Kulicke & Soffa Reports First Fiscal Quarter Results
Thursday January 27, 7:00 am ET
WILLOW GROVE, PA--(MARKET WIRE)--Jan 27, 2005 -- Kulicke & Soffa Industries, Inc. (NasdaqNM:KLIC - News) today announced financial results for its first fiscal quarter ended December 31, 2004.
Net revenue for the first quarter ended December 31, 2004 was $116.3 million compared to $153.9 million in the comparable year-ago quarter. The net loss was $7.2 million or a loss of $0.14 per diluted share versus net income for the year-ago quarter of $0.7 million or $0.01 per diluted share. Included in the results for the December 2004 quarter is a gain on the sale of assets of $1.9 million.
Scott Kulicke, chairman and chief executive officer, stated, "Current levels of business are consistent with our previously announced view that the industry may be settling into the trough of the cycle. We expect March quarter revenue to be in the $105 to $125 million range."
First Quarter Review and Highlights
Technology & Manufacturing
-- The Advanced Vertical Test R&D group completed its proof of concept
milestones for memory and logic probe components. The group pushed out its
initial shipment dates to customers and is now working to resolve some
production scaling issues. This work consists of optimizing assembly
processes/procedures for the first multi-DUT memory probe cards, as well as
the first area array probe cards for logic devices.
-- The K&S China facility increased its cantilever production capacity
and shipments again in the first quarter by 16%. This product line
continues to shift manufacturing capacity to China, while the Company
ceases manufacturing operations at some U.S. and European sites.
-- The K&S wire bonder R&D group completed the milestones that are
required to begin building the new Maxum Ultra machines for testing at
customer sites. We expect the new machine will be both faster and more
process-capable than the current Maxum Plus model. We expect to deliver the
new Maxum Ultra to customers for evaluation during the June 2005 quarter.
-- The K&S capillary product group completed its customer field testing
of its Nexxus product. The new model capillary improves machine uptime and
product yield by optimizing critical features for specific customer
applications.
Key Product Trends
-- The blended average selling price for all wire bonder models was
unchanged from the fourth quarter through the first quarter.
-- K&S significantly increased gold wire shipments to customers in Taiwan
during the past 12 months. Quarterly shipments to three large Taiwan
factories were: 83 million feet in the March 2004 quarter; 164 million feet
in the June 2004 quarter; 203 million feet in the September 2004 quarter;
and 261 million feet in the December 2004 quarter. The large increase in
shipments was a result of K&S providing better levels of performance for
key customer metrics.
Financial Review
-- K&S revenue for the first fiscal quarter of 2005 was $116.3 million,
which produced a net loss from operations of $4.9 million. The closest
comparable quarter for revenue was the quarter ended March 31, 2003 with
$122.3 million in sales and a loss from operations of $8.1 million.
-- K&S generated $5.9 million in net cash from operations during the
quarter. The closest comparable quarter in revenue was the quarter ended
March 31, 2003 with $122.3 in revenue and net cash used in operations of
$20.5 million.
-- The financial results included $639 thousand of cost associated with
the severance from several separate actions taken by the Company.
Business Summary
Scott Kulicke concluded, "We are pleased with the progress made in our technology projects and our cost reduction efforts and look forward to the improved financial performance they will drive when the cycle turns."
A conference call to discuss these results will be held today beginning at 9:00 AM EST. Interested participants may call 877-407-8037 for the teleconference or log on to kns.com for listen-only mode.
About Kulicke & Soffa
Kulicke & Soffa (NasdaqNM:KLIC - News) is the world's leading supplier of semiconductor wire bonding assembly equipment. We believe K&S is the only major supplier to the semiconductor assembly industry that provides customers with semiconductor wire bonding equipment along with the complementing packaging materials and test interconnect products that actually contact the surface of the customer's semiconductor devices. The ability to control all of 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. Test interconnect products include a variety of wafer probe cards, ATE interface assemblies, and PC boards for wafer testing, as well as test sockets for all types of packaged semiconductor devices. Kulicke & Soffa's web site address is 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, operating expenses, profitability, cash flows, introduction of new products, 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 risk that anticipated cost savings will not be achieved; 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. 2004 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
December 31,
2003 (1) 2004
--------- ---------
Net revenue $ 153,869 $ 116,321
Cost of sales 106,507 89,943
--------- ---------
Gross profit 47,362 26,378
--------- ---------
Selling, general and administrative 24,716 22,073
Research and development, net 8,176 8,878
Gain on sale of assets (2) - (1,875)
Amortization of intangible assets 2,315 2,194
--------- ---------
Operating expense 35,207 31,270
--------- ---------
Income (loss) from operations 12,155 (4,892)
Interest income 204 449
Interest expense (4,429) (846)
Charge on early extinguishment of debt (6,152) -
--------- ---------
Income (loss) from continuing operations
before income tax 1,778 (5,289)
Provision for income taxes 1,350 1,902
--------- ---------
Net income (loss) from continuing
operations 428 (7,191)
--------- ---------
Income from discontinued FCT operations 319 -
--------- ---------
Net Income (loss) $ 747 $ (7,191)
========= =========
Net income (loss) per share from
continued operations:
Basic $ 0.01 $ (0.14)
========= =========
Diluted $ 0.01 $ (0.14)
========= =========
Net loss per share from discontinued
operations:
Basic $ 0.00 $ 0.00
========= =========
Diluted $ 0.00 $ 0.00
========= =========
Net loss per share:
Basic $ 0.01 $ (0.14)
========= =========
Diluted $ 0.01 $ (0.14)
========= =========
Weighted average shares outstanding:
Basic 50,392 51,237
Diluted 56,932 51,237
Three months ended
December 31,
Additional financial data: 2003 2004
--------- ---------
Depreciation and amortization $ 8,351 $ 7,012
Capital expenditures $ 2,928 $ 2,978
Backlog of orders
Core Business $ 106,000 $ 58,000
Discontinued Operations $ 8,000 $ -
Number of employees
Core Business 3,260 3,236
Discontinued Operations 112 -
Notes: (1) Prior period income statement has been revised to reflect
accounting for the sale of the Company’s Flip Chip business
as a discontinued operation in accordance with the
requirements of FAS 144.
(2) The Gain on sale of assets is comprised of a gain on the
sale of land and building in Gilbert, Arizona of $1,497
thousand, and recognition of $378 thousand of the $4,536
thousand gain on the sale of the land and building in Willow
Grove, Pennsylvania.
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
September 30, December 31,
2004 2004
--------- ---------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 60,333 $ 82,431
Restricted cash 3,257 3,497
Short-term investments 32,176 24,989
Accounts and notes receivable
(less allowance for doubtful
accounts: 9/30/04 - $3,646;
12/31/04 - $3,346) 110,718 91,454
Inventories, net 58,017 57,856
Assets held for sale 6,072 -
Prepaid expenses and other current
assets 10,310 14,137
Deferred income taxes 12,417 12,250
--------- ---------
TOTAL CURRENT ASSETS 293,300 286,614
Property, plant and equipment, net 51,434 44,674
Intangible assets, (net of accumulated
amortization: 9/30/04 - $35,209;
12/31/04 - $37,403) 54,045 52,789
Goodwill 81,440 81,440
Other assets 7,463 7,222
--------- ---------
TOTAL ASSETS $ 487,682 $ 472,739
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long term debt $ 202 $ 42
Accounts payable 50,002 43,400
Accrued expenses 37,660 34,944
Income taxes payable 11,986 13,051
--------- ---------
TOTAL CURRENT LIABILITIES 99,850 91,437
Long term debt 275,725 270,602
Other liabilities 8,112 9,333
Deferred taxes 36,975 37,567
--------- ---------
TOTAL LIABILITIES 420,662 408,939
--------- ---------
Commitments and contingencies - -
SHAREHOLDERS' EQUITY
Common stock, without par value 213,847 214,960
Retained deficit (139,912) (147,103)
Accumulated other comprehensive loss (6,915) (4,057)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 67,020 63,800
--------- ---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 487,682 $ 472,739
========= =========
KULICKE & SOFFA INDUSTRIES, INC.
OPERATING RESULTS BY BUSINESS SEGMENT
(In thousands)
(Unaudited)
Fiscal 2005:
Packaging
Equipment Materials Test Corporate
Segment Segment Segment and Other Consolidated
------- ------- ------- ------- --------
Quarter ended
December 31, 2004:
Net revenue $29,349 $64,018 $22,954 $ - $116,321
Cost of sales 17,326 51,252 21,365 - 89,943
------- ------- ------- ------- --------
Gross profit 12,023 12,766 1,589 - 26,378
Operating costs 12,077 6,293 10,946 3,829 33,145
Gain on sale
of assets(2) - - (1,497) (378) (1,875)
------- ------- ------- ------- --------
Income (loss)
from operations $ (54) $ 6,473 $(7,860) $(3,451) $ (4,892)
======= ======= ======= ======= ========
Fiscal 2004:
Packaging
Equipment Materials Test Corporate
Segment Segment Segment and Other Consolidated
------- ------- ------- ------- --------
Quarter ended
December 31, 2003:
Net revenue $81,080 $49,508 $23,281 $ - $153,869
Cost of sales 49,124 38,090 19,293 - 106,507
------- ------- ------- ------- --------
Gross profit 31,956 11,418 3,988 - 47,362
Operating costs 14,668 5,224 10,783 4,532 35,207
------- ------- ------- ------- --------
Income (loss)
from operations $17,288 $6,194 $(6,795) $(4,532) $ 12,155
======= ======= ======= ======= ========
Note: (1) Prior period income statement has been revised to reflect
accounting for the sale of the Company’s Flip Chip business
as a discontinued operation in accordance with the
requirements of FAS 144.
(2) The Gain on sale of assets is comprised of a gain on the sale
of land and building in Gilbert, Arizona of $1,497 thousand, and
recognition of $378 thousand of the $4,536 thousand gain on the
sale of the land and building in Willow Grove, Pennsylvania.
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Source: Kulicke & Soffa |
