Call Start: 16:30
Call End: 16:56
Q3 2010 Earnings Call
October 26, 2010 4:30 pm ET
Thomas St. Dennis - Chief Executive Officer, Director
Richard DeLateur - Chief Financial Officer
G. Carl Everett Jr. - Executive Chairman of the Board
Gary Hsueh – Oppenheimer
Timothy Arcuri – Citigroup
Kate Kotlarsky - Goldman Sachs
C.J. Muse - Barclays Capital
Patrick Ho - Stifel Nicolaus
Previous Statements by FORM
» FormFactor Inc. Q2 2010 Earnings Conference Call Transcript
» FormFactor, Inc. Q4 2009 Earnings Call Transcript
» FormFactor Inc. Q3 2009 Earnings Conference Call
» FormFactor, Inc. Q2 2009 Earnings Call Transcript
Welcome, everyone to FormFactor’s third quarter fiscal 2010 earnings conference call. On today’s call are Carl Everett, Executive Chairman of the Board of Directors; Chief Executive Officer, Thomas St. Dennis; and Chief Financial Officer, Richard DeLateur.
Before we begin, let me remind you that the company will be discussing GAAP P&L results and some key non-GAAP result supplement to understand the company’s financials. A schedule that provides GAAP to non-GAAP reconciliation is available in the press release issued today and also on the investor section of FormFactor’s website.
Also a reminder for everyone that today’s discussion contains forward-looking statements and that FormFactor’s actual result could differ materially from those projected in our forward-looking statements. The company assumes no obligation to update the information provided during today’s call, to revise any forward-looking statements or to update the reasons, actual results could differ materially from those anticipated in forward-looking statements. For more information, please refer to the risk factors discussed in the company’s form 10-K from 2009 fiscal year as filed to SEC, subsequent forms 10-Q, SEC filings and the press release issued today.
With that, we will now turn the call over to the CEO, Thomas St. Dennis.
Thomas St. Dennis
Thank you and good afternoon. My first six weeks at FormFactor had been focused on getting up to speed in our products, our organization and our customers. And I’d like to share with you some of the early impressions from this activity.
I spend over a third of my time in the field with our customers and our field organization and it is clear to me from the conversations that I have had from our customers that they have a deed respect for the products and technologies the FormFactor has created over the past 17 years.
They continue to see form factor as a leader in advanced probe card technology. They are counting on us to deliver the enabling test technologies that they will need to go to the 3x nanometer and the 2x nanometer technology nodes. We also see our field support organization as a benchmark in the industry.
What we have fallen short is in our operational execution related to deliveries and lead time, which has been a continuous to be a focus area for FormFactor as we continue to turn the company’s performance around. Overall, I have been very impressed by the people and the products of FormFactor, and I am extremely encouraged by the commitment of our customers to a strong realationship – to a continued strong relationship with us.
The key objective of my joining FormFactor was to ensure a seamless transition with Carl Everett to sustain the focus and momentum that the company has developed. I believe that we are meeting that objective and driving ahead on the key areas. Taking care of our core business is our first priority and that is where our initiatives are focused. Driving the critical product capabilities that our customers need, improving our operational executions, reducing our cost to produce and deliver our products and reducing our operating expenses defines our daily agenda.
We have identified the programs that we must execute on and align the resources of the company to focus on driving those programs. I believe that we got the right people and the resources necessary to successfully deliver the required results. As we communicated on previous calls, the next two quarters will be challenging as we make the changes necessary to have a strong operational and financial foundation for FormFactor’s future. While there is significant work to do, there are several important indicators of recent progress.
We recently completed the qualification of the Matrix platform at another major memory manufacturer and received a multiple unit order from them. We now have the Matrix platform, qualified at four out of the top five 5 MEM manufacturers with the fifth one well under way for qualification.
Recently, delinquencies, hand-on-time delivery have both improved. Operating expenses and cash flow are both trending in the right direction. And while most of these have not reached their targets, their trends show that the actions we have taken are having a positive impact. We will remain focused on these until FormFactor regains its operational and financial health.
With that I’ll turn the call over to Rich for details on the financials.
Thank you Tom, I will begin with a summary of our third quarter results. Total revenue was $47.3 million, down 18% sequentially and up 8% on a year-over-year basis. Total revenue included 1.6 million from a decrease in deferred revenue.
Revenue decline came primarily from the DRAM sector of the business. The details as follows: Third quarter revenue for DRAM products was $30.1 million, down 29% from our second quarter and down 17% versus the third quarter a year ago.
Flash revenue was $9 million, up 7% from Q2 and (330%) versus the third quarter a year ago. NAND growth was considerably stronger with NOR revenue declining, NAND revenue was $6 million. SoC revenue was 8.3 million in the third quarter, up 21% sequentially and 57% versus the third quarter a year ago.