Kulicke & Soffa Reports First Quarter 2013 Results

  Kulicke & Soffa Reports First Quarter 2013 Results

Business Wire

SINGAPORE -- January 29, 2013

Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or
the “Company”) today announced results for its first fiscal quarter ended
December 29, 2012.

 
Quarterly Results
                                             Change vs.         Change vs.
                          Fiscal Q1 2013                       
                                             Fiscal Q1 2012     Fiscal Q4 2012
Net Revenue               $114.0 million     (5.0%)             (57.6%)
Gross Profit              $51.5 million      (6.8%)             (58.1%)
Gross Margin              45.2%              (90) bps           (50) bps
Income from               $4.2 million       (66.0%)            (94.0%)
Operations
Operating Margin          3.7%               (660) bps          (2,240) bps
Net Income                $3.6 million       (57.6%)            (94.6%)
Net Margin                3.2%               (390) bps          (2,180) bps
EPS – Diluted             $0.05              (54.5%)            (94.4%)
                                                                 

Bruno Guilmart, Kulicke & Soffa’s President and Chief Executive Officer, said,
“The first fiscal quarter’s revenue came in at the higher end of our guidance
range. The pullback from the prior quarter reflects the high degree of
seasonality in our business, with the December quarter traditionally the
weakest of the fiscal year. We planned for the decline and took appropriate
actions at the beginning of the quarter to accelerate our cost- containment
programs. As a result, we reduced our operating expenses by 10% compared to
the prior quarter, further strengthened our balance sheet and maintained a
strong gross margin.”

First Quarter Fiscal 2013 Key Product Trends

  * Ball bonder equipment net revenue decreased 64.5% over the September
    quarter.
  * 74.8% of ball bonder equipment was sold as copper capable bonders.
  * Wedge bonder equipment net revenue decreased 23% from the September
    quarter.

First Quarter Fiscal 2013 Financial Highlights

  * Net revenue of $114.0 million.
  * Gross margin of 45.2%.
  * Net income was $3.6 million or $0.05 per share.

       * Net income was reduced by $1.8 million of adjustments related to the
         Company’s RISC (Research Incentive Scheme for Companies) grant.
       * Without this item net income would have been $5.4 million or $0.07
         per share.

  * Total cash and short-term investments were $494.2 million on December 29,
    2012, a $53.9 million increase from the prior quarter ended September 29,
    2012.

Second Quarter Fiscal Year 2013 Outlook

The Company expects net revenue in the second fiscal quarter of 2013 ending
March 30, 2013 to be approximately $90 million to $100 million.

Looking forward, Bruno Guilmart commented, “We expect our business to improve
as we move through the fiscal year based on normal market seasonality combined
with the ongoing copper transition. In general, we normally gain increased
visibility from customers after the Chinese New Year Holiday. We remain
confident in our long-term business prospects given the strength of our
existing equipment portfolio and development pipeline, our market leadership
positions, and our strong balance sheet.”

Earnings Conference Call Details

A conference call to discuss these results will be held today, January 29,
2013, beginning at 8:00 am (EST). 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 February 5, 2013 by calling toll-free +1-877-660-6853 or
internationally +1-201-612-7415 and using the replay ID number of 407421. 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 wedge bonding 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 wire bonding, 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 wire bonding 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. 2012
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
                                            December 29,   December 31,
                                               2012           2011     
                                                            
Net revenue:
Equipment                                   $  99,902      $  106,149
Expendable Tools                               14,137         13,875   
Total net revenue                              114,039        120,024
                                                            
Cost of sales:
Equipment                                      56,432         59,004
Expendable Tools                               6,082          5,744    
Total cost of sales                            62,514         64,748
                                                            
Gross profit:
Equipment                                      43,470         47,145
Expendable Tools                               8,055          8,131    
Total gross profit                             51,525         55,276   
                                                            
Operating expenses:
Selling, general and administrative            26,030         25,240
Research and development                       18,253         14,148
Amortization of intangible assets              2,293          2,295
Restructuring                                  744            1,217    
Total operating expenses                       47,320         42,900   
                                                            
                                                            
Income from operations:
Equipment                                      1,745          9,877
Expendable Tools                               2,460          2,499    
Total income from operations                   4,205          12,376
                                                            
Other income (expense):
Interest income                                174            260
Interest expense                               -              (242    )
Interest expense: non-cash                     -              (1,910  )
                                                            
Income from operations before income taxes     4,379          10,484
                                                            
Provision for income taxes                     775            1,977
                                                            
Net income                                  $  3,604       $  8,507    
                                                            
Net income per share:
Basic                                       $  0.05        $  0.12     
Diluted                                     $  0.05        $  0.11     
                                                            
Weighted average shares outstanding:
Basic                                          74,852         73,540
Diluted                                        76,209         74,628
                                                            
                                            Three months ended
                                            December 29,   December 31,
Supplemental financial data:                   2012           2011     
                                                            
Depreciation and amortization               $  4,802       $  4,258
                                                            
Capital expenditures                        $  1,616       $  1,498
                                                            
Equity-based compensation expense:
Cost of sales                               $  148         $  85
Selling, general and administrative            2,326          1,611
Research and development                       727            403      
Total equity-based compensation expense     $  3,201       $  2,099    
                                                            
                                            As of
                                            December 29,   December 31,
                                               2012           2011     
                                                            
Backlog of orders                           $  71,000      $  88,000
                                                            
Number of employees                            2,609          2,735

 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                                  December 29,   September 29,
                                                     2012           2012      
ASSETS
                                                                  
CURRENT ASSETS
Cash and cash equivalents                         $  494,170     $  440,244
Restricted cash                                      2,900          -
Accounts and notes receivable, net of allowance
for doubtful accounts of $1,019 and $937,            98,715         188,986
respectively
Inventories, net                                     54,328         58,994
Prepaid expenses and other current assets            16,018         21,577
Deferred income taxes                                3,522          3,515     
                                                                  
TOTAL CURRENT ASSETS                                 669,653        713,316
                                                                  
Property, plant and equipment, net                   28,781         28,441
Goodwill                                             41,546         41,546
Intangible assets                                    18,092         20,387
Other assets                                         11,416         11,919    
                                                                  
TOTAL ASSETS                                      $  769,488     $  815,609   
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY
                                                                  
CURRENT LIABILITIES
Accounts payable                                  $  20,305      $  57,231
Accrued expenses and other current liabilities       42,040         57,946
Income taxes payable                                 6,817          8,192     
                                                                  
TOTAL CURRENT LIABILITIES                            69,162         123,369
                                                                  
Deferred income taxes                                38,007         37,875
Other liabilities                                    10,994         10,698    
                                                                  
TOTAL LIABILITIES                                    118,163        171,942   
                                                                  
SHAREHOLDERS' EQUITY
Common stock, no par value                           458,482        455,122
Treasury stock, at cost                              (46,356 )      (46,356  )
Accumulated income                                   236,124        232,520
Accumulated other comprehensive income               3,075          2,381     
                                                                  
TOTAL SHAREHOLDERS' EQUITY                           651,325        643,667   
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY        $  769,488     $  815,609   

 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                            
                                         Three months ended
                                         December 29, 2012   December 31, 2011
                                                              
Net cash provided by operations          $   58,494          $   34,324
Net cash used in discontinued                -                   (486      )
operations
Net cash provided by operating           $   58,494          $   33,838
activities
                                                              
Net cash used in investing activities        (4,516    )         (9,982    )
                                                              
Net cash provided by financing               159                 1,576
activities
Effect of exchange rate changes on           (211      )         141        
cash and cash equivalents
Changes in cash and cash equivalents     $   53,926          $   25,573
Cash and cash equivalents, beginning         440,244             378,188    
of period
Cash and cash equivalents, end of        $   494,170         $   403,761    
period
                                                              
Total cash, cash equivalents and         $   494,170         $   403,761    
short-term investments

Contact:

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Planning
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