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Kulicke & Soffa Reports Third Quarter 2015 Results

August 4, 2015 6:55 AM

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 June 27, 2015.

Quarterly Results

Fiscal Q3 2015

Change vs.

Fiscal Q3 2014

Change vs.

Fiscal Q2 2015

Net Revenue $164.6 million down 8.8% up 13.4%
Gross Profit $77.6 million down 8.9% up 13.1%
Gross Margin 47.1% down 10 bps down 10 bps
Income from Operations $16.1 million down 49.1% up 64.3%
Operating Margin 9.8% down 770 bps up 310 bps
Net Income $25.0 million down 5.9% up 215.7%
Net Margin 15.2% up 50 bps up 970 bps
EPS – Diluted $0.33 down 2.9% up 230.0%

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "Our sequential revenue improvement was largely due to incremental wire bonding capacity additions for select core market customers as well as a pickup in demand for our recently acquired Advanced Packaging Mass Reflow business line."

Third Quarter Fiscal 2015 Key Product Trends

Third Quarter Fiscal 2015 Financial Highlights

Fourth Quarter Fiscal 2015 Outlook

The Company currently expects net revenue in the fourth fiscal quarter of 2015, ending October 3, 2015, to be in the range of approximately $135 million to $145 million.

Looking forward, Bruno Guilmart commented, “The lower level of guidance largely stems from higher inventory levels throughout the semiconductor value chain and expectations for muted semiconductor unit growth. Ultimately, these broad industry conditions reduce the near-term necessity for capacity additions to the install base. Our exposure to new market opportunities combined with a relentless focus on operational efficiency are anticipated to drive fundamental business improvements and further enhance our ability to perform throughout the cycle. Our recent and aggressive efforts to return capital to investors further extends our ability to create and deliver ongoing, meaningful and sustainable value to shareholders."

Earnings Conference Call Details

A conference call to discuss these results will be held today, August 4, 2015, 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 11, 2015 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13613537. 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, 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. (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. 2014 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 STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

Three months ended Nine months ended
June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014
Net revenue $ 164,634 $ 180,517 $ 417,299 $ 373,836
Cost of sales 87,063 95,360 216,424 192,642
Gross profit: 77,571 85,157 200,875 181,194
Operating expenses:
Selling, general and administrative 33,151 28,600 90,140 76,303
Research and development 25,380 23,480 68,133 60,277
Amortization of intangible assets 2,946 1,329 7,032 3,988
Restructuring 8 164 (33 ) 1,139
Total operating expenses 61,485 53,573 165,272 141,707
Income from operations: 16,086 31,584 35,603 39,487
Other income (expense):
Interest income 469 256 1,184 878
Interest expense (291 ) (316 ) (910 ) (732 )
Income from operations before income taxes 16,264 31,524 35,877 39,633
Income taxes (benefit)/expense (8,775 ) 4,908 (4,935 ) 5,904
Net income $ 25,039 $ 26,616 $ 40,812 $ 33,729
Net income per share:
Basic $ 0.33 $ 0.35 $ 0.53 $ 0.44
Diluted $ 0.33 $ 0.34 $ 0.53 $ 0.44
Weighted average shares outstanding:
Basic 75,420 76,596 76,376 76,308
Diluted 75,891 77,605 76,778 77,086
Three months ended Nine months ended
Supplemental financial data: June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014
Depreciation and amortization $ 5,415 $ 3,509 $ 13,978 $ 9,995
Capital expenditures 2,265 1,022 5,709 9,596
Equity-based compensation expense:
Cost of sales 88 82 304 269
Selling, general and administrative 1,914 2,182 6,389 6,924
Research and development 518 471 1,843 1,624
Total equity-based compensation expense $ 2,520 $ 2,735 $ 8,536 $ 8,817

As of

June 27, 2015

June 28, 2014

Backlog of orders 1

$

75,101

$

130,500

Number of employees

2,827

2,643

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 BALANCE SHEETS

(In thousands)

(Unaudited)

As of
June 27, 2015 September 27, 2014
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 475,925 $ 587,981
Short-term investments — 9,105
Accounts and notes receivable, net of allowance for doubtful accounts of $0 and $143 respectively 172,411 171,530
Inventories, net 78,312 49,694
Prepaid expenses and other current assets 16,354 15,090
Deferred income taxes 5,601 4,291
TOTAL CURRENT ASSETS 748,603 837,691
Property, plant and equipment, net 51,923 52,755
Goodwill 81,272 41,546
Intangible assets 60,322 5,891
Other assets 5,354 6,565
TOTAL ASSETS $ 947,474 $ 944,448
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short term debt $ — $ —
Accounts payable 47,907 35,132
Accrued expenses and other current liabilities 47,431 43,731
Income taxes payable 636 2,488
TOTAL CURRENT LIABILITIES 95,974 81,351
Financing obligation 17,634 19,102
Deferred income taxes 44,567 44,963
Other liabilities 11,729 9,790
TOTAL LIABILITIES 169,904 155,206
SHAREHOLDERS' EQUITY
Common stock, no par value 488,495 479,116
Treasury stock, at cost (107,659 ) (46,984 )
Retained earnings 395,678 354,866
Accumulated other comprehensive income 1,056 2,244
TOTAL SHAREHOLDERS' EQUITY 777,570 789,242
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 947,474 $ 944,448

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three months ended Nine months ended
June 27, 2015 June 28, 2014 June 27, 2015 June 28, 2014
Net cash provided by operating activities $ (214 ) $ 5,919 $ 48,346 $ 84,189
Net cash used in investing activities, continuing operations (362 ) 4,657 (90,919 ) (8,672 )
Net cash (used in) / provided by financing activities, continuing operations (51,245 ) (274 ) (69,837 ) 205
Effect of exchange rate changes on cash and cash equivalents 600 45 354 (53 )
Changes in cash and cash equivalents (51,221 ) 10,347 (112,056 ) 75,669
Cash and cash equivalents, beginning of period 527,146 587,110 587,981 521,788
Cash and cash equivalents, end of period $ 475,925 $ 597,457 $ 475,925 $ 597,457

Kulicke & Soffa Industries, Inc.

Joseph Elgindy

Investor Relations

P: +1-215-784-7500

P: +31-40-272-3016

F: +1-215-784-6180

Source: Kulicke & Soffa Industries, Inc.

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