MRO Magazine

Kulicke & Soffa Reports First Quarter 2016 Results

February 3, 2016 | By Business Wire News

SINGAPORE

Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”) today announced results for its first fiscal quarter ended January 2, 2016.

 
Quarterly Results
   

Fiscal Q1 2016

   Change vs.

Fiscal Q1 2015

   Change vs.

Fiscal Q4 2015
Net Revenue   $108.5 million   up 1.0%   down 8.9%
Gross Profit   $50.4 million   down 7.9%   down 13.4%
Gross Margin   46.5%   down 440 bps   down 240 bps
Income from Operations $(1.7) million down 117.5% down 203.5%
Operating Margin   (1.6)%   down 1060 bps   down 300 bps
Net Income $(0.1) million down 101.2% down 100.9%
Net Margin   (0.1)%   down 740 bps   down 830 bps
EPS – Diluted   $—   down 100.0%   down 100.0%
 

Jonathan Chou, Kulicke & Soffa’s Interim Chief Executive Officer, Chief Financial Officer, stated, “Throughout this period of industry softness our entire organization continues to be extremely disciplined on managing costs while we maintain our aggressive development efforts within both our core and emerging advanced packaging opportunities. Ongoing feature releases within our existing equipment and expendable tools businesses as well as market acceptance of our recently introduced thermo-compression tools are testaments to our focus on development and also our traction on expanding reach into new served markets.”

Due to cost-containment efforts as well as favorable one-time operating and tax benefits, the Company was able to come in below its prior break-even expectation. During the fourth quarter 2015 earnings call, break-even revenue for the first quarter was anticipated to be $125 million.

First Quarter Fiscal 2016 Key Product Trends

  • Ball bonder equipment net revenue decreased 4.5% from the September quarter.
  • 93.3% of ball bonder equipment was sold as copper capable.
  • Wedge bonder equipment net revenue increased by 0.2% over the September quarter.
  • Advanced Packaging Mass Reflow net revenue decreased by 28.4% from the September quarter, due to industry seasonality and delayed customer deliveries.

First Quarter Fiscal 2016 Financial Highlights

  • Net revenue of $108.5 million.
  • Gross margin of 46.5%.
  • Net loss of $(0.1) million or $0.00 per share.
  • Cash and cash equivalents were $492.9 million as of January 2, 2016.
  • Through the first fiscal quarter 7.7 million shares, equivalent to 9.9% of weighted average shares outstanding, had been repurchased since the stock repurchase program’s August 2014 initiation.

Second Quarter Fiscal 2016 Outlook

The Company currently expects net revenue in the second fiscal quarter of 2016 ending April 2, 2016 to be approximately $130 million to $140 million.

Looking forward, Jonathan Chou commented, “Stabilizing inventory levels throughout the industry combined with our improved short-term guidance support our view of a recovering market environment. This improving external condition along with our ongoing focus on cost efficiency, prudent capital deployment, targeted development and the initial acceptance of our thermo-compression tool collectively demonstrate our comprehensive effort and execution in driving long-term, sustainable growth.”

Earnings Conference Call Details

A conference call to discuss these results will be held today, February 3, 2016, 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 February 10, 2016 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13628261. 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, LED and electronic 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 and organic development, adding advanced packaging, advanced SMT, 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 substantial completion of transition from gold to copper wire bonding by 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. 2015 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
January 2, 2016 December 27, 2014
Net revenue $ 108,534 $ 107,438
Cost of sales   58,113     52,704  
Gross profit:   50,421     54,734  
Operating expenses:
Selling, general and administrative 24,364 24,098
Research and development 24,194 19,581
Amortization of intangible assets 1,666 1,329
Restructuring   1,902     —  
Total operating expenses   52,126     45,008  
(Loss) / Income from operations: (1,705 ) 9,726
Other income (expense):
Interest income 622 262
Interest expense   (273 )   (303 )
(Loss) / Income from operations before income taxes (1,356 ) 9,685
Income taxes (benefit) / expense   (1,265 )   1,843  
Net (loss) / income $ (91 ) $ 7,842  
 
Net (loss) / income per share:
Basic $ —   $ 0.10  
Diluted $ —   $ 0.10  
 
Weighted average shares outstanding:
Basic 70,738 76,888
Diluted 70,738 77,432
 
Three months ended
Supplemental financial data: January 2, 2016 December 27, 2014
Depreciation and amortization $ 4,051 $ 3,556
Capital expenditures 1,394 2,253
Equity-based compensation expense:
Cost of sales 128 128
Selling, general and administrative (770 ) 2,499
Research and development   704     808  
Total equity-based compensation expense $ 62   $ 3,435  
 
As of
January 2, 2016 December 27, 2014
Backlog of orders 1 $ 83,203 $ 60,545
Number of employees 2,486 2,327
 
1. Represents customer purchase commitments. While the Company believes these orders are firm, they are generally cancellable by customers without penalty.
 
   
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)
 
As of
January 2, 2016 October 3, 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 492,935 $ 498,614
Accounts and notes receivable, net of allowance for doubtful accounts of $621 and $621 respectively 108,628 108,596
Inventories, net 69,648 79,096
Prepaid expenses and other current assets 17,340 16,937
Deferred income taxes   —     4,126  
TOTAL CURRENT ASSETS 688,551 707,369
 
Property, plant and equipment, net 52,076 53,234
Goodwill 81,272 81,272
Intangible assets 55,805 57,471
Other assets   6,388     5,120  
TOTAL ASSETS $ 884,092   $ 904,466  
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable 33,741 25,521
Accrued expenses and other current liabilities 36,810 45,971
Income taxes payable   1,353     2,442  
TOTAL CURRENT LIABILITIES 71,904 73,934
 
Financing obligation 16,508 16,483
Deferred income taxes 29,455 33,958
Other liabilities   11,219     10,842  
TOTAL LIABILITIES   129,086     135,217  
 
SHAREHOLDERS’ EQUITY
Common stock, no par value 492,226 492,339
Treasury stock, at cost (137,696 ) (124,856 )
Retained earnings 402,772 402,863
Accumulated other comprehensive income   (2,296 )   (1,097 )
TOTAL SHAREHOLDERS’ EQUITY   755,006     769,249  
   
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 884,092   $ 904,466  
 
   
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)
 
Three months ended
January 2, 2016 December 27, 2014
Net cash provided by operating activities $ 7,694 $ 46,442
Net cash used in investing activities, continuing operations (1,612 ) (4,176 )
Net cash used in financing activities, continuing operations (12,425 ) (7,621 )
Effect of exchange rate changes on cash and cash equivalents   664     (36 )
Changes in cash and cash equivalents (5,679 ) 34,609
Cash and cash equivalents, beginning of period   498,614     587,981  
Cash and cash equivalents, end of period $ 492,935   $ 622,590  
 

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7518
P: +31-40-272-3016
F: +1-215-784-6180
investor@kns.com

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