Kulicke & Soffa Reports First Quarter 2013 Results

Kulicke & Soffa Reports First Quarter 2013 Results

SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NAS: KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its first fiscal quarter ended December 29, 2012.

 
Quarterly Results
     

Fiscal Q1 2013

    Change vs.

Fiscal Q1 2012

    Change vs.

Fiscal Q4 2012

Net Revenue     $114.0 million     (5.0%)     (57.6%)
Gross Profit     $51.5 million     (6.8%)     (58.1%)
Gross Margin     45.2%     (90) bps     (50) bps
Income from Operations $4.2 million (66.0%) (94.0%)
Operating Margin     3.7%     (660) bps     (2,240) bps
Net Income $3.6 million (57.6%) (94.6%)
Net Margin     3.2%     (390) bps     (2,180) bps
EPS - Diluted     $0.05     (54.5%)     (94.4%)
 

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, "The first fiscal quarter's revenue came in at the higher end of our guidance range. The pullback from the prior quarter reflects the high degree of seasonality in our business, with the December quarter traditionally the weakest of the fiscal year. We planned for the decline and took appropriate actions at the beginning of the quarter to accelerate our cost- containment programs. As a result, we reduced our operating expenses by 10% compared to the prior quarter, further strengthened our balance sheet and maintained a strong gross margin."


First Quarter Fiscal 2013 Key Product Trends

  • Ball bonder equipment net revenue decreased 64.5% over the September quarter.
  • 74.8% of ball bonder equipment was sold as copper capable bonders.
  • Wedge bonder equipment net revenue decreased 23% from the September quarter.

First Quarter Fiscal 2013 Financial Highlights

  • Net revenue of $114.0 million.
  • Gross margin of 45.2%.
  • Net income was $3.6 million or $0.05 per share.
    • Net income was reduced by $1.8 million of adjustments related to the Company's RISC (Research Incentive Scheme for Companies) grant.
    • Without this item net income would have been $5.4 million or $0.07 per share.
  • Total cash and short-term investments were $494.2 million on December 29, 2012, a $53.9 million increase from the prior quarter ended September 29, 2012.

Second Quarter Fiscal Year 2013 Outlook

The Company expects net revenue in the second fiscal quarter of 2013 ending March 30, 2013 to be approximately $90 million to $100 million.

Looking forward, Bruno Guilmart commented, "We expect our business to improve as we move through the fiscal year based on normal market seasonality combined with the ongoing copper transition. In general, we normally gain increased visibility from customers after the Chinese New Year Holiday. We remain confident in our long-term business prospects given the strength of our existing equipment portfolio and development pipeline, our market leadership positions, and our strong balance sheet."

Earnings Conference Call Details

A conference call to discuss these results will be held today, January 29, 2013, 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 www.kns.com/investors/events.

A replay will be available from approximately one hour after the completion of the call through February 5, 2013 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 407421. A webcast replay will also be available at www.kns.com/investors/events.

About Kulicke & Soffa

Kulicke & Soffa (NAS: 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. 2012 Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Kulicke & 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
December 29, December 31,
  2012     2011  
 
Net revenue:
Equipment $ 99,902 $ 106,149
Expendable Tools   14,137     13,875  
Total net revenue 114,039 120,024
 
Cost of sales:
Equipment 56,432 59,004
Expendable Tools   6,082     5,744  
Total cost of sales 62,514 64,748
 
Gross profit:
Equipment 43,470 47,145
Expendable Tools   8,055     8,131  
Total gross profit   51,525     55,276  
 
Operating expenses:
Selling, general and administrative 26,030 25,240
Research and development 18,253 14,148
Amortization of intangible assets 2,293 2,295
Restructuring   744     1,217  
Total operating expenses   47,320     42,900  
 
 
Income from operations:
Equipment 1,745 9,877
Expendable Tools   2,460     2,499  
Total income from operations 4,205 12,376
 
Other income (expense):
Interest income 174 260
Interest expense - (242 )
Interest expense: non-cash   -     (1,910 )
 
Income from operations before income taxes 4,379 10,484
 
Provision for income taxes 775 1,977
     
Net income $ 3,604   $ 8,507  
 
Net income per share:
Basic $ 0.05   $ 0.12  
Diluted $ 0.05   $ 0.11  
 
Weighted average shares outstanding:
Basic 74,852 73,540
Diluted 76,209 74,628
 
Three months ended
December 29, December 31,
Supplemental financial data:   2012     2011  
 
Depreciation and amortization $ 4,802 $ 4,258
 
Capital expenditures $ 1,616 $ 1,498
 
Equity-based compensation expense:
Cost of sales $ 148 $ 85
Selling, general and administrative 2,326 1,611
Research and development   727     403  
Total equity-based compensation expense $ 3,201   $ 2,099  
 
As of
December 29, December 31,
  2012     2011  
 
Backlog of orders $ 71,000 $ 88,000
 
Number of employees 2,609 2,735
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
  December 29,   September 29,
  2012     2012  
ASSETS
 
CURRENT ASSETS
Cash and cash equivalents $ 494,170 $ 440,244
Restricted cash 2,900 -

Accounts and notes receivable, net of allowance for doubtful accounts of $1,019 and $937, respectively

98,715 188,986
Inventories, net 54,328 58,994
Prepaid expenses and other current assets 16,018 21,577
Deferred income taxes   3,522     3,515  
 
TOTAL CURRENT ASSETS 669,653 713,316
 
Property, plant and equipment, net 28,781 28,441
Goodwill 41,546 41,546
Intangible assets 18,092 20,387
Other assets   11,416     11,919  
 
TOTAL ASSETS $ 769,488   $ 815,609  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
CURRENT LIABILITIES
Accounts payable $ 20,305 $ 57,231
Accrued expenses and other current liabilities 42,040 57,946
Income taxes payable   6,817     8,192  
 
TOTAL CURRENT LIABILITIES 69,162 123,369
 
Deferred income taxes 38,007 37,875
Other liabilities   10,994     10,698  
 
TOTAL LIABILITIES   118,163     171,942  
 
SHAREHOLDERS' EQUITY
Common stock, no par value 458,482 455,122
Treasury stock, at cost (46,356 ) (46,356 )
Accumulated income 236,124 232,520
Accumulated other comprehensive income   3,075     2,381  
 
TOTAL SHAREHOLDERS' EQUITY   651,325     643,667  

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 769,488   $ 815,609  
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
   
Three months ended
December 29, 2012 December 31, 2011
 
Net cash provided by operations $ 58,494 $ 34,324
Net cash used in discontinued operations   -     (486 )
Net cash provided by operating activities $ 58,494 $ 33,838
 
Net cash used in investing activities (4,516 ) (9,982 )
 
Net cash provided by financing activities 159 1,576
Effect of exchange rate changes on cash and cash equivalents   (211 )   141  
Changes in cash and cash equivalents $ 53,926 $ 25,573
Cash and cash equivalents, beginning of period   440,244     378,188  

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