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Kulicke & Soffa Reports First Quarter 2017 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 January 2, 2016.

Quarterly Results

Fiscal Q1 2016

  Change vs.

Fiscal Q1 2015

  Change vs.

Fiscal Q4 2015

Net Revenue   $108.5 million   up 1.0%   down 8.9%
Gross Profit   $50.4 million   down 7.9%   down 13.4%
Gross Margin   46.5%   down 440 bps   down 240 bps
Income from Operations   $(1.7) million   down 117.5%   down 203.5%
Operating Margin   (1.6)%   down 1060 bps   down 300 bps
Net Income   $(0.1) million   down 101.2%   down 100.9%
Net Margin   (0.1)%   down 740 bps   down 830 bps
EPS - Diluted   $—   down 100.0%   down 100.0%

Jonathan Chou, Kulicke & Soffa's Interim Chief Executive Officer, Chief Financial Officer, stated, "Throughout this period of industry softness our entire organization continues to be extremely disciplined on managing costs while we maintain our aggressive development efforts within both our core and emerging advanced packaging opportunities. Ongoing feature releases within our existing equipment and expendable tools businesses as well as market acceptance of our recently introduced thermo-compression tools are testaments to our focus on development and also our traction on expanding reach into new served markets."

Due to cost-containment efforts as well as favorable one-time operating and tax benefits, the Company was able to come in below its prior break-even expectation. During the fourth quarter 2015 earnings call, break-even revenue for the first quarter was anticipated to be $125 million.

First Quarter Fiscal 2016 Key Product Trends

  • Ball bonder equipment net revenue decreased 4.5% from the September quarter.
  • 93.3% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased by 0.2% over the September quarter.
  • Advanced Packaging Mass Reflow net revenue decreased by 28.4% from the September quarter, due to industry seasonality and delayed customer deliveries.

First Quarter Fiscal 2016 Financial Highlights

  • Net revenue of $108.5 million.
  • Gross margin of 46.5%.
  • Net loss of $(0.1) million or $0.00 per share.
  • Cash and cash equivalents were $492.9 million as of January 2, 2016.
  • Through the first fiscal quarter 7.7 million shares, equivalent to 9.9% of weighted average shares outstanding, had been repurchased since the stock repurchase program's August 2014 initiation.

Second Quarter Fiscal 2016 Outlook

The Company currently expects net revenue in the second fiscal quarter of 2016 ending April 2, 2016 to be approximately $130 million to $140 million.

Looking forward, Jonathan Chou commented, "Stabilizing inventory levels throughout the industry combined with our improved short-term guidance support our view of a recovering market environment. This improving external condition along with our ongoing focus on cost efficiency, prudent capital deployment, targeted development and the initial acceptance of our thermo-compression tool collectively demonstrate our comprehensive effort and execution in driving long-term, sustainable growth."

Earnings Conference Call Details

A conference call to discuss these results will be held today, February 3, 2016, 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 10, 2016 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13628261. 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, LED and electronic 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 and organic development, adding advanced packaging, advanced SMT, 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 substantial completion of transition from gold to copper wire bonding by 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. 2015 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
            January 2, 2016   December 27, 2014
Net revenue           $ 108,534     $ 107,438  
Cost of sales             58,113       52,704  
Gross profit:             50,421       54,734  
Operating expenses:                
Selling, general and administrative             24,364       24,098  
Research and development             24,194       19,581  
Amortization of intangible assets             1,666       1,329  
Restructuring             1,902        
Total operating expenses             52,126       45,008  
(Loss) / Income from operations:             (1,705 )     9,726  
Other income (expense):                
Interest income             622       262  
Interest expense             (273 )     (303 )
(Loss) / Income from operations before income taxes             (1,356 )     9,685  
Income taxes (benefit) / expense             (1,265 )     1,843  
Net (loss) / income           $ (91 )   $ 7,842  
Net (loss) / income per share:                
Basic           $     $ 0.10  
Diluted           $     $ 0.10  
Weighted average shares outstanding:                
Basic             70,738       76,888  
Diluted             70,738       77,432  
            Three months ended
Supplemental financial data:           January 2, 2016   December 27, 2014
Depreciation and amortization           $ 4,051     $ 3,556  
Capital expenditures             1,394       2,253  
Equity-based compensation expense:                
Cost of sales             128       128  
Selling, general and administrative             (770 )     2,499  
Research and development             704       808  
Total equity-based compensation expense           $ 62     $ 3,435  
    As of        
    January 2, 2016   December 27, 2014        
Backlog of orders 1   $ 83,203   $ 60,545        
Number of employees     2,486     2,327        
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
    January 2, 2016   October 3, 2015
Cash and cash equivalents   $ 492,935     $ 498,614  
Accounts and notes receivable, net of allowance for doubtful accounts of $621 and $621 respectively     108,628       108,596  
Inventories, net     69,648       79,096  
Prepaid expenses and other current assets     17,340       16,937  
Deferred income taxes           4,126  
TOTAL CURRENT ASSETS     688,551       707,369  
Property, plant and equipment, net     52,076       53,234  
Goodwill     81,272       81,272  
Intangible assets     55,805       57,471  
Other assets     6,388       5,120  
TOTAL ASSETS   $ 884,092     $ 904,466  
Accounts payable     33,741       25,521  
Accrued expenses and other current liabilities     36,810       45,971  
Income taxes payable     1,353       2,442  
TOTAL CURRENT LIABILITIES     71,904       73,934  
Financing obligation     16,508       16,483  
Deferred income taxes     29,455       33,958  
Other liabilities     11,219       10,842  
TOTAL LIABILITIES     129,086       135,217  
Common stock, no par value     492,226       492,339  
Treasury stock, at cost     (137,696 )     (124,856 )
Retained earnings     402,772       402,863  
Accumulated other comprehensive income     (2,296 )     (1,097 )
TOTAL SHAREHOLDERS' EQUITY     755,006       769,249  

(In thousands)


    Three months ended
    January 2, 2016   December 27, 2014
Net cash provided by operating activities   $ 7,694     $ 46,442  
Net cash used in investing activities, continuing operations     (1,612 )     (4,176 )
Net cash used in financing activities, continuing operations     (12,425 )     (7,621 )
Effect of exchange rate changes on cash and cash equivalents     664       (36 )
Changes in cash and cash equivalents     (5,679 )     34,609  
Cash and cash equivalents, beginning of period     498,614       587,981  
Cash and cash equivalents, end of period   $ 492,935     $ 622,590  


Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7518
P: +31-40-272-3016
F: +1-215-784-6180

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