Formfactor, Inc. · NASDAQ:FORM
Formfactor — Investor Presentation (June 2016)
23 slides from Formfactor's investor presentation, June 2016
Slide 1: June 2016 Investor Presentation
JUNE 2016 INVESTOR PRESENTATION TRANSITIONING FROM SEMICONDUCTOR TEST SUPPLIER TO BROADER TEST AND MEASUREMENT MARKET LEADER ©2016 FormFactor Inc.
Slide 2: Cautions Regarding Forward-Looking Statements
CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS Forward-Looking Statements This communication contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including with respect to the anticipated timing, completion and
Slide 3: Additional Information and Where to Find It; Participants in the Solicitation
ADDITIONAL INFORMATION AND WHERE TO FIND IT; PARTICIPANTS IN THE SOLICITATION No Offer or Solicitation This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed merger or otherw
Slide 4: Investment Themes
INVESTMENT THEMES Largest supplier of Aligned with Technology Structurally Cascade semiconductor technology leadership profitable financial Microtech probe cards, trends in mobility, enables model delivering acquisition gaining share and connectivity and customers’ most earnings growth provides scal
Slide 5: Gaining Share for Key Applications; Outpacing Market Growth
GAINING SHARE FOR KEY APPLICATIONS; OUTPACING MARKET GROWTH 2015-2020: Market Growth 6% 2020 25% 2015 6% Foundry & Logic: $746M DRAM: $398M Foundry & Logic $552M Flash: $251M DRAM: $318M Flash: $196M TOTAL: $1.07B TOTAL: $1.4B 39% Y/Y Market Growth 1.5% FormFactor Growth: 5.25% Source: V
Slide 6: Aligned with Technology Trends in Mobility, Connectivity and Enterprise Infrastructure
ALIGNED WITH TECHNOLOGY TRENDS IN MOBILITY, CONNECTIVITY AND ENTERPRISE INFRASTRUCTURE Mobility Connectivity Enterprise • Application • Modems • High Performance Processors • Near Field MPU • Mobile DRAM Communication • Server DRAM • NAND Flash • Filters (BAW & SAW) • NAND Flash • Sensors ~ 6% Growt
Slide 7: We Enable Customers' Most Critical Roadmap Advancements
WE ENABLE CUSTOMERS’ MOST CRITICAL ROADMAP ADVANCEMENTS Foundry & Logic DRAM Flash Continued adoption of Continued growth in Growth in industry Cu Pillar at foundry mobile and server NAND capacity and customers Transition to ≤ 20nm wafer starts Transition to 10nm node Bit growth at 35-40% node per y
Slide 8: Recent Results and Outlook
RECENT RESULTS AND OUTLOOK Revenue Gross Margin Diluted Cash Flow ($M) (%)** EPS** ($M)*** Q1 2016 ACTUAL $53.6M 23.3% ($0.11) ($0.4M) Q2 2016 GUIDANCE* $76M-$80M 34%-37% $0.10-$0.14 $4M-$6M 2016 GUIDANCE THEMES*: SHORT-TERM FIRST QUARTER PERFORMANCE ISSUES HAVE BEEN RECTIFIED; PERFORMANCE EXPECTED
Slide 9: Transitioning to Broader Test and Measurement Market Leader
TRANSITIONING TO BROADER TEST AND MEASUREMENT MARKET LEADER $426M 1,400 8 pro-forma employees countries 2015 Diversification & New Market Opportunities Production Probe Cards Engineering + Probe MPU, APU, DRAM / Cards / RF Logic Flash Probe Systems COMBINING COMPLEMENTARY INDUSTRY LEADERS TO CREATE
Slide 10: Our Footprint in the Device Life Cycle
OUR FOOTPRINT IN THE DEVICE LIFE CYCLE Engineering/ Development First Silicon Ramp Production YIELD TIME EXTENDING OUR BREADTH THROUGH THE COMPLETE CUSTOMER PRODUCT LIFE CYCLE 11 ©2016 FormFactor Inc.
Slide 11: Building on Our Foundry & Logic Leadership
BUILDING ON OUR FOUNDRY & LOGIC LEADERSHIP 100 2020 2020 Filters 50 2015 Filters RF FILTERS PER HANDSET EXPANDING INTO ADJACENT AND GROWING RF SPACE Source: Linley Group, June 2015 12 ©2016 FormFactor Inc.
Slide 12: We Will Further Expand Our Addressable Market in Above-Market Growth Sectors
WE WILL FURTHER EXPAND OUR ADDRESSABLE MARKET IN SECTORS EXPERIENCING ABOVE-MARKET GROWTH 37% 2015 25% PRO FORMA 2015 6% 25% Foundry & Logic: $552M Foundry & Logic: $552M DRAM: $318M DRAM: $318M Flash: $196M Flash: $196M Eng. Systems: $310M TOTAL: TOTAL: $1.07B $1.38B 6% 39% 39% NEW $3
Slide 13: Diversifying and Expanding Market Presence and Customer Base
DIVERSIFYING AND EXPANDING MARKET PRESENCE AND CUSTOMER BASE END MARKET Production Engineering Production Engineering 97% Revenue 3% Revenue 75% Revenue 25% Revenue CUSTOMER Top 10 Customers Other Top 10 Customers Other CONCENTRATION 83% Revenue 17% Revenue 62% Revenue 38% Revenue 14 ©2016 FormFacto
Slide 14: Cascade Acquisition Update
CASCADE ACQUISITION UPDATE June 23, 2016 Feb 18, 2016 Cascade Filed April 1, 2016 Shareholder Hart-Scott-Rodino Filed S4 Vote JAN 2016 Feb 4, 1016 March 21, 2016 May 19, 2016 Transaction Hart-Scott-Rodino S4 Effective Announced Expired HIGHLY ACCRETIVE ACQUISITION ON TRACK TO ACCELERATE EARNINGS GRO
Slide 15: Expanding Scale and Providing Significant Accretion
EXPANDING SCALE AND PROVIDING SIGNIFICANT ACCRETION 450 45% $ in Millions 400 40% FINANCIALLY 350 35% TRANSFORMATIONAL 300 30% TRANSACTION 250 25% 200 20% 150 15% 100 10% 50 5% - 0% DRIVING (50) -5% IMPROVED FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 GROSS MARGINS Actual Pro Forma AND Non-GAAP $(1.06)
Slide 16: Strategic Focus Areas
STRATEGIC FOCUS AREAS Leadership in Enter adjacent Profitability core markers markets Continue share gains along Diversify revenue stream and Drive greater operating “line of sight” components customer mix by leading efficiency by gaining in Foundry & Logic, DRAM M&A in test, measurement economies o
Slide 17: Appendix
APPENDIX 18 ©2016 FormFactor Inc.
Slide 18: Foundry & Logic
FOUNDRY & LOGIC Current market share Expanding 25% of $550M TAM; mobile share Expected 2015-2020 with copper pillar CAGR: 6% foundry ramp Retaining Now shipping at strong share “double demand” at 14nm and level to key 10nm nodes customer EXPANDING OUR LEADERSHIP POSITION 19 ©2016 FormFactor Inc.
Slide 19: DRAM
DRAM To be replaced SmartMatrix in #2 Supplier with production use at all ~40% share of 2015 three major DRAM $318M market manufacturers; each now >10% of our sales Continued demand All Q1 push-outs in both mobile and have shipped; server from DDR4 market dynamics devices on ≤20nm improving nodes FO
Slide 20: NAND Flash
NAND FLASH To be replaced Leveraging FormFactor Currently hold less than 10% share of technology & scale in NAND-optimized $200M market Vector product Vector qualified at Continued industry two major NAND growth in bits and flash manufacturers wafer starts ENTRY POINT FOR NEW GROWTH COMPONENT 21 ©20
Slide 21: Strong Track Record of Improving Results
STRONG TRACK RECORD OF IMPROVING RESULTS 300 40% $ in Millions 35% 250 30% 200 25% 150 20% 2016 100 15% EXPECTED TO BE 10% ANOTHER 50 GROWTH YEAR 5% - 0% (50) -5% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 Non-GAAP $(1.06) $(0.71) $(0.40) $0.32 $0.37 Diluted EPS Revenue Non GAAP Net Income Non GAAP Gro
Slide 22: Pro Forma 2015 Reconciliation
PRO FORMA 2015 RECONCILIATION (All am ounts in 000's 2015 except per share am ounts) GAAP Adjustm ents Non-GAAP GAAP Adjustm ents Non-GAAP Deal (2) Non-GAAP Stock-based Am ort. Of Cascade Stock-based Am ort. Of Cascade Adjustm ents Pro form a Form Factor Com pensation Intangibles Other (1) Form Fact
Slide 23: 2015 EBITDA Reconciliation
2015 EBITDA RECONCILIATION Fiscal Year 2015 (Amounts in $000's) Cascade Deal (1) FormFactor Microtech Adjustments Consolidated EBITDA GAAP Income from operations $ (4,103) $ 17,891 $ 7,000 $ 20,788 Adjustments: Depreciation 10,261 3,109 - 13,370 Amortization of intangibles 13,509 2,458 - 15,967 Stoc