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KULICKE & SOFFA INDUSTRIES, INC. REPORTS RESULTS FOR ITS FOURTH QUARTER AND FISCAL YEAR 2010

Kulicke & Soffa Industries, Inc. Reports Results for its Fourth Quarter and Fiscal Year 2010

November 10, 2010 at 12:00 AM EST
Kulicke & Soffa Industries, Inc. Reports Results for its Fourth Quarter and Fiscal Year 2010

FORT WASHINGTON, Pa., Nov 10, 2010 (BUSINESS WIRE) -- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S" or the "Company")today announced results for its fourth fiscal quarter and year ended October 2, 2010. This press release contains both GAAP results and non-GAAP measures.

For its fourth fiscal quarter of 2010, the Company reported net revenue of $259.3 million and net income of $56.1 million, or $0.78 per diluted share. On a non-GAAP basis* for its fourth quarter, the Company reported net income of $63.8 million, or $0.89 per diluted share.

Quarterly GAAP Results

Fiscal Q4 2010

Change vs.
Fiscal Q4 2009**

Change vs.
Fiscal Q3 2010

Net Revenue $259.3 million 134.6% 17.2%
Gross Profit $112.3 million 138.0% 13.3%
Gross Margin 43.3% 60 basis points (150) basis points
Income from Operations $56.7 million 604.9% 13.2%
Operating Margin 21.9% 1,460 basis points (70) basis points
Net Income $56.1 million 872.4% 14.2%
Net Margin 21.6% 1,640 basis points (60) basis points
EPS - Diluted $0.78 875.0% 20.0%
Quarterly Non-GAAP Measures*

Fiscal Q4 2010

Change vs.
Fiscal Q4 2009**

Change vs.
Fiscal Q3 2010

Gross Profit $112.4 million 138.0% 13.3%
Gross Margin 43.4% 70 basis points (140) basis points
Income from Operations $63.0 million 412.9% 14.3%
Operating Margin 24.3% 1,320 basis points (60) basis points
Net Income $63.8 million 492.0% 14.6%
Net Margin 24.6% 1,490 basis points (50) basis points
EPS - Diluted $0.89 456.3% 20.3%

* Non-GAAP measures exclude: equity-based compensation; amortization of intangibles; restructuring; non-cash interest expense; net tax settlement expense (benefit) and other tax adjustments; and related tax effects on non-GAAP adjustments (see reconciliations of GAAP results to non-GAAP measures in the following financial schedules).
** As adjusted for ASC No. 470.20, Debt, Debt With Conversion Options.

Commenting on the results, Bruno Guilmart, President and Chief Executive Officer, said, "In fiscal 2010 we saw significant increases in customer demand and revenue growth, driven by a general recovery of the semiconductor industry and compounded by increased business opportunities such as the transition from gold to copper wire, market share gains in LED bonders, increased wedge bonder demand for power management applications, and the launch of our new 'IStack' high performance die bonder.

"Looking forward to the December quarter we forecast revenue to be in the $125 million to $135 million range. The same level of operational flexibility which allowed us to cost effectively ramp throughout fiscal 2010 will carry forward into the December quarter and enable us to reduce our cost accordingly as we produce at these lower revenue levels."

Key Product Trends

  • Ball bonder net revenue increased by 19.9% over the June quarter.

    • Demand continues for the K&S copper solution; 57.4% of ball bonders sold during the quarter were configured for copper.
    • 8.4% of ball bonders sold were configured for LED applications.
  • The newly released IConn ProCu Wire Bonder will allow for a more efficient industry transition from gold to copper wire through optimized copper wire-bonding processes.
  • Heavy wire wedge bonder demand continues to strengthen; increased volumes are anticipated through the December quarter.

Financial Highlights

  • Revenue increased 17.2% sequentially, achieving the high end of guidance.
  • GAAP operating margin was 21.9%, or 24.3% on a non-GAAP basis.
  • GAAP net income was $56.1 million, or $63.8 million on a non-GAAP basis.
  • GAAP diluted EPS was $0.78, or $0.89 on a non-GAAP basis.
  • Continuing operations generated $19.7 million of net cash.
  • Net revenue for the December quarter is expected to be in the $125 million to $135 million range.

Earnings Conference Call Details

A conference call to discuss these results will be held tomorrow, November 11, 2010 beginning at 9:00 a.m. (ET). To access the conference call, interested parties may call (877) 407-8037 or (201) 689-8037, or log on to Investor 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 353660 (replay ID number). A replay will also be available on the K&S website at Investor Events . The replay will be available via phone and website for a limited time.

Discussion of Non-GAAP Measures

This press release contains non-GAAP measures as a supplement to the consolidated financial results presented in accordance with GAAP. The Company believes certain non-GAAP measures provide investors with an additional, useful perspective on the Company's performance as seen through the eyes of management. Management uses non-GAAP measures along with GAAP financial results for: analyzing the performance of the Company's businesses; strategic and tactical decision making; and determining compensation. The Company does not consider non-GAAP measures to be a substitute for, or superior to, financial results presented in accordance with GAAP. All of the non-GAAP measures included herein are reconciled to the most directly comparable GAAP results in the following financial statements. These non-GAAP measures may be calculated differently from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on a comprehensive set of accounting rules or principles and some of the adjustments reflect the exclusion of items that are recurring and will be reflected in the Company's GAAP financial results for the foreseeable future.

Exclusions from GAAP Results

The Company excludes the following from its GAAP results in presenting non-GAAP measures:

-Equity-based compensation expenses The Company recognizes the fair value of its equity-based compensation in expense. Equity-based compensation consists of common stock, stock options and performance-based, market-based and time-based restricted stock granted under the Company's equity compensation plans. Equity-based compensation can vary significantly in amount from period to period.

-Other The exclusion of certain other non-GAAP amounts allows for improved comparisons of the Company's results to both prior periods and other companies. The Company excludes the following other items from non-GAAP measures as these items are not reflective of the performance of the Company's ongoing businesses:

  • Amortization of intangibles
  • Restructuring
  • Impairment of goodwill
  • Switzerland pension plan curtailment
  • Gain on extinguishment of debt
  • Non-cash interest expense
  • Net tax settlement expense (benefit) and other tax adjustments

- Tax Adjustment Non-GAAP measures are tax adjusted using the GAAP tax rate associated with each quarterly period. The tax rate is calculated by dividing each quarter's GAAP tax expense (benefit), adjusted for discrete quarterly items, by the GAAP operating income (loss) for that quarter. Non-GAAP year-to-date measures are calculated by summing the associated quarterly non-GAAP measures, without further tax adjustments.

Non-GAAP Measures

The specific non-GAAP measures included herein are gross profit, gross margin, net income (loss), net margin, and earnings per share ("EPS"). The Company calculates these measures as follows:

-Adjusted Gross Profit and Adjusted Gross Margin K&S non-GAAP adjusted gross profit and adjusted gross margin exclude the effect of equity-based compensation expense recorded within cost of sales.

-AdjustedNet Income (Loss), Adjusted Net Margin and Adjusted EPS K&S non-GAAP adjusted net income (loss) and adjusted EPS exclude equity-based compensation; amortization of intangibles; restructuring; impairment of goodwill; Switzerland pension curtailment plan; gain on extinguishment of debt; non-cash interest expense; net tax settlement expense (benefit) and other tax adjustments; and related tax effects on non-GAAP adjustments.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: 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 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 increasing, continuing or strengthening demand for our products, and our future revenue, cost reductions,and operational flexibility. 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; 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, associated with a substantial foreign customer and supplier base and substantial foreign manufacturing operations;and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2009 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
October 2, October 3, October 2, October 3,
2010 2009 * 2010 2009 *
Net revenue:
Equipment $ 241,853 $ 92,356 $ 691,988 $ 170,536
Expendable Tools 17,424 18,160 70,796 54,704
Total net revenue 259,277 110,516 762,784 225,240
Cost of sales:
Equipment 140,262 56,270 399,042 111,103
Expendable Tools 6,671 7,045 28,069 25,294
Total cost of sales 146,933 63,315 427,111 136,397
Gross profit:
Equipment 101,591 36,086 292,946 59,433
Expendable Tools 10,753 11,115 42,727 29,410
Total gross profit 112,344 47,201 335,673 88,843
Operating expenses:
Selling, general and administrative 37,699 22,590 119,031 84,124
Research and development 14,833 12,561 56,660 53,483
Amortization of intangible assets 2,385 2,781 9,545 11,092
Restructuring 752 1,229 2,402 10,959
Impairment of goodwill - - - 2,709
Total operating expenses 55,669 39,161 187,638 162,367
Income (loss) from operations:
Equipment 55,512 3,128 137,321 (78,741 )
Expendable Tools 1,163 4,912 10,714 5,217
Total income (loss) from operations 56,675 8,040 148,035 (73,524 )
Other income (expense):
Interest income 113 84 403 1,106
Interest expense (242 ) (398 ) (1,348 ) (1,594 )
Interest expense: non-cash (1,750 ) (1,676 ) (6,985 ) (6,594 )
Gain on extinguishment of debt - - - 3,965
Income (loss) from continuing operations, before tax 54,796 6,050 140,105 (76,641 )
Provision (benefit) for income taxes (1,265 ) 285 (2,037 ) (13,029 )
Income (loss) from continuing operations, net of tax 56,061 5,765 142,142 (63,612 )
Income (loss) from discontinued operations, net of tax - (716 ) - 22,011
Net income (loss) $ 56,061 $ 5,049 $ 142,142 $ (41,601 )
Income (loss) per share from continuing operations:
Basic $ 0.79 $ 0.09 $ 2.01 $ (1.02 )
Diluted $ 0.78 $ 0.08 $ 1.92 $ (1.02 )
Income (loss) per share from discontinued operations:
Basic $ - $ (0.01 ) $ - $ 0.35
Diluted $ - $ (0.01 ) $ - $ 0.35
Net income (loss) per share:
Basic $ 0.79 $ 0.08 $ 2.01 $ (0.67 )
Diluted $ 0.78 $ 0.07 $ 1.92 $ (0.67 )
Weighted average shares outstanding:
Basic 70,426 65,754 70,012 62,188
Diluted 71,229 70,082 73,548 62,188
Three months ended Twelve months ended
October 2, October 3, October 2, October 3,
Supplemental financial data (continuing operations): 2010 2009 2010 2009
Depreciation and amortization $ 4,273 $ 5,616 $ 17,531 $ 21,224
Capital expenditures $ 2,899 $ 865 $ 6,270 $ 5,264
Equity-based compensation expense:
Cost of sales $ 67 $ 25 $ 207 $ 64
Selling, general and administrative 2,628 401 5,846 649
Research and development 448 199 1,512 674
Total equity-based compensation expense $ 3,143 $ 625 $ 7,565 $ 1,387
As of
October 2, October 3,
2010 2009
Backlog of orders $ 252,000 $ 42,000
Number of employees (1) 2,950 2,202
* As adjusted for ASC No. 470.20, Debt, Debt With Conversion Options.
(1) - Increase primarily due to manufacturing headcount
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 2, October 3,
2010 2009 *
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 178,112 $ 144,560
Restricted cash 237 281
Short-term investments 2,985 -
Accounts and notes receivable, net of allowance for doubtful
accounts of $980 and $1,378, respectively 196,035 95,779
Inventories, net 73,893 41,489
Prepaid expenses and other current assets 15,985 11,566
Deferred income taxes 5,443 1,786
TOTAL CURRENT ASSETS 472,690 295,461
Property, plant and equipment, net 30,059 36,046
Goodwill 26,698 26,698
Intangible assets 39,111 48,656
Other assets 11,611 5,774
TOTAL ASSETS $ 580,169 $ 412,635
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt $ - $ 48,964
Accounts payable 82,353 39,908
Accrued expenses and other current liabilities 41,498 32,576
Income taxes payable 1,279 1,612
TOTAL CURRENT LIABILITIES 125,130 123,060
Long term debt 98,475 92,217
Deferred income taxes 20,355 16,282
Other liabilities 13,729 10,273
TOTAL LIABILITIES 257,689 241,832
SHAREHOLDERS' EQUITY
Common stock, no par value 423,715 413,092
Treasury stock, at cost (46,356 ) (46,356 )
Accumulated deficit (55,670 ) (197,812 )
Accumulated other comprehensive income 791 1,879
TOTAL SHAREHOLDERS' EQUITY 322,480 170,803

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 580,169 $ 412,635
* As adjusted for ASC No. 470.20, Debt, Debt With Conversion Options.
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended Twelve months ended

October 2, 2010

October 3, 2009

October 2, 2010

October 3, 2009

Net cash provided by (used in) operating activities, continuing operations $ 19,661 $ (10,161) $ 87,638 $ (51,406)
Net cash used in operating activities, discontinued operations (351) (417) (1,839) (2,116)
Net cash provided by (used in) operating activities $ 19,310 $ (10,578) $ 85,799 $ (53,522)
Net cash provided by (used in) investing activities, continuing operations (5,233) 1,441 (4,591) (51,453)
Net cash provided by (used in) investing activities, discontinued operations - - (1,838) 149,857
Net cash provided by (used in) investing activities $ (5,233) $ 1,441 $ (6,429) $ 98,404
Net cash provided by (used in) financing activities, continuing operations 1,000 38,865 (46,121) (45,439)
Effect of exchange rate changes on cash and cash equivalents 195 145 303 185
Changes in cash and cash equivalents $ 15,272 $ 29,873 $ 33,552 $ (372)
Cash and cash equivalents, beginning of period 162,840 114,687 144,560 144,932
Cash and cash equivalents, end of period $ 178,112 $ 144,560 $ 178,112 $ 144,560
Short-term investments & restricted cash 3,222 281 3,222 281
Total cash, cash equivalents, restricted cash and short-term investments $ 181,334 $ 144,841 $ 181,334 $ 144,841
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - SUMMARY
COMPARISON OF GAAP RESULTS TO NON-GAAP MEASURES
(In thousands, except share amounts)
(Unaudited)
Three months ended Twelve months ended
October 2, October 3, October 2, October 3,
2010 2009 * 2010 2009 *

(GAAP results)

Net revenue $ 259,277 $ 110,516 $ 762,784 $ 225,240
Gross profit 112,344 47,201 335,673 88,843
Income (loss) from operations 56,675 8,040 148,035 (73,524 )
Income (loss) from continuing operations, net of tax 56,061 5,765 142,142 (63,612 )
Weighted average shares outstanding
Basic 70,426 65,754 70,012 62,188
Diluted 71,229 70,082 73,548 62,188
Income (loss) per share from continuing operations
Basic $ 0.79 $ 0.09 $ 2.01 (1.02 )
Diluted $ 0.78 $ 0.08 $ 1.92 $ (1.02 )

(Non-GAAP measures)

Net revenue $ 259,277 $ 110,516 $ 762,784 $ 225,240
Gross profit 112,411 47,226 335,880 88,907
Income (loss) from operations 62,955 12,275 167,547 (47,011 )
Income (loss) from continuing operations, net of tax 63,788 10,774 167,838 (48,759 )
Weighted average shares outstanding, continuing operations
Basic 70,426 65,754 70,012 62,188
Diluted 71,229 70,082 73,548 62,188
Income (loss) per share from continuing operations
Basic $ 0.90 $ 0.16 $ 2.38 $ (0.78 )
Diluted $ 0.89 $ 0.16 $ 2.27 $ (0.78 )
* As adjusted for ASC No. 470.20, Debt, Debt With Conversion Options.
KULICKE & SOFFA INDUSTRIES, INC.
OPERATING RESULTS BY BUSINESS SEGMENT - SUMMARY
COMPARISON OF GAAP RESULTS TO NON-GAAP MEASURES
(In thousands)
(Unaudited)
Expendable
Equipment Tools
Segment Segment Consolidated
Fiscal 2010:
Three months ended October 2, 2010

(GAAP results)

Net revenue $ 241,853 $ 17,424 $ 259,277
Gross profit 101,591 10,753 112,344
Income from operations 55,512 1,163 56,675

(Non-GAAP measures)

Net revenue $ 241,853 $ 17,424 $ 259,277
Gross profit 101,644 10,767 112,411
Income from operations 60,385 2,570 62,955
Twelve months ended October 2, 2010

(GAAP results)

Net revenue $ 691,988 $ 70,796 $ 762,784
Gross profit 292,946 42,727 335,673
Income from operations 137,321 10,714 148,035

(Non-GAAP measures)

Net revenue $ 691,988 $ 70,796 $ 762,784
Gross profit 293,111 42,769 335,880
Income from operations 152,016 15,531 167,547
Fiscal 2009:
Three months ended October 3, 2009

(GAAP results)

Net revenue $ 92,356 $ 18,160 $ 110,516
Gross profit 36,086 11,115 47,201
Income from operations 3,128 4,912 8,040

(Non-GAAP measures)

Net revenue $ 92,356 $ 18,160 $ 110,516
Gross profit 36,107 11,119 47,226
Income from operations 6,605 5,670 12,275
Twelve months ended October 3, 2009

(GAAP results)

Net revenue $ 170,536 $ 54,704 $ 225,240
Gross profit 59,433 29,410 88,843
Income (loss) from operations (78,741 ) 5,217 (73,524 )

(Non-GAAP measures)

Net revenue $ 170,536 $ 54,704 $ 225,240
Gross profit 59,519 29,388 88,907
Income (loss) from operations (59,773 ) 12,762 (47,011 )
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
RECONCILIATION OF GAAP RESULTS TO NON-GAAP MEASURES
(In thousands, except share amounts)
(Unaudited)
Three months ended Three months ended Twelve months ended Twelve months ended
October 2, % of October 3, % of October 2, % of October 3, % of
2010 Revenue 2009 * Revenue 2010 Revenue 2009 * Revenue
Net revenue (GAAP results) $ 259,277 $ 110,516 $ 762,784 $ 225,240
Net revenue (Non-GAAP measures) 259,277 110,516 762,784 225,240
Gross profit (GAAP results) 112,344 43.3 % 47,201 42.7 % 335,673 44.0 % 88,843 39.4 %
- Equity-based compensation expense 67 25 207 64
Gross profit (Non-GAAP measures) 112,411 43.4 % 47,226 42.7 % 335,880 44.0 % 88,907 39.5 %
Income (loss) from operations (GAAP results) 56,675 21.9 % 8,040 7.3 % 148,035 19.4 % (73,524 ) -32.6 %
- Amortization of intangibles 2,385 2,781 9,545 11,092
- Restructuring 752 1,229 2,402 10,959
- Impairment of goodwill - - - 2,709
- Equity-based compensation expense 3,143 625 7,565 1,387
- Switzerland pension plan curtailment - - - (1,446 )
- Tax settlement expense - (400 ) - 1,812
Income (loss) from operations (Non-GAAP measures) 62,955 24.3 % 12,275 11.1 % 167,547 22.0 % (47,011 ) -20.9 %
Income (loss) from continuing operations, net of tax (GAAP results) 56,061 21.6 % 5,765 5.2 % 142,142 18.6 % (63,612 ) -28.2 %
- Total non-GAAP adjustments to income (loss) from continuing operations 6,280 4,235 19,512 26,513
- Gain on extinguishment of debt - - - (3,965 )
- Non cash interest expense 1,750 1,676 6,985 6,594
- Net tax settlement benefit and other tax adjustments - - - (13,201 )
- Tax effect of non-GAAP adjustments (303 ) (902 ) (801 ) (1,088 )
Income (loss) from continuing operations, net of tax (Non-GAAP measures) 63,788 24.6 % 10,774 9.7 % 167,838 22.0 % (48,759 ) -21.6 %
Weighted average shares outstanding (GAAP & Non-GAAP)
Basic 70,426 65,754 70,012 62,188
Diluted 71,229 70,082 73,548 62,188
Income (loss) per share from continuing operations (GAAP results)
Basic $ 0.79 $ 0.09 $ 2.01 $ (1.02 )
Diluted $ 0.78 $ 0.08 $ 1.92 $ (1.02 )
Adjustments to net income per share
Basic $ 0.11 $ 0.07 $ 0.37 $ 0.24
Diluted $ 0.11 $ 0.08 $ 0.35 $ 0.24
Income (loss) per share from continuing operations (Non-GAAP measures)
Basic $ 0.90 $ 0.16 $ 2.38 $ (0.78 )
Diluted $ 0.89 $ 0.16 $ 2.27 $ (0.78 )
* As adjusted for ASC No. 470.20, Debt, Debt With Conversion Options.
KULICKE & SOFFA INDUSTRIES, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
RECONCILIATION OF GAAP RESULTS TO NON-GAAP MEASURES
(In thousands)
(Unaudited)
Expendable
Equipment % of Tools % of
Segment Revenue Segment Revenue Consolidated
Fiscal 2010:
Three months ended October 2, 2010
Net revenue (GAAP results) $ 241,853 $ 17,424 $ 259,277
Net revenue (Non-GAAP measures) 241,853 17,424 259,277
Gross profit (GAAP results) 101,591 42.0 % 10,753 61.7 % 112,344
- Equity-based compensation expense 53 14 67
Gross profit (Non-GAAP measures) 101,644 42.0 % 10,767 61.8 % 112,411
Income from operations (GAAP results) 55,512 23.0 % 1,163 6.7 % 56,675
- Amortization of intangibles 1,813 572 2,385
- Restructuring 564 188 752
- Equity-based compensation expense 2,496 647 3,143
Income from operations (Non-GAAP measures) 60,385 25.0 % 2,570 14.8 % 62,955
Twelve months ended October 2, 2010
Net revenue (GAAP results) $ 691,988 $ 70,796 $ 762,784
Net revenue (Non-GAAP measures) 691,988 70,796 762,784
Gross profit (GAAP results) 292,946 42.3 % 42,727 60.4 % 335,673
- Equity-based compensation expense 165 42 207
Gross profit (Non-GAAP measures) 293,111 42.4 % 42,769 60.4 % 335,880
Income from operations (GAAP results) 137,321 19.8 % 10,714 15.1 % 148,035
- Amortization of intangibles 7,255 2,290 9,545
- Restructuring 1,432 970 2,402
- Equity-based compensation expense 6,008 1,557 7,565
Income from operations (Non-GAAP measures) 152,016 22.0 % 15,531 21.9 % 167,547
Fiscal 2009:
Three months ended October 3, 2009
Net revenue (GAAP results) $ 92,356 $ 18,160 $ 110,516
Net revenue (Non-GAAP measures) 92,356 18,160 110,516
Gross profit (GAAP results) 36,086 39.1 % 11,115 61.2 % 47,201
- Equity-based compensation expense 21 4 25
Gross profit (Non-GAAP measures) 36,107 39.1 % 11,119 61.2 % 47,226
Income from operations (GAAP results) 3,128 3.4 % 4,912 27.0 % 8,040
- Amortization of intangibles 2,124 657 2,781
- Restructuring 817 412 1,229
- Equity-based compensation expense 536 89 625
- Tax settlement expense - (400 ) (400 )
Income from operations (Non-GAAP measures) 6,605 7.2 % 5,670 31.2 % 12,275
Twelve months ended October 3, 2009
Net revenue (GAAP results) $ 170,536 $ 54,704 $ 225,240
Net revenue (Non-GAAP measures) 170,536 54,704 225,240
Gross profit (GAAP results) 59,433 34.9 % 29,410 53.8 % 88,843
- Equity-based compensation expense 86 (22 ) 64
Gross profit (Non-GAAP measures) 59,519 34.9 % 29,388 53.7 % 88,907
Income (loss) from operations (GAAP results) (78,741 ) -46.2 % 5,217 9.5 % (73,524 )
- Amortization of intangibles 8,464 2,628 11,092
- Restructuring 8,023 2,936 10,959
- Impairment of goodwill 2,709 - 2,709
- Equity-based compensation expense 1,218 169 1,387
- Switzerland pension plan curtailment (1,446 ) - (1,446 )
- Tax settlement expense - 1,812 1,812
Income (loss) from operations (Non-GAAP measures) (59,773 ) -35.1 % 12,762 23.3 % (47,011 )
KULICKE & SOFFA INDUSTRIES, INC.
ADJUSTED RETURN ON INVESTED CAPITAL
(In thousands)
(Unaudited)
Three months ended
October 2, 2010
Income from operations $ 56,675
Adjustment: Depreciation and amortization (1) 4,273
Adjusted income from operations 60,948
Adjusted income from operations, annualized (4) $ 243,792
Cash, cash equivalents, restricted cash and investments $ 181,334
Adjustment: cash, cash equivalents, restricted cash and investments (2) (106,334 )
Adjusted cash, cash equivalents and investments $ 75,000
Total assets excluding cash, cash equivalents and investments 398,835
Adjusted total assets 473,835
Total current liabilities $ 125,130
Add: taxes payable (3) 1,968
Adjusted current liabilities 127,098
Adjusted net invested capital $ 346,737
ROIC (4) 70.3 %
(1) Depreciation and amortization are excluded from the ROIC calculation.
(2) Management estimates minimum cash requirement is $75.0 million.

(3) Adjusted current liabilities includes tax liabilities classified as current in prior periods but reclassed to long term liabilities as a result of our adoption of ASC 740.10 during the first quarter of fiscal 2008.

(4) ROIC calculated as adjusted income from operations, annualized through multiplying the current quarter's income from operations by 4, then divided by adjusted net invested capital. Adjusted income from operations is not intended to forecast the Company's future income from operations.

SOURCE: Kulicke & Soffa Industries, Inc.

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations
P: 215-784-7518
F: 215-784-6180
jelgindy@kns.com
or
Headgate Partners LLC
Claire E. McAdams
P: 530-265-9899
F: 530-265-9699
claire@headgatepartners.com