental disclosure of cash flow information: | | | |
Cash paid for income taxes, net | $ | 6,795 | | | $ | 7,475 | |
Cash paid for interest | 496 | | | 683 | |
Operating cash outflows from operating leases | 6,420 | | | 5,566 | |
| | | |
Reconciliation of cash, cash equivalents and restricted cash: | | | |
Cash and cash equivalents | $ | 153,781 | | | $ | 185,368 | |
Restricted cash, current | 2,019 | | | 1,477 | |
Restricted cash, non-current | 1,674 | | | 1,398 | |
Total cash, cash equivalents and restricted cash | $ | 157,474 | | | $ | 188,243 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
FORMFACTOR, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 — 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 nine months ended September 25, 2021 and September 26, 2020 each contained 39 weeks. Fiscal 2021 will end on December 25, 2021.
Significant Accounting Policies
Our significant accounting policies have not changed during the nine months ended September 25, 2021 from those disclosed in our Annual Report on Form 10-K for the year ended December 26, 2020.
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.
Note 2 — 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 | | Nine Months Ended |
| September 25, 2021 | | September 26, 2020 | | September 25, 2021 | | September 26, 2020 |
Intel Corporation | 20.8 | % | | 25.6 | % | | 21.7 | % | | 32.4 | % |
Samsung Electronics., LTD. | 12.9 | % | | 10.6 | % | | 10.5 | % | | * |
Taiwan Semiconductor Manufacturing Co., LTD. | * | | 10.6 | % | | * | | * |
Micron Technology, Inc. | * | | 10.1 | % | | * | | * |
| | | | | | | |
| 33.7 | % | | 56.9 | % | | 32.2 | % | | 32.4 | % |
*Represents less than 10% of total revenues.
At September 25, 2021, one customer accounted for 19.3% of gross accounts receivable. At December 26, 2020, two customers accounted for 15.3% and 13.7% of gross accounts receivable, respectively.
Note 3 — 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):
| | | | | | | | | | | |
| September 25, 2021 | | December 26, 2020 |
Raw materials | $ | 55,352 | | | $ | 48,122 | |
Work-in-progress | 41,638 | | | 30,806 | |
Finished goods | 18,114 | | | 20,301 | |
| $ | 115,104 | | | $ | 99,229 | |
Note 4 — Acquisitions
High Precision Devices, Inc. Acquisition
On October 19, 2020, we acquired HPD for total consideration of $16.9 million, net of cash acquired of $1.7 million, which included an adjustment for changes in working capital. The acquisition was accounted for using the acquisition method of accounting. 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, including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. The fair values assigned to the assets acquired and liabilities assumed were based on management’s assumptions as of the acquisition date. 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 the changes
in identified intangible values and goodwill. The final allocation of the assets acquired, including goodwill and intangibles, and liabilities assumed for the purchase is as follows (in thousands):
| | | | | | | | |
| | Amount |
Cash and cash equivalents | | $ | 1,680 | |
Accounts receivable | | 1,017 | |
Inventories | | 3,047 | |
Property, plant and equipment | | 669 | |
Operating lease, right of use assets | | 2,554 | |
Prepaid expenses and other current assets | | 916 | |
Tangible assets acquired | | 9,883 | |
Deferred revenue | | (2,529) | |
Accounts payable and accrued liabilities | | (1,268) | |
Operating lease liabilities | | (2,554) | |
Deferred tax liabilities | | (2,400) | |
Total tangible assets acquired and liabilities assumed | | 1,132 | |
Intangible assets | | 11,520 | |
Goodwill | | 5,908 | |
Net Assets Acquired | | $ | 18,560 | |
The intangible assets as 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 |
Baldwin Park Acquisition
On July 30, 2020, we acquired the probe card assets of Advantest Corporation for total consideration of $35.0 million. The acquisition was accounted for using the acquisition method of accounting. 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 including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets. The fair values assigned to assets acquired and liabilities assumed were based on management's assumptions as of the acquisition date. 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 the changes in identified intangible values and goodwill. The final
allocation of the assets acquired, including goodwill and intangibles, and liabilities assumed for the purchase as follows (in thousands):
| | | | | | | | |
| | Amount |
Accounts receivable | | $ | 4,365 | |
Inventories | | 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 | |
The intangible assets as of the acquisition date 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 |
Note 5 — 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 | | — | | | 1,254 | | | 1,254 | |
Foreign currency translation | | — | | | (1,074) | | | (1,074) | |
Goodwill, gross, as of September 25, 2021 | | $ | 178,424 | | | $ | 34,869 | | | $ | 213,293 | |
We have not recorded goodwill impairments for the nine months ended September 25, 2021.
Intangible assets were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | September 25, 2021 | | December 26, 2020 |
Intangible Assets | | Gross | | Accumulated Amortization | | Net | | Gross | | Accumulated Amortization | | Net |
Developed technologies | | $ | 173,160 | | | $ | 148,518 | | | $ | 24,642 | | | $ | 176,265 | | | $ | 137,754 | | | $ | 38,511 | |
Customer relationships | | 51,514 | | | 37,885 | | | 13,629 | | | 52,488 | | | 33,378 | | | 19,110 | |
Trade names | | 8,110 | | | 7,586 | | | 524 | | | 8,162 | | | 7,363 | | | 799 | |
Order backlog | | 1,958 | | | 1,958 | | | — | | | 2,227 | | | 1,900 | | | 327 | |
In-process research and development | | 400 | | | — | | | 400 | | | 400 | | | — | | | 400 | |
| | $ | |