Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2013 Results

Business Wire

SINGAPORE--(BUSINESS WIRE)--

Kulicke and Soffa Industries, Inc. (KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”) today announced results for its fourth quarter and fiscal year ended September 28, 2013.

 
Quarterly Results
       
Fiscal Q4 2013
      Change vs.
Fiscal Q4 2012
      Change vs.
Fiscal Q3 2013
Net Revenue       $173.6 million       (35.5)%       23.0%
Gross Profit       $80.7 million       (34.4)%       22.4%
Gross Margin       46.5%       80 bps       (20) bps
Income from Operations $34.5 million (50.9)% 83.1%
Operating Margin       19.9%       (620) bps       650 bps
Net Income $29.5 million (56.1)% 56.4%
Net Margin       17.0%       (800) bps       360 bps
EPS – Diluted       $0.39       (56.7)%       56%
 

Bruno Guilmart, Kulicke & Soffa's President and Chief Executive Officer, said, “For the most part, the fourth quarter developed as expected, but was a lot more dynamic than we anticipated. Demand has rebounded in our wedge bonder business and remained solid for our ball bonders, especially for our copper solutions. During the quarter, we ramped production through our flexible and efficient manufacturing model, and continued to drive overall profitability and free cash flow generation for the Company.”

Fourth Quarter Fiscal 2013 Key Product Trends

  • Ball bonder equipment net revenue increased 24.5% over the June quarter.
  • 80.2% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased 95.5% over the June quarter.

Fiscal Year 2013 Financial Highlights

  • Net revenue of $534.9 million.
  • Gross margin of 46.2%.
  • Net income was $59.4 million or $0.78 per share.
  • Cash, cash equivalents and investments were $525.0 million as at September 28, 2013.

First Quarter Fiscal 2014 Outlook

The Company expects net revenue in the first fiscal quarter of 2014 ending December 28, 2013 to be approximately $70 million to $80 million.

Looking forward, Bruno Guilmart commented, “Our organization’s collective expertise continues to allow K&S to optimize performance in periods of both rapid expansion and contraction. We remain confident as we continue to build on to our market leading positions within both our equipment and expendable tools portfolios. As an example, we released several new core products during the September quarter. Over the next week we plan to ship the first alpha version of our advanced packaging solution to a key strategic customer for evaluation. We are excited about this progress and we will keep the market updated on future developments.”

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 7, 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 investor.kns.com.

A replay will be available from approximately one hour after the completion of the call through November 14, 2013 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 421598. A webcast replay will also be available at investor.kns.com.

About Kulicke & Soffa

Kulicke & Soffa (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 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 28,   September 29, September 28,   September 29,
2013 2012 2013 2012
Net revenue:
Equipment $ 156,479 $ 252,785 $ 472,567 $ 727,082
Expendable Tools 17,129   16,381   62,371   63,941  
Total net revenue 173,608 269,166 534,938 791,023
 
Cost of sales:
Equipment 86,066 139,479 261,270 397,210
Expendable Tools 6,856   6,703   26,723   26,423  
Total cost of sales 92,922 146,182 287,993 423,633
 
Gross profit:
Equipment 70,413 113,306 211,297 329,872
Expendable Tools 10,273   9,678   35,648   37,518  
Total gross profit 80,686   122,984   246,945   367,390  
 
Operating expenses:
Selling, general and administrative 28,072 31,029 108,401 110,966
Research and development 15,377 17,369 61,620 63,446
Amortization of intangible assets 2,292 2,295 9,175 9,178
Restructuring 401   1,959   1,943   4,574  
Total operating expenses 46,142   52,652   181,139   188,164  
 
Income from operations:
Equipment 30,344 67,046 52,991 165,791
Expendable Tools 4,200   3,286   12,815   13,435  
Total income from operations 34,544 70,332 65,806 179,226
 
Other income (expense):
Interest income 254 182 883 833
Interest expense (20 ) (21 ) (633 )
Interest expense: non-cash   (1 )   (5,175 )
 
Income from operations before income taxes 34,778 70,513 66,668 174,251
Provision for income taxes 5,247   3,231   7,310   13,671  
Net income $ 29,531   $ 67,282   $ 59,358   $ 160,580  
 
Net income per share:
Basic $ 0.39   $ 0.91   $ 0.79   $ 2.17  
Diluted $ 0.39   $ 0.89   $ 0.78   $ 2.13  
 
Weighted average shares outstanding:
Basic 75,279 74,116 75,132 73,887
Diluted 76,565 75,942 76,190 75,502
   
Three months ended Twelve months ended
September 28,   September 29, September 28,   September 29,
Supplemental financial data: 2013 2012 2013 2012
Depreciation and amortization $ 4,187 $ 4,615 $ 18,489 $ 17,265
Capital expenditures 11,215 1,757 17,172 6,902
Equity-based compensation expense:
Cost of sales 20 86 295 312
Selling, general and administrative 2,049 1,575 8,457 6,602
Research and development 480   461   1,918   1,777  
Total equity-based compensation expense $ 2,549   $ 2,122   $ 10,670   $ 8,691  
 
 
As of
September 28, September 29,
2013 2012
Backlog of orders $ 52,100 $ 90,000
Number of employees 2,164 2,936
 
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 
As of
September 28,   September 29,
2013 2012
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 521,788 $ 440,244
Short-term investments 3,252
Accounts and notes receivable, net of allowance for doubtful accounts of $504 and $937 respectively 162,714 188,986
Inventories, net 38,135 58,994
Prepaid expenses and other current assets 24,012 21,577
Deferred income taxes

4,487

  3,515  
TOTAL CURRENT ASSETS

754,388

713,316
 
Property, plant and equipment, net 47,541 28,441
Goodwill 41,546 41,546
Intangible assets 11,209 20,387
Other assets 8,310   11,919  
TOTAL ASSETS $

862,994

  $ 815,609  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 37,030 $ 57,231
Accrued expenses and other current liabilities 38,868 57,946
Income taxes payable 1,504   8,192  
TOTAL CURRENT LIABILITIES 77,402 123,369
 
Built-to-suit liability 19,396
Deferred income taxes

40,709

37,875
Other liabilities 8,822   10,698  
TOTAL LIABILITIES

146,329

  171,942  
 
SHAREHOLDERS' EQUITY
Common stock, no par value 467,525 455,122
Treasury stock, at cost (46,356 ) (46,356 )
Accumulated income 291,878 232,520
Accumulated other comprehensive income 3,618   2,381  
TOTAL SHAREHOLDERS' EQUITY $ 716,665   $ 643,667  
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $

862,994

  $ 815,609  
   
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
Three months ended Twelve months ended
September 28,   September 29, September 28,   September 29,
2013 2012 2013 2012
Net cash provided by operations $ 26,644 $ 59,321 $ 94,824 $ 183,969
Net cash used in discontinued operations   (29 )   (1,498 )
Net cash provided by operating activities 26,644 59,292 94,824 182,471
Net cash used in investing activities, continuing operations (14,467 ) (1,757 ) (15,114 ) (15,386 )
Net cash provided by (used in) financing activities, continuing operations 865 1,834 1,733 (105,138 )
Effect of exchange rate changes on cash and cash equivalents 253   178   101   109  
Changes in cash and cash equivalents 13,295 59,547 81,544 62,056
Cash and cash equivalents, beginning of period 508,493   380,697   440,244   378,188  
Cash and cash equivalents, end of period $ 521,788   $ 440,244   $ 521,788   $ 440,244  
 
Short-term investments & restricted cash 3,252     3,252    
Total cash, cash equivalents, restricted cash and short-term investments $ 525,040   $ 440,244   $ 525,040   $ 440,244  

Contact:
Kulicke & Soffa
Joseph Elgindy
Investor Relations & Strategic Planning
P: +1-215-784-7518
F: +1-215-784-6180
jelgindy@kns.com
or
Global IR Partners
David Pasquale
P: +1-914-337-8801
klic@globalirpartners.com

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