Thank you ladies and gentlemen and welcome everyone to FormFactor’s Fourth Quarter 2011 Mid Quarter Update Conference Call. On today’s call are Chief Executive Officer Tom St. Dennis and Chief Financial Officer Mike Ludwig. As a reminder for everyone, today's discussion contains forward-looking statements within the meaning of the Federal Securities Laws. Such forward-looking statements include, but are not limited to, projections, including statements regarding business momentum, demand for our products and future growth. Statements that contain words like expects, anticipates, believes, possibly, should and the assumptions upon which such statements are based. These forward-looking statements are based on current information and expectations that are inherently subject to change and involve a number of risk and uncertainties. FormFactor’s actual results could differ materially from those projected in the 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 the forward-looking statements. For more information, please refer to the Risk Factor discussion in the company’s Form 10-K and the subsequent Form 10-Qs and in the press release issued yesterday. With that, we will now turn the call over to CEO, Tom St. Dennis. Please begin.

Thank you for joining us this morning. The continued price declines and demand reductions in the DRAM market have reduced demand for advanced probe cards significantly this quarter. It appears that the hard disk drive supply disruption in Taiwan has reduced personal computer output and as a result the demand for DRAMs. With DRAM prices now dropping to near the variable cost of manufacture, some DRAM manufacturers have reduced wafer starts and cutback investments. As a result we've seen significant quarter-over-quarter reduction in probe card investments from our customers across all markets. It’s difficult to forecast when DRAM prices and demand will improve given the situation in the disk drive market today. When DRAM prices improve we expect that there will be a strong demand cycle for probe cards if DRAM manufacturers are continuing to drive technology transitions and new designs during the slow period. We are managing expenses closely during this period of time, while continuing to invest in our next-generation Matrix products as well as our new SoC products. The schedule for these new products will not be affected by the current market cycle. We believe these investments will position FormFactor for market share growth in the second half of 2012 and 2013. With that, I’ll turn it over to Mike to give you our updated Q4 guidance.

Thank you, Tom. As Tom mentioned, due to exacerbated DRAM market conditions caused by both volume DRAM prices and the impact of flooding in Thailand, we expect fourth quarter revenues to be $28 million to $31 million, lower than our prior guidance of $30 million to $34 million. We expect revenues to decrease in all markets, DRAM, Flash and SoC compared to third quarter 2011 levels. Given the revenue guidance, we expect non-GAAP gross margins though difficult to forecast to be in the range of negative 2% to negative 9%. Non-GAAP gross margins are being negatively impacted primarily by lower absorption fixed costs and direct labor from lower revenue levels, customer cancelations and an increase in excess and obsolete costs resulting from decreased demand. We expect to meet our non-GAAP OpEx guidance unless they are equal to $19 million while we remain committed to our investments in our next-generation Matrix products in our vertical spring technology for the SoC market. Lower revenues and higher costs will result in a cash burn of $13 million excluding stock repurchases higher than our previous estimate of less than $10 million. Our visibility is still limited with respect to Q1 therefore we will not provide any guidance with respect to Q1 2012 until our fourth quarter earnings call in February. With that, let's open the call for Q&A. Operator?

(Operator Instructions) Our first question is from Tim Arcuri of Citigroup. Your line is open.

This is Wenge Yang for Tim. First of all, the revenue decline, is it solely related to DRAM fundamentals or is there any market share loss issues, also pertaining to the loss?

We believe that the full impact of this on DRAM is related the market declines that have gone as a result of the broader industry issues that I mentioned.

Okay. So there is no market share loss at this point?

This is not related to market share loss, no.

I understand. So given the Q4 revenues and I think in Q1 and Q2 traditionally you know its low for DRAM, what should be your cost structure; are you going to take another look at your breakeven level and cost structure at this point?

You know at this point Wenge and we again I think we communicated that we think the cost structure is what's required in order to take advantage of the opportunities that we have in front of us with respect to next-generation Matrix products as well as the SoC products. We will look at some actions like maybe additional PTO etcetera to reduce some costs in the short term but ultimately I don't think that we are not at this point in time changing our thought process with respect to breakeven point.

Okay, a last question. Could you give some update on the new product traction and in the earnings call you mentioned the new product is gaining a lot of traction and you just mentioned that the new product activity is still ongoing despite the weakness in the overall market. So what is the current status of traction for the new product?

As we mentioned in the previous call, this quarter we are delivering both the next-generation Matrix cards as well as the SoC cards to customers for early evaluation and development. Those programs and projects are continuing. We are I would say on schedule against everything we expected and would expect it in the Q1 timeframe, Q1-Q2 timeframe that we would complete some of these evaluations and start to transition for those two products to contribute to revenues in the second half of 2012. So we are on schedule against what we communicated before.

Thank you. Our next question is from Patrick Ho of Stifel, Nicolaus. Your line is open.

Tom and Mike, in terms of the response time and potential turnaround in the DRAM industry given that you obviously mentioned that the situation in Thailand has caused basically a shutdown in the overall PC supply chain. How quickly can you respond should that situation resolve itself? Do you guys have to build some inventory to meet some potential near term demand or whenever it covers or how quickly can you turnaround products once that scenario is resolved?

Well, one thing we are doing is working with the supply chain to make sure that it’s as ready as we can make it towards a return for the demand which I think could be strong as soon as the signals are clear from the disk drive situation. So we will stay close to them or continue to work on our cycle times also which helps to allow us to respond quicker on that. So we are just continuing to drive the programs and stay in close communication with the supply chain.

And Mike, in terms of the cash burn, it still seems like you guys are trying to manage that as best you can; what are some of the levers that can get you potentially better than that $13 million forecast you just outlined?

Well, I think right now where we are Patrick, given as late as we are in the quarter, the only option that we have at this point in time is to maybe push some payments and I think at that point in time, I don't think that's what we are looking to do. So I don't think that we have a tremendous amount of leverage given as late as we are in the quarter to really move that number significantly lower than $13 million.

Okay, then maybe I will take it, and the final question from me is how, what leverage can you use for say the March quarter. I know you didn't give a revenue outlook, but let's just say if it’s around this level what type of leverage can you do in the following quarter?

Again, I think for us, we are pretty committed to the structure that we have in place at this point in time, but one of the levers that we continue to look at is a little bit of same lever we are using in Q4 which should be additional time off for employees to mitigate expenses.

Thank you. Our next question is from C. J. Muse of Barclays Capital. Your line is open.

Hi, this is [Olga] calling in for C.J. Thanks for taking my question. Just a first question on the Flash side, given the disruption that you are seeing on the [HDD] side and the potential repercussion for the first half of the year, have you begun to see any acceleration of demand out of your Flash customers as you enter the first half?

Well, I think that the Flash market is certainly doing better than the DRAM market in this situation. Perhaps it will even drive a faster transition on to the solid state drives because of the lack of disk drive capacity; but as we said before we have a relatively small part of the overall Flash market where we take about 10% of the market as our serve market in Flash at the higher end of the overall market. We have received Flash orders in the quarter and there are investments going on that way, but there is still some caution on an overall basis in that market. So we see it likely to be down quarter-over-quarter, but certainly nothing like the DRAM market.

And then on the gross margin side you know not to provide guidance for the March quarter; but if you do have a scenario where revenues are actually flattish with the revised revenue levels for December, is there any room for the non GAAP gross margins to move higher off of the realized level or is that the level you would be thinking of in that revenue scenario?

I think it would be fairly close to that. I do think that you know one of the challenges you have when demand shrinks as quickly as it did here; as you have the excess and obsolete challenges that we have because of the custom business and some risk that we take in inventory and to the extent that you have revenues being flat quarter-over-quarter, I do think that we would see better improvement in our you know in the first quarter. So I do think there would be a chance to improve those margins by a few percentage points just because of that.

And just a final question on cash burn; just to verify, if adjusted it would be $13 million in the current quarter. As we look into 2012 how does -- what does that mean for how you think about your spending on CapEx for the entire year?

You know from our perspective we are always careful about investing in CapEx and I think you know I think what we guided this year is somewhere around $8 million. We will have a better view of that when we communicate in February for the beginning of the year. But again, from our perspective we are always going to be careful with respect to CapEx. We would expect maybe there would be some small investments required to take advantage of what we think the opportunities are in the next-generation Matrix and SoC and we will communicate that at that time. But again, I don't see us being maybe slightly more than what we are spending in 2011, but I think it will be within a pretty visible range.

(Operator Instructions) Thank you ladies and gentlemen. This concludes the FormFactor Third Quarter Conference Call. Thank you for your participation. You may now disconnect.