) fourth quarter loss of 32 cents per share was narrower than the
Zacks Consensus Estimate of 33 cents loss per share.
Revenues of $47.7 million were up 15.5% sequentially and 57.7%
from the year-ago quarter.
Revenues by End User
The system on chip (SoC), DRAM and Flash customers generated
52%, 35% and 13% of fourth quarter revenues, respectively.
business generated revenues of $24.8 million, up 259.4%
sequentially. FormFactor is reaping the benefits of its
MicroProbe acquisition, by virtue of which it became the largest
supplier of probe cards to the fast growing SoC probe card
market. Overall strength in this market is currently being driven
by the move from PC applications toward mobile application
business fell 36.5% sequentially to $16.5 million. The weakness
in DRAM probe card demand was on account of oversupply of DRAM
devices and corresponding decline in DRAM prices, mainly because
of the continued softness in PC demand. FormFactor is also
battling lower investment by customers in DRAM test and DRAM
We believe that the DRAM market may recover as the industry
undergoes a structural shift from PC centered computing to mobile
and cloud centered computing.
business was down 23.8% sequentially to $6.4 million. NAND
revenue declined 30.2% to $3.7 million, while NOR revenue dropped
12.9% to $2.7 million in the fourth quarter .
The GAAP gross margin decreased 2,635 basis points (bps)
sequentially but rose 986 bps year over year to (6.6%). Lower
fixed cost leverage despite the benefit from restructuring
actions in the third quarter was the reason for the sequential
decline. However, the contribution from Microprobe was an
offsetting factor in the last quarter.
Total operating expenses of $21.9 million were down 4.1%
sequentially and 5.2% from the year-ago quarter. The operating
margin was (52.5%), down 1,700 bps sequentially but up 4031 bps
from the year-ago quarter. R&D as a percentage of sales was
flat sequentially and down from last year. While SG&A also
declined from last year, it increased sequentially.
The pro forma net loss was $16.9 million or 35.4% of sales,
compared to a loss of $10.7 million or 25.9% in the previous
quarter and a loss of $26.6 million or 87.9% in the year-ago
Including restructuring charges and impairment of long-lived
assets on a tax-adjusted basis, the GAAP net income per share
came to $0.01 in the last quarter compared to a loss of 29 cents
in the prior quarter and 54 cents in the year-ago quarter.
Inventories of $23.6 million were up 17.8% in the fourth
quarter of 2012. The company ended with cash and marketable
securities of $165.8 million, down $110.4 million during the
quarter. FormFactor has no debt. Long-term liabilities totaled
$11.4 million at quarter-end.
Cash used from operations was $110.4 in the fourth quarter
million compared with $1.6 million in the prior quarter.
For the first quarter, FormFactor expects revenue of
$48.0−$53.0 million. The non-GAAP gross margin is expected to be
in the range of 17%-21%. Non-GAAP operating expenses are expected
to be $21.0-$22.0 million. The cash burn in the quarter is
expected to be $10.0-$12.0 million, excluding stock
FormFactor is an original equipment manufacturer (OEM) of
automated wafer probe cards that are used in the back-end portion
of the semiconductor integrated circuits (ICs) manufacturing
process. It is a well-positioned player in the semiconductor
industry and has further solidified its position with the
addition of MicroProbe's SoC probe card segment. The acquisition
will make FormFactor a bigger player in the SoC probe card
However, the lingering macroeconomic weakness and softness in
the PC market that impacted FormFactor's results in the last
quarter are expected to continue in the next. Therefore,
FormFactor's core business (probe cards for DRAM and Flash) is
likely to remain under pressure in the near term.
FormFactor shares carry a Zacks Rank #3 (Hold). Other
front-end equipment suppliers such as
Advanced Semiconductor Engineering Inc.
PLX Technology Inc.
) all have a Zacks Rank #1 (Strong Buy).
ADV SEMICON ADR (ASX): Free Stock Analysis
DIODES INC (DIOD): Free Stock Analysis Report
FORMFACTOR INC (FORM): Free Stock Analysis
PLX TECH INC (PLXT): Free Stock Analysis
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