Kulicke & Soffa Reports Second Quarter 2013 Results

Kulicke & Soffa Reports Second 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 second fiscal quarter ended March 30, 2013.

Quarterly Results

Fiscal Q2 2013

Change vs.
Fiscal Q2 2012

Change vs.
Fiscal Q1 2013

Net Revenue

$106.1 million

(27.5%)

(7.0%)

Gross Profit

$48.8 million

(26.8%)

(5.2%)

Gross Margin

46.0%

40 bps

80 bps

Income from Operations

$8.2 million

(59.5%)

94.8%

Operating Margin

7.7%

(610) bps

400 bps

Net Income

$7.3 million

(55.9%)

103.6%

Net Margin

6.9%

(450) bps

370 bps

EPS - Diluted

$0.10

(54.5%)

100%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "The second fiscal quarter's revenue exceeded the high-end of our guidance range. The broadening of our customer base helped partially offset softer demand from certain key customers. Importantly, despite the recent softness and based on the latest VLSI reports and internal data, we believe that we have at least maintained our market share and we remain confident in the ongoing copper transition."


Second Quarter Fiscal 2013 Key Product Trends

  • Ball bonder equipment net revenue decreased 4.3% over the December quarter.

  • 67.7% of ball bonder equipment was sold as copper capable bonders.

  • Wedge bonder equipment net revenue decreased 56.6% from the December quarter.

Second Quarter Fiscal 2013 Financial Highlights

  • Net revenue of $106.1 million.

  • Gross margin of 46.0%.

  • Net income was $7.3 million or $0.10 per share.

  • Cash and cash equivalents were $498.6 million as at March 30, 2013.

Third Quarter Fiscal 2013 Outlook

The Company expects net revenue in the third fiscal quarter of 2013 ending June 29, 2013 to be approximately $120 million to $130 million.

Looking forward, Bruno Guilmart commented, "Wire bonding remains a very significant manufacturing process step for the overwhelming majority of global semiconductor products. We do not expect this to change over the foreseeable future, as wire bonding is and will likely continue to be the most cost-effective interconnect solution. We remain positive in our core business outlook and continue to invest in new products that maintain our existing market leadership positions, such as our recently released PowerFusionPSTM line of wedge bonding solutions. We also remain focused on new opportunities, such as investments in our advanced packaging program, which will provide new vectors of long-term growth with an attractive return on investment profile."

Earnings Conference Call Details

A conference call to discuss these results will be held today, April 30, 2013, 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 investor.kns.com.

A replay will be available from approximately one hour after the completion of the call through May 7, 2013 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 421379. A webcast replay will also be available at investor.kns.com.

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

Six months ended

March 30,

March 31,

March 30,

March 31,

2013

2012

2013

2012

Net revenue:

Equipment

$

91,083

$

131,053

$

190,985

$

237,202

Expendable Tools

15,027

15,255

29,164

29,130

Total net revenue

106,110

146,308

220,149

266,332

Cost of sales:

Equipment

51,140

72,835

107,572

131,839

Expendable Tools

6,150

6,786

12,232

12,530

Total cost of sales

57,290

79,621

119,804

144,369

Gross profit:

Equipment

39,943

58,218

83,413

105,363

Expendable Tools

8,877

8,469

16,932

16,600

Total gross profit

48,820

66,687

100,345

121,963

Operating expenses:

Selling, general and administrative

26,204

27,484

52,234

52,724

Research and development

12,207

15,911

30,460

30,059

Amortization of intangible assets

2,294

2,294

4,587

4,589

Restructuring

(75

)

756

669

1,973

Total operating expenses

40,630

46,445

87,950

89,345

Income from operations:

Equipment

4,428

18,016

6,173

27,893

Expendable Tools

3,762

2,226

6,222

4,725

Total income from operations

8,190

20,242

12,395

32,618

Other income (expense):

Interest income

188

191

362

451

Interest expense

(1

)

(242

)

(1

)

(484

)

Interest expense: non-cash

-

(1,958

)

-

(3,868

)

Income from operations before income taxes

8,377

18,233

12,756

28,717

Provision for income taxes

1,041

1,616

1,816

3,593

Net income

$

7,336

$

16,617

$

10,940

$

25,124

Net income per share:

Basic

$

0.10

$

0.23

$

0.15

$

0.34

Diluted

$

0.10

$

0.22

$

0.14

$

0.33

Weighted average shares outstanding:

Basic

75,166

73,825

75,009

73,683

Diluted

76,553

75,553

76,332

75,160

Three months ended

Six months ended

March 30,

March 31,

March 30,

March 31,

Supplemental financial data:

2013

2012

2013

2012

Depreciation and amortization

$

4,702

$

4,221

$

9,504

$

8,479

Capital expenditures

$

1,787

$

1,383

$

3,403

$

2,881

Equity-based compensation expense:

Cost of sales

$

74

$

97

$

222

$

182

Selling, general and administrative

1,925

1,833

4,251

3,444

Research and development

293

463

1,020

866

Total equity-based compensation expense

$

2,292

$

2,393

$

5,493

$

4,492

As of

March 30,

March 31,

2013

2012

Backlog of orders

$

56,000

$

164,000

Number of employees

2,328

2,802

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

March 30,

September 29,

2013

2012

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

498,619

$

440,244

Short-term investments

-

-

Accounts and notes receivable, net of allowance for doubtful accounts of $852 and $937, respectively

117,232

188,986

Inventories, net

45,594

58,994

Prepaid expenses and other current assets

18,467

21,577

Deferred income taxes

3,511

3,515

TOTAL CURRENT ASSETS

683,423

713,316

Property, plant and equipment, net

26,592

28,441

Goodwill

41,546

41,546

Intangible assets

15,798

20,387

Other assets

11,039

11,919

TOTAL ASSETS

$

778,398

$

815,609

LIABILITIES AND SH