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Technology Stocks : Kulicke and Soffa -- Ignore unavailable to you. Want to Upgrade?

To: Ian@SI who wrote (5253)	11/19/2002 8:37:07 PM
From: SemiBull	Respond to of 5482

S&P revises Kulicke & Soffa outlook to negative Tuesday November 19, 3:51 pm ET (The following statement was released by the rating agency) NEW YORK, Nov 19 - Standard & Poor's Ratings Services said today that it affirmed its 'B' corporate credit and 'CCC+' subordinated ratings on Willow Grove, Pa.-based Kulicke & Soffa Industries Inc. (NasdaqNM:KLIC - News). At the same time, Standard & Poor's revised the outlook to negative from stable, on expectations that a protracted downturn in demand for semiconductor packaging equipment and materials is likely to delay Kulicke & Soffa's attempts to return to profitability and positive cash flow. Kulicke & Soffa is a leading supplier of equipment and materials used in semiconductor packaging and testing. Total lease-adjusted debt was about $340 million as of September 2002. Kulicke & Soffa expects sales in the December 2002 quarter of $95 million-$105 million, down from $122 million in the September 2002 quarter. In addition, demand in the March 2003 quarter is likely to be seasonally weak. The ratings continue to reflect very volatile sales, operating losses, and negative cash flow, offset by the company's leading niche market position and its dwindling, although still-adequate, cash balances. Despite ongoing cost reductions in Kulicke & Soffa's core wire bonding and test card businesses, and the discontinued operation of its unprofitable substrate venture, the company's actions have proven to be insufficient for resizing its expense structure. Standard & Poor's expects Kulicke & Soffa, which used about $90 million in cash balances over the 12 months ended September 2002, to further cut costs, as well as discontinue or sell unprofitable business lines to focus on core product lines and to slow its cash burn rate. Still, demand conditions remain challenging. "Failure to materially reduce cash usage rates over the near term could result in a downgrade for Kulicke & Soffa," said Standard & Poor's credit analyst Emile Courtney. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www2.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.