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Kulicke & Soffa Reports First Quarter 2014 Results

SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its first fiscal quarter ended December 28, 2013.

Quarterly Results
    Fiscal Q1 2014  

Change vs.
Fiscal Q1 2013


Change vs.
Fiscal Q4 2013

Net Revenue   $79.1 million   (30.6)%   (54.4)%
Gross Profit   $38.4 million   (25.5)%   (52.5)%
Gross Margin   48.5%   330 bps   200 bps
Loss from Operations   ($2.2 million)   (152.5)%   (106.4)%
Operating Margin   (2.8)%   (650) bps   (2,270) bps
Net Loss   ($2.0 million)   (154.3)%   (106.6)%
Net Margin   (2.5)%   (570) bps   (1,950) bps
EPS - Diluted   ($0.03)   (160.0)%   (107.7)%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "We have demonstrated the ability to drive significant operational leverage at reasonable costs, in periods of strong demand and have now demonstrated the ability to lower our break-even point and minimize losses, in periods of soft demand. During the December quarter, the shift in product mix and our ability to adjust manufacturing capacity by over 50%, has enabled us to drive meaningful gross margin improvement."

First Quarter Fiscal 2014 Key Product Trends

  • Ball bonder equipment net revenue decreased 67.5% over the September quarter.
  • 81.5% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased 7.3% over the September quarter.

First Quarter Fiscal 2014 Financial Highlights

  • Net revenue of $79.1 million.
  • Gross margin of 48.5%.
  • Net loss was $(2.0) million or $(0.03) per share.
  • Cash, cash equivalents and short-term investments were $557.2 million as at December 28, 2013.

Second Quarter Fiscal 2014 Outlook

The Company expects net revenue in the second fiscal quarter of 2014 ending March 29, 2014 to be approximately $110 million to $120 million.

Looking forward, Bruno Guilmart commented, "According to Gartner and VLSI Research, 2014 and 2015 semiconductor unit growth forecasts are anticipated to significantly outpace the prior two calendar years. This positive market outlook combined with our operational model, growing balance sheet, core market strength and ongoing investments in advanced packaging allows us to look ahead with continued optimism."

Earnings Conference Call Details

A conference call to discuss these results will be held today, January 28, 2014, 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

A replay will be available from approximately one hour after the completion of the call through February 4, 2014 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13574612. A webcast replay will also be available at

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 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. (

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 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. 2013 Annual Report on Form 10-K and our other filings with the Securities and Exchange CommissionKulicke 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.


(In thousands, except per share and employee data)


    Three months ended
    December 28, 2013   December 29, 2012
Net revenue:        
Equipment   $ 63,145     $ 99,902
Expendable Tools   15,968     14,137
Total net revenue   79,113     114,039
Cost of sales:        
Equipment   34,473     56,432
Expendable Tools   6,275     6,082
Total cost of sales   40,748     62,514
Gross profit:        
Equipment   28,672     43,470
Expendable Tools   9,693     8,055
Total gross profit   38,365     51,525
Operating expenses:        
Selling, general and administrative   21,776     26,030
Research and development   17,471     18,253
Amortization of intangible assets   1,329     2,293
Restructuring   (3 )   744
Total operating expenses   40,573     47,320
(Loss) Income from operations:        
Equipment   (6,880 )   1,745
Expendable Tools   4,672     2,460
Total (loss) income from operations   (2,208 )   4,205
Other income (expense):        
Interest income   279     174
Interest expense   (119 )  
Interest expense: non-cash      
(Loss) Income from operations before income taxes   (2,048 )   4,379
(Benefit) Provision for income taxes   (91 )   775
Net (loss) income   $ (1,957 )   $ 3,604
Net (loss) income per share:        
Basic   $ (0.03 )   $ 0.05
Diluted   $ (0.03 )   $ 0.05
Weighted average shares outstanding:        
Basic   75,912     74,852
Diluted   75,912     76,209
    Three months ended
Supplemental financial data:   December 28, 2013   December 29, 2012
Depreciation and amortization   $ 2,992   $ 4,802
Capital expenditures     5,429     1,616
Equity-based compensation expense:        
Cost of sales     105     148
Selling, general and administrative     2,616     2,326
Research and development     675     727
Total equity-based compensation expense   $ 3,396   $ 3,201
    As of
    December 28, 2013   December 29, 2012
Backlog of orders (1)   $ 46,000   $ 71,000
Number of employees     2,173     2,609

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


(In thousands)


    As of
    December 28, 2013   September 28, 2013
Cash and cash equivalents   $ 550,598     $ 521,788  
Short-term investments   6,552     3,252  
Accounts and notes receivable, net of allowance for doubtful accounts of $733 and $504, respectively   113,246     162,714  
Inventories, net   36,262     38,135  
Prepaid expenses and other current assets   16,818     24,012  
Deferred income taxes   4,474     4,487  
TOTAL CURRENT ASSETS   727,950     754,388  
Property, plant and equipment, net   52,531     47,541  
Goodwill   41,546     41,546  
Intangible assets   9,880     11,209  
Other assets   8,293     8,310  
TOTAL ASSETS   $ 840,200     $ 862,994  
Accounts payable   $ 22,093     $ 37,030  
Accrued expenses and other current liabilities   28,352     38,868  
Income taxes payable   2,006     1,504  
TOTAL CURRENT LIABILITIES   52,451     77,402  
Financing obligation   19,788     19,396  
Deferred income taxes   40,573     40,709  
Other liabilities   8,927     8,822  
TOTAL LIABILITIES   121,739     146,329  
Common stock, no par value   471,388     467,525  
Treasury stock, at cost   (46,356 )   (46,356 )
Accumulated income   289,921     291,878  
Accumulated other comprehensive income   3,508     3,618  
TOTAL SHAREHOLDERS' EQUITY   718,461     716,665  

(In thousands)


    Three months ended
    December 28, 2013   December 29, 2012
Net cash provided by operating activities   $ 37,249     $ 58,494  
Net cash used in investing activities, continuing operations   (8,729 )   (4,516 )
Net cash provided by financing activities, continuing operations   258     159  
Effect of exchange rate changes on cash and cash equivalents   32     (211 )
Changes in cash and cash equivalents   28,810     53,926  
Cash and cash equivalents, beginning of period   521,788     440,244  
Cash and cash equivalents, end of period   $ 550,598     $ 494,170  


Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Planning
P: +1-215-784-7518
F: +1-215-784-6180

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