FORT WASHINGTON, Pa., Aug 04, 2010 (BUSINESS WIRE) -- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S" or the "Company")today announced results for its third fiscal quarter ended July 3, 2010. This press release contains both GAAP results and non-GAAP measures.
For its third fiscal quarter of 2010, the Company reported net revenue of $221.3 million and net income of $49.1 million, or $0.65 per diluted share. On a non-GAAP basis* for its third quarter, the Company reported net income of $55.6 million, or $0.74 per diluted share.
| Quarterly GAAP Results | |||||||||
| Change vs. | Change vs. | ||||||||
| Fiscal Q3 2010 | Fiscal Q3 2009** | Fiscal Q2 2010** | |||||||
| Net Revenue | $221.3 million | 325% | 44% | ||||||
| Gross Profit | $99.2 million | 404% | 46% | ||||||
| Gross Margin | 44.8% | 706 basis points | 77 basis points | ||||||
| Income from Operations | $50.1 million | N/M *** | 115% | ||||||
| Operating Margin | 22.6% | 5,043 basis points | 746 basis points | ||||||
| Net Income | $49.1 million | N/M *** | 132% | ||||||
| Net Margin | 22.2% | 5,149 basis points | 843 basis points | ||||||
| EPS - Diluted | $0.65 | N/M *** | 132% | ||||||
| Quarterly Non-GAAP Measures* | |||||||||
| Change vs. | Change vs. | ||||||||
| Fiscal Q3 2010 | Fiscal Q3 2009** | Fiscal Q2 2010** | |||||||
| Gross Profit | $99.2 million | 403% | 46% | ||||||
| Gross Margin | 44.8% | 700 basis points | 76 basis points | ||||||
| Income from Operations | $55.1 million | N/M *** | 98% | ||||||
| Operating Margin | 24.9% | 4,756 basis points | 681 basis points | ||||||
| Net Income | $55.6 million | N/M *** | 104% | ||||||
| Net Margin | 25.1% | 4,821 basis points | 746 basis points | ||||||
| EPS - Diluted | $0.74 | N/M *** | 106% | ||||||
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* Non-GAAP measures exclude: equity-based compensation; amortization of intangibles; restructuring; Switzerland pension plan curtailment; 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.
*** Not meaningful as comparable period was a loss.
Commenting on the results, Scott Kulicke, Chief Executive Officer, said, "In the June quarter our operations team did a terrific job ramping up production in response to the unprecedented customer demand we are currently experiencing. As a result, we were able to beat our revenue guidance, deliver strong financial performance and demonstrate the strength of our business model.
"Our equipment business grew almost 50% over the March quarter, driven by continued demand from both IDM and subcontractor customers, and across all application spaces. Especially noteworthy were ball bonder shipments for LED applications, which almost doubled over the March quarter, and heavy wire wedge bonder shipments which were up about 50% over the March quarter. We're also starting to see increasing demand from the memory segment. Lastly, the industry's transition to copper continues to be a strong driver of demand, and of our rising market share.
"Last month we commented that we had seen some volatility in our order book as one of our customers had pushed out some deliveries originally scheduled for the September quarter. I'm happy to report that that customer quickly reversed course and pulled some of those machines back into the quarter and that, as we predicted, we easily sold the rest of those delivery slots to other customers eager for capacity.
"We believe it is important for investors to understand that some volatility in our order book is normal, and does not detract from our confidence, based on orders already in hand, for both the September and December quarters. We expect September quarter revenue to be in the $250 million to $260 million range, and, while it is too early to provide December quarter guidance, we can say that we expect that quarter's revenue to be about comparable to September.
"Finally, let me point out that 2010's profitability and cash generation is allowing us to make significant improvements to our capital structure. When coupled with ball bonder market share expansion, continued penetration into the LED market, ongoing strength in the wedge bonder market and initial orders for our iStack die bonder, K&S has a solid foundation for ongoing success."
Key Product Trends
- Ball bonder units and revenue were up approximately 50% over the March quarter.
- Continued strong demand for the K&S copper solution; ball bonders configured for copper remain at approximately 60% of all ball bonder shipments.
- LED ball bonder shipments almost doubled over March quarter levels.
- Heavy wire wedge bonder demand continued to increase, with sales approximately 50% over the March quarter; further incremental demand is anticipated through the September quarter.
- Our recently launched die bonder product continues to gain customer acceptance.
Financial Highlights
- Revenue increased 44% sequentially, exceeding previous guidance by $16.3 million.
- GAAP operating margin was 22.6%, or 24.9% on a non-GAAP basis.
- GAAP net income was $49.1 million, up $27.9 million from the previous quarter.
- GAAP diluted EPS was $0.65, up $0.37 from the previous quarter.
- Continuing operations generated $27.7 million of net cash.
- Completed redemption of $49.0 million in Convertible Subordinated Notes due June 30, 2010 using cash on hand.
- Net revenue for the September quarter is expected to be in the $250 million to $260 million range, revenue of this magnitude is anticipated to follow in December.
Earnings Conference Call Details
A conference call to discuss these results will be held tomorrow, August 5, 2010 beginning at 9:00 am (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 is a non-cash expense that 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 growth, revenue, profitability and cash flow. 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 during periods of historically high demand for our products; 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 | Nine months ended | ||||||||||||||||
| June 27, | July 3, | June 27, | July 3, | ||||||||||||||
| 2009 * | 2010 | 2009 * | 2010 | ||||||||||||||
| Net revenue: | |||||||||||||||||
| Equipment | $ | 37,544 | $ | 202,185 | $ | 78,180 | $ | 450,135 | |||||||||
| Expendable Tools | 14,532 | 19,069 | 36,544 | 53,372 | |||||||||||||
| Total net revenue | 52,076 | 221,254 | 114,724 | 503,507 | |||||||||||||
| Cost of sales: | |||||||||||||||||
| Equipment | 25,612 | 114,169 | 54,833 | 258,780 | |||||||||||||
| Expendable Tools | 6,795 | 7,901 | 18,249 | 21,398 | |||||||||||||
| Total cost of sales | 32,407 | 122,070 | 73,082 | 280,178 | |||||||||||||
| Gross profit: | |||||||||||||||||
| Equipment | 11,932 | 88,016 | 23,347 | 191,355 | |||||||||||||
| Expendable Tools | 7,737 | 11,168 | 18,295 | 31,974 | |||||||||||||
| Total gross profit | 19,669 | 99,184 | 41,642 | 223,329 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative | 18,537 | 31,015 | 61,534 | 81,332 | |||||||||||||
| Research and development | 12,264 | 14,686 | 40,922 | 41,827 | |||||||||||||
| Amortization of intangible assets | 2,783 | 2,386 | 8,311 | 7,160 | |||||||||||||
| Restructuring | 567 | 1,045 | 9,730 | 1,650 | |||||||||||||
| Impairment of goodwill | - | - | 2,709 | - | |||||||||||||
| Total operating expenses | 34,151 | 49,132 | 123,206 | 131,969 | |||||||||||||
| Income (loss) from operations: | |||||||||||||||||
| Equipment | (16,861 | ) | 46,768 | (81,869 | ) | 81,809 | |||||||||||
| Expendable Tools | 2,379 | 3,284 | 305 | 9,551 | |||||||||||||
| Total income (loss) from operations | (14,482 | ) | 50,052 | (81,564 | ) | 91,360 | |||||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 75 | 104 | 1,022 | 290 | |||||||||||||
| Interest expense | (363 | ) | (385 | ) | (1,196 | ) | (1,106 | ) | |||||||||
| Interest expense: non-cash | (1,648 | ) | (1,768 | ) | (4,918 | ) | (5,235 | ) | |||||||||
| Gain on extinguishment of debt | - | - | 3,965 | - | |||||||||||||
| Income (loss) from continuing operations, before tax | (16,418 | ) | 48,003 | (82,691 | ) | 85,309 | |||||||||||
| Benefit for income taxes | (1,156 | ) | (1,080 | ) | (13,314 | ) | (772 | ) | |||||||||
| Income (loss) from continuing operations, net of tax | (15,262 | ) | 49,083 | (69,377 | ) | 86,081 | |||||||||||
| Income from discontinued operations, net of tax | - | - | 22,727 | - | |||||||||||||
| Net income (loss) | $ | (15,262 | ) | $ | 49,083 | $ | (46,650 | ) | $ | 86,081 | |||||||
| Income (loss) per share from continuing operations: | |||||||||||||||||
| Basic | $ | (0.25 | ) | $ | 0.69 | $ | (1.14 | ) | $ | 1.22 | |||||||
| Diluted | $ | (0.25 | ) | $ | 0.65 | $ | (1.14 | ) | $ | 1.15 | |||||||
| Income per share from discontinued operations: | |||||||||||||||||
| Basic | $ | - | $ | - | $ | 0.37 | $ | - | |||||||||
| Diluted | $ | - | $ | - | $ | 0.37 | $ | - | |||||||||
| Net income (loss) per share: | |||||||||||||||||
| Basic | $ | (0.25 | ) | $ | 0.69 | $ | (0.77 | ) | $ | 1.22 | |||||||
| Diluted | $ | (0.25 | ) | $ | 0.65 | $ | (0.77 | ) | $ | 1.15 | |||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 61,220 | 70,131 | 60,908 | 69,873 | |||||||||||||
| Diluted | 61,220 | 74,960 | 60,908 | 74,494 | |||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| June 27, | July 3, | June 27, | July 3, | ||||||||||||||
| Supplemental financial data (continuing operations): | 2009 | 2010 | 2009 | 2010 | |||||||||||||
| Depreciation and amortization | $ | 4,893 | $ | 4,336 | $ | 15,608 | $ | 13,258 | |||||||||
| Capital expenditures | $ | 1,053 | $ | 1,265 | $ | 4,399 | $ | 3,371 | |||||||||
| Equity-based compensation expense: | |||||||||||||||||
| Cost of sales | $ | 40 | $ | 44 | $ | 39 | $ | 140 | |||||||||
| Selling, general and administrative | 499 | 1,231 | 248 | 3,218 | |||||||||||||
| Research and development | 237 | 334 | 475 | 1,064 | |||||||||||||
| Total equity-based compensation expense | $ | 776 | $ | 1,609 | $ | 762 | $ | 4,422 | |||||||||
| As of | |||||||||||||||||
| June 27, | July 3, | ||||||||||||||||
| 2009 | 2010 | ||||||||||||||||
| Backlog of orders | $ | 38,000 | $ | 264,000 | |||||||||||||
| Number of employees | 2,144 | 2,953 | (1) | ||||||||||||||
| * 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 3, | July 3, | |||||||||
| 2009 * | 2010 | |||||||||
| ASSETS | ||||||||||
| CURRENT ASSETS | ||||||||||
| Cash and cash equivalents | $ | 144,560 | $ | 162,840 | ||||||
| Restricted cash | 281 | 226 | ||||||||
|
Accounts and notes receivable, net of allowance for doubtful accounts of $1,378 and $507, respectively |
95,779 | 151,583 | ||||||||
| Inventories, net | 41,489 | 68,833 | ||||||||
| Prepaid expenses and other current assets | 11,566 | 13,956 | ||||||||
| Deferred income taxes | 1,786 | 1,783 | ||||||||
| TOTAL CURRENT ASSETS | 295,461 | 399,221 | ||||||||
| Property, plant and equipment, net | 36,046 | 29,715 | ||||||||
| Goodwill | 26,698 | 26,698 | ||||||||
| Intangible assets | 48,656 | 41,497 | ||||||||
| Other assets | 5,774 | 9,347 | ||||||||
| TOTAL ASSETS | $ | 412,635 | $ | 506,478 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||
| CURRENT LIABILITIES | ||||||||||
| Current portion of long term debt | $ | 48,964 | $ | - | ||||||
| Accounts payable | 39,908 | 80,326 | ||||||||
| Accrued expenses and other current liabilities | 32,576 | 38,197 | ||||||||
| Income taxes payable | 1,612 | 894 | ||||||||
| TOTAL CURRENT LIABILITIES | 123,060 | 119,417 | ||||||||
| Long term debt | 92,217 | 96,861 | ||||||||
| Deferred income taxes | 16,282 | 16,864 | ||||||||
| Other liabilities | 10,273 | 9,330 | ||||||||
| TOTAL LIABILITIES | 241,832 | 242,472 | ||||||||
| SHAREHOLDERS' EQUITY | ||||||||||
| Common stock, no par value | 413,092 | 420,370 | ||||||||
| Treasury stock, at cost | (46,356 | ) | (46,356 | ) | ||||||
| Accumulated deficit | (197,812 | ) | (111,731 | ) | ||||||
| Accumulated other comprehensive income | 1,879 | 1,723 | ||||||||
| TOTAL SHAREHOLDERS' EQUITY | 170,803 | 264,006 | ||||||||
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ | 412,635 | $ | 506,478 | ||||||
| * 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 | Nine months ended | |||||||||||||||
|
June 27, 2009 |
July 3, 2010 |
June 27, 2009 |
July 3, 2010 |
|||||||||||||
| Net cash provided by (used in) continuing operations | $ | (11,412 | ) | $ | 27,658 | $ | (41,245 | ) | $ | 67,977 | ||||||
| Net cash used in discontinued operations | (481 | ) | (582 | ) | (1,699 | ) | (1,488 | ) | ||||||||
| Net cash provided by (used in) operating activities | $ | (11,893 | ) | $ | 27,076 | $ | (42,944 | ) | $ | 66,489 | ||||||
| Net cash provided by (used in) investing activities, continued operations | (1,005 | ) | (1,275 | ) | (52,894 | ) | 642 | |||||||||
| Net cash provided by (used in) investing activities, discontinued operations | - | - | 149,857 | (1,838 | ) | |||||||||||
| Net cash provided by (used in) investing activities | $ | (1,005 | ) | $ | (1,275 | ) | $ | 96,963 | $ | (1,196 | ) | |||||
| Net cash provided by (used in) financing activities, continued operations | 51 | (47,304 | ) | (84,304 | ) | (47,121 | ) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (73 | ) | 262 | 40 | 108 | |||||||||||
| Changes in cash and cash equivalents | $ | (12,920 | ) | $ | (21,241 | ) | $ | (30,245 | ) | $ | 18,280 | |||||
| Cash and cash equivalents, beginning of period | 127,607 | 184,081 | 144,932 | 144,560 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 114,687 | $ | 162,840 | $ | 114,687 | $ | 162,840 | ||||||||
| Short-term investments & restricted cash | 2,598 | 226 | 2,598 | 226 | ||||||||||||
| Total cash, cash equivalents, restricted cash and short-term investments | $ | 117,285 | $ | 163,066 | $ | 117,285 | $ | 163,066 | ||||||||
| 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 | Three months ended | Nine months ended | Nine months ended | |||||||||||
| June 27, | July 3, | June 27, | July 3, | |||||||||||
| 2009 * | 2010 | 2009 * | 2010 | |||||||||||
|
(GAAP results) |
||||||||||||||
| Net revenue | $ | 52,076 | $ | 221,254 | $ | 114,724 | $ | 503,507 | ||||||
| Gross profit | 19,669 | 99,184 | 41,642 | 223,329 | ||||||||||
| Income (loss) from operations | (14,482 | ) | 50,052 | (81,564 | ) | 91,360 | ||||||||
| Income (loss) from continuing operations, net of tax | (15,262 | ) | 49,083 | (69,377 | ) | 86,081 | ||||||||
| Weighted average shares outstanding | ||||||||||||||
| Basic | 61,220 | 70,131 | 60,908 | 69,873 | ||||||||||
| Diluted | 61,220 | 74,960 | 60,908 | 74,494 | ||||||||||
| Income (loss) per share from continuing operations | ||||||||||||||
| Basic | $ | (0.25 | ) | $ | 0.69 | (1.14 | ) | $ | 1.22 | |||||
| Diluted | $ | (0.25 | ) | $ | 0.65 | $ | (1.14 | ) | $ | 1.15 | ||||
|
(Non-GAAP measures) |
||||||||||||||
| Net revenue | $ | 52,076 | $ | 221,254 | $ | 114,724 | $ | 503,507 | ||||||
| Gross profit | 19,709 | 99,228 | 41,681 | 223,469 | ||||||||||
| Income (loss) from operations | (11,802 | ) | 55,092 | (59,286 | ) | 104,592 | ||||||||
| Income (loss) from continuing operations, net of tax | (12,010 | ) | 55,643 | (59,533 | ) | 104,050 | ||||||||
| Weighted average shares outstanding, continuing operations | ||||||||||||||
| Basic | 61,220 | 70,131 | 60,908 | 69,873 | ||||||||||
| Diluted | 61,220 | 74,960 | 60,908 | 74,494 | ||||||||||
| Income (loss) per share from continuing operations | ||||||||||||||
| Basic | $ | (0.20 | ) | $ | 0.79 | $ | (0.98 | ) | $ | 1.48 | ||||
| Diluted | $ | (0.20 | ) | $ | 0.74 | $ | (0.98 | ) | $ | 1.39 | ||||
| * 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 July 3, 2010 | ||||||||||||||
|
(GAAP results) |
||||||||||||||
| Net revenue | $ | 202,185 | $ | 19,069 | $ | 221,254 | ||||||||
| Gross profit | 88,016 | 11,168 | 99,184 | |||||||||||
| Income from operations | 46,768 | 3,284 | 50,052 | |||||||||||
|
(Non-GAAP measures) |
||||||||||||||
| Net revenue | $ | 202,185 | $ | 19,069 | $ | 221,254 | ||||||||
| Gross profit | 88,051 | 11,177 | 99,228 | |||||||||||
| Income from operations | 50,486 | 4,606 | 55,092 | |||||||||||
| Nine months ended July 3, 2010 | ||||||||||||||
|
(GAAP results) |
||||||||||||||
| Net revenue | $ | 450,135 | $ | 53,372 | $ | 503,507 | ||||||||
| Gross profit | 191,355 | 31,974 | 223,329 | |||||||||||
| Income from operations | 81,809 | 9,551 | 91,360 | |||||||||||
|
(Non-GAAP measures) |
||||||||||||||
| Net revenue | $ | 450,135 | $ | 53,372 | $ | 503,507 | ||||||||
| Gross profit | 191,467 | 32,002 | 223,469 | |||||||||||
| Income from operations | 91,631 | 12,961 | 104,592 | |||||||||||
| Fiscal 2009: | ||||||||||||||
| Three months ended June 27, 2009 | ||||||||||||||
|
(GAAP results) |
||||||||||||||
| Net revenue | $ | 37,544 | $ | 14,532 | $ | 52,076 | ||||||||
| Gross profit | 11,932 | 7,737 | 19,669 | |||||||||||
| Income (loss) from operations | (16,861 | ) | 2,379 | (14,482 | ) | |||||||||
|
(Non-GAAP measures) |
||||||||||||||
| Net revenue | $ | 37,544 | $ | 14,532 | $ | 52,076 | ||||||||
| Gross profit | 11,962 | 7,747 | 19,709 | |||||||||||
| Income (loss) from operations | (15,686 | ) | 3,884 | (11,802 | ) | |||||||||
| Nine months ended June 27, 2009 | ||||||||||||||
|
(GAAP results) |
||||||||||||||
| Net revenue | $ | 78,180 | $ | 36,544 | $ | 114,724 | ||||||||
| Gross profit | 23,347 | 18,295 | 41,642 | |||||||||||
| Income (loss) from operations | (81,869 | ) | 305 | (81,564 | ) | |||||||||
|
(Non-GAAP measures) |
||||||||||||||
| Net revenue | $ | 78,180 | $ | 36,544 | $ | 114,724 | ||||||||
| Gross profit | 23,412 | 18,269 | 41,681 | |||||||||||
| Income (loss) from operations | (66,378 | ) | 7,092 | (59,286 | ) | |||||||||
| 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 | Nine months ended | Nine months ended | |||||||||||||||||||||||||
| June 27, |
% of Revenue |
July 3, |
% of Revenue |
June 27, |
% of Revenue |
July 3, |
% of Revenue |
|||||||||||||||||||||
| 2009 * | 2010 | 2009 * | 2010 | |||||||||||||||||||||||||
| Net revenue (GAAP results) | $ | 52,076 | $ | 221,254 | $ | 114,724 | $ | 503,507 | ||||||||||||||||||||
| Net revenue (Non-GAAP measures) | 52,076 | 221,254 | 114,724 | 503,507 | ||||||||||||||||||||||||
| Gross profit (GAAP results) | 19,669 | 37.8 | % | 99,184 | 44.8 | % | 41,642 | 36.3 | % | 223,329 | 44.4 | % | ||||||||||||||||
| - Equity-based compensation expense | 40 | 44 | 39 | 140 | ||||||||||||||||||||||||
| Gross profit (Non-GAAP measures) | 19,709 | 37.8 | % | 99,228 | 44.8 | % | 41,681 | 36.3 | % | 223,469 | 44.4 | % | ||||||||||||||||
| Income (loss) from operations (GAAP results) | (14,482 | ) | -27.8 | % | 50,052 | 22.6 | % | (81,564 | ) | -71.1 | % | 91,360 | 18.1 | % | ||||||||||||||
| - Amortization of intangibles | 2,783 | 2,386 | 8,311 | 7,160 | ||||||||||||||||||||||||
| - Restructuring | 567 | 1,045 | 9,730 | 1,650 | ||||||||||||||||||||||||
| - Impairment of goodwill | - | - | 2,709 | - | ||||||||||||||||||||||||
| - Equity-based compensation expense | 776 | 1,609 | 762 | 4,422 | ||||||||||||||||||||||||
| - Switzerland pension plan curtailment | (1,446 | ) | - | (1,446 | ) | - | ||||||||||||||||||||||
| - Tax settlement expense | - | - | 2,212 | - | ||||||||||||||||||||||||
| Income (loss) from operations (Non-GAAP measures) | (11,802 | ) | -22.7 | % | 55,092 | 24.9 | % | (59,286 | ) | -51.7 | % | 104,592 | 20.8 | % | ||||||||||||||
| Income (loss) from continuing operations, net of tax (GAAP results) | (15,262 | ) | -29.3 | % | 49,083 | 22.2 | % | (69,377 | ) | -60.5 | % | 86,081 | 17.1 | % | ||||||||||||||
| - Total non-GAAP adjustments to income (loss) from continuing operations | 2,680 | 5,040 | 22,278 | 13,232 | ||||||||||||||||||||||||
| - Gain on extinguishment of debt | - | - | (3,965 | ) | - | |||||||||||||||||||||||
| - Non cash interest expense | 1,648 | 1,768 | 4,918 | 5,235 | ||||||||||||||||||||||||
| - Net tax settlement benefit and other tax adjustments | (1,047 | ) | - | (13,201 | ) | - | ||||||||||||||||||||||
| - Tax effect of non-GAAP adjustments | (29 | ) | (248 | ) | (186 | ) | (498 | ) | ||||||||||||||||||||
| Income (loss) from continuing operations, net of tax (Non-GAAP measures) | (12,010 | ) | -23.1 | % | 55,643 | 25.1 | % | (59,533 | ) | -51.9 | % | 104,050 | 20.7 | % | ||||||||||||||
| Weighted average shares outstanding (GAAP & Non-GAAP) | ||||||||||||||||||||||||||||
| Basic | 61,220 | 70,131 | 60,908 | 69,873 | ||||||||||||||||||||||||
| Diluted | 61,220 | 74,960 | 60,908 | 74,494 | ||||||||||||||||||||||||
| Income (loss) per share from continuing operations (GAAP results) | ||||||||||||||||||||||||||||
| Basic | $ | (0.25 | ) | $ | 0.69 | $ | (1.14 | ) | $ | 1.22 | ||||||||||||||||||
| Diluted | $ | (0.25 | ) | $ | 0.65 | $ | (1.14 | ) | $ | 1.15 | ||||||||||||||||||
| Adjustments to net income (loss) per share | ||||||||||||||||||||||||||||
| Basic | $ | 0.05 | $ | 0.10 | $ | 0.16 | $ | 0.26 | ||||||||||||||||||||
| Diluted | $ | 0.05 | $ | 0.09 | $ | 0.16 | $ | 0.24 | ||||||||||||||||||||
| Income (loss) per share from continuing operations (Non-GAAP measures) | ||||||||||||||||||||||||||||
| Basic | $ | (0.20 | ) | $ | 0.79 | $ | (0.98 | ) | $ | 1.48 | ||||||||||||||||||
| Diluted | $ | (0.20 | ) | $ | 0.74 | $ | (0.98 | ) | $ | 1.39 | ||||||||||||||||||
| * 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 July 3, 2010 | ||||||||||||||||||
| Net revenue (GAAP results) | $ | 202,185 | $ | 19,069 | $ | 221,254 | ||||||||||||
| Net revenue (Non-GAAP measures) | 202,185 | 19,069 | 221,254 | |||||||||||||||
| Gross profit (GAAP results) | 88,016 | 43.5 | % | 11,168 | 58.6 | % | 99,184 | |||||||||||
| - Equity-based compensation expense | 35 | 9 | 44 | |||||||||||||||
| Gross profit (Non-GAAP measures) | 88,051 | 43.5 | % | 11,177 | 58.6 | % | 99,228 | |||||||||||
| Income from operations (GAAP results) | 46,768 | 23.1 | % | 3,284 | 17.2 | % | 50,052 | |||||||||||
| - Amortization of intangibles | 1,814 | 572 | 2,386 | |||||||||||||||
| - Restructuring | 626 | 419 | 1,045 | |||||||||||||||
| - Equity-based compensation expense | 1,278 | 331 | 1,609 | |||||||||||||||
| Income from operations (Non-GAAP measures) | 50,486 | 25.0 | % | 4,606 | 24.2 | % | 55,092 | |||||||||||
| Nine months ended July 3, 2010 | ||||||||||||||||||
| Net revenue (GAAP results) | $ | 450,135 | $ | 53,372 | $ | 503,507 | ||||||||||||
| Net revenue (Non-GAAP measures) | 450,135 | 53,372 | 503,507 | |||||||||||||||
| Gross profit (GAAP results) | 191,355 | 42.5 | % | 31,974 | 59.9 | % | 223,329 | |||||||||||
| - Equity-based compensation expense | 112 | 28 | 140 | |||||||||||||||
| Gross profit (Non-GAAP measures) | 191,467 | 42.5 | % | 32,002 | 60.0 | % | 223,469 | |||||||||||
| Income from operations (GAAP results) | 81,809 | 18.2 | % | 9,551 | 17.9 | % | 91,360 | |||||||||||
| - Amortization of intangibles | 5,442 | 1,718 | 7,160 | |||||||||||||||
| - Restructuring | 868 | 782 | 1,650 | |||||||||||||||
| - Equity-based compensation expense | 3,512 | 910 | 4,422 | |||||||||||||||
| Income from operations (Non-GAAP measures) | 91,631 | 20.4 | % | 12,961 | 24.3 | % | 104,592 | |||||||||||
| Fiscal 2009: | ||||||||||||||||||
| Three months ended June 27, 2009 | ||||||||||||||||||
| Net revenue (GAAP results) | $ | 37,544 | $ | 14,532 | $ | 52,076 | ||||||||||||
| Net revenue (Non-GAAP measures) | 37,544 | 14,532 | 52,076 | |||||||||||||||
| Gross profit (GAAP results) | 11,932 | 31.8 | % | 7,737 | 53.2 | % | 19,669 | |||||||||||
| - Equity-based compensation expense | 30 | 10 | 40 | |||||||||||||||
| Gross profit (Non-GAAP measures) | 11,962 | 31.9 | % | 7,747 | 53.3 | % | 19,709 | |||||||||||
| Income (loss) from operations (GAAP results) | (16,861 | ) | -44.9 | % | 2,379 | 16.4 | % | (14,482 | ) | |||||||||
| - Amortization of intangibles | 2,126 | 657 | 2,783 | |||||||||||||||
| - Restructuring | (93 | ) | 660 | 567 | ||||||||||||||
| - Equity-based compensation expense | 588 | 188 | 776 | |||||||||||||||
| - Switzerland pension plan curtailment | (1,446 | ) | - | (1,446 | ) | |||||||||||||
| Income (loss) from operations (Non-GAAP measures) | (15,686 | ) | -41.8 | % | 3,884 | 26.7 | % | (11,802 | ) | |||||||||
| Nine months ended June 27, 2009 | ||||||||||||||||||
| Net revenue (GAAP results) | $ | 78,180 | $ | 36,544 | $ | 114,724 | ||||||||||||
| Net revenue (Non-GAAP measures) | 78,180 | 36,544 | 114,724 | |||||||||||||||
| Gross profit (GAAP results) | 23,347 | 29.9 | % | 18,295 | 50.1 | % | 41,642 | |||||||||||
| - Equity-based compensation expense | 65 | (26 | ) | 39 | ||||||||||||||
| Gross profit (Non-GAAP measures) | 23,412 | 29.9 | % | 18,269 | 50.0 | % | 41,681 | |||||||||||
| Income (loss) from operations (GAAP results) | (81,869 | ) | -104.7 | % | 305 | 0.8 | % | (81,564 | ) | |||||||||
| - Amortization of intangibles | 6,340 | 1,971 | 8,311 | |||||||||||||||
| - Restructuring | 7,206 | 2,524 | 9,730 | |||||||||||||||
| - Impairment of goodwill | 2,709 | - | 2,709 | |||||||||||||||
| - Equity-based compensation expense | 682 | 80 | 762 | |||||||||||||||
| - Switzerland pension plan curtailment | (1,446 | ) | - | (1,446 | ) | |||||||||||||
| - Tax settlement expense | - | 2,212 | 2,212 | |||||||||||||||
| Income (loss) from operations (Non-GAAP measures) | (66,378 | ) | -84.9 | % | 7,092 | 19.4 | % | (59,286 | ) | |||||||||
| KULICKE & SOFFA INDUSTRIES, INC. | ||||||||
| ADJUSTED RETURN ON INVESTED CAPITAL | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Three months ended | ||||||||
| July 3, 2010 | ||||||||
| Income from operations | $ | 50,052 | ||||||
| Adjustment: Depreciation and amortization (1) | 4,336 | |||||||
| Adjusted income from operations | 54,388 | |||||||
| Adjusted income from operations, annualized (4) | $ | 217,552 | ||||||
| Cash, cash equivalents, restricted cash and investments | $ | 163,066 | ||||||
| Adjustment: cash, cash equivalents, restricted cash and investments (2) | (88,066 | ) | ||||||
| Adjusted cash, cash equivalents and investments | $ | 75,000 | ||||||
| Total assets excluding cash, cash equivalents and investments | 343,412 | |||||||
| Adjusted total assets | 418,412 | |||||||
| Total current liabilities | $ | 119,417 | ||||||
| Add: taxes payable (3) | 1,552 | |||||||
| Adjusted current liabilities | 120,969 | |||||||
| Adjusted net invested capital | $ | 297,443 | ||||||
| ROIC (4) | 73.1 | % | ||||||
(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
