Kulicke and Soffa Industries Inc. : Kulicke & Soffa Reports First Quarter 2013 Results

Kulicke and Soffa Industries, Inc. (NASDAQ: 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 [phone] or internationally [phone]. 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 [phone] or internationally [phone] 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 (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. 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
Cash and cash equivalents, end of period		$	494,170			$	403,761
Total cash, cash equivalents and short-term investments		$	494,170			$	403,761

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Planning
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David Pasquale
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