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Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2014 Results

SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its fourth quarter and fiscal year ended September 27, 2014.

Quarterly Results
     
Fiscal Q4 2014
    Change vs.
Fiscal Q4 2013
   

Change vs.
Fiscal Q3 2014

Net Revenue     $194.7 million     12.2%     7.9%
Gross Profit     $92.4 million     14.5%     8.5%
Gross Margin     47.4%     90 bps     20 bps
Income from Operations     $37.5 million     8.5%     18.7%
Operating Margin     19.3%     (60) bps     180 bps
Net Income     $29.3 million     (0.9)%     9.9%
Net Margin     15.0%     (200) bps     30 bps
EPS - Diluted     $0.38     (2.6)%     11.8%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "We ended fiscal 2014 with a great September quarter where we generated healthy revenues and strong margins. Throughout the fiscal year we have made positive steps to further enhance our profitability and market leadership positions, including expansion of our manufacturing footprint, execution of our aggressive product roadmaps and significant development progress within our organic core, advanced packaging and value-added-services programs."

Fourth Quarter Fiscal 2014 Key Product Trends

  • Ball bonder equipment net revenue increased 5.0% over the June quarter.
  • 83.5% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased 47.8% over the June quarter.

Fiscal Year 2014 Financial Highlights

  • Net revenue of $568.6 million.
  • Gross margin of 48.1%.
  • Net income was $63.0 million or $0.81 per diluted share.
  • Cash, cash equivalents and investments were $597.1 million as at September 27, 2014.

First Quarter Fiscal 2015 Outlook

The Company expects net revenue in the first fiscal quarter of 2015 ending December 27, 2014 to be approximately $90 million to $100 million.

Looking forward, Bruno Guilmart commented, "We introduced eight new Equipment and Expendable Tools solutions this past fiscal year, which extend our reach into current markets, expand our applications served and are expected to broaden and diversify our customer base. We continue to receive tremendous interest from potential customers regarding our latest recently launched solution, the APAMATM, Chip-to-Substrate Thermo-Compression Bonder. We are increasingly well positioned to capitalize on the industry's adoption of advanced packaging technologies."

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 6, 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 investor.kns.com.

A replay will be available from approximately one hour after the completion of the call through November 13, 2014 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13593103. A webcast replay will also be available at investor.kns.com.

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. (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; 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.

         
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

         
    Three months ended   Twelve months ended
   

September 27,
2014

 

September 28,
2013

 

September 27,
2014

 

September 28,
2013

Net revenue:                        
Equipment   $ 177,279     $ 156,479     $ 503,049     $ 472,567  
Expendable Tools   17,454     17,129     65,520     62,371  
Total net revenue   194,733     173,608     568,569     534,938  
                         
Cost of sales:                        
Equipment   95,001     86,066     268,934     261,270  
Expendable Tools   7,372     6,856     26,081     26,723  
Total cost of sales   102,373     92,922     295,015     287,993  
                         
Gross profit:                        
Equipment   82,278     70,413     234,115     211,297  
Expendable Tools   10,082     10,273     39,439     35,648  
Total gross profit   92,360     80,686     273,554     246,945  
                         
Operating expenses:                        
Selling, general and administrative   30,774     28,072     107,077     108,401  
Research and development   22,779     15,377     83,056     61,620  
Amortization of intangible assets   1,330     2,292     5,318     9,175  
Restructuring   (20 )   401     1,119     1,943  
Total operating expenses   54,863     46,142     196,570     181,139  
                         
Income from operations:                        
Equipment   33,552     30,344     59,769     52,991  
Expendable Tools   3,945     4,200     17,215     12,815  
Total income from operations   37,497     34,544     76,984     65,806  
                         
Other income (expense):                        
Interest income   319     254     1,197     883  
Interest expense   (316 )   (20 )   (1,048 )   (21 )
                         
Income from operations before income taxes   37,500     34,778     77,133     66,668  
Provision for income taxes   8,241     5,247     14,145     7,310  
Net income   $ 29,259     $ 29,531     $ 62,988     $ 59,358  
                         
Net income per share:                        
Basic   $ 0.38     $ 0.39     $ 0.82     $ 0.79  
Diluted   $ 0.38     $ 0.39     $ 0.81     $ 0.78  
                         
Weighted average shares outstanding:                        
Basic   76,658     75,279     76,396     75,132  
Diluted   77,925     76,565     77,292     76,190  
                         
    Three months ended   Twelve months ended
Supplemental financial data:  

September 27,
2014

 

September 28,
2013

 

September 27,
2014

 

September 28,
2013

Depreciation and amortization   $ 3,525     $ 4,187     $ 13,520     $ 18,489
Capital expenditures   2,805     11,215     12,401     17,172
Equity-based compensation expense:                      
Cost of sales   75     20     344     295
Selling, general and administrative   1,982     2,082     8,906     8,457
Research and development   462     480     2,086     1,918
Total equity-based compensation expense   $ 2,519     $ 2,582     $ 11,336     $ 10,670
    As of
   

September 27,
2014

 

September 28,
2013

Backlog of orders1   $ 79,100     $ 52,100
Number of employees   2,278     2,164

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

     
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

     
    As of
   

September 27,
2014

 

September 28,
2013

ASSETS
CURRENT ASSETS            
Cash and cash equivalents   $ 587,981     $ 521,788  
Short-term investments   9,105     3,252  
Accounts and notes receivable, net of allowance for doubtful accounts of $143 and $504 respectively   171,530     162,714  
Inventories, net   49,694     38,135  
Prepaid expenses and other current assets   15,090     24,012  
Deferred income taxes   4,291     4,487  
TOTAL CURRENT ASSETS   837,691     754,388  
             
Property, plant and equipment, net   52,755     47,541  
Goodwill   41,546     41,546  
Intangible assets   5,891     11,209  
Other assets   6,565     8,310  
TOTAL ASSETS   $ 944,448     $ 862,994  
             
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES            
Accounts payable   $ 35,132     $ 37,030  
Accrued expenses and other current liabilities   43,731     38,868  
Income taxes payable   2,488     1,504  
TOTAL CURRENT LIABILITIES   81,351     77,402  
             
Financing obligation   19,102     19,396  
Deferred income taxes   44,963     40,709  
Other liabilities   9,790     8,822  
TOTAL LIABILITIES   155,206     146,329  
             
SHAREHOLDERS' EQUITY            
Common stock, no par value   479,116     467,525  
Treasury stock, at cost   (46,984 )   (46,356 )
Accumulated income   354,866     291,878  
Accumulated other comprehensive income   2,244     3,618  
TOTAL SHAREHOLDERS' EQUITY   $ 789,242     $ 716,665  
             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 944,448     $ 862,994  
         
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

         
    Three months ended   Twelve months ended
   

September 27,
2014

 

September 28,
2013

 

September 27,
2014

 

September 28,
2013

Net cash (used in) provided by operating activities   (1,729 )   26,644     82,460     94,824  
Net cash used in investing activities   (7,302 )   (14,467 )   (15,974 )   (15,114 )
Net cash (used in) provided by financing activities   (369 )   865     (164 )   1,733  
Effect of exchange rate changes on cash and cash equivalents   (76 )   253     (129 )   101  
Changes in cash and cash equivalents   (9,476 )   13,295     66,193     81,544  
Cash and cash equivalents, beginning of period   597,457     508,493     521,788     440,244  
Cash and cash equivalents, end of period   $ 587,981     $ 521,788     $ 587,981     $ 521,788  
                         
Short-term investments   9,105     3,252     9,105     3,252  
Total cash, cash equivalents and short-term investments   $ 597,086     $ 525,040     $ 597,086     $ 525,040  

 

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

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