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KULICKE & SOFFA REPORTS FOURTH QUARTER AND FISCAL YEAR 2015 RESULTS

Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2015 Results

November 17, 2015 at 6:55 AM EST

SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its fourth quarter and fiscal year ended October 3, 2015.

 
Quarterly Results
   


Fiscal Q4 2015

    Change vs.
Fiscal Q4 2014
    Change vs.
Fiscal Q3 2015
Net Revenue $119.2 million down 38.8% down 27.6%
Gross Profit $58.2 million down 37.0% down 25.0%
Gross Margin 48.9% up 150 bps up 180 bps
Income from Operations $1.6 million down 95.7% down 90.1%
Operating Margin 1.4% down 1790 bps down 840 bps
Net Income $9.8 million down 66.6% down 60.8%
Net Margin 8.2% down 680 bps down 700 bps
EPS - Diluted $0.13 down 65.8% down 60.6%
 

Jonathan Chou, Kulicke & Soffa's Chief Financial Officer and Interim Chief Executive Officer, stated, "While we exceeded our revised fourth quarter revenue guidance of $100 to $110 million and demonstrated strong operational performance, we ended the year in a challenging market environment. Considering this market softness, we drove further improvements to our operating model as well as refinements to our development initiatives which reduces our break-even point and further aligns our R&D efforts with market opportunities expected to drive the most meaningful and long-term shareholder returns."

The Company's reported fourth quarter net income included favorable non-cash tax benefits of approximately $9.6 million, or approximately $0.13 per share, which was lower than the anticipated non-cash tax benefit of $20 million, or approximately $0.27 per share.

Fourth Quarter Fiscal 2015 Key Product Trends

  • Ball bonder equipment net revenue decreased 45.3% over the June quarter.
  • 72.6% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased 8.5% over the June quarter.
  • Advanced packaging mass reflow equipment net revenue increased by 0.7% over the June quarter.

Fiscal Year 2015 Financial Highlights

  • Net revenue of $536.5 million.
  • Gross margin of 48.3%.
  • Net income was $50.6 million or $0.67 per diluted share.
  • Cash, cash equivalents and investments were $498.6 million as at October 3, 2015.
  • Through fiscal year end, 6.4 million shares, equivalent to over 8% of weighted average shares outstanding, had been repurchased since the stock repurchase program's August 2014 initiation.

First Quarter Fiscal 2016 Outlook

The Company currently expects net revenue in the first fiscal quarter of 2016 ending January 2, 2016 to be approximately $90 million to $100 million.

Looking forward, Jonathan Chou commented, "Our recent cost reduction efforts provide further enhancements to the flexibility of our established operational model which has been built on driving through-cycle performance. Tactically, our near-term growth initiatives continue to be centered on enhancing market breadth through highly-targeted product and feature releases which serve the deep-rooted core, sizeable Advanced SMT and expanding Advanced Packaging market opportunities. We are well situated to emerge from this softer demand environment a stronger, more agile and further diversified organization."

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 17, 2015, beginning at 8:00am (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 investor.kns.com.

A replay will be available from approximately one hour after the completion of the call through November 24, 2015 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13623161. A webcast replay will also be available at investor.kns.com.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a global leader in the design and manufacture of semiconductor, LED and electronic 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 and organic development, adding advanced packaging, advanced SMT, 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 substantial completion of transition from gold to copper wire bonding by 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. 2015 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     Twelve months ended

October 3,
2015

   

September 27,
2014

October 3,
2015

   

September 27,
2014

Net revenue $ 119,172 $ 194,733 $ 536,471 $ 568,569
Cost of sales 60,955   102,373   277,379   295,015  
Gross profit 58,217   92,360   259,092   273,554  
Operating expenses:
Selling, general and administrative 29,944 30,774 120,084 107,077
Research and development 21,900 22,779 90,033 83,056
Amortization of intangible assets 2,851 1,330 9,883 5,318
Restructuring 1,874   (20 ) 1,841   1,119  
Total operating expenses 56,569   54,863   221,841   196,570  
Income from operations 1,648 37,497 37,251 76,984
Other income (expense):
Interest income 453 319 1,637 1,197
Interest expense (273 ) (316 ) (1,183 ) (1,048 )
Income from operations before income taxes 1,828 37,500 37,705 77,133
Income taxes (benefit)/ expense (7,999 ) 8,241   (12,934 ) 14,145  
Net income $ 9,827   $ 29,259   $ 50,639   $ 62,988  
 
Net income per share:
Basic $ 0.14   $ 0.38   $ 0.67   $ 0.82  
Diluted $ 0.13   $ 0.38   $ 0.67   $ 0.81  
 
Weighted average shares outstanding:
Basic 72,731 76,658 75,414 76,396
Diluted 72,883 77,925 75,659 77,292
 
           
Three months ended Twelve months ended
Supplemental financial data:

October 3,
2015

   

September 27,
2014

October 3,
2015

   

September 27,
2014

Depreciation and amortization $ 4,994 $ 3,525 $ 18,972 $ 13,520
Capital expenditures 3,810 2,805 9,519 12,401
Equity-based compensation expense:
Cost of sales 89 75 393 344
Selling, general and administrative 2,738 1,982 9,127 8,906
Research and development 626   462   2,469   2,086

Total equity-based compensation expense

$ 3,453   $ 2,519   $ 11,989   $ 11,336
 
       
As of

October 3,
2015

   

September 27,
2014

Backlog of orders1 $ 52,500 $ 79,100
Number of employees 2,373 2,164
 

1. Represents customer purchase commitments. While the Company believes these
orders will proceed, they are generally cancellable by customers without penalty.

 
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

     
As of

October 3,
2015

   

September 27,
2014

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 498,614 $ 587,981
Short-term investments 9,105

Accounts and notes receivable, net of allowance for doubtful accounts of $621 and
$143 respectively

108,596 171,530
Inventories, net 79,096 49,694
Prepaid expenses and other current assets 16,937 15,090
Deferred income taxes 4,126   4,291  
TOTAL CURRENT ASSETS 707,369 837,691
 
Property, plant and equipment, net 53,234 52,755
Goodwill 81,272 41,546
Intangible assets 57,471 5,891
Other assets 5,120   6,565  
TOTAL ASSETS $ 904,466   $ 944,448  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 25,521 $ 35,132
Accrued expenses and other current liabilities 45,971 43,731
Income taxes payable 2,442   2,488  
TOTAL CURRENT LIABILITIES 73,934 81,351
 
Financing obligation 16,483 19,102
Deferred income taxes 31,316 44,963
Other liabilities 10,842   9,790  
TOTAL LIABILITIES 132,575   155,206  
 
SHAREHOLDERS' EQUITY
Common stock, no par value 492,339 479,116
Treasury stock, at cost (124,856 ) (46,984 )
Retained earnings 405,505 354,866
Accumulated other comprehensive (loss) income (1,097 ) 2,244  
TOTAL SHAREHOLDERS' EQUITY $ 771,891   $ 789,242  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 904,466   $ 944,448  
 
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

         
Three months ended Twelve months ended

October 3,
2015

   

September 27,
2014

October 3,
2015

   

September 27,
2014

Net cash provided by (used in) operating activities 39,529 (1,781 ) 87,875 82,460

Net cash used in investing activities, continuing
operations

(3,190 ) (7,302 ) (94,109 ) (15,974 )

Net cash used in financing activities, continuing
operations

(14,622 ) (369 ) (84,459 ) (164 )

Effect of exchange rate changes on cash and cash
equivalents

972   (76 ) 1,326   (129 )
Changes in cash and cash equivalents 22,689 (9,528 ) (89,367 ) 66,193
Cash and cash equivalents, beginning of period 475,925   597,509   587,981   521,788  
Cash and cash equivalents, end of period $ 498,614   $ 587,981   $ 498,614   $ 587,981  
 
Short-term investments   9,105     9,105  

Total cash, cash equivalents and short-term
investments

$ 498,614   $ 597,086   $ 498,614   $ 597,086  
 

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7518
P: +31-40-272-3016
F: +1-215-784-6180
investor@kns.com

Source: Kulicke & Soffa Industries, Inc.

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