Kulicke & Soffa Reports First Quarter 2013 Results

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Kulicke & Soffa Reports First Quarter 2013 Results

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

 
Quarterly Results
   

Fiscal Q1 2013

  Change vs.

Fiscal Q1 2012

  Change vs.

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 Operations$4.2 million(66.0%)(94.0%)
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 (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 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 revenue114,039120,024
 
Cost of sales:
Equipment56,43259,004
Expendable Tools 6,082  5,744 
Total cost of sales62,51464,748
 
Gross profit:
Equipment43,47047,145
Expendable Tools 8,055  8,131 
Total gross profit 51,525  55,276 
 
Operating expenses:
Selling, general and administrative26,03025,240
Research and development18,25314,148
Amortization of intangible assets2,2932,295
Restructuring 744  1,217 
Total operating expenses 47,320  42,900 
 
 
Income from operations:
Equipment1,7459,877
Expendable Tools 2,460  2,499 
Total income from operations4,20512,376
 
Other income (expense):
Interest income174260
Interest expense-(242)
Interest expense: non-cash -  (1,910)
 
Income from operations before income taxes4,37910,484
 
Provision for income taxes7751,977
   
Net income$3,604 $8,507 
 
Net income per share:
Basic$0.05 $0.12 
Diluted$0.05 $0.11 
 
Weighted average shares outstanding:
Basic74,85273,540
Diluted76,20974,628
 
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 administrative2,3261,611
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 employees2,6092,735
 
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 cash2,900-

Accounts and notes receivable, net of allowance for doubtful accounts of $1,019 and $937, respectively

98,715188,986
Inventories, net54,32858,994
Prepaid expenses and other current assets16,01821,577
Deferred income taxes 3,522  3,515 
 
TOTAL CURRENT ASSETS669,653713,316
 
Property, plant and equipment, net28,78128,441
Goodwill41,54641,546
Intangible assets18,09220,387
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 liabilities42,04057,946
Income taxes payable 6,817  8,192 
 
TOTAL CURRENT LIABILITIES69,162123,369
 
Deferred income taxes38,00737,875
Other liabilities 10,994  10,698 
 
TOTAL LIABILITIES 118,163  171,942 
 
SHAREHOLDERS' EQUITY
Common stock, no par value458,482455,122
Treasury stock, at cost(46,356)(46,356)
Accumulated income236,124232,520
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, 2012December 31, 2011
 
Net cash provided by operations$58,494$34,324
Net cash used in discontinued operations -  (486)
Net cash provided by operating activities$58,494$33,838
 
Net cash used in investing activities(4,516)(9,982)
 
Net cash provided by financing activities1591,576
Effect of exchange rate changes on cash and cash equivalents (211) 141 
Changes in cash and cash equivalents$53,926$25,573
Cash and cash equivalents, beginning of period 440,244  378,188 
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