Kulicke & Soffa Reports Second Quarter 2014 Results

SINGAPORE--()--Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”) today announced results for its second fiscal quarter ended March 29, 2014.

 
Quarterly Results
     

Fiscal Q2 2014

    Change vs.

Fiscal Q2 2013

    Change vs.

Fiscal Q1 2014

Net Revenue     $114.2 million     7.6%     44.4%
Gross Profit     $57.7 million     18.1%     50.3%
Gross Margin     50.5%     450 bps     200 bps
Income from Operations $10.1 million 23.5% (557.9)%
Operating Margin     8.9%     113 bps     1,164 bps
Net Income $9.1 million 23.6% (563.5)%
Net Margin     7.9%     103 bps     1,041 bps
EPS – Diluted     $0.12     20.0%     (500.0)%
 

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "Revenue in our second fiscal quarter was in the mid-range of our guidance and represented a 44% sequential increase. Our ability to generate strong gross margins was due, in part, to the strong contributions from wedge bonding, stud bumping, tools, and our service solutions, and the positive impact of our flexible manufacturing model. In addition, efforts in advanced packaging continue to produce outstanding results as the development team continues to innovate and produce deliverables against an aggressive road map."

Second Quarter Fiscal 2014 Key Product Trends

  • Ball bonder equipment net revenue increased 80.9% over the December quarter.
  • 69.7% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue decreased 32.7% over the December quarter.

Second Quarter Fiscal 2014 Financial Highlights

  • Net revenue of $114.2 million.
  • Gross margin of 50.5%.
  • Net income of $9.1 million or $0.12 per share.
  • Cash, cash equivalents and short-term investments were $596.3 million as at March 29, 2014.

Third Quarter Fiscal 2014 Outlook

The Company currently expects net revenue in the third fiscal quarter of 2014, ending June 28, 2014, to be in the range of approximately $165 million to $175 million.

Looking forward, Bruno Guilmart commented, "We have experienced strengthening demand in the majority of served markets and expect this trend to continue throughout the June quarter. We look ahead with great optimism as we continue to actively enhance our core market positions, expand in adjacent areas through organic development and pursue meaningful external growth opportunities."

Earnings Conference Call Details

A conference call to discuss these results will be held today, April 29, 2014, 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 May 6, 2014 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13579632. 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 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 Six months ended
March 29, 2014     March 30, 2013 March 29, 2014     March 30, 2013
Net revenue:
Equipment $ 97,612 $ 91,083 $ 160,757 $ 190,985
Expendable Tools 16,594   15,027   32,562   29,164  
Total net revenue 114,206 106,110 193,319 220,149
 
Cost of sales:
Equipment 50,711 51,140 85,184 107,572
Expendable Tools 5,823   6,150   12,098   12,232  
Total cost of sales 56,534 57,290 97,282 119,804
 
Gross profit:
Equipment 46,901 39,943 75,573 83,413
Expendable Tools 10,771   8,877   20,464   16,932  
Total gross profit 57,672   48,820   96,037   100,345  
 
Operating expenses:
Selling, general and administrative 25,927 26,204 47,703 52,234
Research and development 19,326 12,207 36,797 30,460
Amortization of intangible assets 1,330 2,294 2,659 4,587
Restructuring 978   (75 ) 975   669  
Total operating expenses 47,561   40,630   88,134   87,950  
 
Income from operations:
Equipment 5,293 4,428 (1,587 ) 6,173
Expendable Tools 4,818   3,762   9,490   6,222  
Total income from operations 10,111 8,190 7,903 12,395
 
Other income (expense):
Interest income 343 188 622 362
Interest expense (297 ) (1 ) (416 ) (1 )
 
Income from operations before income taxes 10,157 8,377 8,109 12,756
Provision for income taxes 1,087   1,041   996   1,816  
Net income $ 9,070   $ 7,336   $ 7,113   $ 10,940  
 
Net income per share:
Basic $ 0.12   $ 0.10   $ 0.09   $ 0.15  
Diluted $ 0.12   $ 0.10   $ 0.09   $ 0.14  
 
Weighted average shares outstanding:
Basic 76,404 75,166 76,163 75,009
Diluted 77,021 76,553 76,777 76,332
 
       
Three months ended Six months ended
Supplemental financial data: March 29, 2014     March 30, 2013 March 29, 2014     March 30, 2013
Depreciation and amortization $ 3,494 $ 4,702 $ 6,486 $ 9,504
Capital expenditures 3,198 1,787 8,574 3,403
Equity-based compensation expense:
Cost of sales 82 74 187 222
Selling, general and administrative 2,126 1,924 4,742 4,250
Research and development 478   293   1,153   1,020

Total equity-based compensation expense

$ 2,686   $ 2,291   $ 6,082   $ 5,492
 
   
As of
March 29, 2014     March 30, 2013
Backlog of orders 1 $ 51,000 $ 56,000
Number of employees 2,306 2,328
 

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
March 29, 2014     September 28, 2013
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 587,110 $ 521,788
Short-term investments 9,152 3,252
Accounts and notes receivable, net of allowance for doubtful accounts of $318 and $504 respectively 97,342 162,714
Inventories, net 43,617 38,135
Prepaid expenses and other current assets 18,488 24,012
Deferred income taxes 4,475   4,487  
TOTAL CURRENT ASSETS 760,184 754,388
 
Property, plant and equipment, net 53,432 47,541
Goodwill 41,546 41,546
Intangible assets 8,550 11,209
Other assets 8,321   8,310  
TOTAL ASSETS $ 872,033   $ 862,994  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 38,288 $ 37,030
Accrued expenses and other current liabilities 32,187 38,868
Income taxes payable 1,771   1,504  
TOTAL CURRENT LIABILITIES 72,246 77,402
 
Financing obligation 19,615 19,396
Deferred income taxes 41,220 40,709
Other liabilities 8,830   8,822  
TOTAL LIABILITIES 141,911   146,329  
 
SHAREHOLDERS' EQUITY
Common stock, no par value 474,195 467,525
Treasury stock, at cost (46,356 ) (46,356 )
Accumulated income 298,991 291,878
Accumulated other comprehensive income 3,292   3,618  
TOTAL SHAREHOLDERS' EQUITY 730,122   716,665  
       
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 872,033   $ 862,994  
 
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

       
Three months ended Six months ended
March 29, 2014     March 30, 2013 March 29, 2014     March 30, 2013
Net cash provided by (used in) operating activities $ 41,021 $ (1,662 ) $ 78,270 $ 56,832
Net cash (used in) provided by investing activities, continuing operations (4,600 ) 6,423 (13,329 ) 1,907
Net cash provided by financing activities, continuing operations 221 381 479 540
Effect of exchange rate changes on cash and cash equivalents (130 ) (693 ) (98 ) (904 )
Changes in cash and cash equivalents 36,512 4,449 65,322 58,375
Cash and cash equivalents, beginning of period 550,598   494,170   521,788   440,244  
Cash and cash equivalents, end of period $ 587,110   $ 498,619   $ 587,110   $ 498,619  
 

Contacts

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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Contacts

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