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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
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