SINGAPORE — (BUSINESS WIRE) — August 2, 2011 — Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) (“K&S” or the “Company”) today announced results for its third fiscal quarter ended July 2, 2011.
For its third quarter of fiscal 2011, the Company reported net revenue of $294.4 million and net income of $70.7 million, or $0.95 per diluted share.
| Quarterly Results | ||||||
|
Fiscal Q3 2011 |
Change vs.
Fiscal Q3 2010 |
Change vs.
Fiscal Q2 2011 |
||||
| Net Revenue | $294.4 million | 33.1% | 42.4% | |||
| Gross Profit | $134.1 million | 35.2% | 35.5% | |||
| Gross Margin | 45.5% | 70 bps | (240) bps | |||
| Income from Operations | $81.7 million | 63.1% | 87.1% | |||
| Operating Margin | 27.7% | 510 bps | 660 bps | |||
| Net Income | $70.7 million | 44.1% | 77.3% | |||
| Net Margin | 24.0% | 180 bps | 470 bps | |||
| EPS – Diluted | $0.95 | 46.2% | 75.9% | |||
Bruno Guilmart, Kulicke & Soffa’s President and Chief Executive Officer, said, “Our results again exceeded the high-end of guidance, with revenue increasing approximately 42% sequentially and net income surpassing the Company’s historic record. At the high level, our June quarter results reflect the strong demand generated from our market leadership positions, specifically within our Ball and Wedge bonder equipment lines. The continued success of our copper capable solutions affirms our customers’ ongoing adoption of incremental copper capacity and highlights our leadership in the significant transition. Our flexible and efficient manufacturing model enabled us to increase production and meet our customers’ record demand, while balancing inventory and maximizing profitability.”
Key Product Trends
- Ball bonder equipment net revenue increased 70% over the March quarter.
- 70% of ball bonder equipment shipments were sold as copper capable bonders.
- Wedge bonder equipment net revenue decreased 32% over the March quarter.
Financial Highlights
- Net revenue increased sequentially to $294.4 million, exceeding the high end of guidance.
- Gross margin remained robust at 45.5%.
- Operating margin was up 660 bps from the prior quarter to 27.7%.
- Net income was $70.7 million.
- Diluted EPS was $0.95.
- Cash, cash equivalents and investments increased to $335.5 million up $53.7 million from the prior quarter.
Fourth Quarter Fiscal 2011 Outlook
The Company expects net revenue for the fourth quarter of fiscal 2011 to be approximately $155 million to $175 million, mainly due to a softening of OSAT demand. On a full year basis, this would represent revenue growth of approximately 6% to 8% for fiscal year 2011 compared to fiscal year 2010.
Looking forward, Bruno Guilmart, commented, “Our growth has outpaced expectations for the past few quarters given our market leadership and the world class solutions we provide customers. We expect to benefit from longer-term trends, including the copper transition, for the next few years. Our prior efforts to improve efficiency, while increasing the capacity of our supply chain, will enable us to maximize profitability, as we maintain our focus on new and existing market opportunities while leveraging our manufacturing model.”
Earnings Conference Call Details
A conference call to discuss these results will be held today, August 2, 2011 beginning at 8:00 am (ET). To access the conference call, interested parties may call +1-877-407-8037 or internationally +1-201-689-8037, or can access the live webcast at www.kns.com/investors/events.
A replay will be available from approximately one hour after the completion of the call through August 9, 2011 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the following replay access codes: 5521 (account number) and 375366 (replay ID number). A webcast replay will also be available at www.kns.com/investors/events.
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 die and wedge bonders 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 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 and improving OSAT volumes. 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; 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. 2010 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 | Nine months ended | ||||||||||||||||
| July 2, | July 3, | July 2, | July 3, | ||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||
| Net revenue: | |||||||||||||||||
| Equipment | $ | 275,398 | $ | 202,185 | $ | 598,106 | $ | 450,135 | |||||||||
| Expendable Tools | 19,040 | 19,069 | 51,924 | 53,372 | |||||||||||||
| Total net revenue | 294,438 | 221,254 | 650,030 | 503,507 | |||||||||||||
| Cost of sales: | |||||||||||||||||
| Equipment | 152,493 | 114,169 | 323,564 | 258,780 | |||||||||||||
| Expendable Tools | 7,851 | 7,901 | 21,303 | 21,398 | |||||||||||||
| Total cost of sales | 160,344 | 122,070 | 344,867 | 280,178 | |||||||||||||
| Gross profit: | |||||||||||||||||
| Equipment | 122,905 | 88,016 | 274,542 | 191,355 | |||||||||||||
| Expendable Tools | 11,189 | 11,168 | 30,621 | 31,974 | |||||||||||||
| Total gross profit | 134,094 | 99,184 | 305,163 | 223,329 | |||||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative | 31,715 | 31,015 | 97,800 | 81,332 | |||||||||||||
| Research and development | 16,595 | 14,686 | 48,314 | 41,827 | |||||||||||||
| Amortization of intangible assets | 2,391 | 2,386 | 7,163 | 7,160 | |||||||||||||
| Restructuring | 1,740 | 1,045 | 4,516 | 1,650 | |||||||||||||
| Total operating expenses | 52,441 | 49,132 | 157,793 | 131,969 | |||||||||||||
| Income from operations: | |||||||||||||||||
| Equipment | 77,348 | 46,768 | 137,879 | 81,809 | |||||||||||||
| Expendable Tools | 4,305 | 3,284 | 9,491 | 9,551 | |||||||||||||
| Total income from operations | 81,653 | 50,052 | 147,370 | 91,360 | |||||||||||||
| Other income (expense): | |||||||||||||||||
| Interest income | 185 | 104 | 445 | 290 | |||||||||||||
| Interest expense | (241 | ) | (385 | ) | (724 | ) | (1,106 | ) | |||||||||
| Interest expense: non-cash | (1,877 | ) | (1,768 | ) | (5,429 | ) | (5,235 | ) | |||||||||
| Income from operations before income taxes | 79,720 | 48,003 | 141,662 | 85,309 | |||||||||||||
| Provision (benefit) for income taxes | 9,006 | (1,080 | ) | 15,964 | (772 | ) | |||||||||||
| Net income | $ | 70,714 | $ | 49,083 | $ | 125,698 | $ | 86,081 | |||||||||
| Net income per share: | |||||||||||||||||
| Basic | $ | 0.97 | $ | 0.69 | $ | 1.75 | $ | 1.22 | |||||||||
| Diluted | $ | 0.95 | $ | 0.65 | $ | 1.71 | $ | 1.15 | |||||||||
| Weighted average shares outstanding: | |||||||||||||||||
| Basic | 72,199 | 70,131 | 71,531 | 69,873 | |||||||||||||
| Diluted | 74,130 | 74,960 | 73,082 | 74,494 | |||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| July 2, | July 3, | July 2, | July 3, | ||||||||||||||
| Supplemental financial data: | 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Depreciation and amortization | $ | 4,470 | $ | 4,339 | $ | 13,274 | $ | 13,258 | |||||||||
| Capital expenditures | $ | 1,226 | $ | 1,265 | $ | 5,815 | $ | 3,371 | |||||||||
| Equity-based compensation expense: | |||||||||||||||||
| Cost of sales | $ | 55 | $ | 44 | $ | 159 | $ | 140 | |||||||||
| Selling, general and administrative | 1,673 | 1,231 | 4,784 | 3,218 | |||||||||||||
| Research and development | 340 | 334 | 970 | 1,064 | |||||||||||||
| Total equity-based compensation expense | $ | 2,068 | $ | 1,609 | $ | 5,913 | $ | 4,422 | |||||||||
| As of | |||||||||||||||||
| July 2, | July 3, | ||||||||||||||||
| 2011 | 2010 | ||||||||||||||||
| Backlog of orders | $ | 176,000 | $ | 264,000 | |||||||||||||
| Number of employees | 3,005 | 2,953 | |||||||||||||||
| KULICKE & SOFFA INDUSTRIES, INC. | |||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
| July 2, | October 2, | ||||||||
| 2011 | 2010 | ||||||||
| ASSETS | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and cash equivalents | $ | 329,281 | $ | 178,112 | |||||
| Restricted cash | - | 237 | |||||||
| Short-term investments | 6,253 | 2,985 | |||||||
| Accounts and notes receivable, net of allowance for doubtful | |||||||||
| accounts of $705 and $980, respectively | 215,410 | 196,035 | |||||||
| Inventories, net | 86,290 | 73,893 | |||||||
| Prepaid expenses and other current assets | 16,535 | 15,985 | |||||||
| Deferred income taxes | 5,461 | 5,443 | |||||||
| TOTAL CURRENT ASSETS | 659,230 | 472,690 | |||||||
| Property, plant and equipment, net | 29,782 | 30,059 | |||||||
| Goodwill | 39,196 | 26,698 | |||||||
| Intangible assets | 31,953 | 39,111 | |||||||
| Other assets | 12,049 | 11,611 | |||||||
| TOTAL ASSETS | $ | 772,210 | $ | 580,169 | |||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Current portion of long term debt | $ | 103,483 | $ | - | |||||
| Accounts payable | 97,011 | 82,353 | |||||||
| Accrued expenses and other current liabilities | 52,244 | 41,498 | |||||||
| Earnout agreement payable | 12,498 | - | |||||||
| Income taxes payable | - | 1,279 | |||||||
| TOTAL CURRENT LIABILITIES | 265,236 | 125,130 | |||||||
| Long term debt | - | 98,475 | |||||||
| Deferred income taxes | 28,523 | 20,355 | |||||||
| Other liabilities | 13,123 | 13,729 | |||||||
| TOTAL LIABILITIES | 306,882 | 257,689 | |||||||
| SHAREHOLDERS' EQUITY | |||||||||
| Common stock, no par value | 439,618 | 423,715 | |||||||
| Treasury stock, at cost | (46,356 | ) | (46,356 | ) | |||||
| Accumulated income (deficit) | 70,028 | (55,670 | ) | ||||||
| Accumulated other comprehensive income | 2,038 | 791 | |||||||
| TOTAL SHAREHOLDERS' EQUITY | 465,328 | 322,480 | |||||||
| TOTAL LIABILITIES AND | |||||||||
| SHAREHOLDERS' EQUITY | $ | 772,210 | $ | 580,169 | |||||
| KULICKE & SOFFA INDUSTRIES, INC. | |||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||||
| (In thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three months ended | Nine months ended | ||||||||||||||||
| July 2, 2011 | July 3, 2010 | July 2, 2011 | July 3, 2010 | ||||||||||||||
| Net cash provided by continuing operations | $ | 50,300 | $ | 27,658 | $ | 152,087 | $ | 67,977 | |||||||||
| Net cash used in discontinued operations | (579 | ) | (582 | ) | (1,547 | ) | (1,488 | ) | |||||||||
| Net cash provided by operating activities | $ | 49,721 | $ | 27,076 | $ | 150,540 | $ | 66,489 | |||||||||
| Net cash provided by (used in) investing activities, continuing operations | (1,420 | ) | (1,275 | ) | (9,057 | ) | 642 | ||||||||||
| Net cash used in investing activities, discontinued operations | - | - | - | (1,838 | ) | ||||||||||||
| Net cash used in investing activities | $ | (1,420 | ) | $ | (1,275 | ) | $ | (9,057 | ) | $ | (1,196 | ) | |||||
| Net cash provided by (used in) financing activities | 4,805 | (47,304 | ) | 8,836 | (47,121 | ) | |||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 499 | 262 | 850 | 108 | |||||||||||||
| Changes in cash and cash equivalents | $ | 53,605 | $ | (21,241 | ) | $ | 151,169 | $ | 18,280 | ||||||||
| Cash and cash equivalents, beginning of period | 275,676 | 184,081 | 178,112 | 144,560 | |||||||||||||
| Cash and cash equivalents, end of period | $ | 329,281 | $ | 162,840 | $ | 329,281 | $ | 162,840 | |||||||||
| Short-term investments & restricted cash | 6,253 | 226 | 6,253 | 226 | |||||||||||||
| Total cash, cash equivalents, restricted cash and short-term investments | $ | 335,534 | $ | 163,066 | $ | 335,534 | $ | 163,066 | |||||||||
Contact:
Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor
Relations
P: +1-215-784-7518
F: +1-215-784-6180
Email Contact
or
Global
IR Partners
David Pasquale
P: +1-914-337-8801
Email Contact