Lane - according to a poster on Yahoo Klic's btb was 1.26.
For the first time ever, I listened to a CC (well, about 80% of it). I highly recommend this. It will only be available through tomorrow (via the KNS web site).
While I know virtually nothing about this industry, even a novice would have been impressed with the tone and the content of SK's presentation. Read the following with *caution* - especially since I'm a shareholder:
-the company sold 1750 bonders in the quarter - a staggering number - and expects to maintain this level for the foreseeable future. Virtually all of these were made in Singapore, a facility where the margins are significantly higher than Willow Grove. The fact that Singapore is completely ramped, and the fact that it will be running at full tilt for a long time, indicates that the company has a cash cow, plain and simple. In sum, the company is at least one quarter AHEAD of schedule for many of its financial goals; when specifically referring to operating margin, SK made the point that the goal (~41%?, now 37%?) is just a goal and he saw no reason margins couldn't beyond that. If he didn't envision that, he wouldn't say it.
-Scott was in an uncharacteristically jovial mood - in fact he debated at the beginning whether he should be his usual somber self or go ape about the earnings report - but there's no question he was proud of the company's accomplishments and was anticipating a very bright future. This is from a man who definitely calls them as he sees them. He was undoubtedly frustrated with the low valuation of the stock and was fully expecting a warm reaction to the earnings. While frustrated, he seemed to enjoy the bantering with the analysts - and the analysts the same (he made an 'inside' joke with Sue Billat about a bathtub that no one else but the two of them understood). Every analyst (~10) offered warm and hearty congratulations on the company's performance. There's no doubt ALL of them were impressed. There was clearly no hard feelings whatsoever between the CEO and the analysts; in fact, all the players seemed to have a very good time of it.
- There is no doubt that SK is taking the company through a transition and he made this point repeatedly. While bonder sales will remain huge for an extended period - thus providing a high baseline for the company's earnings - the growth will be in the nonbonder business. All of these business have higher margins than the bonders and some are already contributing to the bottom line. This contribution will expand significantly in the future. And these businesses are less exposed to the fluctuations of the cycle thus Klic’s earnings will be less prone to severe distortion in the future. There was disappointment (my word) in the FlipChip side but SK stated, in detail, how this was a reflection of highly mundane internal issues (training personnel to handle chips properly, for example) that have mostly been worked out.
-The fact is K & S really really REALLY is no longer simply a bonder manufacturer and EVERYONE needs to understand this. The transition is already underway and is beginning to contribute significantly to the earnings. Thus a projection of a plateau of bonder sales - even at these incredible levels (and even if they will provide the company with A LOT of cash) - has probably worried some people. As David Wu of ABN AMRO has already stated, if you understand Klic's impending diversification, you would understand the current strength of Klic.
- I've gone on too long. One last thing, the company is on the prowl for acquisitions. With the large operating cash flow, and the $175 mil from the recent convertible offering, there's no question they mean it. IMO, expect some announcements in the near future.
In my opinion, talk of a takeover of Klic is silly. |
