FormFactor, Inc. Revises First Quarter Guidance and Announces Cost Reduction Plan
April 8, 2008
LIVERMORE, Calif. — April 8, 2008 — FormFactor, Inc. (Nasdaq: FORM) today revised its guidance for the first fiscal quarter, ended March 29, 2008. Based on a preliminary review, the company now expects first quarter revenue to be in the range of $65 million to $66 million, compared to its previous guidance of $70 to $80 million. The company expects its non-GAAP operating margin will be worse than the 6% to 19% previously forecast and that its GAAP loss per share will be greater than its previous forecast of $0.15 to $0.25 per share. First quarter results will reflect restructuring charges associated with the company’s ongoing cost reduction plan. Bookings for the first fiscal quarter were approximately $66 million.
The lower than expected revenue is due primarily to the deterioration of the DRAM market throughout the first quarter. Depressed memory device prices are causing customers to delay test capacity expansions and technology transitions, and to take additional actions to reduce costs, all of which impact the company’s business. The company believes these conditions that impact revenue will continue to exist at least through the first half of 2008. The guidance contained in this release is based on preliminary information and is subject to change.
In addition, the company also announced a global cost reduction plan. As part of the plan the company will reduce its global workforce by about 12%, with the reductions primarily coming from the company’s North America operations. The company expects to incur $3.5-$4.5 million in charges related to the plan, which will be recorded in the second quarter of fiscal 2008.
The company plans to release its financial results for its first quarter on April 29, 2008 and will provide more details on its first quarter performance at that time.