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FormFactor Inc. Reports Operating Results (10-Q)

August 06, 2009 | About:

FormFactor Inc. (NASDAQ:FORM) filed Quarterly Report for the period ended 2009-06-27.

Formfactor Inc designs develops manufactures sells and supports precision high performance advanced semiconductor wafer probe cards. Their products are based on proprietary technology including its MicroSpring interconnect technology which enables FormFactor to produce wafer probe cards for test applications that require reliability speed precision and signal integrity. FormFactor is headquartered in Livermore California. FormFactor Inc. has a market cap of $1.06 billion; its shares were traded at around $21.47 with and P/S ratio of 5.1. FormFactor Inc. had an annual average earning growth of 47% over the past 5 years.

Highlight of Business Operations:

We incurred a net loss of $65.8 million in the second quarter of fiscal 2009 as compared to net loss of $18.7 million for the second quarter of fiscal 2008 primarily due to lower revenues as well as the inclusion of a $44.7 million valuation allowance for our deferred tax assets. We incurred a net loss of $103.8 million in the first half of fiscal 2009 as compared to net loss of $36.6 million for the first half of fiscal 2008 primarily due to lower revenues, the inclusion of a valuation allowance of $44.7 million for our deferred tax assets, the inclusion of $7.9 million of restructuring charges as well as $4.9 million in provision for bad debts due to the heightened risk of non-payment of certain accounts receivable. Net loss for the first half of fiscal 2008 included $8.5 million in restructuring charges and $0.5 million in provision for doubtful debts. In the first quarter of fiscal 2009, we initiated a global reorganization and cost reduction plan designed to lower our cash breakeven level in order to enable us to sustain ourselves financially in the current market environment. As part of the plan, we reduced our workforce by approximately 22%. We also implemented certain non-severance measures that we expect to result in future cost savings.

Our cash, cash equivalents and marketable securities totaled approximately $486.8 million as of June 27, 2009 as compared to $522.9 million at December 27, 2008. While there are no specific significant transactions or arrangements that are likely to materially affect liquidity, economic uncertainty and weak credit markets are driving our customers to delay their procurement as well as payment decisions which could adversely delay and affect our cash collections. 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 will further decline in the second half of fiscal 2009.

Read the The complete ReportFORM is in the portfolios of PRIMECAP Management, George Soros of Soros Fund Management LLC.

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