EX-99.1 2 exhibit9912016.htm EXHIBIT 99.1 Exhibit
Exhibit 99.1
logoa19.jpg
Kulicke & Soffa Pte Ltd 
23A Serangoon North Avenue 5 #01-01
K&S Corporate Headquarters
Singapore 554369
 
+65-6880-9600 main
+65-6880-9580 fax
www.kns.com
Co. Regn. No. 199902120H
 Kulicke & Soffa Reports Fourth Quarter and Fiscal Year 2016 Results
 
Singapore – November 15, 2016 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”) today announced results for its fourth quarter and fiscal year ended October 1, 2016.    
Quarterly Results
 
 
Fiscal Q4 2016
 
Change vs.
Fiscal Q4 2015
Change vs.
Fiscal Q3 2016
Net Revenue
$145.8 million
up 22.3%
down 32.6%
Gross Profit
$66.6 million
up 14.4%
down 33.4%
Gross Margin
45.7%
down 320 bps
down 50 bps
Income from Operations
$3.9 million
up 143.8%
down 89.9%
Operating Margin
2.7%
up 130 bps
down 1510 bps
Net Income
$10.3 million
up 5.1%
down 67.5%
Net Margin
7.1%
down 110 bps
down 760 bps
EPS – Diluted
$0.15
up 15.4%
down 66.7%
Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, “For the September quarter, we have exceeded our revenue guidance and experienced improved demand over the same period in the prior fiscal year. This better-than-expected performance was largely due to the strengthening of the memory segment and new traction within the automotive segment."
The Company's reported fourth quarter net income included a unique operating expense reserve in the amount of $7 million related to restructuring of its international operations. This amount was offset by a favorable tax benefit of $7.6 million, related to the same restructuring exercise.
Fourth Quarter Fiscal 2016 Key Product Trends
•
Ball bonder equipment net revenue decreased 35.8% over the June quarter.
•
Wedge bonder equipment net revenue decreased 21.8% over the June quarter.
•
Advanced packaging mass reflow equipment net revenue decreased by 42.0% over the June quarter.
Fiscal Year 2016 Financial Highlights
•
Net revenue of $627.2 million.
•
Gross margin of 45.7%.
•
Net income was $47.1 million or $0.67 per diluted share.
•
Cash, cash equivalents and investments were $547.9 million as at October 1, 2016.
•
7.9 million shares had been repurchased since the stock repurchase program's August 2014 initiation, equivalent to 10.1% of weighted average shares outstanding at the program's inception.

First Quarter Fiscal 2017 Outlook
The Company currently expects net revenue in the first fiscal quarter of 2017 ending December 31, 2016 to be approximately $135 million to $145 million.
Looking forward, Dr. Chen commented, “As we continue driving efficiency through our manufacturing process and supply chain, we maintain optimism through the softer near-term outlook. Looking ahead, we anticipate the industry will return to a more normalized growth rate in fiscal 2017. In parallel, we continue to aggressively pursue meaningful opportunities becoming increasingly accessible through our evolving industry, market-facing development and our broadening suite of solutions."

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Earnings Conference Call Details
A conference call to discuss these results will be held today, November 15, 2016, beginning at 8:00am (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 November 22, 2016 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13647734. A webcast replay will also be available at investor.kns.com.

About Kulicke & Soffa
Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor packaging and electronic assembly solutions supporting the global automotive, consumer, communications, computing, and industrial segments. As a pioneer in the semiconductor space, 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, electronics assembly, wedge bonding and a broader range of expendable tools to its core offerings. Combined with its extensive expertise in process technology and focus on development, K&S is well positioned to help customers meet the challenges of packaging and assembling the next-generation of electronic 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.

Contacts:
Kulicke & Soffa Industries, Inc.
 
Joseph Elgindy
 
Investor Relations & Strategic Initiatives
 
P: +1-215-784-7500
 
P: +31-40-272-3016
 
F: +1-215-784-6180
 
investor@kns.com
 

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KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
 
 
Three months ended
 
Twelve months ended
 
 
October 1, 2016
 
October 3, 2015
 
October 1, 2016
 
October 3, 2015
Net revenue
 
145,844

 
119,172

 
627,192

 
536,471

Cost of sales
 
79,223

 
60,955

 
340,463

 
277,379

Gross profit
 
66,621

 
58,217

 
286,729

 
259,092

Operating expenses:
 
 
 
 
 
 
 
 
Selling, general and administrative
 
29,778

 
29,944

 
124,706

 
120,084

Research and development
 
22,781

 
21,900

 
92,374

 
90,033

Amortization of intangible assets
 
1,665

 
2,851

 
6,661

 
9,883

Restructuring
 
8,484

 
1,874

 
10,449

 
1,841

Total operating expenses
 
62,708

 
56,569

 
234,190

 
221,841

Income from operations
 
3,913

 
1,648

 
52,539

 
37,251

Other income (expense):
 
 
 
 
 
 
 
 
Interest income
 
1,023

 
453

 
3,318

 
1,637

Interest expense
 
(268
)
 
(273
)
 
(1,107
)
 
(1,183
)
Income from operations before income taxes
 
4,668

 
1,828

 
54,750

 
37,705

Income taxes (benefit)/ expense
 
(5,661
)
 
(7,999
)
 
7,638

 
(12,934
)
Net income
 
$
10,329

 
$
9,827

 
$
47,112

 
$
50,639

 
 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.15

 
$
0.14

 
$
0.67

 
$
0.67

Diluted
 
$
0.15

 
$
0.13

 
$
0.67

 
$
0.67

 
 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
 
Basic
 
70,404

 
72,731

 
70,477

 
75,414

Diluted
 
71,017

 
72,883

 
70,841

 
75,659

  
 
 
Three months ended
 
Twelve months ended
Supplemental financial data:
 
October 1, 2016
 
October 3, 2015
 
October 1, 2016
 
October 3, 2015
Depreciation and amortization
 
$
4,009

 
$
4,994

 
$
16,230

 
$
18,972

Capital expenditures
 
1,905

 
3,810

 
6,301

 
9,519

Equity-based compensation expense:
 
 
 
 
 
 
 
 
Cost of sales
 
98

 
89

 
421

 
393

Selling, general and administrative
 
1,223

 
2,738

 
3,244

 
9,127

Research and development
 
473

 
626

 
2,065

 
2,469

Total equity-based compensation expense
 
$
1,794

 
$
3,453

 
$
5,730

 
$
11,989

 
 
 
As of
 
 
October 1, 2016
 
October 3, 2015
Backlog of orders1
 
87,200

 
52,500

Number of employees
 
2,389

 
2,373

 
1.
Represents customer purchase commitments. While the Company believes these orders will proceed, they are generally cancellable by customers without penalty.

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KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
As of
 
 
October 1, 2016
 
October 3, 2015
ASSETS
CURRENT ASSETS
 
 
 
 
Cash and cash equivalents
 
$
547,907

 
$
498,614

Accounts and notes receivable, net of allowance for doubtful accounts of $506 and $143 respectively
 
130,455

 
108,596

Inventories, net
 
87,295

 
79,096

Prepaid expenses and other current assets
 
15,285

 
16,937

Deferred income taxes
 
—

 
4,126

TOTAL CURRENT ASSETS
 
780,942

 
707,369

 
 
 
 


Property, plant and equipment, net
 
50,342

 
53,234

Goodwill
 
81,272

 
81,272

Intangible assets
 
50,810

 
57,471

Other assets
 
19,078

 
5,120

TOTAL ASSETS
 
$
982,444

 
$
904,466

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
 
 

 
 

Accounts payable
 
$
41,813

 
$
25,521

Accrued expenses and other current liabilities
 
63,954

 
45,971

Income taxes payable
 
12,830

 
2,442

TOTAL CURRENT LIABILITIES
 
118,597

 
73,934

 
 
 
 
 
Financing obligation
 
16,701

 
16,483

Deferred income taxes
 
27,697

 
33,958

Other liabilities
 
12,931

 
10,842

TOTAL LIABILITIES
 
175,926

 
135,217

 
 
 
 
 
SHAREHOLDERS' EQUITY
 
 

 
 

Common stock, no par value
 
498,676

 
492,339

Treasury stock, at cost
 
(139,407
)
 
(124,856
)
Retained earnings
 
449,975

 
402,863

Accumulated other comprehensive loss
 
(2,726
)
 
(1,097
)
TOTAL SHAREHOLDERS' EQUITY
 
$
806,518

 
$
769,249

 
 
 
 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
982,444

 
$
904,466


 




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KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
Three months ended
 
Twelve months ended
 
 
October 1, 2016
 
October 3, 2015
 
October 1, 2016
 
October 3, 2015
Net cash provided by operating activities
 
33,949

 
39,529

 
68,407

 
87,875

Net cash used in investing activities, continuing operations
 
(1,526
)
 
(3,190
)
 
(5,165
)
 
(94,109
)
Net cash used in financing activities, continuing operations
 
(291
)
 
(14,622
)
 
(14,486
)
 
(84,459
)
Effect of exchange rate changes on cash and cash equivalents
 
(353
)
 
972

 
537

 
1,326

Changes in cash and cash equivalents
 
31,779

 
22,689

 
49,293

 
(89,367
)
Cash and cash equivalents, beginning of period
 
516,128

 
475,925

 
498,614

 
587,981

Cash and cash equivalents, end of period
 
$
547,907

 
$
498,614

 
$
547,907

 
$
498,614

 
 



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