Kulicke & Soffa Reports Third Quarter 2013 Results

Kulicke & Soffa Reports Third 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 third fiscal quarter ended June 29, 2013.

Quarterly Results

Fiscal Q3 2013

Change vs.
Fiscal Q3 2012

Change vs.
Fiscal Q2 2013

Net Revenue

$141.2 million

(44.7)%

33.1%

Gross Profit

$65.9 million

(46.2)%

35.0%

Gross Margin

46.7%

(120) bps

70 bps

Income from Operations

$18.9 million

(75.3)%

130.4%

Operating Margin

13.4%

(1,650) bps

570 bps

Net Income

$18.9 million

(72.3)%

157.5%

Net Margin

13.4%

(1,330) bps

650 bps

EPS - Diluted

$0.25

(72.2)%

150%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "Revenue for the third fiscal quarter exceeded the high end of our guidance range. This sequential growth reflects a higher proportion of sales to our top 5 customers, along with a broader recovery of the sector. We are encouraged by our ability to maintain our cost structure while also maintaining our gross margins at 46.7%, above our trailing 3 year average of 46.0%. This reflects our brand premium and technology leadership in the market place, and also our highly responsive, scalable operating model."


Third Quarter Fiscal 2013 Key Product Trends

  • Ball bonder equipment net revenue increased 44.7% over the March quarter.

  • 85.7% of ball bonder equipment was sold as copper capable.

  • Wedge bonder equipment net revenue increased 7.8% over the March quarter.

Third Quarter Fiscal 2013 Financial Highlights

  • Net revenue of $141.2 million.

  • Gross margin of 46.7%.

  • Net income was $18.9 million or $0.25 per share.

  • Cash and cash equivalents were $508.5 million as at June 29, 2013.

Fourth Quarter Fiscal 2013 Outlook

The Company expects net revenue in the fourth fiscal quarter of 2013 ending September 28, 2013 to be approximately $175 million to $185 million.

Looking forward, Bruno Guilmart commented, "In addition to the revenue opportunities around the copper transition, demand has strengthened in the mobile device and memory segments. We also see increasing volumes from local customers in emerging markets, which further diversifies our revenue profile. We are focused on efficiently ramping capacity and scale to meet the anticipated rise in demand. In the longer term, by leveraging our technical strength and healthy balance sheet, we remain dedicated on maintaining our leading market positions while diligently exploring and entering new growth opportunities."

Earnings Conference Call Details

A conference call to discuss these results will be held today, July 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 August 7, 2013 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 417170. 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 and 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 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

Net revenue:

Equipment

$

125,103

$

237,095

$

316,088

$

474,297

Expendable Tools

16,078

18,430

45,242

47,560

Total net revenue

141,181

255,525

361,330

521,857

Cost of sales:

Equipment

67,632

125,892

175,204

257,731

Expendable Tools

7,635

7,190

19,867

19,720

Total cost of sales

75,267

133,082

195,071

277,451

Gross profit:

Equipment

57,471

111,203

140,884

216,566

Expendable Tools

8,443

11,240

25,375

27,840

Total gross profit

65,914

122,443

166,259

244,406

Operating expenses:

Selling, general and administrative

28,095

27,213

80,329

79,937

Research and development

15,783

16,018

46,243

46,077

Amortization of intangible assets

2,296

2,294

6,883

6,883

Restructuring

873

642

1,542

2,615

Total operating expenses

47,047

46,167

134,997

135,512

Income from operations:

Equipment

16,474

70,852

22,647

98,745

Expendable Tools

2,393

5,424

8,615

10,149

Total income from operations

18,867

76,276

31,262

108,894

Other income (expense):

Interest income

267

200

629

651

Interest expense

(149

)

(1

)

(633

)

Interest expense: non-cash

(1,306

)

(5,174

)

Income from operations before income taxes

19,134

75,021

31,890

103,738

Provision for income taxes

247

6,847

2,063

10,440

Net income

$

18,887

$

68,174

$

29,827

$

93,298

Net income per share:

Basic

$

0.25

$

0.92

$

0.40

$

1.26

Diluted

$

0.25

$

0.90

$

0.39

$

1.24

Weighted average shares outstanding:

Basic

75,231

74,067

75,083

73,811

Diluted

76,473

75,994

76,204

75,516

Three months ended

Nine months ended

Supplemental financial data:

June 29, 2013

June 30, 2012

June 29, 2013

June 30, 2012

Depreciation and amortization

$

4,798

$

4,171

$

14,302

$

12,650

Capital expenditures

2,554

2,264

5,957

5,145

Equity-based compensation expense:

Cost of sales

53

44

275

226

Selling, general and administrative

2,125

1,583

6,375

5,027

Research and development

418

450

1,438

1,316

Total equity-based compensation expense

$

2,596

$

2,077

$

8,088

$

6,569

As of

June 29, 2013

June 30, 2012

Backlog of orders

$

125,000

$

224,000

Number of employees

2,437

3,208

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

As of

June 29, 2013

September 29, 2012

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$

508,493

$

440,244

Accounts and notes receivable, net of allowance for doubtful accounts of $817 and $937 respectively

147,038

188,986

Inventories, net

48,087

58,994

Prepaid expenses and other current assets

21,565

21,577

Deferred income taxes

3,812

3,515

TOTAL CURRENT ASSETS

728,995

713,316

Property, plant and equipment, net

32,881

28,441

Goodwill

41,546

41,546

Intangible assets

13,504

20,387

Other assets

9,622

11,919

TOTAL ASSETS

$

826,548

$

815,609

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

46,246

$

57,231

Accrued expenses and other current liabilities

48,509

57,946

Income taxes payable

2,974

8,192

TOTAL CURRENT LIABILITIES

97,729

123,369

Deferred income taxes

36,481

37,875

Other liabilities

9,100

10,698

TOTAL LIABILITIES

143,310

171,942

SHAREHOLDERS' EQUITY

Common stock, no par value

464,078

455,122

Treasury stock, at cost

(46,356

)

(46,356

)

Accumulated income

262,347

232,520

Accumulated other comprehensive income

3,169