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Kulicke & Soffa Reports Third Quarter Fiscal 2012 Results

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 administrative 27,213 31,715 79,937 97,800
Research and development 16,018 16,595 46,077 48,314
Amortization of intangible assets 2,294 2,391 6,883 7,163
Restructuring   642     1,740     2,615     4,516  

Total operating expenses

  46,167     52,441     135,512     157,793  
 
 
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 operations 76,276 81,653 108,894 147,370
 
Other income (expense):
Interest income 200 185 651 445
Interest expense (149 ) (241 ) (633 ) (724 )
Interest expense: non-cash   (1,306 )   (1,877 )   (5,174 )   (5,429 )
 
Income from operations before income taxes 75,021 79,720 103,738 141,662
 
Provision for income taxes 6,847 9,006 10,440 15,964
       
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 data: 2012 2011 2012 2011
 
Depreciation and amortization $ 4,171 $ 4,470 $ 12,650 $ 13,274
 
Capital expenditures $ 2,264 $ 1,226 $ 5,145 $ 5,815
 
Equity-based compensation expense:
Cost of sales $ 44 $ 55 $ 226 $ 159
Selling, general and administrative 1,583 1,673 5,027 4,784
Research and development   450     340     1,316     970  
Total equity-based compensation expense $ 2,077   $ 2,068   $ 6,569   $ 5,913  
 
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, respectively

177,864 138,649
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 operations $ 66,701 $ 50,300 $ 124,648 $ 152,087
Net cash used in discontinued operations   (424 )     (579 )   (1,469 )     (1,547 )
Net cash provided by operating activities $ 66,277 $ 49,721 $ 123,179 $ 150,540
 
Net cash used in investing activities, continuing operations (2,264 ) (1,420 ) (13,629 ) (9,057 )
 
Net cash provided by (used in) financing activities, continuing operations (109,515 ) 4,805 (106,972 ) 8,836
Effect of exchange rate changes on cash and cash equivalents   60       499     (69 )     850  
Changes in cash and cash equivalents $ (45,442 ) $ 53,605 $ 2,509 $ 151,169
Cash and cash equivalents, beginning of period   426,139       275,676     378,188       178,112  
Cash and cash equivalents, end of period $ 380,697   $ 329,281   $ 380,697   $ 329,281  
 
Short-term investments & restricted cash   -       6,253     -       6,253  
Total cash, cash equivalents, restricted cash and short-term investments $ 380,697     $ 335,534   $ 380,697     $ 335,534  
 




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