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Kulicke & Soffa Industries' CEO Discusses F2Q12 Results - Earnings Call Transcript

I would now like to turn the call over to Mr. Bruno Guilmart. Please go ahead, Bruno.

Bruno Guilmart

Thank you, Joe and thank you all for joining our call today. We are pleased with our business performance this quarter. Results came in above the high end of our prior guidance. Importantly, the revenue strength was matched by gross margin strength. Our continued success strategy – that exposed our business strategy and our long term road map.

Our focus remains on expanding our technology and market leadership while pursuing areas that can reduce the cyclicality in our business. In immediate terms, we continue to capture all opportunities possible related to yield bearing and broadening position for growth suffered. We are still (inaudible) and capacity. This momentum gives us a distinct business advantage as we move forward.

In terms of strength in the March quarter, we’ve – for normal seasonal recovery as the December quarter’s demand was – is typically lower. Unlike the prior quarter, we are trying to see encouraging data points. This is led by positive equipment inventory trends, capacity levels and end market gross drivers like mobile reputations. Although we continue to see clear signs of the improved demand in the short term, our management team remains focused in tracing the company’s – for long term this includes new product initiatives, ongoing gross margin improvements, operational efficiency gain and overall cash generation.

This ever-present focus on continual improvement has enabled us to better manage our financial performance to the cycle. Over the past three years, our average gross margin exceeded 45%, our average operating margin has been over 17% and we generated nearly $300 million of cash.

For the March quarter, we’ve achieved gross margin of 45.6% on operating profit of $20.2 million and we generated an additional 22.4 million of cash. All this during a period of relatively soft demand combined with a short quarter due to the Chinese New Year holiday.

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