SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its third fiscal quarter ended July 1, 2017. The Company reported third quarter net revenue of $243.9 million and a diluted EPS of $0.43. The adjusted non-GAAP diluted EPS was $0.62 after exclusion of a unique charge and favorable tax credit as detailed below.

Quarterly Results
			Fiscal Q3 2017			Change vs. Fiscal Q3 2016			Change vs. Fiscal Q2 2017
Net Revenue			$243.9 million			up 12.7%			up 22.2%
Gross Profit			$111.7 million			up 11.7%			up 23.7%
Gross Margin			45.8%			down 40 bps			up 60 bps
Income from Operations			$11.5 million			down 70.3%			down 64.8%
Operating Margin			4.7%			down 1310 bps			down 1160 bps
Net Income			$30.8 million			down 3.1%			up 6.1%
Net Margin			12.6%			down 210 bps			down 190 bps
EPS - Diluted			$0.43			down 4.4%			up 7.5%

Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "We continue to benefit from the strong industry environment, improved market dynamics and new opportunities in our core business and expanding portfolio. In parallel, we remain focused on further enhancing exposure and alignment to several other meaningful near and long-term opportunities."

During the June quarter the Company incurred a one-time, non-cash impairment charge of $35.2 million as well as a favorable foreign tax credit of $20.9 million. Excluding this unique charge and credit resulted in an adjusted non-GAAP net income of $45.1 million and diluted EPS of $0.62.

Third Quarter Fiscal 2017 Key Product Trends

• Ball bonder equipment net revenue increased by 19.0% over the March quarter.
• Wedge bonder equipment net revenue decreased by 5.9% over the strong March quarter.

Third Quarter Fiscal 2017 Financial Highlights

• Net revenue of $243.9 million.
• Gross margin of 45.8%.
• Net income of $30.8 million or $0.43 per share.
• Cash, cash equivalents, restricted cash and short-term investments were $593.9 million as of July 1, 2017.

Fourth Quarter Fiscal 2017 Outlook

The Company currently expects net revenue in the fourth fiscal quarter of 2017 ending September 30, 2017 to be approximately $200 million to $215 million, a 42% improvement over the same period in the prior year.

Looking forward, Dr. Fusen Chen commented, "As we aggressively work toward optimizing our existing businesses, accomplishing our development goals and executing on existing and new growth initiatives, such as the recent Liteq acquisition, we anticipate fundamental enhancements to our value proposition."

K&S anticipates revenue for its full fiscal year 2017 to fall between $793 million and $808 million, an approximately 28% improvement over the prior fiscal year.

Earnings Conference Call Details

A conference call to discuss these results will be held today, August 2, 2017, beginning at 8:00 am (EDT). 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 August 9, 2017 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13666382. A webcast replay will also be available at investor.kns.com.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor packaging and electronic assembly solutions supporting the global automotive, consumer, communications, computing and industrial segments. As a pioneer in the semiconductor space, 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, electronics assembly, wedge bonding and a broader range of expendable tools to its core offerings. Combined with its extensive expertise in process technology and focus on development, K&S is well positioned to help customers meet the challenges of packaging and assembling the next-generation of electronic 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, replacement demand, our research and development efforts, our ability to control costs, and our ability to identify and realize new growth opportunities within segments, such as automotive and industrial as well as surrounding technology adoption such as system in package and advanced packaging techniques. 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; the risk that identified market opportunities may not grow or developed as we anticipated; 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; the possibility that we may need to impair the carrying value of goodwill and/or intangibles established in connection with one or more of our prior acquisitions; 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. 2016 Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Kulicke 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 CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share and employee data) (Unaudited)
			Three months ended										Nine months ended
			July 1, 2017					July 2, 2016					July 1, 2017					July 2, 2016
Net revenue			$	243,897				$	216,414				$	593,149				$	481,348
Cost of sales				132,199					116,374					322,842					261,240
Gross profit				111,698					100,040					270,307					220,108
Operating expenses:
Selling, general and administrative				35,356					36,776					94,398					94,928
Research and development				25,980					22,960					72,505					69,593
Impairment charges				35,207					—					35,207					—
Amortization of intangible assets				1,521					1,665					4,565					4,996
Restructuring				2,170					17					2,282					1,965
Total operating expenses				100,234					61,418					208,957					171,482
Income from operations				11,464					38,622					61,350					48,626
Other income (expense):
Interest income				1,751					972					4,502					2,295
Interest expense				(264	)				(290	)				(787	)				(839	)
Income before income taxes				12,951					39,304					65,065					50,082
Income tax (benefit) expense				(17,867	)				7,519					(10,377	)				13,299
Share of results of equity-method investee, net of tax				7					—					7					—
Net income			$	30,811				$	31,785				$	75,435				$	36,783
Net income per share:
Basic			$	0.43				$	0.45				$	1.06				$	0.52
Diluted			$	0.43				$	0.45				$	1.05				$	0.52
Weighted average shares outstanding:
Basic				71,063					70,379					70,960					70,502
Diluted				72,483					70,843					72,169					70,802
			Three months ended										Nine months ended
Supplemental financial data:			July 1, 2017					July 2, 2016					July 1, 2017					July 2, 2016
Depreciation and amortization			$	3,964				$	4,019				$	11,739				$	12,221
Capital expenditures				3,803					1,480					21,909					4,396
Equity-based compensation expense:
Cost of sales				97					98					344					323
Selling, general and administrative				2,179					1,331					7,363					2,021
Research and development				514					472					1,763					1,592
Total equity-based compensation expense			$	2,790				$	1,901				$	9,470				$	3,936
													As of
													July 1, 2017					July 2, 2016
Backlog of orders 1													$	198,592				$	82,976
Number of employees														3,299					2,743

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

KULICKE & SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited)
			As of
			July 1, 2017					October 1, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	455,357				$	423,907
Restricted cash				28,572					—
Short-term investments				110,000					124,000
Accounts and other receivable, net of allowance for doubtful accounts of $82 and $506 respectively				214,147					130,455
Inventories, net				126,382					87,295
Prepaid expenses and other current assets				25,027					15,285
TOTAL CURRENT ASSETS				959,485					780,942
Property, plant and equipment, net				66,233					50,342
Goodwill				46,065					81,272
Intangible assets, net				46,244					50,810
Deferred income taxes				27,593					16,822
Equity investments				1,305					—
Other assets				1,991					2,256
TOTAL ASSETS			$	1,148,916				$	982,444
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable			$	87,151				$	41,813
Accrued expenses and other current liabilities				101,261					63,954
Income taxes payable				10,181					12,830
TOTAL CURRENT LIABILITIES				198,593					118,597
Financing obligation				16,031					16,701
Deferred income taxes				32,324					27,697
Other liabilities				14,197					12,931
TOTAL LIABILITIES				261,145					175,926
SHAREHOLDERS' EQUITY
Common stock, no par value				504,155					498,676
Treasury stock, at cost				(139,594	)				(139,407	)
Retained earnings				525,410					449,975
Accumulated other comprehensive loss				(2,200	)				(2,726	)
TOTAL SHAREHOLDERS' EQUITY				887,771					806,518
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY			$	1,148,916				$	982,444

KULICKE & SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
			Three months ended										Nine months ended
			July 1, 2017					July 2, 2016					July 1, 2017					July 2, 2016
Net cash provided by operating activities			$	25,188				$	35,437				$	68,166				$	34,458
Net cash used in investing activities, continuing operations				(4,185	)				(1,847	)				(36,584	)				(3,639	)
Net cash provided used in financing activities, continuing operations				(162	)				(102	)				(805	)				(14,195	)
Effect of exchange rate changes on cash and cash equivalents				(687	)				647					673					890
Changes in cash and cash equivalents				20,154					34,135					31,450					17,514
Cash and cash equivalents, beginning of period				435,203					481,993					423,907					498,614
Cash and cash equivalents, end of period			$	455,357				$	516,128				$	455,357				$	516,128
Restricted cash				28,572					—					28,572					—
Short-term investments				110,000					—					110,000					—
Total cash, cash equivalents, restricted cash and short-term investments				593,929					516,128					593,929					516,128

 

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