Kulicke & Soffa Reports Results for its Fourth Quarter and Fiscal Year 2009

Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) ("K&S”) today announced results for its fourth fiscal quarter and year ended October 3, 2009. For the fourth quarter, the Company reported net revenue from continuing operations of $110.5 million and net income of $6.5 million or $0.09 per diluted share. This press release contains both GAAP results and non-GAAP measures.

On a non-GAAP basis* for the fourth quarter of 2009, the Company reported net revenue from continuing operations of $110.5 million with net income of $9.8 million or $0.14 per diluted share.

*Non-GAAP measures from continuing operations exclude: equity-based compensation; amortization of intangibles; severance; Switzerland pension plan curtailment; tax settlement; other tax adjustments and related tax effects on non-GAAP adjustments (see reconciliations of GAAP results to Non-GAAP measures in the following financial schedules).

Commenting on the results, Scott Kulicke, Chairman and Chief Executive Officer, said, "Considering the year we’ve all been through, results for the September quarter were quite good. Revenue grew to $110 million, more than doubling since the June quarter. This revenue growth, coupled with our previous expense reductions, returned K&S to profitability in the September quarter. For the December quarter, we currently expect revenue for this period to improve to approximately $115 to $120 million.”

Financial Highlights

• Returned to profitability in the September quarter
• Successfully completed an equity offering of 8.0 million shares in August 2009 for net proceeds of $38.7 million
• Total debt at 2009 fiscal year end was $159.0 million, down $88.4 million from $247.4 million at 2008 fiscal year end
• Total cash and cash equivalents of $144.8 million as of October 3, 2009

Key Product Trends

• Ball bonder unit volumes up approximately 173% over June quarter levels
  • Conversion to copper wire bonding is accelerating; over 600 copper conversion kits were sold during the quarter
  • Successful launch and initial sales of ConnX-LED_PS^TM automatic ball bonder
• Highest heavy wire wedge bonder unit volumes since acquisition of Orthodyne; unit volumes increased approximately 169% over June quarter levels
• Multiple customer qualifications of iStack_PS^TM automatic die bonder on-going through first quarter of fiscal 2010
  • Initial sales expected in the March 2010 quarter

Outlook for First Fiscal Quarter 2010

• Net revenue is expected to be $115 to $120 million

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 19, 2009 beginning at 9:00 AM EST. Interested parties may call (877) 407-8037 or (201) 689-8037, or log on to 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 335875 (replay ID number). A replay will also be available on the K&S website at www.kns.com/investors/events. The replay will be available via phone and website for a limited time.

Fiscal 2009 Results

From continuing operations in fiscal 2009, K&S net revenue was $225.2 million with a net loss of $58.8 million or $0.95 per diluted share. On a non-GAAP basis*, fiscal 2009 net revenue was $225.2 million with a net loss of $50.5 million or $0.81 per diluted share.

*Non-GAAP measures from continuing operations exclude: equity-based compensation; amortization of intangibles; severance; facilities contractual commitments; Switzerland pension plan curtailment; goodwill impairment; U.S. pension plan termination; tax settlements; debt extinguishment; other tax adjustments and related tax effects on non-GAAP adjustments (see reconciliations of GAAP results to Non-GAAP measures in the following financial schedules).

Discussion of Non-GAAP Measures

This press release contains non-GAAP financial measures as a supplement to the consolidated financial results presented in accordance with GAAP. The Company believes certain non-GAAP measures provide investors with an additional, useful perspective on the Company’s performance as seen through the eyes of management. Management uses non-GAAP financial measures along with GAAP financial results for: analyzing the performance of the Company’s businesses; strategic and tactical decision making; and determining compensation. The Company does not consider non-GAAP financial measures to be a substitute for, or superior to, financial results presented in accordance with GAAP. All of the non-GAAP financial measures included herein are reconciled to the most directly comparable GAAP results in the following financial statements. These non-GAAP measures may be calculated differently from non-GAAP measures used by other companies. In addition, these non-GAAP financial measures are not based on a comprehensive set of accounting rules or principles and some of the adjustments reflect the exclusion of items that are recurring and will be reflected in the Company’s GAAP financial results for the foreseeable future.

Exclusions from GAAP Results

The Company excludes the following from its GAAP results in presenting non-GAAP financial measures:

- Equity-based compensation expenses. The Company recognizes the fair value of its equity-based compensation in expenses. Equity-based compensation consists of common stock, stock options and performance-based restricted stock granted under the Company’s equity compensation plans. Equity-based compensation is a non-cash expense that can vary significantly in amount from period to period.

- Other. The exclusion of certain other non-GAAP amounts allows for improved comparisons of the Company’s results to both prior periods and other companies. The Company excludes the following other items from non-GAAP measures as these items are not reflective of the performance of the Company’s ongoing businesses:

• U.S. pension plan termination
• Debt extinguishment
• Amortization of intangibles
• Severance
• Goodwill impairment
• Facilities contractual commitments
• Switzerland pension plan curtailment
• Tax settlements
• Other tax adjustments

- Tax Adjustment. Non-GAAP measures are tax adjusted using the GAAP tax rate associated with each quarterly period. The tax rate is calculated by dividing each quarter’s GAAP tax expense, adjusted for discrete quarterly items, by the GAAP operating income for that quarter. Non-GAAP year-to-date measures are calculated by summing the associated quarterly non-GAAP measures, without further tax adjustments.

Non-GAAP Measures

The specific non-GAAP measures included herein are gross profit, gross margin, net income, net margin, and EPS. The Company calculates these measures as follows:

--Gross Profit. K&S non-GAAP gross profit excludes the effects of equity-based compensation expense recorded within cost of sales.

--Gross Margin. K&S non-GAAP gross margin excludes the impact of equity-based compensation expense recorded within cost of sales.

--Net Income (Loss) and Earnings per Share. K&S non-GAAP net income (loss) and EPS exclude equity-based compensation, amortization of intangibles, severance, facilities contractual commitments, Switzerland pension plan curtailment, goodwill impairment, U.S. pension plan termination, tax settlements, debt extinguishment, other tax adjustments and related tax effects on non-GAAP adjustments.

--Net Margin. K&S non-GAAP net margin reflects the Company’s net margin excluding equity-based compensation, amortization of intangibles, severance, facilities contractual commitments, Switzerland pension plan curtailment, goodwill impairment, U.S. pension plan termination, tax settlements, debt extinguishment, other tax adjustments and related tax effects on non-GAAP adjustments.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a global leader in the design and manufacture of semiconductor assembly equipment. As one of the pioneers of the industry, 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, adding die bonding, wedge bonding and a broader range of expendable tools to its core ball bonding products. Combined with its extensive expertise in process technology, K&S is well positioned to help customers meet the challenges of assembling the next-generation semiconductor devices. (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 accelerating conversion to copper wire bonding and future revenue, sales, demand for our products and product development. 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: difficult 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; the risk of failure to successfully integrate Orthodyne; the risk that anticipated customer 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; 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; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2008 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.