-- Q4 Revenue exceeds the Company's September 4, 2007 guidance
-- Q4 Net income of $30.3 million
-- Q4 Earnings per share of $0.47
FORT WASHINGTON, Pa., Nov. 15, 2007 (PRIME NEWSWIRE) -- Kulicke & Soffa Industries, Inc. (Nasdaq:KLIC) ("K&S") today reports results for its quarter ended September 29, 2007 ("fourth quarter"). K&S announced fourth quarter net revenue of $236.8 million, net income of $30.3 million and diluted earnings per share ("EPS") of $0.47.
Fourth quarter results included $75.1 million of gold metal revenue in the packaging materials segment compared to $74.0 million for the prior quarter and $80.4 million for the year-ago quarter. These same amounts are also included in cost of sales for the packaging materials segment. Also included in the fourth quarter is a gain of $2.8 million on bond redemption.
--------------------------------------------------------------------- From Continuing Operations: Q4 2007 vs. Q4 2006 vs. Q3 2007 --------------------------------------------------------------------- Net Revenue $236.8 million +47% +40% --------------------------------------------------------------------- Gross Profit $67.7 million +59% +58% Gross Margin 28.6% +220 basis points +320 basis points --------------------------------------------------------------------- Net Income $30.3 million +134% +448% --------------------------------------------------------------------- EPS- Diluted $0.47 +147% +488% ---------------------------------------------------------------------
Scott Kulicke, chairman and chief executive officer, commented, "This quarter, we doubled our wire bonder shipments over the June quarter -- extending our wire bonding market leadership with the strongest technology, manufacturing execution, and customer relationships in our industry. We are investing aggressively in our next-generation die bonder in order to leverage these strengths as we expand into the $600 million die bonder market."
For fiscal year 2007, K&S achieved net revenue of $700.4 million, net income of $37.7 million and diluted EPS of $0.57. Results for fiscal 2007 also included $291.7 million of gold metal revenue in the packaging materials segment compared to $278.8 million in fiscal 2006. These same amounts are also included in cost of sales for the packaging materials segment. Fiscal 2007 net income includes expenses associated with the Company's investment in its next-generation die bonder.
---------------------------------------------------------------------
From Continuing
Operations: FY 2007 FY 2006 Change
---------------------------------------------------------------------
Net Revenue $700.4 million $696.3 million +0.6%
---------------------------------------------------------------------
Gross Profit $180.9 million $196.6 million -8%
Gross Margin 25.8% 28.2% -240 basis points
---------------------------------------------------------------------
Net Income $37.7 million $77.0 million -51%
---------------------------------------------------------------------
EPS- Diluted $0.57 $1.14 -50%
---------------------------------------------------------------------
Fourth Quarter Financial Highlights
* K&S repurchased $6 million of common stock during the fourth
quarter, at an average share price of $8.20, reducing the basic
share count by 0.7 million shares. The Company also redeemed $53.6
million of its outstanding 0.5% notes, which will reduce the total
diluted share count by 2.6 million shares. As of September 29,
2007, there were 53.2 million basic shares and 62.9 million diluted
shares outstanding.
* Cash from operations provided $28.8 million in the fourth quarter.
Cash, cash equivalents, and short-term investments were $169.9
million at the close of the fourth quarter.
* The Company uses Return On Invested Capital ("ROIC") as a principle
measure of business success. ROIC was 48.6% for the fourth quarter
compared to 11.2% last quarter. ROIC is a non-GAAP financial
measure. For additional details, please refer to the sections of
this press release entitled "Disclosure of Non-GAAP Financial
Measure" and "Reconciliation of Return on Invested Capital."
Key Product Trends
* K&S was rated the best assembly supplier in Taiwan according to a
customer survey conducted by VLSI Research. The Company received
high scores in all three judged categories: technology,
performance, and support.
* K&S packaging materials experienced record copper wire growth in Q4
(+ 22% Q-Q and + 31% Y-Y). The new K&S copper wire, Maxsoft, was
qualified by three customers during the fourth quarter.
* K&S high performance gold wires: FP2 and Radix comprised 20% of
total wire shipments during the fourth quarter. This illustrates
growing acceptance of K&S's leading high performance wires for
reliability critical applications.
* K&S received the first purchase orders for the new Fortus
capillary. Soon after its launch date, customers began accelerated
qualification activities to solve various issues on difficult
leadframe applications.
Outlook for First Fiscal Quarter
* Net revenue is expected to be about $220 million
* Gold metal content is expected to be about $90 million
Earnings Conference Call Details
A conference call to discuss these results will be held today, November 15, 2007 beginning at 9:00 AM EST. Interested participants may call 877-407-8037 for the teleconference or log on to http://www.kns.com/investors/events for listen-only mode. A replay will be available approximately one hour after the completion of the call by calling toll free 877-660-6853 or internationally 201-612-7415 and using the following replay access codes 5521 (account number) and 258731 (replay ID number). A replay will also be available on the K&S web site at http://www.kns.com/investors/events. The replay will be available via phone and web site through January 11, 2008.
Disclosure of Non-GAAP Financial Measure
We believe Return On Invested Capital (ROIC) is a useful measure in providing investors with information regarding our performance. ROIC is a widely accepted measure of earnings efficiency in relation to capital employed. We believe that increasing the return on capital employed, as measured by ROIC, is an effective method to sustain and increase shareholder value. ROIC is defined as U.S. Generally Accepted Accounting Principles (GAAP) Operating Income plus GAAP Depreciation divided by adjusted Net Invested Capital. Net Invested Capital is defined as Total Assets less Current Liabilities. Reconciliation to the most comparable GAAP measurements is shown in the table titled "Reconciliation of Return On Invested Capital". K&S does not intend for this non-GAAP financial measure to be considered in isolation or as a substitute for the related GAAP measures. Other companies may define ROIC differently.
About Kulicke & Soffa
Kulicke & Soffa (Nasdaq:KLIC) is the world's leading supplier of semiconductor assembly equipment, materials, and technology. K&S provides wire bonders, capillaries, wire, die bonders, and die collets for all types of semiconductor packages using wire as the internal electrical interconnections. K&S is the only major supplier to the semiconductor assembly industry that provides customers with semiconductor assembly equipment along with the complementing packaging materials and process technology that enable our customers to achieve the highest possible yields and throughput. The ability to provide these assembly related products is unique to Kulicke & Soffa, and allows us to develop system solutions to the new technology challenges inherent in assembling and packaging next-generation semiconductor devices. Kulicke & Soffa's web site address is http://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, revenue growth, sales, profitability, financial results, unit volumes, product development, release of products, industry forecasts, market share, the semiconductor business cycle, the price of gold metal, and projected continued demand for our products. 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 of failure to successfully manage our operations; the risk that anticipated orders may not materialize or that orders received may be postponed or canceled, generally without charges; the volatility in the demand for semiconductors and our products and services; the risk that we may not be able to develop and manufacture new products and product enhancements on a timely and cost effective basis; acts of terrorism and violence; overall global economic conditions; risks, such as changes in trade regulations, currency fluctuations, political instability and war, associated with a substantial foreign customer and supplier base and substantial foreign manufacturing operations; potential instability in foreign capital markets; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2006 Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission. Kulicke & Soffa Industries 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 STATEMENT OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
Three months ended Fiscal year ended
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
--------- --------- --------- ---------
2006 2007 2006 2007
--------- --------- --------- ---------
Net revenue $ 161,415 $ 236,757 $ 696,311 $ 700,404
Cost of sales 118,861 169,016 499,750 519,470
--------- --------- --------- ---------
Gross profit 42,554 67,741 196,561 180,934
--------- --------- --------- ---------
Selling, general and
administrative 19,380 24,136 81,462 93,803
Research and development 9,552 13,619 37,657 50,685
Gain on sale of assets -- -- (4,544) --
--------- --------- --------- ---------
Operating expenses 28,932 37,755 114,575 144,488
--------- --------- --------- ---------
Income from operations 13,622 29,986 81,986 36,446
Interest income 1,301 2,073 3,921 6,866
Interest expense (634) (924) (3,126) (2,876)
Gain on early
extinguishment of debt -- 2,802 4,040 2,802
--------- --------- --------- ---------
Income from continuing
operations before
income taxes 14,289 33,937 86,821 43,238
Provision for income taxes 1,335 3,686 9,789 5,508
--------- --------- --------- ---------
Income from continuing
operations 12,954 30,251 77,032 37,730
--------- --------- --------- ---------
Loss from discontinued
operations (121) -- (24,862) --
--------- --------- --------- ---------
Net income $ 12,833 $ 30,251 $ 52,170 $ 37,730
========= ========= ========= =========
Income per share from
continuing operations:
Basic $ 0.22 $ 0.56 $ 1.40 $ 0.67
========= ========= ========= =========
Diluted $ 0.19 $ 0.47 $ 1.14 $ 0.57
========= ========= ========= =========
Loss per share from
discontinued operations:
Basic $ -- $ -- $ (0.45) $ --
========= ========= ========= =========
Diluted $ -- $ -- $ (0.36) $ --
========= ========= ========= =========
Net income per share:
Basic $ 0.22 $ 0.56 $ 0.95 $ 0.67
========= ========= ========= =========
Diluted $ 0.19 $ 0.47 $ 0.78 $ 0.57
========= ========= ========= =========
Weighted average shares
outstanding:
Basic 57,100 53,546 55,089 56,221
Diluted 69,157 64,702 68,881 68,274
Stock-based compensation
expense included in
continuing operations:
Cost of sales $ 79 $ 45 $ 619 $ 236
Selling, general and
administrative 747 542 2,996 3,678
Research and development 188 330 1,121 1,576
--------- --------- --------- ---------
Total continuing
operations $ 1,014 $ 917 $ 4,736 $ 5,490
========= ========= ========= =========
Discontinued operations $ -- $ -- $ 626 $ --
========= ========= ========= =========
Three months ended Fiscal year ended
Sept. 30, Sept. 29, Sept. 30, Sept. 29,
--------- --------- --------- ---------
Additional financial data: 2006 2007 2006 2007
--------- --------- --------- ---------
Depreciation and
amortization
Continuing operations $ 2,078 $ 3,471 $ 9,523 $ 10,911
Discontinued operations $ -- $ -- $ 2,314 $ --
Capital expenditures
Continuing operations $ 1,404 $ 2,026 $ 9,496 $ 5,763
Discontinued operations $ -- $ -- $ 753 $ --
Sept. 30, Sept. 29,
--------- ---------
2006 2007
--------- ---------
Backlog of orders
Continuing operations $ 56,000 $ 105,000
Number of employees
Continuing operations 2,492 2,903
Transition personnel 159 --
Note - Prior period statements of operations and additional financial
data have been adjusted to reflect accounting for the sale of
the company's Test business as a discontinued operation in
accordance with the requirements of FAS 144.
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, September 29,
2006 2007
----------- -----------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 133,967 $ 150,571
Restricted cash 1,973 --
Short-term investments 21,343 19,339
Accounts and notes receivable, net of
allowance for doubtful accounts of
$3,068 and $1,713, respectively 120,651 177,512
Inventories, net 47,866 68,955
Prepaid expenses and other current assets 10,446 14,201
Deferred income taxes 3,990 3,631
Current assets of discontinued operations 3,832 --
----------- -----------
TOTAL CURRENT ASSETS 344,068 434,209
Property, plant and equipment, net 28,487 37,953
Goodwill 29,684 33,212
Intangible assets -- 500
Other assets 3,262 6,726
----------- -----------
TOTAL ASSETS $ 405,501 $ 512,600
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 42,881 $ 82,615
Accrued expenses 32,970 37,170
Income taxes payable 19,239 22,665
----------- -----------
TOTAL CURRENT LIABILITIES 95,090 142,450
Long term debt 195,000 251,412
Other liabilities 10,640 12,335
Deferred income taxes 25,465 23,148
----------- -----------
TOTAL LIABILITIES 326,195 429,345
----------- -----------
SHAREHOLDERS' EQUITY
Common stock, no par value 277,194 288,714
Treasury stock, at cost -- (46,118)
Accumulated deficit (191,824) (154,094)
Accumulated other comprehensive loss (6,064) (5,247)
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 79,306 83,255
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 405,501 $ 512,600
=========== ===========
KULICKE & SOFFA INDUSTRIES, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(In thousands)
(Unaudited)
Fiscal 2007:
Packaging
Equipment Materials
Three months ended September 29, Segment Segment Consolidated
2007: --------- --------- ---------
Net revenue $ 136,645 $ 100,112 $ 236,757
Cost of sales 82,825 86,191 169,016
--------- --------- ---------
Gross profit 53,820 13,921 67,741
Operating expenses 28,283 9,472 37,755
--------- --------- ---------
Income from continuing operations $ 25,537 $ 4,449 $ 29,986
========= ========= =========
Fiscal year ended September 29, 2007:
Net revenue $ 316,718 $ 383,686 $ 700,404
Cost of sales 188,028 331,442 519,470
--------- --------- ---------
Gross profit 128,690 52,244 180,934
Operating expenses 108,257 36,231 144,488
--------- --------- ---------
Income from continuing operations $ 20,433 $ 16,013 $ 36,446
========= ========= =========
Fiscal 2006:
Packaging
Equipment Materials
Three months ended September 30, Segment Segment Consolidated
2006: --------- --------- ---------
Net revenue $ 54,900 $ 106,515 $ 161,415
Cost of sales 27,756 91,105 118,861
--------- --------- ---------
Gross profit 27,144 15,410 42,554
Operating expenses 19,806 9,126 28,932
--------- --------- ---------
Income from continuing operations $ 7,338 $ 6,284 $ 13,622
========= ========= =========
Fiscal year ended September 30, 2006:
Net revenue $ 319,788 $ 376,523 $ 696,311
Cost of sales 178,473 321,277 499,750
--------- --------- ---------
Gross profit 141,315 55,246 196,561
Operating expenses 85,445 33,674 119,119
Gain on sale of assets -- -- (4,544)
--------- --------- ---------
Income from continuing operations $ 55,870 $ 21,572 $ 81,986
========= ========= =========
Reconciliation of Return on Invested Capital
(For the Three Months ending September 29, 2007)
(In thousands)
(Unaudited)
As Reported U.S.
GAAP Results Adjustments non-GAAP ROIC
------------------------ ----------- -------------
Depreciation/
Amortization
Income from
Operations $ 29,986 $ 3,471 $ 33,457 Adjusted Net
Operating Income
X 4
--------
$133,828(A) Annualized
Company Cash
Limit(1)
Cash & Cash
Equivalents $169,910 $(94,910) $ 75,000
Non-Cash Assets $342,690 $342,690
-------- --------
Total Assets $512,600 $417,690
Total Current
Liabilities $142,450 $142,450
-------- --------
Net Invested
Capital $370,150 $275,240(B) Adjusted Net
Invested Capital
48.6%(A)/(B) ROIC
(1) Only the first $75 million of cash is used for the ROIC
calculation