Kulicke and Soffa Industries (KLIC) 8-K Completion of Acquisition or Disposition of Assets

Exhibit 99.1

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET

(in thousands)

	December 31, 2005
	Company Historical (1)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	84,320		$	—		$	9,000	(4)(a)	$	93,320
Restricted cash		10,255			—			—			10,255
Short-term investments		7,222			—			—			7,222
Accounts and notes receivable, net		179,520			(11,192	)		5,192	(4)(b)		173,520
Inventories, net		62,926			(6,002	)		—			56,924
Prepaid expenses and other current assets		14,117			—			—			14,117
Deferred income taxes		1,567			—			—			1,567
Total current assets		359,927			(17,194	)		14,192			356,925
Property, plant and equipment, net		44,372			(10,512	)		—			33,860
Goodwill		29,684			—			—			29,684
Other assets		5,835			—			—			5,835
TOTAL ASSETS	$	439,818		$	(27,706	)	$	14,192		$	426,304
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt	$	9,970		$	—		$	—		$	9,970
Accounts payable		80,523			(2,445	)		—			78,078
Accrued expenses		32,017			—			—			32,017
Income taxes payable		20,615			—			—			20,615
Total current liabilities		143,125			(2,445	)		—			140,680
Long-term debt		270,000			—			—			270,000
Other liabilities		6,610			—			—			6,610
Deferred income taxes		23,207			—			—			23,207
Total liabilities		442,942			(2,445	)		—			440,497
Commitments and contingencies		—			—			—			—
Shareholders’ equity (deficit):
Common stock, no par value		221,305			—			—			221,305
Accumulated deficit		(218,692	)		—			(11,069	)(4)(c)		(229,761	)
Accumulated other comprehensive loss		(5,737	)		—			—			(5,737	)
Total shareholders’ equity (deficit)		(3,124	)		—			(11,069	)		(14,193	)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	$	439,818		$	(2,445	)	$	(11,069	)	$	426,304

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

	For the Three Months Ended December 31, 2005
	Company Historical (1)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
Net revenue	$	228,100		$	(14,790	)	$	—		$	213,310
Cost of sales		157,223			(11,912	)		—			145,311
Gross profit		70,877			(2,878	)		—			67,999
Selling, general and administrative		27,933			(5,408	)		1,184	(4)(d)		23,709
Research and development, net		12,179			(2,266	)		—			9,913
Total operating expenses		40,112			(7,674	)		1,184			33,622
Income from operations		30,765			4,796			(1,184	)		34,377
Interest income		712			—			—			712
Interest expense		(958	)		—			—			(958	)
Income from operations before income taxes		30,519			4,796			(1,184	)		34,131
Provision for income taxes		5,218			32			—			5,250
Net income	$	25,301		$	4,764		$	(1,184	)	$	28,881
Net income per share:
Basic	$	0.49								$	0.55
Diluted	$	0.38								$	0.43
Weighted average shares outstanding:
Basic		52,044									52,044
Diluted		68,239									68,239

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

	For the Three Months Ended December 31, 2004
	Company Historical (1)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
Net revenue	$	116,321		$	(14,017	)	$	—		$	102,304
Cost of sales		89,943			(14,574	)		—			75,369
Gross profit		26,378			557			—			26,935
Selling, general and administrative		22,073			(5,246	)		1,344	(4)(d)		18,171
Research and development, net		8,878			(1,171	)		—			7,707
Gain on sale of assets		(1,875	)		1,497			—			(378	)
Amortization of intangible assets		2,194			(1,340	)		—			854
Total operating expenses		31,270			(6,260	)		1,344			26,354
Income (loss) from operations		(4,892	)		6,817			(1,344	)		581
Interest income		449			—			—			449
Interest expense		(846	)		—			—			(846	)
Income (loss) from operations before income taxes		(5,289	)		6,817			(1,344	)		184
Provision for income taxes		1,902			64			—			1,966
Net loss	$	(7,191	)	$	6,753		$	(1,344	)	$	(1,782	)
Net loss per share:
Basic	$	(0.14	)							$	(0.03	)
Diluted	$	(0.14	)							$	(0.03	)
Weighted average shares outstanding:
Basic		51,237									51,237
Diluted		51,237									51,237

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

	For the Fiscal Year Ended September 30, 2005
	Company Historical (3)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
Net revenue	$	561,274		$	(53,854	)	$	—		$	507,420
Cost of sales		419,695			(55,267	)		—			364,428
Gross profit		141,579			1,413			—			142,992
Selling, general and administrative		94,473			(21,257	)		4,861	(4)(d)		78,077
Research and development		41,025			(6,351	)		—			34,674
Asset impairment		48,820			(29,322	)		—			19,498
Goodwill impairment		51,756			(31,623	)		—			20,133
Amortization of intangible assets		6,225			(3,707	)		—			2,518
Gain on sale of assets		(2,173	)		818			—			(1,355	)
Total operating expenses		240,126			(91,442	)		4,861			153,545
Loss from operations		(98,547	)		92,855			(4,861	)		(10,553	)
Interest income		2,228			—			—			2,228
Interest expense		(3,806	)		—			—			(3,806	)
Loss from operations before income taxes		(100,125	)		92,855			(4,861	)		(12,131	)
Provision for income taxes		3,957			555			—			4,512
Net loss	$	(104,082	)	$	92,300		$	(4,861	)	$	(16,643	)
Net loss per share:
Basic	$	(2.02	)							$	(0.32	)
Diluted	$	(2.02	)							$	(0.32	)
Weighted average shares outstanding:
Basic		51,619									51,619
Diluted		51,619									51,619

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

	For the Fiscal Year Ended September 30, 2004
	Company Historical (3)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
Net revenue	$	717,811		$	(78,283	)	$	—		$	639,528
Cost of sales		486,806			(64,947	)		—			421,859
Gross profit		231,005			(13,336	)		—			217,669
Selling, general and administrative		101,225			(22,998	)		4,959	(4)(d)		83,186
Research and development		34,611			(3,954	)		—			30,657
Resizing		(68	)		—			—			(68	)
Asset impairment		3,293			(110	)		—			3,183
Amortization of intangible assets		9,022			(5,911	)		—			3,111
Gain on sale of assets		(1,023	)		—			—			(1,023	)
Total operating expenses		147,060			(32,973	)		4,959			119,046
Income from operations		83,945			19,637			(4,959	)		98,623
Interest income		1,109			—			—			1,109
Interest expense		(10,466	)		—			—			(10,466	)
Charge on extinguishment of debt		(10,510	)		—			—			(10,510	)
Income from continuing operations before income taxes		64,078			19,637			(4,959	)		78,756
Provision for income taxes		7,386			(291	)		—			7,095
Net income from continuing operations	$	56,692		$	19,928		$	(4,959	)	$	71,661
Net income per share from continuing operations:
Basic	$	1.12								$	1.41
Diluted	$	0.90								$	1.12
Weighted average shares outstanding:
Basic		50,746									50,746
Diluted		68,582									68,582

KULICKE AND SOFFA INDUSTRIES, INC.

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS

(in thousands, except per share amounts)

	For the Fiscal Year Ended September 30, 2003
	Company Historical (3)			Sale of Wafer Test Business (2)			Pro Forma Adjustments			Company Pro Forma Combined
Net revenue	$	477,935		$	(62,720	)	$	—		$	415,215
Cost of sales		349,727			(55,060	)		—			294,667
Gross profit		128,208			(7,660	)		—			120,548
Selling, general and administrative		102,327			(16,747	)		2,278	(4)(d)		87,858
Research and development		38,121			(3,188	)		—			34,933
Resizing		(475	)		103			—			(372	)
Asset impairment		3,629			(1,691	)		—			1,938
Amortization of intangible assets		9,260			(5,723	)		—			3,537
Loss on sale of product lines		5,257			—			—			5,257
Total operating expenses		158,119			(27,246	)		2,278			133,151
Loss from operations		(29,911	)		19,586			(2,278	)		(12,603	)
Interest income		940			—			—			940
Interest expense		(17,431	)		—			—			(17,431	)
Loss from continuing operations before income taxes		(46,402	)		19,586			(2,278	)		(29,094	)
Provision for income taxes for continuing operations		7,594			(90	)		—			7,504
Net loss from continuing operations	$	(53,996	)	$	19,676		$	(2,278	)	$	(36,598	)
Net loss per share:
Basic	$	(1.09	)							$	(0.74	)
Diluted	$	(1.09	)							$	(0.74	)
Weighted average shares outstanding:
Basic		49,695									49,695
Diluted		49,695									49,695

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

(1) As reported in K&S’s unaudited quarterly report on Form 10-Q for the quarterly period ended December 31, 2005.

(2) Prepared by the Company from its accounting records. The wafer test business had not historically been managed or reported as a separate business and this financial information is prepared on a “carve-out” basis and reflects an allocation of certain corporate costs (see footnote (4(d)). These allocations have been prepared on a basis considered reasonable by management.

(3) As reported in K&S’s audited annual report on Form 10-K for the year ended September 30, 2005.

(4) Pro forma adjustments reflect only those adjustments which are directly attributable to the transaction and do not include the impact of contingencies. Pro forma adjustments include the following ($ in thousands):

(a) To record cash proceeds of $9,000, net of estimated transaction costs of $1,000 from the sale of the wafer test business.

(b) To add back certain assets of the wafer test business which will be retained by K&S, (consisting primarily of accounts receivable).

(c) Represents the estimated loss on sale of net assets of $11,069.

(d) To add back allocated corporate general and administrative expenses, incentive compensation, and stock-based compensation expense that are included in the wafer test business carve-out amounts that will not be eliminated with the disposal of the business and will continue to be incurred by K&S.

	Three Months Ended December 31,					Fiscal Year Ended December 31,
	2005		2004			2005		2004		2003
Corporate Allocated Expenses:
Selling, general and administrative	$	912	$	1,382		$	4,790	$	4,414	$	2,278
Incentive compensation		191		(38	)		71		545		—
Stock-based compensation		81		—			—		—		—
	$	1,184	$	1,344		$	4,861	$	4,959	$	2,278