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KULICKE & SOFFA REPORTS FOURTH QUARTER AND FISCAL YEAR 2011 RESULTS

Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2011 Results

November 10, 2011 at 12:00 AM EST
Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2011 Results

SINGAPORE, Nov 10, 2011 (BUSINESS WIRE) --

Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S" or the "Company")today announced results for its fourth fiscal quarter ended October 1, 2011.

Quarterly Results

Fiscal Q4 2011

Change vs.

Fiscal Q4 2010

Change vs.

Fiscal Q3 2011

Net Revenue $180.4 million -30.4% -38.7%
Gross Profit $82.7 million -26.3% -38.3%
Gross Margin 45.9% 260 bps 40 bps
Income from Operations $22.7 million -60.0% -72.2%
Operating Margin 12.6% -930 bps -1,510 bps
Net Income $1.9 million -96.6% -97.3%
Net Margin 1.1% -2,050 bps -2,290 bps
EPS - Diluted $0.03 -96.2% -96.8%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "Our results for the fiscal fourth quarter exceeded the high-end of our prior guidance, with gross margin improving despite the revenue decline. For the full fiscal year, we achieved record Company revenue of $830.4 million and operating income of $170.1 million, and remained very successful at cost control and cash generation. Our technology and market leadership helped lessen the impact of the challenging global economic situation and the more cautious approach to capital spending at our customers. Our performance serves to further validate the long-term opportunities we are pursuing, including but not limited to, the continued copper transition, which enables higher productivity and cost savings for our customers. We continue to focus on research and development, agile operational efficiency and the ability to quickly react to changes in our customers' demand."

Fourth Quarter Fiscal 2011 Key Product Trends

  • Ball bonder equipment net revenue decreased 44% over the June quarter.
  • 63% of ball bonder equipment was sold as copper capable bonders, compared to 57% in the same period one year ago.
  • Wedge bonder equipment net revenue decreased 35% over the June quarter.

Fourth Quarter Fiscal 2011 Financial Highlights

  • Net revenue decreased to $180.4 million.
  • Gross margin remained strong at 45.9%.
  • Fiscal 2011 income tax expense was $34.8 million.
  • Net income was $1.9 million or $0.03 per share. Net income was negatively impacted by the following items:

    • Approximately $16.0 million due to higher income tax expenses associated with revenue from higher tax jurisdictions and additional tax exposure in Asia;
    • $2.6 million, net of tax, related to net foreign currency exchange losses; and,
    • $2.5 million, net of tax, related to the write down in market value of the Company's building in Switzerland.
    • Without these items net income would have been $23.0 million or $0.31 per diluted share.
  • Cash, cash equivalents and investments increased to $384.6 million up $49.0 million from the prior quarter.

First Quarter Fiscal 2012 Outlook

The Company expects net revenue for the first quarter of fiscal 2012 to be approximately $100 million to $120 million, reflecting the current uncertain economic environment in addition to typical industry seasonality.

Looking forward, Bruno Guilmart, commented, "We entered the first quarter in one of the best financial and operational positions the Company has ever been in. We will continue to leverage our leadership position in the copper transition and wedge bonding to help mitigate the macro pressure facing the broader market. While continuing to maintain our flexible cost structure, we will work closely with our customers and support their needs through ongoing R&D investments. We also remain committed to pursuing new growth opportunities, as we work to improve our cross-cyclical performance."

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 10, 2011 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 December 1, 2011 by calling +1-877-660-6853 or internationally +1-201-612-7415, with account number 5521 and replay ID 381528. A webcast replay will also be available at www.kns.com/investors/events.

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 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; 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. 2010 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. These results should be considered preliminary until the 2011 Annual Report on Form 10-K is filed.

KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
Three months ended Twelve months ended
October 1, October 2, October 1, October 2,
2011 2010 2011 2010
Net revenue:
Equipment $ 161,225 $ 241,853 $ 759,331 $ 691,988
Expendable Tools 19,146 17,424 71,070 70,796
Total net revenue 180,371 259,277 830,401 762,784
Cost of sales:
Equipment 89,350 140,262 412,914 399,042
Expendable Tools 8,275 6,671 29,578 28,069
Total cost of sales 97,625 146,933 442,492 427,111
Gross profit:
Equipment 71,875 101,591 346,417 292,946
Expendable Tools 10,871 10,753 41,492 42,727
Total gross profit 82,746 112,344 387,909 335,673
Operating expenses:
Selling, general and administrative 40,471 37,699 138,273 119,031
Research and development 16,821 14,833 65,135 56,660
Amortization of intangible assets 2,386 2,385 9,549 9,545
Restructuring 377 752 4,892 2,402
Total operating expenses 60,055 55,669 217,849 187,638
Income from operations:
Equipment 18,908 55,512 156,786 137,321
Expendable Tools 3,783 1,163 13,274 10,714
Total income from operations 22,691 56,675 170,060 148,035
Other income (expense):
Interest income 202 113 648 403
Interest expense (241 ) (242 ) (965 ) (1,348 )
Interest expense: non-cash (1,886 ) (1,750 ) (7,315 ) (6,985 )
Income from operations before income taxes 20,766 54,796 162,428 140,105
Provision (benefit) for income taxes 18,854 (1,265 ) 34,818 (2,037 )
Net income $ 1,912 $ 56,061 $ 127,610 $ 142,142
Net income per share:
Basic $ 0.03 $ 0.79 $ 1.77 $ 2.01
Diluted $ 0.03 $ 0.78 $ 1.73 $ 1.92
Weighted average shares outstanding:
Basic 72,688 70,426 71,820 70,012
Diluted 74,184 71,229 73,341 73,548
Three months ended Twelve months ended
October 1, October 2, October 1, October 2,
Supplemental financial data: 2011 2010 2011 2010
Depreciation and amortization $ 4,487 $ 4,273 $ 17,761 $ 17,531
Capital expenditures $ 1,873 $ 2,899 $ 7,688 $ 6,270
Equity-based compensation expense:
Cost of sales $ 54 $ 67 $ 213 $ 207
Selling, general and administrative 887 2,628 5,671 5,846
Research and development 358 448 1,328 1,512
Total equity-based compensation expense $ 1,299 $ 3,143 $ 7,212 $ 7,565
As of
October 1, October 2,
2011 2010
Backlog of orders $ 103,000 $ 252,000
Number of employees 2,866 2,950
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
October 1, October 2,
2011 2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 378,188 $ 178,112
Restricted cash - 237
Short-term investments 6,364 2,985
Accounts and notes receivable, net of allowance for doubtful
accounts of $2,194 and $980, respectively 138,649 196,035
Inventories, net 73,092 73,893
Prepaid expenses and other current assets 21,897 15,985
Deferred income taxes 1,651 5,443
TOTAL CURRENT ASSETS 619,841 472,690
Property, plant and equipment, net 26,501 30,059
Goodwill 41,546 26,698
Intangible assets 29,565 39,111
Other assets 10,938 11,611
TOTAL ASSETS $ 728,391 $ 580,169
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt $ 105,224 $ -
Accounts payable 36,321 82,353
Accrued expenses and other current liabilities 43,528 41,498
Earnout agreement payable 14,848 -
Income taxes payable 14,261 1,279
TOTAL CURRENT LIABILITIES 214,182 125,130
Long term debt - 98,475
Deferred income taxes 32,065 20,355
Other liabilities 12,267 13,729
TOTAL LIABILITIES 258,514 257,689
SHAREHOLDERS' EQUITY
Common stock, no par value 441,749 423,715
Treasury stock, at cost (46,356 ) (46,356 )
Accumulated income (deficit) 71,940 (55,670 )
Accumulated other comprehensive income 2,544 791
TOTAL SHAREHOLDERS' EQUITY 469,877 322,480
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 728,391 $ 580,169
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended Twelve months ended

October 1, 2011

October 2, 2010

October 1, 2011

October 2, 2010

Net cash provided by operating activities, continuing operations $ 50,169 $ 19,661 $ 202,257 $ 87,638
Net cash used in operating activities, discontinued operations (314 ) (351 ) (1,861 ) (1,839 )
Net cash provided by operating activities $ 49,855 $ 19,310 $ 200,396 $ 85,799
Net cash used in investing activities, continuing operations (2,049 ) (5,233 ) (11,106 ) (4,591 )
Net cash used in investing activities, discontinued operations - - - (1,838 )
Net cash used in investing activities $ (2,049 ) $ (5,233 ) $ (11,106 ) $ (6,429 )
Net cash provided by (used in) financing activities 460 1,000 9,296 (46,121 )
Effect of exchange rate changes on cash and cash equivalents 640 195 1,490 303
Changes in cash and cash equivalents $ 48,906 $ 15,272 $ 200,076 $ 33,552
Cash and cash equivalents, beginning of period 329,282 162,840 178,112 144,560
Cash and cash equivalents, end of period $ 378,188 $ 178,112 $ 378,188 $ 178,112
Short-term investments & restricted cash 6,364 3,222 6,364 3,222
Total cash, cash equivalents, restricted cash and short-term investments $ 384,552 $ 181,334 $ 384,552 $ 181,334

SOURCE: Kulicke & Soffa Industries, Inc.

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations
P: +1-215-784-7518
F: +1-215-784-6180
jelgindy@kns.com
or
Global IR Partners
David Pasquale
P: +1-914-337-8801
klic@globalirpartners.com