SOURCE: Kulicke & Soffa

January 25, 2007 07:00 ET

Kulicke & Soffa Reports Results for Its First Fiscal Quarter; Earnings of $0.08 per Diluted Share

FORT WASHINGTON, PA -- (MARKET WIRE) -- January 25, 2007 -- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC)

--  Q1 Revenue exceeds the Company's high-end guidance
--  Q1 Net Income of $0.08 per diluted share
--  $139.5 million cash position after the acquisition of Alphasem
    

Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) today announced financial results for its quarter ended December 30, 2006 ("first quarter").

Net revenue from continuing operations for the first quarter was $152.3 million compared to $161.4 million for the previous quarter and $204.6 million for the comparable year-ago quarter. Income from continuing operations was $4.9 million or $0.08 per diluted share, versus $12.9 million or $0.19 per diluted share for the previous quarter, and $30.6 million or $0.45 per diluted share for the year-ago quarter.

Included in net revenue from continuing operations for the first quarter is $71.0 million of gold metal content compared to $80.4 million for the previous quarter and $59.7 million for the year-ago quarter. These amounts are included in both our revenue and cost of sales. The cost of the gold metal content of our wire is passed through to our customers without generating a profit.

Scott Kulicke, chairman and chief executive officer, commented on the first quarter, "We are pleased with the financial results for the quarter, especially in terms of net income and cash from operations. The Company was able to achieve good financial performance in spite of revenue approaching what we believe to be trough levels as the industry moves through the semiconductor business cycle." He continued, "In addition, we are pleased that the Alphasem integration is tracking according to our plan. As we have previously discussed, the die attach equipment market will provide a key growth driver for the Company as we establish ourselves in that market. The engineering and product teams are already working together, coordinating wire bonder and die bonder product updates and new designs."

First Quarter Review and Highlights:

Key Product Trends

--  K&S's next generation wire bonder program completed a major milestone
    in the first quarter. Several machines were completely assembled in the
    Singapore factory and delivered to the R&D facilities in the U.S. and Asia
    to begin system/process testing.
    
--  The K&S CuPRAplus capillary was introduced to the market in the first
    quarter. This capillary offers increased copper wire bond strength and a
    more robust bonding process for customers that are using fine copper wire
    as a substitute for gold wire interconnects.
    
    
--  K&S introduced a new gold bonding wire, called Formax. This special
    wire alloy provides a growth opportunity by expanding the K&S wire product
    portfolio in the high-end packaging market. It is designed for customers
    producing stacked-die and multi-tier packages requiring accurate,
    consistent loop shapes, and higher wire bond yields.
    
Technology & Manufacturing
--  K&S copper wire bonding technology remained very active during the
    first quarter. One IDM customer, which is currently producing chips
    assembled with copper wire, has purchased additional kits with special
    hardware and software to convert K&S wire bonders from gold wire bonding to
    the copper wire bonding process.
    
--  We consolidated Alphasem's China manufacturing operations into the K&S
    factory in Suzhou, China.
    
Financial Review
--  Cash, cash equivalents, and short-term investments decreased
    approximately $18 million, from $157.3 million to $139.5 million at the end
    of the first quarter. The Company used $29.4 million in cash for Alphasem
    (including deal costs), materially offset by cash generated from
    operations.
    
Guidance for Second Fiscal Quarter:

Mr. Kulicke provided the following revenue guidance, "We expect revenue in the March quarter to be about $140 million. This is primarily the result of lower equipment sales anticipated in the March quarter. In addition, capillary and wire unit volumes are expected to be seasonally lower due to the lunar New Year holidays in February."

Earnings Conference Call Details

A conference call to discuss these results will be held today, January 25, 2007 beginning at 9:00 AM EST. Interested participants may call 877-407-8037 for the teleconference or log on to http://www.kns.com/investors/events for listen-only mode. A replay will be available approximately one hour after the completion of the call by calling toll free 877-660-6853 or internationally 201-612-7415 and using the following replay access codes 5521 (account number) and 226443 (conference number). A replay will also be available on the K&S web site at http://www.kns.com/investors. The replay will be available via phone and web site through March 25, 2007.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is the world's leading supplier of semiconductor assembly equipment, materials, and technology. K&S provides wire bonders, capillaries, wire, die bonders, and die collets for all types of semiconductor packages using wire as the internal electrical interconnections. K&S is the only major supplier to the semiconductor assembly industry that provides customers with semiconductor assembly equipment along with the complementing packaging materials and process technology that enable our customers to achieve the highest possible yields and throughput. The ability to provide these assembly related products is unique to Kulicke & Soffa, and allows us to develop system solutions to the new technology challenges inherent in assembling and packaging next-generation semiconductor devices. Kulicke & Soffa's web site address is http://www.kns.com.

Caution Concerning 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, revenue growth, sales, profitability, financial results, unit volumes, product development, release of products, industry forecasts, the semiconductor business cycle, and projected continued demand for our products. 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 of failure to successfully manage our operations; the risk that anticipated orders may not materialize or that orders received may be postponed or canceled, generally without charges; the volatility in the demand for semiconductors and our products and services; the risk that we may not be able to develop and manufacture new products and product enhancements on a timely and cost effective basis; acts of terrorism and violence; overall global economic conditions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with a substantial foreign customer and supplier base and substantial foreign manufacturing operations; potential instability in foreign capital markets; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2006 Annual report on Form 10-K and our other filings with the Securities and Exchange Commission. Kulicke & Soffa Industries 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 STATEMENT OF OPERATIONS
            (In thousands, except per share and employee data)
                                (Unaudited)

                                                   Three months ended
                                              December 31,   December 30,
                                              -------------  -------------
                                                  2005           2006
                                              -------------  -------------
Net revenue                                   $     204,632  $     152,308

Cost of sales                                       139,169        113,589
                                              -------------  -------------

Gross profit                                         65,463         38,719
                                              -------------  -------------

Selling, general and administrative                  20,582         22,055
Research and development, net                         8,668         11,538
                                              -------------  -------------

Operating expense                                    29,250         33,593
                                              -------------  -------------

Income from operations                               36,213          5,126

Interest income                                         712          1,457
Interest expense                                       (958)          (636)
                                              -------------  -------------
Income from continuing operations
 before income taxes                                 35,967          5,947

Provision for income taxes                            5,349          1,021
                                              -------------  -------------
Income from continuing operations                    30,618          4,926
                                              -------------  -------------

Loss from discontinued operations                    (5,317)             -

                                              -------------  -------------
Net income                                    $      25,301  $       4,926
                                              =============  =============

Income per share from continuing operations:
    Basic                                     $        0.59  $        0.09
                                              =============  =============
    Diluted                                   $        0.45  $        0.08
                                              =============  =============

Loss per share from discontinued operations:
    Basic                                     $       (0.10) $           -
                                              =============  =============
    Diluted                                   $       (0.07) $           -
                                              =============  =============

Net income per share:
    Basic                                     $        0.49  $        0.09
                                              =============  =============
    Diluted                                   $        0.38  $        0.08
                                              =============  =============

Weighted average shares outstanding:
    Basic                                            52,044         57,301
    Diluted                                          68,239         69,456

Stock-based compensation expense included in
 continuing operations:
    Cost of sales                             $          98  $          67
    Selling, general and administrative                 815            851
    Research and development, net                       240            261
                                              -------------  -------------
Total continuing operations                   $       1,153  $       1,179
                                              =============  =============
     Discontinued operations                  $         347  $           -
                                              =============  =============

                                                   Three months ended
                                               December 31,   December 30,
                                              -------------  -------------
Additional financial data:                        2005           2006
                                              -------------  -------------

Depreciation and amortization
  Continuing operations                       $       2,809  $       2,305
  Discontinued operations                     $       1,364  $           -

Capital expenditures
  Continuing operations                       $       2,360  $       1,100
  Discontinued operations                     $         605  $           -

Backlog of orders
  Continuing operations                       $      66,000  $      56,000
  Discontinued operations                     $       7,000  $           -

Number of employees
  Continuing operations                               2,580          2,700
  Discontinued operations                               932              -



                     KULICKE & SOFFA INDUSTRIES, INC.
                        CONSOLIDATED BALANCE SHEET
                              (In thousands)

                                                              (Unaudited)
                                              September 30,  December 30,
                                                  2006           2006
                                              -------------  -------------
                  ASSETS

CURRENT ASSETS
Cash and cash equivalents                     $     133,967  $     127,898
Restricted cash                                       1,973              -
Short-term investments                               21,343         11,560
Accounts and notes receivable (less allowance
 for doubtful accounts: 9/30/06 - $3,068;
 12/30/06 - $4,181)                                 120,651        123,118
Inventories, net                                     47,866         58,282
Current assets of discontinued operations             3,832              -
Prepaid expenses and other current assets            10,446         10,996
Deferred income taxes                                 3,990          3,992
                                              -------------  -------------

  TOTAL CURRENT ASSETS                              344,068        335,846

Property, plant and equipment, net                   28,487         39,271
Intangible assets, (net of accumulated
 amortization: 9/30/06 - $0;
 12/30/06 - $0)                                           -            626
Goodwill                                             29,684         29,684
Other assets                                          3,262          4,657
                                              -------------  -------------

  TOTAL ASSETS                                $     405,501  $     410,084
                                              =============  =============

         LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Accounts payable                              $      42,881  $      37,484
Accrued expenses                                     32,970         32,374
Income taxes payable                                 19,239         20,587
                                              -------------  -------------

  TOTAL CURRENT LIABILITIES                          95,090         90,445

Long term debt                                      195,000        195,000
Other liabilities                                    10,640         10,331
Deferred taxes                                       25,465         26,455
                                              -------------  -------------

  TOTAL LIABILITIES                                 326,195        322,231
                                              -------------  -------------


Commitments and contingencies                             -              -

SHAREHOLDERS' EQUITY
Common stock, without par value                     277,194        279,631
Accumulated deficit                                (191,824)      (186,898)
Accumulated other comprehensive loss                 (6,064)        (4,880)
                                              -------------  -------------

  TOTAL SHAREHOLDERS' EQUITY                         79,306         87,853
                                              -------------  -------------
  TOTAL LIABILITIES AND
   SHAREHOLDERS' EQUITY                       $     405,501  $     410,084
                                              =============  =============



                     KULICKE & SOFFA INDUSTRIES, INC.
                  OPERATING RESULTS BY BUSINESS SEGMENT
                              (In thousands)
                                (Unaudited)


Fiscal 2007:
                                                   Packaging
                                      Equipment    Materials
Three months ended  December 30,        Segment     Segment    Consolidated
 2006:                               ------------ ------------ ------------

Net revenue                          $     58,166 $     94,142 $    152,308
Cost of sales                              33,176       80,413      113,589
                                     ------------ ------------ ------------
Gross profit                               24,990       13,729       38,719
Operating costs                            24,518        9,075       33,593
                                     ------------ ------------ ------------
Income from operations               $        472 $      4,654 $      5,126
                                     ============ ============ ============


Fiscal 2006:
                                                   Packaging
                                      Equipment    Materials
Three months ended December 31,        Segment      Segment    Consolidated
 2005:                               ------------ ------------ ------------

Net revenue                          $    120,672 $     83,960 $    204,632
Cost of sales                              68,695       70,474      139,169
                                     ------------ ------------ ------------
Gross profit                               51,977       13,486       65,463
Operating costs                            21,943        7,307       29,250
                                     ------------ ------------ ------------
Income from operations               $     30,034 $      6,179 $     36,213
                                     ============ ============ ============

Contact Information

  • Company Contact:
    Michael Sheaffer
    215-784-6411
    215-784-6167 fax
    Email Contact