Kulicke & Soffa Reports Third Quarter Fiscal 2012 Results

  Kulicke & Soffa Reports Third Quarter Fiscal 2012 Results

Business Wire

SINGAPORE -- July 31, 2012

Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) (“K&S” or the “Company”) today
announced results for its third fiscal quarter ended June 30, 2012.


Quarterly Results
                                          Change vs.       Change vs.
                       Fiscal Q3 2012                 
                                          Fiscal Q3 2011   Fiscal Q2 2012
Net Revenue             $255.5 million  -13.2%          74.6%
Gross Profit            $122.4 million  -8.7%           83.6%
Gross Margin            47.9%           240 bps         230 bps
Income from Operations   $76.3 million    -6.6%            276.8%
Operating Margin        29.9%           220 bps         1,610 bps
Net Income               $68.2 million    -3.6%            310.3%
Net Margin              26.7%           270 bps         1,530 bps
EPS – Diluted           $0.90           -5.3%           309.1%
                                                           

Bruno Guilmart, Kulicke & Soffa’s President and Chief Executive Officer, said,
“Results for the quarter were above the high end of our prior guidance, driven
by our market leading copper position, as well as strong market demand for our
AT Premier solution. The key themes to our continued success include our
multi-segment leadership, flexible manufacturing strategy, R&D strength and
our now debt-free balance sheet. This holistic strategy has enhanced both our
margin profile and cash flow generation.”

Third Quarter Fiscal 2012 Key Product Trends

  *Ball bonder equipment net revenue increased 91.9% over the March quarter.
  *79.7% of ball bonder equipment was sold as copper capable bonders.
  *Wedge bonder equipment net revenue increased 12.9% from the March quarter.

Third Quarter Fiscal 2012 Financial Highlights

  *Net revenue of $255.5 million.
  *Gross margin of 47.9%.
  *Net income was $68.2 million or $0.90 per share.
  *On June 1, 2012, the Company repaid its $110 million debt obligation and
    is now debt free, eliminating approximately $8 million of related annual
    expenses. Cash, cash equivalents and investments stood at $380.7 million
    at quarter end.

Fourth Quarter Fiscal 2012 Outlook

The Company expects net revenue for the fourth quarter of fiscal 2012 to be
approximately $250 million to $270 million, reflecting the Company’s
technology leadership position in the key markets it serves.

Looking forward, Bruno Guilmart commented, “Our focus remains on expanding our
technology and market leadership. We continue to capture all opportunities
possible related to the ongoing and broadening transition from gold to copper
and look ahead at wedge bonder volume improvements, LED expansion and advanced
packaging growth opportunities. We are also carefully evaluating synergistic
opportunities where we can further broaden our reach by leveraging our
technology leadership position.”

Earnings Conference Call Details

A conference call to discuss these results will be held today, July 31, 2012,
beginning at 8:00 am (EDT). To access the conference call, interested parties
may call +1-877-407-8037 or internationally +1-201-689-8037. The call will
also be available by live webcast at www.kns.com/investors/events.

A replay will be available from approximately one hour after the completion of
the call through August 7, 2012 by calling +1-877-660-6853 or internationally
+1-201-612-7415, with account number 5521 and replay ID 397269. A webcast
replay will also be available at www.kns.com/investors/events.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a global leader in the design and
manufacture of semiconductor and LED assembly equipment. As a pioneer in this
industry, K&S has provided customers with market leading packaging solutions
for decades. In recent years, K&S has expanded its product offerings through
strategic acquisitions, adding die and wedge bonders and a broader range of
expendable tools to its core ball bonding products. Combined with its
extensive expertise in process technology, K&S is well positioned to help
customers meet the challenges of assembling the next-generation semiconductor
and LED devices. (www.kns.com)

Caution Concerning Results and Forward Looking Statements

In addition to historical statements, this press release contains statements
relating to future events and our future results. These statements are
“forward-looking” statements within the meaning of the Private Securities
Litigation Reform Act of 1995, and include, but are not limited to, statements
that relate to our future revenue, sustained, increasing, continuing or
strengthening demand for our products, the continuing transition from gold to
copper wirebonding, replacement demand, our research and development efforts,
our ability to identify and realize new growth opportunities and our ability
to control costs. While these forward-looking statements represent our
judgments and future expectations concerning our business, a number of risks,
uncertainties and other important factors could cause actual developments and
results to differ materially from our expectations. These factors include, but
are not limited to: the risk that customer orders already received may be
postponed or canceled, generally without charges; the risk that anticipated
customer orders may not materialize; the risk that our suppliers may not be
able to meet our demands on a timely basis; the volatility in the demand for
semiconductors and our products and services; a slowdown of transition from
gold to copper wirebonding by our customers and the industry, volatile global
economic conditions, which could result in, among other things, sharply lower
demand for products containing semiconductors and for the Company’s products,
and disruption of capital and credit markets; the risk of failure to
successfully manage our operations; acts of terrorism and violence; risks,
such as changes in trade regulations, currency fluctuations, political
instability and war, which may be associated with a substantial non-U.S.
customer and supplier base and substantial non-U.S. manufacturing operations;
and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2011
Annual Report on Form 10-K and our other filings with the Securities and
Exchange Commission. Kulicke & Soffa Industries, Inc is under no obligation to
(and expressly disclaims any obligation to) update or alter its
forward-looking statements whether as a result of new information, future
events or otherwise.

                                                              
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
                                                     
                         Three months ended          Nine months ended
                         June 30,      July 2,       June 30,      July 2,
                         2012          2011          2012          2011
                                                                   
Net revenue:
Equipment                $ 237,095     $ 275,398     $ 474,297     $ 598,106
Expendable Tools          18,430     19,040      47,560      51,924  
Total net revenue          255,525       294,438       521,857       650,030
                                                                   
Cost of sales:
Equipment                  125,892       152,493       257,731       323,564
Expendable Tools          7,190       7,851       19,720      21,303  
Total cost of sales        133,082       160,344       277,451       344,867
                                                                   
Gross profit:
Equipment                  111,203       122,905       216,566       274,542
Expendable Tools          11,240      11,189      27,840      30,621  
Total gross profit        122,443     134,094     244,406     305,163 
                                                                   
Operating expenses:
Selling, general and       27,213        31,715        79,937        97,800
administrative
Research and               16,018        16,595        46,077        48,314
development
Amortization of            2,294         2,391         6,883         7,163
intangible assets
Restructuring             642         1,740       2,615       4,516   
Total operating           46,167      52,441      135,512     157,793 
expenses
                                                                   
                                                                   
Income from
operations:
Equipment                  70,852        77,348        98,745        137,879
Expendable Tools          5,424       4,305       10,149      9,491   
Total income from          76,276        81,653        108,894       147,370
operations
                                                                   
Other income
(expense):
Interest income            200           185           651           445
Interest expense           (149    )     (241    )     (633    )     (724    )
Interest expense:         (1,306  )    (1,877  )    (5,174  )    (5,429  )
non-cash
                                                                   
Income from operations     75,021        79,720        103,738       141,662
before income taxes
                                                                   
Provision for income       6,847         9,006         10,440        15,964
taxes
                                                                
Net income               $ 68,174     $ 70,714     $ 93,298     $ 125,698 
                                                                   
Net income per share:
Basic                    $ 0.92       $ 0.97       $ 1.26       $ 1.75    
Diluted                  $ 0.90       $ 0.95       $ 1.24       $ 1.71    
                                                                   
Weighted average
shares outstanding:
Basic                      74,067        72,199        73,811        71,531
Diluted                    75,994        74,130        75,516        73,082
                                                                   
                         Three months ended          Nine months ended
                         June 30,      July 2,       June 30,      July 2,
Supplemental financial   2012          2011          2012          2011
data:
                                                                   
Depreciation and         $ 4,171       $ 4,470       $ 12,650      $ 13,274
amortization
                                                                   
Capital expenditures     $ 2,264       $ 1,226       $ 5,145       $ 5,815
                                                                   
Equity-based
compensation expense:
Cost of sales            $ 44          $ 55          $ 226         $ 159
Selling, general and       1,583         1,673         5,027         4,784
administrative
Research and              450         340         1,316       970     
development
Total equity-based       $ 2,077      $ 2,068      $ 6,569      $ 5,913   
compensation expense
                                                                   
                                                     As of
                                                     June 30,      July 2,
                                                     2012          2011
                                                                   
Backlog of orders                                    $ 224,000     $ 176,000
                                                                   
Number of employees                                    3,208         3,005
                                                                   

                                                                
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                                                   
                                                     June 30,      October 1,
                                                     2012          2011
ASSETS
                                                                   
CURRENT ASSETS
Cash and cash equivalents                            $ 380,697     $ 378,188
Short-term investments                                 -             6,364
Accounts and notes receivable, net of allowance
for doubtful accounts of $1,167 and $2,194,            177,864       138,649
respectively
Inventories, net                                       65,233        73,092
Prepaid expenses and other current assets              22,902        21,897
Deferred income taxes                                 1,656       1,651   
                                                                   
TOTAL CURRENT ASSETS                                   648,352       619,841
                                                                   
Property, plant and equipment, net                     25,504        26,501
Goodwill                                               41,546        41,546
Intangible assets                                      22,681        29,565
Other assets                                          10,622      10,938  
                                                                   
TOTAL ASSETS                                         $ 748,705    $ 728,391 
                                                                   
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                   
CURRENT LIABILITIES
Current portion of long term debt                    $ -           $ 105,224
Accounts payable                                       70,012        36,321
Accrued expenses and other current liabilities         48,717        43,528
Earnout agreement payable                              -             14,848
Income taxes payable                                  16,390      14,261  
                                                                   
TOTAL CURRENT LIABILITIES                              135,119       214,182
                                                                   
Deferred income taxes                                  30,992        32,065
Other liabilities                                     9,728       12,267  
                                                                   
TOTAL LIABILITIES                                     175,839     258,514 
                                                                   
SHAREHOLDERS' EQUITY
Common stock, no par value                             451,451       441,749
Treasury stock, at cost                                (46,356 )     (46,356 )
Accumulated income (deficit)                           165,238       71,940
Accumulated other comprehensive income                2,533       2,544   
                                                                   
TOTAL SHAREHOLDERS' EQUITY                            572,866     469,877 
                                                                   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY           $ 748,705    $ 728,391 
                                                                   

                                                             
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                  
                   Three months ended             Nine months ended
                   June 30, 2012   July 2, 2011   June 30, 2012   July 2, 2011
                                                                  
Net cash
provided by        $  66,701       $  50,300      $  124,648      $  152,087
operations
Net cash used in
discontinued         (424     )    (579    )     (1,469   )    (1,547  )
operations
Net cash
provided by        $  66,277       $  49,721      $  123,179      $  150,540
operating
activities
                                                                  
Net cash used in
investing
activities,           (2,264   )      (1,420  )      (13,629  )      (9,057  )
continuing
operations
                                                                  
Net cash
provided by
(used in)
financing             (109,515 )      4,805          (106,972 )      8,836
activities,
continuing
operations
Effect of
exchange rate
changes on cash      60           499          (69      )    850     
and cash
equivalents
Changes in cash
and cash           $  (45,442  )   $  53,605      $  2,509        $  151,169
equivalents
Cash and cash
equivalents,         426,139      275,676      378,188      178,112 
beginning of
period
Cash and cash
equivalents, end   $  380,697     $  329,281    $  380,697     $  329,281 
of period
                                                                  
Short-term
investments &        -            6,253        -            6,253   
restricted cash
Total cash, cash
equivalents,
restricted cash    $  380,697    $  335,534    $  380,697    $  335,534 
and short-term
investments
                                                                  

Contact:

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations
P: +1-215-784-7518
F: +1-215-784-6180
jelgindy@kns.com
or
Global IR Partners
David Pasquale
P: +1-914-337-8801
klic@globalirpartners.com
 
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