Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2014 Results

SINGAPORE--()--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 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 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  

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

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