6 unchanged sentences
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
−Removed: Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors, management and other personnel and consultants, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
+Added: Internal control over financial reporting is a process designed by, or under the supervision of, our principal executive officer and principal financial officer, and effected by our board of directors,
+Added: management and other personnel and consultants, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
(i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and dispositions of assets;
19 unchanged sentences
Other Information
+Added: Insider Trading Arrangements
+Added: During the quarter ended December 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as those terms are defined in Item 408 of Regulation S-K), except as follows:
+Added: Mike Slessor , the Company’s Chief Executive Officer , adopted a Rule 10b5-1 trading arrangement on November 20, 2023 .
+Added: Under this arrangement, a total of 84,002 shares of our common stock may be sold, subject to certain conditions, after March 1, 2024 and before the arrangement expires on November 5, 2025.
+Added: The above arrangement is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
39 unchanged sentences
Form of Change of Control Severance Agreement 8-K 000-50307 7/26/2022 10.1
−Removed: Employee Incentive Plan, as amended and restated effective October 1, 2019 10-K 000-50307 2/21/2020 10.9
+Added: Employee Incentive Plan, as amended and restated effective January 25, 2022
Equity Incentive Plan, as amended and restated effective May 27, 2022 DEF 14A 000-50307 4/13/2022 Appendix B
−Removed: Employee Stock Purchase Plan, as amended and restated May 18, 2018 DEF 14A 000-50307 4/3/2018 Appendix A
−Removed: First Amendment to FormFactor, Inc.
−Removed: Employee Stock Purchase Plan 10-Q 000-50307 8/2/2022 10.1
+Added: Employee Stock Purchase Plan, as amended and restated May 19, 2023
+Added: DEF 14A 000-50307 4/4/2023 Appendix A
Pacific Corporate Center Lease (Building 1) by and between Greenville Holding Company LLC (successor to Greenville Investors, L.P.) (“Greenville”) and the Registrant dated May 3, 2001 S-1/A 333-86738 6/10/2003 10.18
21 unchanged sentences
10-Q 000-51072 5/9/2014 10.1
+Added: Second Amendment to Lease dated February 25, 2013, between Nimbus Center LLC and Cascade Microtech, Inc.
+Added: 10-Q 000-51072 5/8/2013 10.2
Incorporated by Reference
1 unchanged sentence
First Filing Exhibit
−Removed: Second Amendment to Lease dated February 25, 2013, between Nimbus Center LLC and Cascade Microtech, Inc.
−Removed: 10-Q 000-51072 5/8/2013 10.2
Third Amendment to Lease dated January 23, 2014, between Nimbus Center LLC and Cascade Microtech, Inc.
7 unchanged sentences
Seventh Amendment to Lease dated June 5, 2018, between Nimbus Center LLC and FormFactor Beaverton, Inc.
+Added: 10-K 000-50307
Eighth Amendment to Lease dated December 14, 2022, between Nimbus Center LLC and FormFactor, Inc.
+Added: 10-K 000-50307
Employment Offer Letter, dated August 29, 2012 to Mike Slessor 10-K 000-50307 3/13/2013 10.19+
2 unchanged sentences
Change of Control Severance Agreement, dated July 20, 2022 by and between Shai Shahar and the Registrant 8-K 000-50307 7/26/2022 10.2
+Added: Share Purchase Agreement by and among Camtek, Ltd.
+Added: as purchaser and FormFactor GmbH as seller and FormFactor, Inc as Parent and FRT GmbH as Company, dated as of September 17, 2023
+Added: 10-Q 000-50307 11/7/2023 10.01
List of Registrant's subsidiaries — — — — X
7 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — — — X
+Added: Incentive Compensation Clawback Policy, effective October 2, 2023
101** The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 30, 2023, formatted in Inline XBRL:
4 unchanged sentences
101.LAB** XBRL Taxonomy Extension Label Linkbase Document — — — — X
+Added: Incorporated by Reference
+Added: Number Exhibit Description Form File No Date of
+Added: First Filing Exhibit
101.PRE** XBRL Taxonomy Extension Presentation Linkbase Document — — — — X
8 unchanged sentences
Chief Financial Officer
−Removed: (Principal Financial Officer and Principal
−Removed: Accounting Officer)
−Removed: POWER OF ATTORNEY
−Removed: KNOW BY ALL PERSONS BY THESE PRESENTS, that each of the undersigned whose signature appears below constitutes and appoints Shai Shahar and Christy Robertson, and each of them, the undersigned's true and lawful attorneys in-fact and agents with full power of substitution, for the undersigned and in the undersigned's name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and any other documents in connection therewith, and to file the same, with all exhibits thereto, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act requisite and necessary to be done with respect to this Annual Report on Form 10-K, including amendments, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
−Removed: IN WITNESS WHEREOF, each of the undersigned has executed this Power of Attorney as of the date indicated below.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date
−Removed: Principal Executive Officer:
/s/ MICHAEL D.
−Removed: SLESSOR President, Chief Executive Officer and Director February 24, 2023
−Removed: Principal Financial Officer and Principal
−Removed: Accounting Officer:
−Removed: /s/ SHAI SHAHAR Chief Financial Officer February 24, 2023
−Removed: Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
−Removed: Signature Title Date
−Removed: Additional Directors:
+Added: SLESSOR President, Chief Executive Officer and Director (Principal Executive Officer)
+Added: February 23, 2024
+Added: /s/ SHAI SHAHAR Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
+Added: February 23, 2024
/s/ THOMAS ST.
DENNIS Director February 23, 2024
−Removed: /s/ RAYMOND LINK Director February 24, 2023
/s/ LOTHAR MAIER Director February 23, 2024
43 unchanged sentences
As discussed in notes 2 and 3 to the consolidated financial statements, the Company’s net inventories were $111.7 million as of December 30, 2023, and inventory write-downs totaled $15.0 million for the year ended December 30, 2023.
−Removed: T he Company states its inventories at the lower of cost or net realizable value.
+Added: The Company states its inventories at the lower of cost or net realizable value.
The Company records an adjustment to the cost basis of inventory when evidence exists that the net realizable value of inventory is lower than its cost, which occurs when the Company has excess and/or obsolete inventory.
5 unchanged sentences
We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s process to estimate inventory excess and obsolescence.
−Removed: This included controls related to the development of certain assumptions used to estimate future consumption of inventory, including qualitative other factors.
−Removed: We assessed the Company’s assumptions used to estimate future consumption of inventory, including qualitative other factors by:
+Added: This included controls related to the development of certain assumptions used to estimate future consumption of inventory, including qualitative other factors.We assessed the Company’s assumptions used to estimate future consumption of inventory, including qualitative other factors by:
• evaluating historical cumulative write down trends and relevant changes to the overall business environment, including key customers and product lines
37 unchanged sentences
Long-term operating lease liabilities 25,334 27,587
+Added: Deferred grant 18,000 —
Other liabilities 10,247 5,568
9 unchanged sentences
Accumulated other comprehensive loss ( 4,052 ) ( 5,578 )
−Removed: Accumulated deficit ( 31,056 ) ( 81,794 )
+Added: Accumulated income (deficit) 51,331 ( 31,056 )
Total stockholders’ equity 908,804 808,285
13 unchanged sentences
Total operating expenses 248,777 241,097 224,729
+Added: Gain on sale of business 72,953 — —
Operating income 82,756 54,912 98,038
1 unchanged sentence
Interest expense ( 421 ) ( 579 ) ( 602 )
−Removed: Other income, net 1,317 495 750
+Added: Other income (expense), net ( 285 ) 1,317 495
Income before income taxes 89,267 57,870 98,500
23 unchanged sentences
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
−Removed: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total
+Added: Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Income (Deficit) Total
Shares Amount
4 unchanged sentences
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 946,325 1 ( 20,604 ) — — ( 20,603 )
+Added: Purchase and retirement of common stock ( 622,400 ) ( 1 ) ( 24,037 ) — — ( 24,038 )
Stock-based compensation — — 29,095 — — 29,095
−Removed: Other comprehensive income — — — 6,545 — 6,545
+Added: Other comprehensive loss — — — ( 7,335 ) — ( 7,335 )
Net income — — — — 83,924 83,924
9 unchanged sentences
Issuance of common stock under the Employee Stock Purchase Plan 363,190 — 8,822 — — 8,822
−Removed: Issuance of common stock pursuant to exercise of options for cash 6,000 — 42 — — 42
Issuance of common stock pursuant to vesting of restricted stock units, net of stock withheld for tax 635,495 1 ( 10,688 ) — — ( 10,687 )
1 unchanged sentence
Stock-based compensation — — 38,272 — — 38,272
−Removed: Other comprehensive loss — — — ( 4,129 ) — ( 4,129 )
+Added: Other comprehensive income — — — 1,526 — 1,526
Net income — — — — 82,387 82,387
15 unchanged sentences
Deferred income tax provision (benefit) ( 12,100 ) ( 6,343 ) 3,869
+Added: Gain on sale of business ( 72,953 ) — —
Provision for excess and obsolete inventories 15,003 24,632 15,544
3 unchanged sentences
Gain on contingent consideration — — ( 95 )
−Removed: Foreign currency transaction losses (gains) 2,251 1,582 ( 936 )
−Removed: Loss on derivative instruments — — 372
+Added: Foreign currency transaction losses 2,282 2,251 1,582
+Added: Other than temporary impairment on debt receivable 1,083 — —
Changes in assets and liabilities:
7 unchanged sentences
Deferred revenues ( 10,176 ) 1,286 1,974
+Added: Deferred grant 18,000 — —
Operating lease liabilities ( 7,615 ) ( 8,016 ) ( 7,442 )
3 unchanged sentences
Acquisition of business, net of cash acquired — ( 3,350 ) —
−Removed: Proceeds from sale of subsidiary — — 82
+Added: Proceeds from sale of business 101,785 — —
Purchase of promissory note receivable — ( 1,000 ) —
1 unchanged sentence
Proceeds from maturities of marketable securities 118,753 95,794 91,734
−Removed: Net cash used in investing activities ( 75,704 ) ( 124,741 ) ( 98,922 )
+Added: Net cash provided by (used in) investing activities 29,049 ( 75,704 ) ( 124,741 )
Cash flows from financing activities:
2 unchanged sentences
Tax withholdings related to net share settlements of equity awards ( 10,687 ) ( 15,705 ) ( 20,604 )
−Removed: Proceeds from term loan — — 18,000
Payments on term loan ( 1,045 ) ( 8,398 ) ( 9,337 )
−Removed: Payment of term loan issuance costs — — ( 78 )
Payment of contingent consideration — — ( 3,873 )
12 unchanged sentences
Operating lease, right-of-use assets obtained in exchange for lease obligations $ 6,491 $ 4,975 $ 12,254
−Removed: Increase in accounts payable and accrued liabilities related to property, plant and equipment purchases 7,469 2,711 2,545
+Added: Increase (decrease) in accounts payable and accrued liabilities related to property, plant and equipment purchases ( 5,961 ) 7,469 2,711
Supplemental disclosure of cash flow information:
12 unchanged sentences
FormFactor, Inc.
−Removed: was incorporated in Delaware on April 15, 1993 and is headquartered in Livermore, California.
−Removed: We are a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test.
+Added: is a leading provider of essential test and measurement technologies along the full semiconductor product lifecycle - from characterization, modeling, reliability, and design de-bug, to qualification and production test.
We provide a broad range of high-performance probe cards, analytical probes, probe stations, metrology systems, thermal systems, and cryogenic systems to both semiconductor companies and scientific institutions.
−Removed: Our products provide electrical and physical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production.
−Removed: Customers use our products and services to accelerate profitability by optimizing device performance and advancing yield knowledge.
+Added: Our products provide electrical information from a variety of semiconductor and electro-optical devices and integrated circuits from early research, through development, to high-volume production.
+Added: Customers use our products and services to accelerate profitability by optimizing device performance, reducing scrap, and improving yields.
Design, development and manufacturing operations are located in Livermore, Carlsbad, and Baldwin Park, California;
2 unchanged sentences
and Woburn, Massachusetts, all in the United States;
−Removed: Bergisch Gladbach, Munich and Thiendorf, Germany, and sales, service and support operations are located in the United States, Germany, France, Italy, South Korea, Japan, Taiwan, China and Singapore.
+Added: Munich and Thiendorf, Germany, and sales, service and support operations are located in the United States, Germany, France, Italy, South Korea, Japan, Taiwan, China and Singapore.
Our fiscal year ends on the last Saturday in December.
13 unchanged sentences
Revenues and costs in local currency are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates.
−Removed: The resulting remeasurement gains and losses are included in the Consolidated Statements of Income as a component of Other income, net as incurred.
+Added: The resulting remeasurement gains and losses are included in the Consolidated Statements of Income as a component of Other income (expense), net as incurred.
Use of Estimates
5 unchanged sentences
Our consolidated financial statements include the operations of acquired businesses after the completion of their respective acquisitions.
−Removed: We account for acquired businesses using the acquisition method of accounting, which requires, among other
+Added: We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and that the fair value of acquired intangibles be recorded on the balance sheet.
+Added: that the fair value of acquired intangibles be recorded on the balance sheet.
Transaction costs are expensed as incurred.
6 unchanged sentences
Furthermore, we report them at fair value with the related unrealized gains and losses included in Accumulated other comprehensive loss in our Consolidated Balance Sheets.
−Removed: Any unrealized losses which are considered to be other-than-temporary are recorded in Other income, net, in the Consolidated Statements of Income.
−Removed: Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in Other income, net, in the Consolidated Statements of Income.
+Added: Any unrealized losses which are considered to be other-than-temporary are recorded in Other income (expense), net, in the Consolidated Statements of Income.
+Added: Realized gains and losses on the sale of marketable securities are determined using the specific-identification method and recorded in Other income (expense), net, in the Consolidated Statements of Income.
All of our available-for-sale investments are subject to a periodic impairment review.
5 unchanged sentences
We enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures and certain operational costs denominated in local currency impacting our statement of income.
−Removed: For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income, net in our Consolidated Statements of Income for both realized and unrealized gains and losses.
+Added: For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income (expense), net in our Consolidated Statements of Income for both realized and unrealized gains and losses.
Certain of our foreign currency forward contracts are designated as cash flow hedges, and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded as a component of Accumulated other comprehensive loss and reclassified into earnings in the same period in which the hedged transaction affects earnings, and in the same line item on the Consolidated Statements of Income as the impact of the hedge transaction.
13 unchanged sentences
Balance at end of year $ 501 $ 168 $ 195
+Added: We state our inventories at the lower of cost (principally standard cost which approximates actual cost on a first in, first out basis) or net realizable value.
+Added: We regularly assess the value of our inventory and will periodically write down its value for
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: We state our inventories at the lower of cost (principally standard cost which approximates actual cost on a first in, first out basis) or net realizable value.
−Removed: We regularly assess the value of our inventory and will periodically write down its value for estimated excess inventory and product obsolescence based upon an analysis of existing inventory quantities compared to estimated future consumption.
+Added: estimated excess inventory and product obsolescence based upon an analysis of existing inventory quantities compared to estimated future consumption.
Future consumption is estimated based upon assumptions about how past consumption, recent purchases, backlog and other factors may indicate future consumption.
11 unchanged sentences
Restricted Cash
−Removed: Restricted cash is comprised primarily of funds held by our foreign subsidiaries for employee obligations, office leases, customer deposits, temporary customs import permits, and environmental remediation.
+Added: Restricted cash is comprised primarily of funds held by our foreign subsidiaries for employee obligations, office leases, environmental remediation, and temporary customs import permits
Property, Plant, and Equipment
20 unchanged sentences
We evaluate impairment by first assessing qualitative factors to determine whether it is necessary to perform a quantitative impairment test.
−Removed: If we determine, as a result of the qualitative assessment, that it is more likely than not that the fair value of a
+Added: If we determine, as a result of the qualitative assessment, that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the quantitative impairment test is required.
+Added: Otherwise, no further testing is required.
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: reporting unit is less than its carrying amount, then the quantitative impairment test is required.
−Removed: Otherwise, no further testing is required.
We perform our annual goodwill impairment test in the fourth quarter of each year by assessing qualitative factors, including, but not limited to, an assessment of our market capitalization, which was significantly higher than our book value.
41 unchanged sentences
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: At December 31, 2022, one customer accounted for 13.8 % of gross accounts receivable.
+Added: At December 30, 2023, two customers accounted for 17.8 % and 11.0 % of gross accounts receivable.
At December 31, 2022, one customer accounted for 13.8 % of gross accounts receivable.
3 unchanged sentences
These counterparties are large international financial institutions, and, to date, no such counterparty has failed to meet its financial obligations to us.
+Added: Government Assistance
+Added: In January 2023, we received $ 18.0 million in cash from a California Competes Grant (the “Grant”) awarded from the California Governor’s Office of Business and Economic Development.
+Added: The Grant requires us to create and maintain full-time jobs and make significant infrastructure investments within California over a 5-year term.
+Added: If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant.
+Added: The Grant is included in our Consolidated Balance Sheets within Deferred grant and we will recognize the Grant over time when earned as an offset to Cost of revenues and Operating expenses within our Consolidated Statements of Income.
+Added: We have presented the proceeds from the Grant as cash provided by operating activities within our Consolidated Statements of Cash Flows as the Grant is to offset operations.
+Added: No amounts were recognized as an offset to expenses in fiscal 2023 and the full grant remains deferred.
Revenue Recognition
24 unchanged sentences
For contracts with multiple performance obligations, we allocate the contract’s transaction price to each performance obligation based on its relative stand-alone selling price.
−Removed: The stand-alone selling prices are determined based on observable prices, which are the prices at which we separately sell these products.
+Added: The stand-alone selling prices are determined based on observable prices, which
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: are the prices at which we separately sell these products.
For items which do not have observable prices, we use our best estimate of the stand-alone selling prices.
3 unchanged sentences
The foregoing excludes the value of remaining performance obligations that have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Contract balances:
27 unchanged sentences
Settlements ( 8,687 ) ( 6,352 ) ( 6,872 )
+Added: Reduction - FRT divestiture ( 106 ) — —
Balance at end of year $ 3,177 $ 4,199 $ 2,805
2 unchanged sentences
All research and development costs are expensed as incurred.
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We utilize the asset and liability method of accounting for income taxes, under which deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse and for operating losses and tax credit carryforwards.
5 unchanged sentences
In evaluating the ability to recover deferred tax assets, we consider all available positive and negative evidence giving greater weight to our recent cumulative income, our historical ability to utilize net operating losses in recent years, and our forecast of future taxable income, including the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
We recognize and measure uncertain tax positions taken or expected to be taken in a tax return if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.
26 unchanged sentences
Weighted-average shares used in computing basic and diluted net income per share 78,159 78,201 79,133
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accumulated other comprehensive loss
−Removed: Accumulated other comprehensive loss (“OCI/L”) includes the following items, the impact of which has been excluded from earnings and reflected as components of stockholders' equity as shown below (in thousands):
+Added: Accumulated other comprehensive loss (“AOCL”) includes the following items, the impact of which has been excluded from earnings and reflected as components of stockholders' equity as shown below (in thousands):
December 30, 2023 December 31, 2022
3 unchanged sentences
Accumulated other comprehensive loss $ ( 4,052 ) $ ( 5,578 )
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 3— Balance Sheet Components
5 unchanged sentences
Corporate bonds 81,612 267 ( 529 ) 81,350
−Removed: Certificate of deposit 720 — ( 14 ) 706
agency securities 10,086 9 ( 92 ) 10,003
4 unchanged sentences
Corporate bonds 68,845 — ( 1,449 ) 67,396
−Removed: Certificate of deposit 1,200 1 ( 2 ) 1,199
+Added: Certificates of deposit 720 — ( 14 ) 706
+Added: agency securities 11,295 — ( 250 ) 11,045
$ 131,251 $ — $ ( 2,245 ) $ 129,006
13 unchanged sentences
See also Note 10, Fair Value .
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Inventories, net
5 unchanged sentences
$ 111,685 $ 123,157
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Property, Plant and Equipment, net
25 unchanged sentences
On June 9, 2022 we acquired the assets of the dilution refrigerator product line of American ULT Cryogenics, formerly d/b/a JanisULT (“Woburn”), for total consideration of $ 3.4 million.
−Removed: This acquisition adds cryogen-free dilution refrigerators capable of cooling to sub-10 millikelvin to our product portfolio, which is required for operation of superconducting quantum computers.
+Added: This acquisition added cryogen-free dilution refrigerators capable of cooling to sub-10 millikelvin to our product portfolio, which is required for operation of superconducting quantum computers.
The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values.
16 unchanged sentences
Net assets acquired $ 3,350
−Removed: High Precision Devises, Inc.
−Removed: (“HPD”) Acquisition
−Removed: On October 19, 2020, we acquired 100 % of the shares of HPD for total consideration of $ 16.9 million, net of cash acquired of $ 1.7 million, which included an adjustment for changes in working capital.
−Removed: This acquisition brought highly specialized skills and know-how to address the unique test challenges within the emerging quantum computing, superconducting computing, and ultra-sensitive sensor markets which operate at temperatures as low as 30 millikelvin.
−Removed: The acquisition was accounted for using the acquisition method of accounting, with FormFactor treated as the acquirer.
−Removed: The acquired assets and liabilities of HPD were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.
−Removed: Our Consolidated Statements of Income include the financial results of HPD subsequent to the acquisition date of October 19, 2020.
−Removed: Revenue in fiscal 2020 related to HPD subsequent to the acquisition date that was included in our Consolidated Statements of Income was not material.
−Removed: The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values.
−Removed: The fair values assigned to assets acquired and liabilities assumed were based on management’s assumptions as of the acquisition date.
−Removed: We subsequently made certain immaterial adjustments within the measurement period to the acquisition price allocation as a result of finalization of our valuation of
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: identifiable assets and liabilities.
−Removed: The purchase price allocated to the underlying assets acquired, including goodwill and intangibles, and liabilities assumed based on the final amounts are as follows (in thousands):
−Removed: Cash and cash equivalents $ 1,680
−Removed: Accounts receivable 1,017
−Removed: Inventory 3,047
−Removed: Property, plant and equipment 669
−Removed: Operating lease, right-of-use-assets 2,554
−Removed: Prepaid expenses and other assets 916
−Removed: Tangible assets acquired 9,883
−Removed: Deferred revenue ( 2,529 )
−Removed: Accounts payable and accrued liabilities ( 1,268 )
−Removed: Operating lease liabilities ( 2,554 )
−Removed: Deferred tax liability ( 2,400 )
−Removed: Total net tangible assets acquired and liabilities assumed 1,132
−Removed: Intangible assets 11,520
−Removed: Goodwill 5,908
−Removed: Net assets acquired $ 18,560
−Removed: The intangible assets as of the acquisition date included (in thousands):
−Removed: Amount Weighted Average Useful Life (in years)
−Removed: Developed technologies $ 7,500 10.0
−Removed: Customer relationships 3,600 5.0
−Removed: Order backlog 200 0.5
−Removed: Trade names 220 5.0
−Removed: Total intangible assets $ 11,520 8.2
−Removed: The fair value of the intangible assets acquired in connection with the acquisition were determined using either the income, market or replacement cost methodologies.
−Removed: The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized.
−Removed: Identifiable Intangible Assets
−Removed: Valuation of intangible assets involves multiple assumptions.
−Removed: The key assumptions are described below.
−Removed: Developed technologies acquired primarily consist of existing technology related to cryogenic probe stations, Adiabatic Demagnetization Refrigerator (“ADR”), and continuous ADR cryostats and similar tools, and technology related to other cryogenic applications.
−Removed: We valued the developed technologies using the multi-period excess earnings method under the income approach.
−Removed: Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return.
−Removed: Customer relationships represent the fair value of future projected revenues that will be derived from the sale of products to HPD's existing customers.
−Removed: We valued customer relationships using the incremental cash flow method.
−Removed: This method estimates value based on the incremental cash flow afforded by having the customer relationships in place on the acquisition date versus having no relationships in place and needing to replicate or replace those relationships.
−Removed: The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.
−Removed: Order backlog represents business under existing contractual obligations.
−Removed: Expected cash flow from order backlog was valued on a discounted direct cash flow basis, net of returns on contributory assets such as working capital, property and equipment, trade name and assembled workforce.
+Added: Note 5— Divestiture
+Added: On September 18, 2023, the Company announced entry into a definitive agreement to sell its FRT Metrology (“FRT”) business to Camtek Ltd.
+Added: (“Camtek”) for $ 100 million in cash, subject to customary purchase price adjustments.
+Added: The Company acquired FRT GmbH in fiscal 2019 for total consideration of $ 24.4 million, net of cash acquired.
+Added: Headquartered in Bergisch Gladbach, Germany, the FRT business is a leading supplier of high-precision metrology solutions for the Advanced Packaging and Silicon Carbide markets, and was part of the Company's Systems segment.
+Added: On November 1, 2023, we closed on the sale of the FRT business to Camtek and received net cash proceeds of $ 99.8 million, net of cash transferred and transaction expenses, and after customary adjustments for indebtedness and changes in net working capital.
+Added: The disposition of the FRT business did not meet the criteria to be classified as a discontinued operation in the Company’s financial statements because the disposition did not represent a strategic shift that had, or will have, a major effect on the Company’s operations and financial results.
+Added: The following table summarizes the fair value of the sale proceeds received in connection with the divestiture, which are subject to further post-closing adjustment (in thousands):
+Added: November 1, 2023
+Added: Fair value of sale consideration $ 99,031
+Added: Estimated working capital adjustment
+Added: Cash transferred to the buyer at closing ( 2,049 )
+Added: Direct costs to sell ( 1,225 )
+Added: Fair value of sale consideration $ 99,786
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The identified trade names intangibles relate to the estimated fair value of future cash flows related to the HPD brand.
−Removed: We valued trade names by applying the relief-from-royalty method under the income approach.
−Removed: This method is based on the application of a royalty rate to forecasted revenue under the trade name.
−Removed: The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the acquisition.
−Removed: We believe the factors that contributed to goodwill include synergies that are specific to our consolidated business, such as cost savings and operational efficiencies, and the acquisition of a talented workforce that expands our expertise in business development and commercializing semiconductor test products, none of which qualify for recognition as a separate intangible asset.
−Removed: We do not expect any portion of this goodwill to be deductible for tax purposes.
−Removed: The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment.
−Removed: The goodwill arising from the acquisition was allocated to the HPD reporting unit within the Systems reportable segment.
−Removed: We have not presented unaudited combined pro forma financial information as the HPD acquisition was not significant to our consolidated results of operations and financial position.
−Removed: Baldwin Park Acquisition
−Removed: On July 30, 2020, we acquired the probe card assets of Advantest Corporation for total cash consideration of $ 35.0 million.
−Removed: This acquisition brought important enabling technologies and capabilities for designing and manufacturing advanced probe cards, and adds a complementary 3D-NAND Flash probe card product that is qualified and in production at one of the world's leading NAND Flash manufacturers.
−Removed: The acquisition was accounted for using the acquisition method of accounting, with FormFactor treated as the acquirer.
−Removed: The acquired assets and liabilities of Baldwin Park were recorded at their respective fair values including an amount for goodwill representing the difference between the acquisition consideration and the fair value of the identifiable net assets.
−Removed: Our Consolidated Statements of Income include the financial results of Baldwin Park subsequent to the acquisition date of July 30, 2020.
−Removed: Revenue in fiscal 2020 related to Baldwin Park subsequent to the acquisition date that was included in our Consolidated Statements of Income was not material.
−Removed: The acquisition price was allocated to the tangible and identified intangible assets acquired and liabilities assumed as of the closing date of the acquisition based upon their respective fair values.
−Removed: The fair values assigned to assets acquired and liabilities assumed were based on management’s assumptions as of the acquisition date.
−Removed: We subsequently made certain immaterial adjustments within the measurement period to the acquisition price allocation as a result of finalization of our valuation of identifiable assets and liabilities.
−Removed: The purchase price allocated to the underlying assets acquired, including goodwill and intangibles, and liabilities assumed based on the final amounts are as follows (in thousands):
−Removed: Accounts receivable $ 4,365
−Removed: Inventory 2,727
−Removed: Property, plant and equipment 9,053
−Removed: Operating lease, right-of-use-assets 519
−Removed: Prepaid expenses and other assets 56
−Removed: Tangible assets acquired 16,720
−Removed: Accounts payable and accrued liabilities ( 743 )
−Removed: Operating lease liabilities ( 519 )
−Removed: Total net tangible assets acquired and liabilities assumed 15,458
−Removed: Intangible assets 13,600
+Added: The carrying amount of net assets associated with the FRT business was approximately $ 26.8 million.
+Added: The major classes of assets and liabilities sold consisted of the following:
+Added: November 1, 2023
+Added: Accounts receivable, net $ 7,738
+Added: Inventories, net 6,446
+Added: Other current assets 635
+Added: Total current assets 14,819
+Added: Intangibles, net 6,897
Goodwill 10,660
−Removed: Net assets acquired $ 35,000
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: The intangible assets as of the acquisition date included (in thousands):
−Removed: Amount Weighted Average Useful Life (in years)
−Removed: Developed technologies $ 8,800 10.0
−Removed: Customer relationships 4,400 3.0
−Removed: In-process research and development 400 N/A
−Removed: Total intangible assets $ 13,600 7.7
−Removed: The fair value of the intangible assets acquired in connection with the acquisition were determined using either the income, market or replacement cost methodologies.
−Removed: The intangible assets are being amortized over periods which reflect the pattern in which economic benefits of the assets are expected to be realized.
−Removed: Identifiable Intangible Assets
−Removed: Valuation of intangible assets involves multiple assumptions.
−Removed: The key assumptions are described below.
−Removed: Developed technologies acquired consists of existing technology related to 3D-NAND Flash probe cards and the value of cost savings expected to be derived from Low Temperature Co-fired Ceramic (“LTCC”) technology.
−Removed: We valued the developed technology related to 3D-NAND Flash using the multi-period excess earnings method under the income approach.
−Removed: Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return.
−Removed: We valued the LTCC developed technology asset using the incremental cash flow method.
−Removed: This method estimates value based on the incremental cash flow afforded by having the LTCC capability in place on the acquisition date versus having no capability in place and needing to replicate or replace that capability.
−Removed: The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.
−Removed: In-process research and development (“IPR&D”) acquired primarily consists of research and development projects that were in process at the time of acquisition related to technologies used in DRAM probe cards.
−Removed: Once these projects are complete they will be placed in developed technologies and amortized over their useful lives.
−Removed: We valued the IPR&D using the multi-period excess earnings method under the income approach.
−Removed: Using this approach, the estimated fair values were calculated using expected future cash flows from specific products discounted to their net present values at an appropriate risk-adjusted rate of return.
−Removed: Customer relationships represent the fair value of future projected revenues that will be derived from the sale of products to Baldwin Park's existing customers.
−Removed: We valued customer relationships using the incremental cash flow method.
−Removed: This method estimates value based on the incremental cash flow afforded by having the customer relationships in place on the acquisition date versus having no relationships in place and needing to replicate or replace those relationships.
−Removed: The incremental cash flows are then discounted to a present value to arrive at an estimate of fair value for this asset class.
−Removed: The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the amount of goodwill resulting from the acquisition.
−Removed: We believe the factors that contributed to goodwill include synergies that are specific to our consolidated business, such as cost savings and operational efficiencies, and the acquisition of a talented workforce that expands our expertise in business development, none of which qualify for recognition as a separate intangible asset.
−Removed: We expect this goodwill to be deductible for tax purposes.
−Removed: The goodwill attributable to the acquisition was recorded as a non-current asset and is not amortized, but is subject to an annual review for impairment.
−Removed: The goodwill arising from the acquisition was allocated to the Probe Cards reporting unit within the Probe Cards reportable segment.
−Removed: We have not presented unaudited combined pro forma financial information as the Baldwin Park acquisition was not significant to our consolidated results of operations and financial position.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Other assets 1,612
+Added: Total assets $ 33,988
+Added: Current liabilities $ 4,300
+Added: Other liabilities 2,856
+Added: Total liabilities $ 7,156
+Added: As a result of the divestiture, the Company recognized a pre-tax gain of $ 73.0 million.
+Added: The Company recorded an income tax liability associated with the divestiture of approximately $ 5.9 million.
Our debt consisted of the following (in thousands):
December 30, 2023 December 31, 2022
−Removed: Term loans $ 15,499 $ 24,435
+Added: Term loan $ 14,448 $ 15,499
Less unamortized issuance costs ( 59 ) ( 65 )
−Removed: Term loans less issuance costs $ 15,434 $ 24,365
−Removed: FRT Term Loan
−Removed: On October 25, 2019, we entered into a euro denominated $ 23.4 million three-year credit facility loan agreement (the “FRT Term Loan”) with HSBC Trinkaus & Burkhardt AG, Germany, to fund the acquisition of FRT GmbH, which we acquired on October 9, 2019.
−Removed: The FRT Term Loan bore interest at a rate equal to the Euro Interbank Offered Rate (“EURIBOR”) plus 1.75 % per annum and was repaid in quarterly installments of approximately $ 2.0 million plus interest.
−Removed: We made the final payment on the FRT Term Loan on October 25, 2022.
−Removed: We are no longer subject to the terms of the FRT Term Loan.
−Removed: Building Term Loan
+Added: Term loan less issuance costs $ 14,389 $ 15,434
On June 22, 2020, we entered into an $ 18.0 million 15-year credit facility loan agreement (the “Building Term Loan”) with MUFG Union Bank, National Association (“Union Bank”).
The proceeds of the Building Term Loan were used to purchase a building adjacent to our leased facilities in Livermore, California.
−Removed: The Building Term Loan bears interest at a rate equal to the applicable LIBOR rate plus 1.75 % per annum.
+Added: On May 19, 2023, we amended the Building Term Loan, replacing the benchmark reference rate LIBOR with SOFR, with no change to the amount or timing of contractual cash flows.
+Added: The Building Term Loan bears interest at a rate equal to the applicable SOFR rate, plus 0.1148 %, plus 1.75 % per annum.
Interest payments are payable in monthly installments over a fifteen-year period.
−Removed: The interest rate at December 31, 2022 was 5.87 %.
+Added: The interest rate at December 30, 2023 was 7.20 % before consideration of the interest rate swap.
On March 17, 2020, we entered into an interest rate swap agreement with Union Bank to hedge the interest payments on the Building Term Loan for the notional amount of $ 18.0 million.
−Removed: As future levels of LIBOR over the life of the loan are uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates.
−Removed: By entering into the agreement, we convert a floating rate interest at one-month LIBOR plus 1.75 % into a fixed rate interest at 2.75 %.
−Removed: The interest rate swap included a 0 % floor that was effective for one year from the date of the swap.
−Removed: As of December 31, 2022, the notional amount of the loan that is subject to this interest rate swap is $ 15.5 million.
+Added: As future levels of LIBOR over the life of the loan were uncertain, we entered into this interest-rate swap agreement to hedge the exposure in interest rate risks associated with movement in LIBOR rates.
+Added: This agreement was amended on May 19, 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended).
+Added: After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate of 2.75 %.
+Added: As of December 30, 2023, the notional amount of the loan that is subject to this interest rate swap was $ 14.4 million.
See Note 10, Fair Value , for additional information.
3 unchanged sentences
As of December 30, 2023, the balance outstanding pursuant to the Building Term Loan was $ 14.4 million.
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Future principal and interest payments on our term loans as of December 30, 2023, based on the interest rate in effect at that date were as follows (in thousands):
1 unchanged sentence
2024 2025 2026 2027 2028 2029 and thereafter Total
−Removed: Term loans - principal payments $ 1,050 $ 1,080 $ 1,111 $ 1,142 $ 1,175 $ 9,941 $ 15,499
+Added: Term loan - principal payments $ 1,080 $ 1,111 $ 1,142 $ 1,175 $ 1,208 $ 8,732 $ 14,448
Term loans - interest payments (1)
1 unchanged sentence
$ 2,105 $ 2,048 $ 1,999 $ 1,948 $ 1,896 $ 10,895 $ 20,891
−Removed: (1) Represents our minimum interest payment commitment at 5.87 % per annum for the Building Term Loan, excluding the interest rate swap described above.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: (1) Represents our minimum interest payment commitment at 7.20 % per annum, excluding the interest rate swap described above.
Note 7— Leases
1 unchanged sentence
Our leases have remaining terms of 1 to 11 years, and some leases include options to extend up to 20 years.
−Removed: We also have operating leases for automobiles with remaining lease terms of 1 to 3 years.
We did not include any of our renewal options in our lease terms for calculating our lease liability as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options at this time.
18 unchanged sentences
On October 25, 2022, we adopted a restructuring plan (“2022 restructuring plan”) to align our cost structure with reduced demand levels, by streamlining and improving the efficiency and business effectiveness of our operations.
−Removed: This plan has included lowering headcount by approximately 13 % of our workforce, which has resulted in recognizing restructuring charges of approximately $ 7.0 million for the year ended December 31, 2022, consisting of severance and employee-related costs with $ 6.0 million within the Probe Cards segment, $ 0.5 million within the Systems segment, and $ 0.5 million within Corporate.
−Removed: We expect total restructuring charges of $ 8.5 million to $ 9.5 million.
+Added: This plan included lowering headcount by approximately 13 % of our workforce.
+Added: The Company recognized 2022 restructuring plan charges of approximately $ 1.1 million for the year ended December 30, 2023, all within the Probe Cards segment.
+Added: The Company has recognized total 2022 restructuring plan charges of $ 8.1 million for
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: severance and employee-related costs, including $ 0.3 million for stock-based compensation, with $ 7.1 million within the Probe Cards segment, $ 0.5 million within the Systems segment, and $ 0.5 million within Corporate.
+Added: We do not expect to incur additional material costs related to the 2022 restructuring plan.
2021 Restructuring Plan
3 unchanged sentences
Additionally, as part of these plans we have undertaken actions to adjust capacity for certain product offerings, which included contract termination costs to satisfy contract obligations.
−Removed: Restructuring charges for the year ended December 31, 2022 were $ 8.5 million, consisting of $ 0.3 million of severance and employee-related costs, $ 0.4 million in contract and lease termination costs, $ 7.6 million in inventory impairments and other inventory related costs, and $ 0.2 million of cost related to impairment of leasehold improvements, facility exits and fixed asset related costs.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: Total restructuring charges for the plans are $ 12.6 million, with $ 9.9 million within the Probe Cards segment and $ 2.7 million within the Systems segment, and were comprised of $ 1.3 million of severance and employee-related costs, $ 1.8 million in contract and lease termination costs, $ 9.0 million in inventory impairments and other inventory related costs, and $ 0.5 million of cost related to impairment of leasehold improvements, facility exits and other costs.
+Added: The Company recognized 2021 restructuring plans charges of approximately $ 0.8 million for the year ended December 30, 2023, with $ 0.3 million within the Probe Cards segment and $ 0.5 million within the Systems segment.
+Added: The Company has recognized total 2021 restructuring plan charges of $ 13.3 million, with $ 10.1 million within the Probe Cards segment and $ 3.2 million within the Systems segment, and were comprised of $ 1.4 million of severance and employee-related costs, $ 2.0 million in contract and lease termination costs, $ 9.4 million in inventory impairments and other inventory related costs, and $ 0.5 million of cost related to impairment of leasehold improvements, facility exits and other costs.
We do not expect to incur additional material costs related to the 2021 Restructuring Plans.
−Removed: Total restructuring charges included in our Consolidated Statements of Income for both the 2022 and 2021 Restructuring Plans were as follows (in thousands):
+Added: Total restructuring charges for both the 2022 and 2021 restructuring plans included in our Consolidated Statements of Income were as follows (in thousands):
Fiscal Year Ended
−Removed: December 31, 2022 December 25, 2021
+Added: December 30, 2023 December 31, 2022 December 25, 2021
Cost of revenues $ 357 $ 11,775 $ 3,205
3 unchanged sentences
Changes to the restructuring accrual during the years ended December 31, 2022 and December 30, 2023 were as follows (in thousands):
−Removed: and Benefits Inventory
+Added: and Benefits Stock-based Compensation Inventory
Impairments &
7 unchanged sentences
Restructuring charges 7,269 — 7,629 186 502 15,586
+Added: Cash payments ( 7,048 ) — ( 1,112 ) ( 112 ) ( 1,719 ) ( 9,991 )
Adjustment to restructuring charges — — — — ( 147 ) ( 147 )
3 unchanged sentences
Cash payments ( 2,166 ) — ( 89 ) — ( 233 ) ( 2,488 )
−Removed: Adjustment to restructuring charges — — — ( 147 ) ( 147 )
Non-cash settlement — ( 295 ) ( 301 ) — — ( 596 )
5 unchanged sentences
We utilize foreign currency forward contracts to hedge against future movements in foreign exchange rates that affect certain existing foreign currency denominated assets and liabilities and forecasted foreign currency revenue and expense transactions.
−Removed: Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts in order to mitigate the risks and volatility associated with foreign currency transaction gains or losses.
+Added: Under this program, our strategy is to have increases or decreases in our foreign currency exposures mitigated by gains or losses on the foreign currency forward contracts in order to mitigate the risks and volatility associated with foreign
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: currency transaction gains or losses.
We do not use derivative financial instruments for speculative or trading purposes.
−Removed: For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income, net in our Consolidated Statements of Income for both realized and unrealized gains and losses.
+Added: For accounting purposes, certain of our foreign currency forward contracts are not designated as hedging instruments and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded within Other income (expense), net in our Consolidated Statements of Income for both realized and unrealized gains and losses.
Certain of our foreign currency forward contracts are designated as cash flow hedges, and, accordingly, we record the fair value of these contracts as of the end of our reporting period in our Consolidated Balance Sheets with changes in fair value recorded as a component of Accumulated other comprehensive loss and reclassified into earnings in the same period in which the hedged transaction affects earnings, and in the same line item on the Consolidated Statements of Income as the impact of the hedge transaction.
At December 30, 2023, we expect to reclassify $ 0.3 million of the amount accumulated in other comprehensive loss to earnings during the next 12 months, due to the recognition in earnings of the hedged forecasted transactions.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The fair value of our foreign exchange derivative contracts was determined based on current foreign currency exchange rates and forward points.
3 unchanged sentences
Euro Buy 26,597 $ 29,224
−Removed: Euro Sell 4,927 5,107
Japanese Yen Sell 2,961,827 21,073
2 unchanged sentences
Our foreign currency contracts are classified within Level 2 of the fair value hierarchy as they are valued using pricing models that utilize observable market inputs.
−Removed: The location and amount of gains (losses) related to non-designated derivative instruments in the Consolidated Statements of Income were as follows (in thousands):
−Removed: Location of Gain (Loss) Recognized
−Removed: on Derivatives Fiscal Year Ended
−Removed: Derivatives Not Designated as Hedging Instruments December 31, 2022 December 25, 2021 December 26, 2020
−Removed: Foreign exchange forward contracts Other income, net $ 2,439 $ 1,585 $ ( 1,437 )
+Added: The location and amount of gains related to non-designated derivative instruments in the Consolidated Statements of Income were as follows (in thousands):
+Added: Derivatives Not Designated as Hedging Instruments Location of Gain Recognized Fiscal Year Ended
+Added: December 30, 2023 December 31, 2022 December 25, 2021
+Added: Foreign exchange forward contracts Other income (expense), net $ 2,504 $ 2,439 $ 1,585
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The location and amount of gains (losses) related to foreign currency derivative instruments designated as cash flow hedges on our Consolidated Statements of Income was as follows (in thousands):
−Removed: Amount of Gain or (Loss) Recognized in Accumulated OCI/L on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI/L into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI/L into Income
+Added: Amount of Gain or (Loss) Recognized in AOCL on Derivative Location of Gain or (Loss) Reclassified from AOCL into Income Amount of Gain or (Loss) Reclassified from AOCL into Income
Fiscal 2023 $ 160 Cost of revenues $ 222
11 unchanged sentences
By entering into the agreement, we convert a floating rate interest at one-month LIBOR plus 1.75 % into a fixed rate interest at 2.75 %.
−Removed: The interest rate swap also included a 0 % floor that was effective for one year from the date of the swap.
+Added: This agreement was amended in fiscal 2023 to replace the benchmark reference rate LIBOR with SOFR to match the Building Term Loan agreement (as amended).
+Added: After the amendment, the interest rate swap continues to convert our floating-rate interest into a fixed-rate at 2.75 %.
As of December 30, 2023, the notional amount of the loan that is subject to this interest rate swap was $ 14.4 million.
See Note 6, Debt , for additional information.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For accounting purposes, the interest-rate swap contracts qualify for and are designated as cash flow hedges.
4 unchanged sentences
The impact of the interest rate swaps on the Consolidated Statements of Income was as follows (in thousands):
−Removed: Amount of Gain or (Loss) Recognized in OCI/L on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI/L into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from Accumulated OCI/L into Income (Effective Portion)
−Removed: Fiscal 2022 $ 1,906 Other income, net $ 106
−Removed: Fiscal 2021 451 Other income, net ( 154 )
−Removed: Fiscal 2020 ( 119 ) Other income, net ( 64 )
+Added: Amount of Gain Recognized in AOCL on Derivative (Effective Portion) Location of Gain Reclassified from AOCL into Income (Effective Portion) Amount of Gain or (Loss) Reclassified from AOCL into Income (Effective Portion)
+Added: Fiscal 2023 $ 230 Other income (expense), net $ 615
+Added: Fiscal 2022 1,906 Other income (expense), net 106
+Added: Fiscal 2021 451 Other income (expense), net ( 154 )
See also Note 10, Fair Value .
2 unchanged sentences
The three levels of inputs that may be used to measure fair value are as follows:
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
• Level 1 valuations are obtained from real-time quotes for transactions in active exchange markets involving identical securities;
12 unchanged sentences
In addition, all of our investments have a sufficient level of trading volume to demonstrate that the fair value is appropriate.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Assets and liabilities Measured at Fair Value on a Recurring Basis
3 unchanged sentences
Money market funds $ 110,980 $ — $ — $ 110,980
−Removed: Commercial paper — 4,969 — 4,969
−Removed: agency securities — 996 — 996
+Added: treasuries 4,581 — — 4,581
115,561 — — 115,561
1 unchanged sentence
treasuries 45,837 — — 45,837
−Removed: Certificates of deposit — 706 — 706
agency securities — 10,003 — 10,003
3 unchanged sentences
Foreign exchange derivative contracts — 284 — 284
−Removed: Promissory note receivable — — 943 943
Interest rate swap derivative contracts — 1,989 — 1,989
2 unchanged sentences
Total liabilities $ — $ ( 30 ) $ — $ ( 30 )
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 2022 Level 1 Level 2 Level 3 Total
1 unchanged sentence
Money market funds $ 21,279 $ — $ — $ 21,279
−Removed: treasuries 2,500 — — 2,500
Commercial paper — 4,969 — 4,969
4 unchanged sentences
Certificates of deposit — 706 — 706
+Added: agency securities — 11,045 — 11,045
Corporate bonds — 67,396 — 67,396
1 unchanged sentence
25,019 103,987 — 129,006
+Added: Foreign exchange derivative contracts — 664 — 664
+Added: Promissory note receivable — — 943 943
Interest rate swap derivative contracts — 2,374 — 2,374
1 unchanged sentence
Foreign exchange derivative contracts $ — $ ( 193 ) $ — $ ( 193 )
−Removed: Interest rate swap derivative contracts $ — $ ( 55 ) $ — $ ( 55 )
Total liabilities $ — $ ( 193 ) $ — $ ( 193 )
2 unchanged sentences
Other than as discussed in Note 4, Acquisitions and Note 8, Restructuring Charges, there were no assets or liabilities measured at fair value on a non-recurring basis during fiscal 2023, 2022 or 2021.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 11— Goodwill and Intangible Assets
2 unchanged sentences
Goodwill, as of December 25, 2021 $ 178,424 $ 33,875 $ 212,299
−Removed: Addition - Baldwin Park acquisition 352 — 352
−Removed: Addition - HPD acquisition — 1,254 1,254
+Added: Addition - Woburn acquisition — 550 550
Foreign currency translation — ( 1,405 ) ( 1,405 )
Goodwill, as of December 31, 2022 178,424 33,020 211,444
−Removed: Addition - Woburn acquisition — 550 550
+Added: Reduction - FRT divestiture — ( 10,660 ) ( 10,660 )
Foreign currency translation — 306 306
Goodwill, as of December 30, 2023 $ 178,424 $ 22,666 $ 201,090
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Intangible Assets
5 unchanged sentences
Customer relationships 48,022 46,712 1,310 50,912 45,003 5,909
−Removed: Backlog — — — 1,896 1,896 —
In-process research and development 400 — 400 400 — 400
14 unchanged sentences
See Note 7, Leases .
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: Government Assistance
+Added: In January 2023, we received a $ 18.0 million Grant from the California Governor’s Office of Business and Economic Development.
+Added: The Grant requires us to create and maintain full-time jobs and make significant infrastructure investments within California over a 5-year term.
+Added: If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant.
+Added: See Note 2, Summary of Significant Accounting Policies under the caption “Government Assistance,” for additional information.
Environmental Matters
5 unchanged sentences
Environmental contamination or violations may negatively impact our business.
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Indemnification Arrangements
10 unchanged sentences
Legal Matters
−Removed: From time to time, we may be subject to legal proceedings and claims in the ordinary course of business.
−Removed: As of December 31, 2022, and as of the filing of these financial statements, we were not involved in any material legal proceedings.
−Removed: In the future, we may become a party to additional legal proceedings that may require us to spend significant resources.
−Removed: Litigation can be expensive and disruptive to normal business operations.
−Removed: The results of legal proceedings are difficult to predict, and the costs incurred in litigation can be substantial, regardless of outcome.
+Added: From time to time, we are subject to legal proceedings and claims in the ordinary course of business, the outcomes of which cannot be estimated with certainty.
+Added: Our ability to estimate the outcomes may change in the near term and the effect of any such change could have a material adverse effect on our financial position, results of operations or cash flows.
Note 13— Stockholders' Equity
7 unchanged sentences
On October 26, 2020, our Board of Directors authorized a two-year program to repurchase up to $ 50 million of outstanding common stock to offset potential dilution from issuances of common stock under our stock-based compensation programs.
−Removed: During fiscal 2020, we did not repurchase any shares.
−Removed: During fiscal 2021 we repurchased and retired 622,400 shares of common stock for $ 24.0 million, and as of December 31, 2022 we had utilized the remaining funds available for repurchase under this program after repurchasing 676,408 shares of common stock for $ 26.0 million during fiscal 2022.
+Added: During fiscal 2021 and 2022, we repurchased and retired 622,400 shares of common stock for $ 24.0 million and 676,408 shares of common stock for $ 26.0 million, respectively, utilizing the remaining shares available for repurchase under the program.
+Added: On May 20, 2022, our Board of Directors authorized a two-year program to repurchase up to $ 75 million of outstanding common stock to offset potential dilution from issuance of common stock under our stock-based compensation programs.
+Added: During fiscal 2022 and 2023, we repurchased and retired 1,700,893 shares of common stock for $ 56.4 million and 504,352 shares of common stock for $ 18.6 million, respectively, utilizing the remaining shares available for repurchase under the program.
+Added: On October 30, 2023, our Board of Directors authorized an additional program to repurchase up to $ 75 million of outstanding common stock, also with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs.
+Added: This share repurchase program will expire on October 30, 2025.
+Added: During fiscal 2023, we repurchased and retired 32,020 shares of common stock for $ 1.2 million and as of December 30, 2023 $ 73.8 million remained available for future repurchases.
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: On May 20, 2022, our Board of Directors authorized an additional program to repurchase up to $ 75 million of outstanding common stock, also with the primary purpose of offsetting potential dilution from issuance of common stock under our stock-based compensation programs.
−Removed: This share repurchase program will expire on May 20, 2024.
−Removed: During fiscal 2022, we repurchased and retired 1,700,893 shares of common stock for $ 56.4 million and as of December 31, 2022 $ 18.6 million remained available for future repurchases.
Equity Incentive Plan
15 unchanged sentences
The performance criteria are based on a metric called Total Shareholder Return (“TSR”) for the performance period of three years , relative to the TSR of the companies identified as being part of the S&P Semiconductor Select Industry Index (FormFactor peer companies) as of a specific date.
−Removed: Of the 273,000 PRSUs granted in fiscal 2019, 36,000 shares were forfeited, resulting in 237,000 shares vesting in fiscal 2022.
−Removed: These shares achieved 147 % TSR performance, which resulted in an additional 110,605 shares issued during fiscal 2022 related to the 2019 PRSU grant.
+Added: Of the 258,000 PRSUs granted in fiscal 2020, none of the 191,400 outstanding PRSU awards vested in 2023, at the end of the requisite service period, as the TSR performance was not met.
PRSU grant activity was as follows:
12 unchanged sentences
We have treated the 2012 ESPP as a compensatory plan.
−Removed: FORMFACTOR, INC.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During fiscal 2023, employees purchased 363,190 shares under this program at a weighted average exercise price of $ 24.29 per share, which represented a weighted average discount of $ 7.65 per share from the fair value of the stock purchased.
As of December 30, 2023, 3,613,021 shares remained available for issuance.
+Added: FORMFACTOR, INC.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 14— Stock-Based Compensation
14 unchanged sentences
Total stock-based compensation $ 38,616 $ 31,337 $ 29,384
−Removed: Stock-based compensation tax benefit $ 2,772 $ 6,118 $ 4,962
+Added: Stock-based compensation tax benefit (expense) $ ( 1,424 ) $ 2,772 $ 6,118
Unrecognized Stock-Based Compensation Expense
59 unchanged sentences
Stock-based compensation 1,424 ( 2,772 ) ( 6,118 )
−Removed: Research and development credits ( 8,264 ) ( 7,153 ) ( 6,576 )
+Added: Tax credits ( 13,368 ) ( 8,264 ) ( 7,153 )
Foreign taxes at rates different than the U.S.
1 unchanged sentence
Other permanent differences 1,010 1,964 2,043
+Added: Foreign gain exclusion (1)
+Added: ( 21,567 ) — —
Global intangible low-taxed income 7,885 7 —
4 unchanged sentences
Total $ 6,880 $ 7,132 $ 14,576
+Added: (1) The rate reconciliation includes an exclusion of a portion of the gain on the sale of the FRT business under German tax law.
Deferred Tax Assets and Liabilities
20 unchanged sentences
jurisdictions on an ongoing basis to determine whether there is a need for a valuation allowance with respect to such deferred tax assets.
−Removed: As of December 31, 2022, we maintained a valuation allowance of $ 43.3 million, primarily related to California deferred tax assets and foreign tax credit carryovers, due to uncertainty about the future realization of these assets.
−Removed: We believe that future reversals of taxable temporary differences, and our forecast of continued earnings in both our U.S.
−Removed: jurisdictions, support our decision to not record a valuation allowance on other deferred tax assets.
+Added: As of December 30, 2023, we maintained a valuation allowance of $ 45.9 million, primarily related to California deferred tax assets
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
+Added: and foreign tax credit carryovers, due to uncertainty about the future realization of these assets.
+Added: We believe that future reversals of taxable temporary differences, and our forecast of continued earnings in both our U.S.
+Added: jurisdictions, support our decision to not record a valuation allowance on other deferred tax assets.
Tax Credits and Carryforwards
57 unchanged sentences
Certain components of our operating results are utilized to determine executive compensation along with other measures.
−Removed: Corporate and Other includes unallocated expenses relating to amortization of intangible assets, share-based compensation expense, acquisition-related costs, including charges related to inventory and fixed assets stepped up to fair value, and other costs, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.
+Added: Corporate and Other includes unallocated expenses relating to amortization of stock-based compensation expense, intangible assets, acquisition-related costs, including charges related to inventory and fixed assets stepped up to fair value, restructuring charges, and other costs, which are not used in evaluating the results of, or in allocating resources to, our reportable segments.
Acquisition-related costs include transaction costs and any costs directly related to the acquisition and integration of acquired businesses.
4 unchanged sentences
December 30, 2023 December 31, 2022 December 25, 2021
−Removed: Taiwan 22.7 % 24.2 % 21.7 %
−Removed: China 21.5 21.2 25.2
United States 25.9 % 17.1 % 15.9 %
+Added: Taiwan 22.3 22.7 24.2
South Korea 17.8 14.9 16.0
−Removed: Malaysia 6.7 6.4 1.6
−Removed: Singapore 5.3 4.7 2.4
+Added: China 13.8 21.5 21.2
Europe 5.9 5.2 5.7
Japan 5.5 5.1 4.7
+Added: Malaysia 4.0 6.7 6.4
+Added: Singapore 2.8 5.3 4.7
Rest of World 2.0 1.5 1.2
22 unchanged sentences
Note 18— New Accounting Pronouncements
−Removed: In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805):
−Removed: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers .
−Removed: The new guidance requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards Codification 606, “Revenue from Contracts with Customers,” as if it had originated the contracts.
+Added: In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “ Income Taxes (Topic 740):
+Added: Improvements to Income Tax Disclosures.
+Added: ” The ASU includes requirements that an entity disclose specific categories in the rate reconciliation and provide additional information for reconciling items that are greater than five percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate.
+Added: The standard also requires that entities disclose income before income taxes and provision for income taxes disaggregated between
FORMFACTOR, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
−Removed: elected to early adopt on a prospective basis during the second quarter of fiscal 2022.
−Removed: The adoption did not have a material effect on the Company's Consolidated Financial Statements.
+Added: domestic and foreign.
+Added: This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted.
+Added: We have not yet determined the impact of this standard on our financial statements.
+Added: In November 2023, the FASB issued ASU 2023-07, “ Segment Reporting (Topic 280):
+Added: Improvements to Reportable Segment Disclosures .” The ASU includes requirements that an entity disclose the title of the CODM and on an interim and annual basis, significant segment expenses and the composition of other segment items for each segment's reported profit.
+Added: The standard also permits disclosure of additional measures of segment profit.
+Added: This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, on a retrospective basis, with early adoption permitted.
+Added: We have not yet determined the impact of this standard on our financial statements.
+Added: In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848):
+Added: Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides temporary optional expedients and exceptions for applying GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference the London Interbank Offered Rate (“LIBOR“) or another reference rate expected to be discontinued.
+Added: In December 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848):
+Added: Deferral of the Sunset Date of Topic 848,” extending the relief offered in Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the optional expedients in Topic 848.
+Added: In May 2023, the Company entered into a rate replacement amendment to its credit facility loan agreement to replace LIBOR with the Secured Overnight Financing Rate (“SOFR”) and concurrently signed an amendment to modify the floating rate option on its interest rate swap to match that of the debt.
+Added: The Company applied practical expedients provided in Topic 848 allowing the modified instrument to be accounted for and presented in the same manner as the instrument existing before the modification.
+Added: These modifications did not have a significant impact on our financial statements.
Note 19- Subsequent Events
−Removed: In January 2023.
−Removed: we received $ 18.0 million in cash from a California competes grant (the “Grant”) awarded from the California Governor’s Office of Business and Economic Development.
−Removed: The Grant requires FormFactor to create and maintain full-time jobs and make significant infrastructure investments within California over a 5-year term.
−Removed: If we do not meet the requirements of the Grant, we will be required to repay all or a portion of the Grant.
+Added: On February 7, 2024, the Company announced entry into a definitive agreement to sell its China operations to Grand Junction Semiconductor Pte.
+Added: for $ 25.0 million in cash, subject to customary purchase price adjustments, and establish an exclusive distribution and partnership agreement to continue sales and support of our products to the region.
+Added: The following subsidiaries are included as part of the divestiture:
+Added: Microprobe HongKong Limited, FormFactor Technology (Suzhou) Co.
+Added: Ltd., Cascade Microtech Singapore Pte, Ltd, and FormFactor International (Shanghai) Trading Co., Ltd.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.