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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 ____________________________
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported):  February 7, 2024
 
FORMFACTOR, INC.
(Exact Name of Registrant as Specified in Charter)
 
Delaware 000-50307 13-3711155
(State or Other Jurisdiction of Incorporation) (Commission File Number) (IRS Employer Identification No.)
7005 Southfront Road
Livermore,
CA
94551
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s telephone number, including area code:  (925) 290-4000
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
_____________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐     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.



Item 2.02.  Results of Operations and Financial Condition.
 
On February 7, 2024, FormFactor, Inc. (“FormFactor”) issued a press release announcing its financial results for the fourth quarter of fiscal 2023 that ended on December 30, 2023. A copy of the press release is furnished as Exhibit 99.01 to this report and is incorporated herein by reference.

Item 9.01.  Financial Statements and Exhibits.
 
(d) Exhibits.

The following exhibit is filed herewith and this list is intended to constitute the exhibit index.
Exhibit Number Description
Press release dated February 7, 2024
 
The information in this report and the accompanying exhibit shall not be incorporated by reference into any filing of FormFactor with the Securities and Exchange Commission, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing. The information in this report, including the accompanying exhibit, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended.





 
SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
FORMFACTOR, INC.
Date:
February 7, 2024
By: /s/ SHAI SHAHAR
Name: Shai Shahar
Title: Chief Financial Officer
 



EX-99.01 2 q423exhibit9901.htm EX-99.01 Document

EXHIBIT 99.01
ffq118logorgbinlinea06.jpg                            
News Release
 
Investor Contact:
Stan Finkelstein
Investor Relations
(925) 290-4321
ir@formfactor.com
 


FORMFACTOR, INC. REPORTS 2023 FOURTH QUARTER AND FISCAL 2023 RESULTS
Delivered Q4 Revenue and Gross Margin above Mid-Point of the Outlook Range, Sees Similar Overall Demand Levels in Q1

LIVERMORE, Calif. — February 7, 2024 —FormFactor, Inc. (Nasdaq: FORM) today announced its financial results for the fourth quarter of fiscal 2023 ended December 30, 2023. Quarterly revenues were $168.2 million, a decrease of 2.0% compared to $171.6 million in the third quarter of fiscal 2023, and an increase of 1.3% from $166.0 million in the fourth quarter of fiscal 2022. For fiscal 2023, FormFactor recorded revenues of $663 million, down 11.3% from $748 million in fiscal 2022.

•Experienced relatively stable demand as the result of its differentiated product diversification strategy.
•Benefited from strong demand for DRAM probe cards driven by growth of high-bandwidth-memory, a key enabler of generative AI.
•Signed agreement today with Grand Junction Semiconductor Pte. Ltd. to divest China operations and establish an exclusive distribution and partnership agreement to continue sales and support of FormFactor’s products in the region.

“Compared to the outlook, FormFactor delivered moderately higher fourth quarter revenue and gross margins offset by a higher tax rate that produce non-GAAP EPS at mid-point of the outlook,” said Mike Slessor, CEO of FormFactor, Inc. “The strength and stability of our balanced product portfolio enables us to make investments in innovation, capacity and other strategic initiatives, while maximizing quarterly profitability and protecting our strong balance sheet during the current period of industry softness.”

Fourth Quarter and Fiscal 2023 Highlights

On a GAAP basis, net income for the fourth quarter of fiscal 2023 was $75.8 million, or $0.97 per fully-diluted share, compared to net income for the third quarter of fiscal 2023 of $4.4 million, or $0.06 per fully-diluted share, and net loss for the fourth quarter of fiscal 2022 of $13.7 million, or negative $0.18 per fully-diluted share. Net income for fiscal 2023 was $82.4 million, or $1.05 per fully-diluted share, compared to net income for fiscal 2022 of $50.7 million, or $0.65, per fully-diluted share. Gross margin for the fourth quarter of 2023 was 40.4%, compared with 40.4% in the third quarter of 2023, and 27.2% in the fourth quarter of 2022. Gross margin for fiscal 2023 was 39.0%, compared to 39.6% for fiscal 2022. The GAAP financial results for the fourth quarter of 2023 include a $73.0 million gain from the sale of FRT that has been excluded from FormFactor's fourth quarter non-GAAP results.
 
On a non-GAAP basis, net income for the fourth quarter of fiscal 2023 was $15.7 million, or $0.20 per fully-diluted share, compared to net income for the third quarter of fiscal 2023 of $17.3 million, or $0.22 per fully-diluted share, and net income for the fourth quarter of fiscal 2022 of $4.1 million, or $0.05 per fully-diluted share. Non-GAAP net income for fiscal 2023 was $56.8 million, or $0.73 per fully-diluted share, compared to net income of $97.9 million, or $1.25 per fully-diluted share for fiscal 2022. On a non-GAAP basis, gross margin for the fourth quarter of 2023 was 42.1%, compared with 41.8% in the third quarter of 2023, and 31.7% in the fourth quarter of 2022. Non-GAAP gross margin for fiscal 2023 was 40.7%, compared to 42.3% for fiscal 2022.

A reconciliation of GAAP to non-GAAP measures is provided in the schedules included below.

GAAP net cash provided by operating activities for the fourth quarter of fiscal 2023 was $9.3 million, compared to $20.6 million for the third quarter of fiscal 2023, and $20.7 million for the fourth quarter of fiscal 2022. Free cash flow for the fourth quarter of fiscal 2023 was negative $0.3 million, compared to free cash flow for the third quarter of fiscal 2023 of $16.9 million, and free cash flow for the fourth quarter of 2022 of negative $5.4 million. Free cash flow for fiscal 2023 and fiscal 2022 was $11.4 million and $67.1 million, respectively.



A reconciliation of net cash provided by operating activities to non-GAAP free cash flow is provided in the schedules included below.

Outlook

Dr. Slessor added, “We continue to operate in an overall demand environment similar to the levels we experienced last year and expect FormFactor’s first-quarter results to be similar to those achieved in recent quarters.”

For the first quarter ending March 30, 2024, FormFactor is providing the following outlook*:
GAAP Reconciling Items** Non-GAAP
Revenue
$165 million +/- $5 million
$165 million +/- $5 million
Gross Margin
40% +/- 1.5%
$2 million
41% +/- 1.5%
Net income per diluted share
$0.07 +/- $0.04
$0.12
$0.19 +/-$0.04
*This outlook assumes consistent foreign currency rates.
**Reconciling items are stock-based compensation, restructuring charges, divestiture-related expenses, adjustments to the gain on sale of business, and amortization of intangibles and fixed asset fair value adjustments due to acquisitions, net of applicable income tax impacts.

We posted our revenue breakdown by geographic region, by market segment and with customers with greater than 10% of total revenue on the Investor Relations section of our website at www.formfactor.com. We will conduct a conference call at 1:25 p.m. PT, or 4:25 p.m. ET, today.

The public is invited to listen to a live webcast of FormFactor’s conference call on the Investor Relations section of our website at www.formfactor.com. A telephone replay of the conference call will be available approximately two hours after the conclusion of the call. The replay will be available on the Investor Relations section of our website, www.formfactor.com.

Use of Non-GAAP Financial Information:

To supplement our condensed consolidated financial results prepared under generally accepted accounting principles, or GAAP, we disclose certain non-GAAP measures of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses and non-GAAP operating income, that are adjusted from the nearest GAAP financial measure to exclude certain costs, expenses, gains and losses. Reconciliations of the adjustments to GAAP results for the three and twelve months ended December 30, 2023, and for outlook provided before, as well as for the comparable periods of fiscal 2022, are provided below, and on the Investor Relations section of our website at www.formfactor.com. Information regarding the ways in which management uses non-GAAP financial information to evaluate its business, management's reasons for using this non-GAAP financial information, and limitations associated with the use of non-GAAP financial information, is included under “About our Non-GAAP Financial Measures” following the tables below.

About FormFactor:
 
FormFactor, Inc. (NASDAQ: FORM), is a leading provider of essential test and measurement technologies along the full semiconductor product life cycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test. Semiconductor companies rely upon FormFactor’s products and services to accelerate profitability by optimizing device performance and advancing yield knowledge. The Company serves customers through its network of facilities in Asia, Europe, and North America. For more information, visit the Company’s website at www.formfactor.com.

Forward-looking Statements:

This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the federal securities laws, including with respect to the Company’s future financial and operating results, and the Company’s plans, strategies and objectives for future operations. These statements are based on management’s current expectations and beliefs as of the date of this release, and are subject to a number of risks and uncertainties, many of which are beyond the Company’s control, that could cause actual results to differ materially from those described in the forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding future financial and operating results, customer demand, conditions in the semiconductor industry, and growth opportunities, and other statements regarding the Company’s business. Forward-looking statements may contain words such as “may,” “might,” “will,” “expect,” “plan,” “anticipate,” and “continue,” the negative or plural of these words and similar expressions, and include the assumptions that underlie such statements.



The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: changes in demand for the Company’s products; customer-specific demand; market opportunity; anticipated industry trends; the availability, benefits, and speed of customer acceptance or implementation of new products and technologies; manufacturing, processing, and design capacity, goals, expansion, volumes, and progress; difficulties or delays in research and development; industry seasonality; risks to the Company’s realization of benefits from acquisitions, investments in capacity and investments in new electronic data systems and information technology; reliance on customers or third parties (including suppliers); changes in macro-economic environments; events affecting global and regional economic and market conditions and stability such as military conflicts, political volatility, infectious diseases and pandemics, and similar factors, operating separately or in combination; and other factors, including those set forth in the Company’s most current annual report on Form 10-K, quarterly reports on Form 10-Q and other filings by the Company with the U.S. Securities and Exchange Commission. We continue to operate in an environment with substantial uncertainties arising from global, regional and national health crises such as the COVID-19 pandemic, including with respect to their impact on our operations, capacity, customer demand, and supply chain, as well as the macroeconomic environment. In addition, there are varying barriers to international trade, including restrictive trade and export regulations such as the US-China restrictions, dynamic tariffs, trade disputes between the U.S. and other countries, and national security developments or tensions, that may substantially restrict or condition our sales to or in certain countries, increase the cost of doing business internationally, and disrupt our supply chain. No assurances can be given that any of the events anticipated by the forward-looking statements within this press release will transpire or occur, or if any of them do so, what impact they will have on the results of operations or financial condition of the Company. Unless required by law, the Company is under no obligation (and expressly disclaims any such obligation) to update or revise its forward-looking statements whether as a result of new information, future events, or otherwise.




FORMFACTOR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 
  Three Months Ended Twelve Months Ended
  December 30,
2023
September 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
Revenues $ 168,163  $ 171,575  $ 165,987  $ 663,102  $ 747,937 
Cost of revenues 100,229  102,290  120,784  404,522  451,928 
Gross profit 67,934  69,285  45,203  258,580  296,009 
Operating expenses:    
Research and development 28,166  31,014  27,222  115,765  109,222 
Selling, general and administrative 31,451  35,564  33,926  133,012  131,875 
Total operating expenses 59,617  66,578  61,148  248,777  241,097 
Gain on sale of business 72,953  —  —  72,953  — 
Operating income (loss) 81,270  2,707  (15,945) 82,756  54,912 
Interest income, net 2,376  1,662  957  6,796  1,641 
Other income (expense), net (1,546) 788  (467) (285) 1,317 
Income (loss) before income taxes 82,100  5,157  (15,455) 89,267  57,870 
Provision (benefit) for income taxes 6,254  786  (1,728) 6,880  7,132 
Net income (loss) $ 75,846  $ 4,371  $ (13,727) $ 82,387  $ 50,738 
Net income (loss) per share:
Basic $ 0.98  $ 0.06  $ (0.18) $ 1.06  $ 0.65 
Diluted $ 0.97  $ 0.06  $ (0.18) $ 1.05  $ 0.65 
Weighted-average number of shares used in per share calculations:
Basic 77,684  77,571  76,972  77,370  77,578 
Diluted 78,410  78,412  76,972  78,159  78,201 




FORMFACTOR, INC. 
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 30,
2023
September 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
GAAP Gross Profit $ 67,934  $ 69,285  $ 45,203  $ 258,580  $ 296,009 
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other 756  1,118  1,360  4,336  4,908 
Stock-based compensation 2,053  1,376  973  6,854  3,807 
Restructuring charges —  —  5,122  357  11,775 
Non-GAAP Gross Profit $ 70,743  $ 71,779  $ 52,658  $ 270,127  $ 316,499 
GAAP Gross Margin 40.4  % 40.4  % 27.2  % 39.0  % 39.6  %
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other 0.5  % 0.6  % 0.8  % 0.6  % 0.6  %
Stock-based compensation 1.2  % 0.8  % 0.6  % 1.0  % 0.5  %
Restructuring charges —  % —  % 3.1  % 0.1  % 1.6  %
Non-GAAP Gross Margin 42.1  % 41.8  % 31.7  % 40.7  % 42.3  %
GAAP operating expenses $ 59,617  $ 66,578  $ 61,148  $ 248,777  $ 241,097 
Adjustments:
Amortization of intangibles and other (518) (466) (1,530) (4,081) (6,184)
Stock-based compensation (7,230) (9,463) (8,491) (31,762) (27,530)
Restructuring charges —  —  (3,249) (1,183) (3,664)
Costs related to sale of business (268) (2,139) —  (2,407) — 
Non-GAAP operating expenses $ 51,601  $ 54,510  $ 47,878  $ 209,344  $ 203,719 
GAAP operating income (loss) $ 81,270  $ 2,707  $ (15,945) $ 82,756  $ 54,912 
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions, and other 1,274  1,584  2,890  8,417  11,092 
Stock-based compensation 9,283  10,839  9,464  38,616  31,337 
Restructuring charges —  —  8,371  1,540  15,439 
Gain on sale of business and related costs (72,685) 2,139  —  (70,546) — 
Non-GAAP operating income $ 19,142  $ 17,269  $ 4,780  $ 60,783  $ 112,780 




FORMFACTOR, INC. 
NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 30,
2023
September 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
GAAP net income (loss) $ 75,846  $ 4,371  $ (13,727) $ 82,387  $ 50,738 
Adjustments:
Amortization of intangibles, inventory and fixed asset fair value adjustments due to acquisitions 1,274  1,584  2,890  8,417  11,092 
Stock-based compensation 9,283  10,839  9,464  38,616  31,337 
Restructuring charges —  —  8,371  1,540  15,439 
Gain on sale of business and related costs (72,685) 2,139  —  (70,546) — 
Income tax effect of non-GAAP adjustments 2,026  (1,617) (2,850) (3,624) (10,663)
Non-GAAP net income $ 15,744  $ 17,316  $ 4,148  $ 56,790  $ 97,943 
GAAP net income (loss) per share:
Basic $ 0.98  $ 0.06  $ (0.18) $ 1.06  $ 0.65 
Diluted $ 0.97  $ 0.06  $ (0.18) $ 1.05  $ 0.65 
Non-GAAP net income per share:
Basic $ 0.20  $ 0.22  $ 0.05  $ 0.73  $ 1.26 
Diluted $ 0.20  $ 0.22  $ 0.05  $ 0.73  $ 1.25 








FORMFACTOR, INC. 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Twelve Months Ended
December 30,
2023
December 31,
2022
Cash flows from operating activities:
Net income $ 82,387  $ 50,738 
Selected adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 30,603  28,646 
Amortization 6,850  9,391 
Stock-based compensation expense 38,616  31,337 
Provision for excess and obsolete inventories 15,003  24,632 
Gain on sale of business (72,953) — 
Non-cash restructuring charges —  200 
Other activity impacting operating cash flows (35,904) (13,158)
Net cash provided by operating activities 64,602  131,786 
Cash flows from investing activities:
Acquisition of property, plant and equipment (56,027) (65,254)
Acquisition of business —  (3,350)
Proceeds from sale of business 101,785  — 
Purchases of marketable securities, net (16,709) (6,100)
Purchase of promissory note receivable —  (1,000)
Net cash proved by (used in) investing activities 29,049  (75,704)
Cash flows from financing activities:
Purchase of common stock through stock repurchase program (19,801) (82,328)
Proceeds from issuances of common stock 8,822  10,499 
Principal repayments on term loans (1,045) (8,398)
Tax withholdings related to net share settlements of equity awards (10,687) (15,705)
Net cash used in financing activities (22,711) (95,932)
Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,649) (2,510)
Net increase (decrease) in cash, cash equivalents and restricted cash 68,291  (42,360)
Cash, cash equivalents and restricted cash, beginning of period 112,982  155,342 
Cash, cash equivalents and restricted cash, end of period $ 181,273  $ 112,982 







FORMFACTOR, INC. 
RECONCILIATION OF CASH PROVIDED BY OPERATING ACTIVITIES TO NON-GAAP FREE CASH FLOW
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 30,
2023
September 30,
2023
December 31,
2022
December 30,
2023
December 31,
2022
Net cash provided by operating activities $ 9,250  $ 20,571  $ 20,738  $ 64,602  $ 131,786 
Adjustments:
Payments related to sale of business in working capital 268  2,139  —  2,407  — 
Cash paid for interest 105  105  117  422  535 
Capital expenditures (9,933) (5,917) (26,230) (56,027) (65,254)
Free cash flow $ (310) $ 16,898  $ (5,375) $ 11,404  $ 67,067 





FORMFACTOR, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited) 
  December 30,
2023
September 30,
2023
December 31,
2022
ASSETS
Current assets:
Cash and cash equivalents $ 177,812  $ 108,731  $ 109,130 
Marketable securities 150,507  135,693  129,006 
Accounts receivable, net of allowance for credit losses 102,957  88,965  88,143 
Inventories, net 111,685  111,626  123,157 
Restricted cash 1,152  1,171  1,221 
Assets held-for-sale —  33,718  — 
Prepaid expenses and other current assets 29,667  26,681  23,895 
Total current assets 573,780  506,585  474,552 
Restricted cash 2,309  2,146  2,631 
Operating lease, right-of-use-assets 30,519  29,824  31,362 
Property, plant and equipment, net of accumulated depreciation 204,399  203,510  189,848 
Goodwill 201,090  200,485  211,444 
Intangibles, net 12,938  13,578  26,751 
Deferred tax assets 78,964  73,572  67,646 
Other assets 2,795  3,267  3,994 
Total assets $ 1,106,794  $ 1,032,967  $ 1,008,228 
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current liabilities:
Accounts payable $ 63,857  $ 61,589  $ 69,308 
Accrued liabilities 41,037  36,487  42,115 
Current portion of term loan, net of unamortized issuance costs 1,075  1,067  1,045 
Deferred revenue 16,704  13,855  29,846 
Liabilities held-for-sale —  8,521  — 
Operating lease liabilities 8,422  8,007  7,353 
Total current liabilities 131,095  129,526  149,667 
Term loan, less current portion, net of unamortized issuance costs 13,314  13,586  14,389 
Deferred tax liabilities —  317  2,732 
Long-term operating lease liabilities 25,334  25,096  27,587 
Deferred grant 18,000  18,000  — 
Other liabilities 10,247  5,754  5,568 
Total liabilities 197,990  192,279  199,943 
Stockholders’ equity:  
Common stock 77  78  77 
Additional paid-in capital 861,448  873,634  844,842 
Accumulated other comprehensive loss (4,052) (8,509) (5,578)
Accumulated income (deficit) 51,331  (24,515) (31,056)
Total stockholders’ equity 908,804  840,688  808,285 
Total liabilities and stockholders’ equity $ 1,106,794  $ 1,032,967  $ 1,008,228 




About our Non-GAAP Financial Measures:

We believe that the presentation of non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating income and free cash flow provides supplemental information that is important to understanding financial and business trends and other factors relating to our financial condition and results of operations. Non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income are among the primary indicators used by management as a basis for planning and forecasting future periods, and by management and our board of directors to determine whether our operating performance has met certain targets and thresholds. Management uses non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income when evaluating operating performance because it believes that the exclusion of the items indicated herein, for which the amounts or timing may vary significantly depending upon our activities and other factors, facilitates comparability of our operating performance from period to period. We use free cash flow to conduct and evaluate our business as an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows. Many investors also prefer to track free cash flow, as opposed to only GAAP earnings. Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures, and therefore it is important to view free cash flow as a complement to our entire consolidated statements of cash flows. We have chosen to provide this non-GAAP information to investors so they can analyze our operating results closer to the way that management does, and use this information in their assessment of our business and the valuation of our Company. We compute non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income, by adjusting GAAP net income, GAAP net income per basic and diluted share, GAAP gross profit, GAAP gross margin, GAAP operating expenses, and GAAP operating income (loss) to remove the impact of certain items and the tax effect, if applicable, of those adjustments. These non-GAAP measures are not in accordance with, or an alternative to, GAAP, and may be materially different from other non-GAAP measures, including similarly titled non-GAAP measures used by other companies. The presentation of this additional information should not be considered in isolation from, as a substitute for, or superior to, net income, net income per basic and diluted share, gross profit, gross margin, operating expenses, or operating income (loss) in accordance with GAAP. Non-GAAP financial measures have limitations in that they do not reflect certain items that may have a material impact upon our reported financial results. We may expect to continue to incur expenses of a nature similar to the non-GAAP adjustments described above, and exclusion of these items from our non-GAAP net income, non-GAAP net income per basic and diluted share, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, and non-GAAP operating income should not be construed as an inference that these costs are unusual, infrequent or non-recurring. For more information on the non-GAAP adjustments, please see the table captioned “Non-GAAP Financial Measure Reconciliations” and “Reconciliation of Cash Provided by Operating Activities to non-GAAP Free Cash Flow” included in this press release.

Source: FormFactor, Inc.
FORM-F