Formfactor Inc. has a market cap of $732 million; its shares were traded at around $14.66 with and P/S ratio of 5.4. FORM is in the portfolios of PRIMECAP Management, RS Investment Management, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:We incurred a net loss of $38.2 million in the first quarter of fiscal 2010 as compared to net loss of $37.9 million for the first quarter of fiscal 2009. The net loss for the first quarter of fiscal 2010 includes $3.6 million of pre-tax restructuring charges. Net loss for the first quarter of fiscal 2009 included $7.7 million in pre-tax restructuring charges and $5.2 million in pre-tax provision for bad debts due to the heightened risk of non-payment of certain accounts receivable. The restructuring plan initiated in the first quarter of fiscal 2010 is intended to align resources in continuation of our global regionalization strategy to place more decision-making in regions close to our semiconductor customers. As part of this regionalization strategy, we are moving certain assembly and test operations from our back-end manufacturing processes from Livermore, CA to Asia and are bringing up and plan to qualify our back-end manufacturing operations in Singapore in the third quarter of fiscal 2010.
Revenues in the three months ended March 27, 2010 increased 44.9%, or $12.3 million, to $39.7 million from $27.4 million in the comparable period a year ago. The increase in revenues for the three months ended March 27, 2010 is 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.
Gross margin fluctuates with revenue levels, product mix, selling prices, factory loading, and material costs. For the three months ended March 27, 2010, gross margin improved compared to the same period in the prior year, primarily due to the increase in revenue driving higher factory utilization, thereby reducing unit manufacturing costs, combined with favorable changes in product mix from lower margin to higher margin products. Additionally, inventory provision decreased from $5.1 million or 18.5% of revenues the first quarter of fiscal 2009 to $1.2 million or 3.0% of revenues in the first quarter of fiscal 2010. The higher inventory write-downs in the first quarter of fiscal 2009 were associated with deterioration in the DRAM memory segment in that period. Gross margin for the first three months of fiscal 2010 includes stock-based compensation expense of $1.0 million or 2.4% of revenue compared to $0.8 million, or 2.8% of revenue for the first three months of fiscal 2009.
Research and development expenses increased in absolute dollars for the three months ended March 27, 2010 compared to the same period in the prior year primarily due to an increase in personnel costs as well as certain new technology product development related costs. For the three months ended March 27, 2010, personnel costs increased $1.2 million, primarily due to increases in headcount as well as costs of temporary employee incentive programs. Stock-based compensation included within research and development was $1.4 million for the three months ended March 27, 2010 compared to $1.0 million for the three months ended March 28, 2009, with the increase in absolute dollars being primarily due to increase in employee stock awards.
Outside legal and other professional fees decreased by $3.4 million primarily due to the scheduling of the International Trade Commission hearing on the investigation (337-TA-621) of two of our competitors, which arose out of our complaint filed in late 2007. The majority of the fees and costs related to the hearing and post hearing activities were incurred by the end of the first quarter of fiscal 2009. Personnel related costs decreased by approximately $0.5 million primarily due to the work force reductions implemented in 2009. Additionally, we recorded a provision for doubtful accounts of $5.2 million in the first quarter of fiscal 2009 primarily due to the heightened risk of non-payment of accounts receivable by certain customers facing financial difficulty. We recorded a reduction in the provision for doubtful accounts of $0.1 million in the first quarter of fiscal 2010 primarily due to the payment of accounts receivable that was previously reserved.
Facilities-related costs and depreciation decreased by $0.6 million in the first quarter of fiscal 2010 as compared to the first quarter of fiscal 2009. In addition, stock-based compensation included within selling, general and administrative expense was $2.9 million for the three months ended March 27, 2010 compared to $2.8 million for three months ended March 28, 2009.
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