Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2012 Results

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Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2012 Results

SINGAPORE--(BUSINESS WIRE)-- Kulicke & Soffa Industries, Inc. (NAS: KLIC) ("K&S" or the "Company") today announced results for its fourth quarter and fiscal year ended September 29, 2012.

Quarterly Results
  Change vs. Change vs.
  Fiscal Q4 2012 Fiscal Q4 2011 Fiscal Q3 2012
Net Revenue $269.2 million 49.2% 5.3%
Gross Profit$123.0 million48.6%0.4%
Gross Margin 45.7% (20) bps (220) bps
Income from Operations$70.3 million210.0%(7.8%)
Operating Margin 26.1% 1,350 bps (380) bps
Net Income$67.3 million3,418.9%(1.3%)
Net Margin 25.0% 2,390 bps (170) bps
EPS - Diluted $0.89 2,866.7% (1.1%)
 

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "The fourth quarter ended a very strong year for K&S with results at the high-end of our guidance. We are succeeding in a challenging market due to our multi-segment leadership, flexible manufacturing strategy, R&D strength, free cash flow generation and our improving, debt-free balance sheet. We were able to achieve record annual net income of $160.6 million due to the operating leverage we have created in our business combined with a favorable product mix."


Fourth Quarter Fiscal 2012 Key Product Trends

  • Ball bonder equipment net revenue increased 7.0% over the June quarter.
  • 84.5% of ball bonder equipment was sold as copper capable bonders.
  • Wedge bonder equipment net revenue increased 20.8% from the June quarter.

Fiscal Year 2012 Financial Highlights

  • Net revenue of $791.0 million.
  • Gross margin of 46.4%.
  • Net income of $160.6 million or $2.13 per share.
  • Total cash and short-term investments were $440.2 million on September 29, 2012, a $59.5 million increase from the prior quarter ended June 30, 2012.

First Quarter Fiscal Year 2013 Outlook

The Company expects net revenue in the typically seasonally slower fiscal first quarter of 2013 ending December 29, 2012, to be approximately $95 million to $115 million.

Looking forward, Bruno Guilmart commented, "We are confident in the near and long-term prospects for our business. Structural improvements we previously implemented give us an added advantage in navigating periods of fluctuating demand. These improvements include our corporate-wide cost containment program and our now debt-free balance sheet. We also continue to benefit from our flexible manufacturing strategy and strong product offerings. In addition to maintaining a disciplined operations strategy, we are pursuing opportunities that will position us for growth."

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 8, 2012, 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 November 15, 2012 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 401769. A webcast replay will also be available at www.kns.com/investors/events.

About Kulicke & Soffa

Kulicke & Soffa (NAS: 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, our improving balance sheet, 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. 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 Twelve months ended
September 29, October 1,September 29, October 1,
 2012  2011  2012  2011 
 
Net revenue:
Equipment$252,785$161,225$727,082$759,331
Expendable Tools 16,381   19,146  63,941  71,070 
Total net revenue269,166180,371791,023830,401
 
Cost of sales:
Equipment139,47989,350397,210412,914
Expendable Tools 6,703  8,275  26,423  29,578 
Total cost of sales146,18297,625423,633442,492
 
Gross profit:
Equipment113,30671,875329,872346,417
Expendable Tools 9,678  10,871  37,518  41,492 
Total gross profit 122,984  82,746  367,390  387,909 
 
Operating expenses:
Selling, general and administrative31,02940,471110,966138,273
Research and development17,36916,82163,44665,135
Amortization of intangible assets2,2952,3869,1789,549
Restructuring 1,959  377  4,574  4,892 
Total operating expenses 52,652  60,055  188,164  217,849 
 
 
Income from operations:
Equipment67,04618,908165,791156,786
Expendable Tools 3,286  3,783  13,435  13,274 
Total income from operations70,33222,691179,226170,060
 
Other income (expense):
Interest income182202833648
Interest expense-(241)(633)(965)
Interest expense: non-cash (1) (1,886) (5,175) (7,315)
 
Income from operations before income taxes70,51320,766174,251162,428
 
Provision (benefit) for income taxes3,23118,85413,67134,818
    
Net income$67,282 $1,912 $160,580 $127,610 
 
Net income per share:
Basic$0.91 $0.03 $2.17 $1.77 
Diluted$0.89 $0.03 $2.13 $1.73 
 
Weighted average shares outstanding:
Basic74,11672,68873,88771,820
Diluted75,94274,18475,50273,341
 
Three months endedTwelve months ended
September 29,October 1,September 29,October 1,
Supplemental financial data: 2012  2011  2012  2011 
 
Depreciation and amortization$4,615$4,487$17,265$17,761
 
Capital expenditures$1,757$1,873$6,902$7,688
 
Equity-based compensation expense:
Cost of sales$86$54$312$213
Selling, general and administrative1,5758876,6025,671
Research and development 461  358  1,777  1,328 
Total equity-based compensation expense$2,122 $1,299 $8,691 $7,212 
 
As of
September 29,October 1,
 2012  2011 
 
Backlog of orders$90,000$103,000
 
Number of employees2,9362,866
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 September 29, October 1,
 2012  2011 
ASSETS
 
CURRENT ASSETS
Cash and cash equivalents$440,244$378,188
Short-term investments-6,364

Accounts and notes receivable, net of allowance for doubtful accounts of $937 and $2,194, respectively

188,986138,649
Inventories, net58,99473,092
Prepaid expenses and other current assets21,57721,897
Deferred income taxes 3,515  1,651 
 
TOTAL CURRENT ASSETS713,316619,841
 
Property, plant and equipment, net28,44126,501
Goodwill41,54641,546
Intangible assets20,38729,565
Other assets 11,919  10,938 
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