FormFactor Inc. (NASDAQ:FORM) filed Quarterly Report for the period ended 2010-09-25.
Formfactor Inc. has a market cap of $475.7 million; its shares were traded at around $9.7 with and P/S ratio of 3.4. FORM is in the portfolios of PRIMECAP Management, Chuck Royce of Royce& Associates, Louis Moore Bacon of Moore Capital Management, LP, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:We incurred a net loss of $95.8 million in the third quarter of fiscal 2010 as compared to net loss of $23.9 million in the third quarter of fiscal 2009. The net loss for the third quarter of fiscal 2010 includes $8.5 million of pre-tax restructuring charges, the impairment of certain long-lived assets of $55.4 million and a $4.1 million out of period adjustments to cost of revenues. We incurred a net loss of $167.9 million in the first nine months of fiscal 2010 as compared to net loss of $127.7 million for the first nine months of fiscal 2009. The net loss for the first nine months of fiscal 2010 is primarily due to lower revenue and margins, $14.6 million of pre-tax restructuring charges, and the impairment of certain long-lived assets of $56.4 million. The net loss for the first nine months of fiscal 2009 was primarily due to lower revenues, the recognition of a valuation allowance of $44.7 million for our deferred tax assets as well as the $5.0 million provision for bad debts due to the heightened risk of non-payment of certain accounts receivable.
Our cash, cash equivalents and marketable securities totaled approximately $371.5 million as of September 25, 2010, as compared to $449.2 million at December 26, 2009. We believe that we will be able to satisfy our working capital requirements for the next twelve months with the liquidity provided by our existing cash, cash equivalents and marketable securities. If we are unsuccessful in improving our operating efficiency, reducing our cash outlays or increasing our available cash through financing, our cash, cash equivalents and marketable securities could further decline in the fourth quarter of fiscal 2010 and in future fiscal quarters.
During the three months ended September 25, 2010 we recorded an adjustment related to cost of revenues that resulted in $4.1 million of additional expense offset by an income tax benefit of $0.5 million. The adjustment to cost of revenues resulted from an error in the calculation of capitalized manufacturing variances starting in the first quarter of fiscal 2009 through the second quarter of fiscal 2010. The error caused the understatement of cost of revenues and the overstatement of the overhead capitalized in inventory for most quarters. The income tax benefit resulted from higher net losses in 2009 due to higher cost of revenue expenses. We are able to carry back the increase in the 2009 loss to recover more prior year tax payments. Management and the Audit Committee believe that such amounts are not material to current and previously reported financial statements.
Revenues for the three and nine months ended September 25, 2010 increased 8.2%, or $3.6 million, and 41.3%, or $42.3 million, compared to the revenues of the comparable periods of the prior year. The increases are primarily due to increased demand for our advanced wafer probe cards caused by an overall improvement in the semiconductor market, and in particular the memory segment.
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