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Kulicke & Soffa Industries, Inc. Reports Results for Its First Quarter Fiscal 2011

SINGAPORE, Feb 01, 2011 (BUSINESS WIRE) -- Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S" or the "Company")today announced results for its first fiscal quarter ended January 1, 2011. All information included in this press release relates to GAAP results.

For its first quarter of fiscal 2011, the Company reported net revenue of $148.9 million and net income of $15.1 million, or $0.21 per diluted share.

Quarterly GAAP Results


  Change vs.   Change vs.

Fiscal Q1 2011

  Fiscal Q1 2010   Fiscal Q4 2010
Net Revenue   $148.9 million   15.9%   (42.6%)
Gross Profit   $72.1 million   27.9%   (35.8%)
Gross Margin   48.4%   450 basis points   510 basis points
Income from Operations   $22.1 million   22.7%   (61.1%)
Operating Margin   14.8%   80 basis points   (710) basis points
Net Income   $15.1 million   (4.7%)   (73.1%)
Net Margin   10.1%   (220) basis points   (1150) basis points
EPS - Diluted   $0.21   0.0%   (73.1%)

Commenting on the results, Bruno Guilmart, President and Chief Executive Officer, said, "Revenue in the December quarter came in better than expected, with the sequential decline in ball bonder shipments significantly less than anticipated.

"We continue to see strong momentum in the gold to copper transition and have shipped initial volume orders of our newly introduced IConnPS ProCuTM machine. Given the proven productivity advantage of our ProCu machine we expect to see increased demand as we gain market share and benefit from replacement orders.

"Our wedge bonder equipment line continued to perform very well, with revenue increasing 66% in the December quarter compared to the September quarter. The increase was driven primarily by higher sales from the power semiconductor market but also continued demand in the automotive and renewable energy markets. The higher volume shipments of wedge bonder equipment during the December quarter contributed to the higher overall gross margin for the company."

Key Product Trends


  • Ball bonder net revenue decreased 58.1% over the September quarter. This sequential decrease was predominantly driven by reduced OSAT customer demand.
  • The first volume orders of the newly released IConnPS ProCu wire bonder have been recognized in the December quarter.
  • Sustained volumes of wedge bonder shipments are anticipated to continue through the March quarter.

Financial Highlights


  • Net revenue decreased sequentially although less than anticipated, exceeding the high end of guidance.
  • Gross margin increased 5.1% from the prior quarter to 48.4%.
  • Operating margin was 14.8%.
  • Net income was $15.1 million.
  • Diluted EPS was $0.21.
  • Operations generated $25.3 million of net cash.

Second Quarter Fiscal 2011 Outlook

The Company expects net revenue for the second quarter fiscal 2011 to be approximately $175 million to $195 million.

Looking forward, Bruno Guilmart, President and Chief Executive Officer, commented, "We expect our ball bonder business to benefit from our technology leadership as customers continue to transition from gold to copper wire bonding, replacement demand and improving OSAT volumes as well as continued strength in our wedge bonder business."

Earnings Conference Call Details

A conference call to discuss these results will be held today, February 1, 2011 beginning at 8:00 am (ET). To access the conference call, interested parties may call (877) 407-8037 or (201) 689-8037, or can access the live webcast at Investor Events.

A replay will be available from approximately one hour after the completion of the call through February 8, 2011 by calling toll-free (877) 660-6853 or internationally (201) 612-7415 and using the following replay access codes: 5521 (account number) and 364696 (replay ID number). A webcast replay will also be available Investor 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. (

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 our future revenue, sustained, increasing, continuing or strengthening demand for our products, increasing market share, the continuing transition from gold to copper wire bonding, replacement demand and improving OSAT volumes. 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.

(In thousands, except per share and employee data)
    Three months ended


  January 1,   January 2,
      2011       2010  
Net revenue:        
Equipment   $ 132,698     $ 111,597  
Expendable Tools     16,165       16,818  
Total net revenue     148,863       128,415  
Cost of sales:        
Equipment     70,238       65,145  
Expendable Tools     6,513       6,897  
Total cost of sales     76,751       72,042  
Gross profit:        
Equipment     62,460       46,452  
Expendable Tools     9,652       9,921  
Total gross profit     72,112       56,373  
Operating expenses:        
Selling, general and administrative     30,672       22,639  
Research and development     15,195       13,161  
Amortization of intangible assets     2,386       2,388  
Restructuring     1,792       199  
Total operating expenses     50,045       38,387  
Income from operations:        
Equipment     19,184       14,847  
Expendable Tools     2,883       3,139  
Total income from operations     22,067       17,986  
Other income (expense):        
Interest income     105       97  
Interest expense     (242 )     (371 )
Interest expense: non-cash     (1,772 )     (1,712 )
Income from operations before income taxes     20,158       16,000  
Provision for income taxes     5,059       160  
Net income   $ 15,099     $ 15,840  
Net income per share:        
Basic   $ 0.21     $ 0.23  
Diluted   $ 0.21     $ 0.21  
Weighted average shares outstanding:        
Basic     70,881       69,684  
Diluted     71,706       73,687  
    Three months ended
    January 1,   January 2,
Supplemental financial data:     2011       2010  
Depreciation and amortization   $ 4,407     $ 4,509  
Capital expenditures   $ 2,705     $ 1,096  
Equity-based compensation expense:        
Cost of sales   $ 48     $ 46  
Selling, general and administrative     963       714  
Research and development     276       344  
Total equity-based compensation expense   $ 1,287     $ 1,104  
    As of
    January 1,   January 2,
      2011       2010  
Backlog of orders   $ 193,000     $ 36,000  
Number of employees     2,628       2,574  
(In thousands)


  January 1,   October 2,
    2011   2010
Cash and cash equivalents   $ 197,551     $ 178,112  
Restricted cash     -       237  
Short-term investments     6,074       2,985  

Accounts and notes receivable, net of allowance for doubtful accounts of $1,261 and $980, respectively





Inventories, net     74,661       73,893  
Prepaid expenses and other current assets     13,224       15,985  
Deferred income taxes     5,445       5,443  
TOTAL CURRENT ASSETS     458,000       472,690  
Property, plant and equipment, net     30,766       30,059  
Goodwill     26,698       26,698  
Intangible assets     36,726       39,111  
Other assets     11,641       11,611  
TOTAL ASSETS   $ 563,831     $ 580,169  
Accounts payable   $ 41,567     $ 82,353  
Accrued expenses and other current liabilities     40,781       41,498  
Income taxes payable     3,904       1,279  
TOTAL CURRENT LIABILITIES     86,252       125,130  
Long term debt     100,110       98,475  
Deferred income taxes     20,896       20,355  
Other liabilities     14,657       13,729  
TOTAL LIABILITIES     221,915       257,689  
Common stock, no par value     427,397       423,715  
Treasury stock, at cost     (46,356 )     (46,356 )
Accumulated deficit     (40,571 )     (55,670 )
Accumulated other comprehensive income     1,446       791  
TOTAL SHAREHOLDERS' EQUITY     341,916       322,480  


  $ 563,831     $ 580,169  
(In thousands)


        Three months ended
        January 1, 2011   January 2, 2010
Net cash provided by operations     $ 25,310     $ 34,125  
Net cash used in discontinued operations       (524 )     (496 )
Net cash provided by operating activities     $ 24,786     $ 33,629  
Net cash used in investing activities, continuing operations       (5,648 )     (1,031 )
Net cash used in investing activities, discontinued operations       -       (1,838 )
Net cash used in investing activities     $ (5,648 )   $ (2,869 )
Net cash used in financing activities, continuing operations       125       (23 )
Effect of exchange rate changes on cash and cash equivalents       176       (90 )
  Changes in cash and cash equivalents     $ 19,439     $ 30,647  
  Cash and cash equivalents, beginning of period       178,112       144,560  
  Cash and cash equivalents, end of period     $ 197,551     $ 175,207  
  Short-term investments & restricted cash       6,074       216  
  Total Cash, cash equivalents, restricted cash and short-term investments   $ 203,625     $ 175,423  

SOURCE: Kulicke & Soffa Industries, Inc.

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations
P: 215-784-7518
F: 215-784-6180
Global IR Partners
David Pasquale
P: 914-337-8801

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