Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2012 Results

SINGAPORE--(BUSINESS WIRE)-- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S" or the "Company") today announced results for its fourth quarter and fiscal year ended September 29, 2012.

Quarterly Results
				Change vs.		Change vs.
		Fiscal Q4 2012		Fiscal Q4 2011		Fiscal Q3 2012
Net Revenue		$269.2 million		49.2%		5.3%
Gross Profit		$123.0 million		48.6%		0.4%
Gross Margin		45.7%		(20) bps		(220) bps
Income from Operations		$70.3 million		210.0%		(7.8%)
Operating Margin		26.1%		1,350 bps		(380) bps
Net Income		$67.3 million		3,418.9%		(1.3%)
Net Margin		25.0%		2,390 bps		(170) bps
EPS — Diluted		$0.89		2,866.7%		(1.1%)

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "The fourth quarter ended a very strong year for K&S with results at the high-end of our guidance. We are succeeding in a challenging market due to our multi-segment leadership, flexible manufacturing strategy, R&D strength, free cash flow generation and our improving, debt-free balance sheet. We were able to achieve record annual net income of $160.6 million due to the operating leverage we have created in our business combined with a favorable product mix."

Fourth Quarter Fiscal 2012 Key Product Trends

• Ball bonder equipment net revenue increased 7.0% over the June quarter.
• 84.5% of ball bonder equipment was sold as copper capable bonders.
• Wedge bonder equipment net revenue increased 20.8% from the June quarter.

Fiscal Year 2012 Financial Highlights

• Net revenue of $791.0 million.
• Gross margin of 46.4%.
• Net income of $160.6 million or $2.13 per share.
• Total cash and short-term investments were $440.2 million on September 29, 2012, a $59.5 million increase from the prior quarter ended June 30, 2012.

First Quarter Fiscal Year 2013 Outlook

The Company expects net revenue in the typically seasonally slower fiscal first quarter of 2013 ending December 29, 2012, to be approximately $95 million to $115 million.

Looking forward, Bruno Guilmart commented, "We are confident in the near and long-term prospects for our business. Structural improvements we previously implemented give us an added advantage in navigating periods of fluctuating demand. These improvements include our corporate-wide cost containment program and our now debt-free balance sheet. We also continue to benefit from our flexible manufacturing strategy and strong product offerings. In addition to maintaining a disciplined operations strategy, we are pursuing opportunities that will position us for growth."

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 8, 2012, 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 November 15, 2012 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 401769. 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, our improving balance sheet, 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. 2011 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
		September 29,				October 1,				September 29,				October 1,
			2012				2011				2012				2011
Net revenue:
Equipment		$	252,785			$	161,225			$	727,082			$	759,331
Expendable Tools			16,381				19,146				63,941				71,070
Total net revenue			269,166				180,371				791,023				830,401
Cost of sales:
Equipment			139,479				89,350				397,210				412,914
Expendable Tools			6,703				8,275				26,423				29,578
Total cost of sales			146,182				97,625				423,633				442,492
Gross profit:
Equipment			113,306				71,875				329,872				346,417
Expendable Tools			9,678				10,871				37,518				41,492
Total gross profit			122,984				82,746				367,390				387,909
Operating expenses:
Selling, general and administrative			31,029				40,471				110,966				138,273
Research and development			17,369				16,821				63,446				65,135
Amortization of intangible assets			2,295				2,386				9,178				9,549
Restructuring			1,959				377				4,574				4,892
Total operating expenses			52,652				60,055				188,164				217,849
Income from operations:
Equipment			67,046				18,908				165,791				156,786
Expendable Tools			3,286				3,783				13,435				13,274
Total income from operations			70,332				22,691				179,226				170,060
Other income (expense):
Interest income			182				202				833				648
Interest expense			-				(241	)			(633	)			(965	)
Interest expense: non-cash			(1	)			(1,886	)			(5,175	)			(7,315	)
Income from operations before income taxes			70,513				20,766				174,251				162,428
Provision (benefit) for income taxes			3,231				18,854				13,671				34,818
Net income		$	67,282			$	1,912			$	160,580			$	127,610
Net income per share:
Basic		$	0.91			$	0.03			$	2.17			$	1.77
Diluted		$	0.89			$	0.03			$	2.13			$	1.73
Weighted average shares outstanding:
Basic			74,116				72,688				73,887				71,820
Diluted			75,942				74,184				75,502				73,341
		Three months ended								Twelve months ended
		September 29,				October 1,				September 29,				October 1,
Supplemental financial data:			2012				2011				2012				2011
Depreciation and amortization		$	4,615			$	4,487			$	17,265			$	17,761
Capital expenditures		$	1,757			$	1,873			$	6,902			$	7,688
Equity-based compensation expense:
Cost of sales		$	86			$	54			$	312			$	213
Selling, general and administrative			1,575				887				6,602				5,671
Research and development			461				358				1,777				1,328
Total equity-based compensation expense		$	2,122			$	1,299			$	8,691			$	7,212
										As of
										September 29,				October 1,
											2012				2011
Backlog of orders										$	90,000			$	103,000
Number of employees											2,936				2,866

KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
		September 29,				October 1,
			2012				2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	440,244			$	378,188
Short-term investments			-				6,364
Accounts and notes receivable, net of allowance for doubtful accounts of $937 and $2,194, respectively			188,986				138,649
Inventories, net			58,994				73,092
Prepaid expenses and other current assets			21,577				21,897
Deferred income taxes			3,515				1,651
TOTAL CURRENT ASSETS			713,316				619,841
Property, plant and equipment, net			28,441				26,501
Goodwill			41,546				41,546
Intangible assets			20,387				29,565
Other assets			11,919				10,938
TOTAL ASSETS		$	815,609			$	728,391
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt		$	-			$	105,224
Accounts payable			57,231				36,321
Accrued expenses and other current liabilities			57,946				43,528
Earnout agreement payable			-				14,848
Income taxes payable			8,192				14,261
TOTAL CURRENT LIABILITIES			123,369				214,182
Deferred income taxes			37,875				32,065
Other liabilities			10,698				12,267
TOTAL LIABILITIES			171,942				258,514
SHAREHOLDERS' EQUITY
Common stock, no par value			455,122				441,749
Treasury stock, at cost			(46,356	)			(46,356	)
Accumulated income			232,520				71,940
Accumulated other comprehensive income			2,381				2,544
TOTAL SHAREHOLDERS' EQUITY			643,667				469,877
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	815,609			$	728,391

KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
		Three months ended								Twelve months ended
		September 29, 2012				October 1, 2011				September 29, 2012				October 1, 2011
Net cash provided by operating activities		$	59,321			$	50,169			$	183,969			$	202,257
Net cash used in discontinued operations			(29	)			(314	)			(1,498	)			(1,861	)
Net cash provided by operating activities		$	59,292			$	49,855			$	182,471			$	200,396
Net cash used in investing activities, continuing operations		$	(1,757	)		$	(2,049	)		$	(15,386	)		$	(11,106	)
Net cash provided by (used in) financing activities			1,834				460				(105,138	)			9,296
Effect of exchange rate on cash and cash equivalents			178				640				109				1,490
Changes in cash and cash equivalents		$	59,547			$	48,906			$	62,056			$	200,076
Cash and cash equivalents, beginning of period			380,697				329,282				378,188				178,112
Cash and cash equivalents, end of period		$	440,244			$	378,188			$	440,244			$	378,188
Short-term investments & restricted cash			-				6,364				-				6,364
Total cash, cash equivalents, restricted cash and short-term investments		$	440,244			$	384,552			$	440,244			$	384,552

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

Source: Kulicke & Soffa Industries, Inc.

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