) first-quarter 2013 loss of 18 cents per share was narrower than
the Zacks Consensus Estimate of 26 cents loss per share.
Revenues of $52.6 million were up 10.4% sequentially and 51.2%
from the year-ago quarter.
Revenues by End User
The system on chip (SoC), DRAM and Flash customers generated
50%, 42% and 8% of first-quarter revenues, respectively.
business generated revenues of $26.4 million, up 6.5%
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
processors where the probe card solutions are more complex and
require higher parallelism.
business rose 33.3% sequentially to $22.0 million. The strength
in DRAM probe cards resulted from stronger mobile demand and
stronger pricing of DRAM devices that began in the fourth quarter
of 2012. FormFactor is seeing a rise in demand for DRAM
consumption in smartphones, which will exceed PC demand.
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 34.3% sequentially to $4.2 million. NAND
revenues were $2.5 million while NOR accounted for the balance.
Both product lines saw revenue declines at a similar rate. .
The GAAP gross margin increased 2,384 basis points (bps)
sequentially and 531 bps year over year to 17.3%. Higher revenues
and a favorable product mix drove the expansion in gross
Total operating expenses of $29.6 million were up 35.3%
sequentially and 33.7% from the year-ago quarter. The operating
margin was (39.0%), up 1,350 bps sequentially and 1,266 bps from
the year-ago quarter. Selling, general and administrative
(SG&A) expenses as a percentage of sales declined both
sequentially and from last year's quarter. While research and
development (R&D) expenses declined from last year, it
Pro forma net loss was $9.9 million or 18.8% of sales,
compared to a loss of $16.9 million or 35.4% in the previous
quarter and a loss of $17.3 million or 49.8% in the year-ago
Including restructuring charges and impairment of long-lived
assets on a tax-adjusted basis, GAAP net income per share came to
(37 cents) in the last quarter compared to earnings of 1
cent in the prior quarter and a loss of 35 cents in the
Inventories of $24.7 million were up 4.5% in the first quarter
of 2013. The company exited the quarter with cash and marketable
securities of $153.6 million, down $12.2 million during the
quarter. FormFactor has no debt. Long-term liabilities totaled to
$10.5 million at quarter-end.
Cash used from operations was $11.1 million in the first
quarter compared with $110.4 million in the prior quarter.
For the second quarter, FormFactor expects revenues in the
range of $58.0−$62.0 million. The non-GAAP gross margin is
expected in the range of 28%-31%. Non-GAAP operating expenses are
expected to be $21.0-$22.0 million. The cash burn in the quarter
is expected to be $3.0-$5.0 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 affected 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
technology stocks worth considering include
Arm Holdings Plc Ads
Tessera Technologies Inc.
) each with a Zacks Rank #2 (Buy).
ARM HOLDNGS ADR (ARMH): Free Stock Analysis
ATMEL CORP (ATML): Free Stock Analysis Report
FORMFACTOR INC (FORM): Free Stock Analysis
TESSERA TEC INC (TSRA): Free Stock Analysis
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