Kulicke and Soffa Industries (KLIC) 8-K Kulicke & Soffa Reports Second Fiscal Quarter Results

Exhibit 99.1

Kulicke & Soffa Reports Second Fiscal Quarter Results

A conference call to discuss these results will be held today beginning at 9:00 AM EDT. Interested participants may call 877-407-8037 for the teleconference or log on to http://www.kns.com/investors/events for listen-only mode.

Willow Grove, PA—April 27, 2006—Kulicke & Soffa Industries, Inc. (K&S) (Nasdaq: KLIC) today announced financial results for its quarter ended April 1, 2006 (“second fiscal quarter”).

The Company’s Test segment was sold during the second fiscal quarter and has been classified as discontinued operations for all periods in the attached financial statements.

Net revenue from continuing operations for the second fiscal quarter was $160.3 million, compared to $102.6 million in the comparable year-ago quarter. This revenue growth was primarily from the Company’s equipment segment, which was up 88% from a year ago. Net income from continuing operations for the second fiscal quarter was $17.1 million or $0.25 per diluted share versus net income from continuing operations for the year-ago quarter of $2.2 million, or $0.04 per diluted share.

Net loss for the second fiscal quarter was $729 thousand (including the discontinued operations from our Test segment) or a loss of $0.01 per share versus a loss of $7.7 million or ($0.15) per share for the year-ago quarter. The financial results for the second fiscal quarter of 2006 include:

• Pre-tax Gain on the early extinguishment of the Company’s 0.5% Convertible Subordinated Notes (the “Notes”) of $4.0 million, or $0.06 per diluted share.

• Loss from discontinued operations of $17.8 million or ($0.26) per share (which includes employee termination benefits, facility lease costs, and transaction fees) compared to a loss for the Test segment of $9.9 million or ($0.19) per share for the year-ago quarter.

• Expense for stock-based compensation from stock options of $1.7 million or $0.03 per diluted share. As previously reported, the Company began recording stock-based compensation expense during the first fiscal quarter. Stock-based compensation expense was not recorded in any period prior to fiscal year 2006.

Scott Kulicke, chairman and chief executive officer of K&S, commented on a recent VLSI Research report regarding the Company’s market share, “We continued to expand our equipment customer base compared to the prior year with our Maxum Ultra and Elite bonders, and we are also receiving a higher market share at some of our existing customers, especially in China and Japan.” He added, “Although the financial results for the second fiscal quarter are somewhat complicated by the sale of our Test segment, we are quite pleased with the results from our continuing operations, especially our ball bonder business.”

Second Quarter Review and Highlights

Corporate Strategy

• K&S sold its Test segment during the second fiscal quarter. These actions will allow the Company to strengthen its focus on its current core businesses- semiconductor assembly equipment and materials- and explore growth strategies in those markets.

• K&S reduced its long term debt by $75.0 million and increased shareholder equity by $42.7 million during the second fiscal quarter. The exchange of cash and shares for the Notes demonstrates our commitment to improving the Company’s capital structure.

Technology & Manufacturing

• K&S was named the market leader for ball bonders in calendar 2005 by VLSI research. According to the VLSI report, K&S’s market share was 45% of the total ball bonder market. In addition, the VLSI 2005 customer satisfaction report placed K&S as one of the 10 best assembly equipment suppliers.

• K&S gold wire products received quality supplier awards from Infineon, Malaysia and AIT, Batam for excellent quality, delivery, and technology in calendar 2005.

• The K&S AT Premier wafer bumping equipment continued to expand its customer base in the second fiscal quarter. Customers are currently purchasing lab-scale machine quantities for pre-production evaluation of gold bumped devices used in various flip-chip products.

Key Product Trends

• K&S bonder sales in Japan during the second fiscal quarter represented the strongest quarter for the past two years. Compared to the prior quarter, Japanese customer sales climbed from 2% to 11% of total equipment revenue in the second fiscal quarter.

• K&S bonding tool unit sales for the second fiscal quarter were approximately flat compared to the first fiscal quarter. Wire unit sales for the same periods declined approximately 9%, primarily due to a decline at a large subcontract customer. The increased revenue for the packaging materials segment ($83.9 million in the first fiscal quarter compared to $87.2 million in the second fiscal quarter) was attributable to higher gold prices.

Financial Review

• The K&S Equipment segment maintained a 43% gross margin in the second fiscal quarter.

• Cash and cash equivalents increased from $101.8 million at the beginning of the second quarter to $122.2 million at the end of the quarter.

Business Summary

Mr. Kulicke concluded, “Our third fiscal quarter is looking like another solid quarter, with revenue for the June quarter expected to be $155 million plus or minus about 5% (excluding any impact of fluctuations in gold pricing).”

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is the world’s leading supplier of semiconductor wire bonding assembly equipment. K&S is the only major supplier to the semiconductor assembly industry that provides customers with semiconductor assembly equipment along with the complementing packaging materials that contact the surface of the customer’s semiconductor devices. The ability to provide 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. Kulicke & Soffa’s web site address is http://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 our future revenue, orders for our products, operating expenses, profitability, cash flows, market share, improvement of our capital structure, introduction and customer adoption of new products, growth strategies, 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 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. 2005 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.

Company Contact: Michael Sheaffer, 215-784-6411, 215-784-6167 fax, msheaffer@kns.com

# # #

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

	Three months ended						Six months ended
	March 31, 2005 (1)			April 1, 2006			March 31, 2005 (1)			April 1, 2006
Net revenue	$	102,601		$	160,329		$	195,968		$	364,961
Cost of sales		74,662			115,389			143,163			254,558
Gross profit		27,939			44,940			52,805			110,403
Selling, general and administrative		16,765			20,758			32,899			41,334
Research and development, net		7,098			9,394			13,685			18,062
Operating expenses		23,863			30,152			46,584			59,396
Income from operations		4,076			14,788			6,221			51,007
Interest income		567			799			1,016			1,511
Interest expense		(1,047	)		(846	)		(1,893	)		(1,804	)
Gain on early extinguishment of debt		—			4,040			—			4,040
Income from continuing operations before income taxes		3,596			18,781			5,344			54,754
Provision for income taxes		1,356			1,667			3,322			7,016
Net income from continuing operations		2,240			17,114			2,022			47,738
Loss from discontinued operations of Test Business, including loss on disposal of $773, net of tax		(9,913	)		(17,843	)		(16,886	)		(23,160	)
Net income (loss)	$	(7,673	)	$	(729	)	$	(14,864	)	$	24,578
Net income (loss) per share from continuing operations:
Basic	$	0.04		$	0.31		$	0.04		$	0.90
Diluted	$	0.04		$	0.25		$	0.04		$	0.71
Loss per share from discontinued operations:
Basic	$	(0.19	)	$	(0.32	)	$	(0.33	)	$	(0.44	)
Diluted	$	(0.19	)	$	(0.26	)	$	(0.33	)	$	(0.34	)
Net income (loss) per share:
Basic	$	(0.15	)	$	(0.01	)	$	(0.29	)	$	0.46
Diluted	$	(0.15	)	$	(0.01	)	$	(0.29	)	$	0.37
Weighted average shares outstanding:
Basic		51,490			54,512			51,363			53,271
Diluted		51,490			69,298			51,363			68,553
Stock-based compensation expense included in continuing operations:
Cost of sales	$	—		$	354		$	—		$	452
Selling, general and administrative		—			677			—			1,492
Research and development		—			445			—			685
Total continuing operations	$	—		$	1,476		$	—		$	2,629
Discontinued operations	$	—		$	272		$	—		$	619

	Three months ended				Six months ended
	March 31, 2005 (1)		April 1, 2006 (1)		March 31, 2005 (1)		April 1, 2006 (1)
Additional financial data:
Depreciation and amortization
Continuing operations	$	5,419	$	2,488	$	10,673	$	5,297
Discontinued operations	$	1,570	$	950	$	3,328	$	2,314
Capital expenditures
Continuing operations	$	2,548	$	3,817	$	4,265	$	6,177
Discontinued operations	$	812	$	148	$	2,073	$	753

	March 31, 2005 (1)	April 1, 2006 (1)
Backlog of orders
Continuing operations	56,000	60,000
Discontinued operations	6,000	—
Number of employees
Continuing operations	2,246	2,395
Transition personnel	—	386
Discontinued operations	1,024	—

Note (1)– Prior period statements of operations and additional financial data have been adjusted to reflect accounting for the sale of the company’s Test business as a discontinued operation in accordance with the requirements of FAS 144.

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEET

(In thousands)

				(Unaudited)
	September 30, 2005 (1)			April 1, 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	79,455		$	108,335
Restricted cash		1,381			11,945
Short-term investments		14,533			1,911
Accounts and notes receivable (less allowance for doubtful accounts: 9/30/05 - $3,257; 3/31/06 - $3,165)		128,376			142,398
Inventories, net		46,115			46,073
Assets held for sale		4,428			4,452
Current assets of discontinued operations		22,294			—
Prepaid expenses and other current assets		10,267			14,816
Deferred income taxes		1,605			1,582
TOTAL CURRENT ASSETS		308,454			331,512
Property, plant and equipment, net		31,915			32,739
Goodwill		29,684			29,684
Long-term assets of discontinued operations		10,323			—
Other assets		6,120			5,554
TOTAL ASSETS	$	386,496		$	399,489
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of long term debt	$	10,119		$	9,819
Accounts payable		53,498			54,111
Accrued expenses		32,748			41,533
Income taxes payable		17,196			20,348
Liabilities held for sale		529			1,978
Current liabilities of discontinued operations		5,421			—
TOTAL CURRENT LIABILITIES		119,511			127,789
Long term debt		270,000			195,000
Other liabilities		6,389			7,530
Deferred taxes		22,344			22,970
TOTAL LIABILITIES		418,244			353,289
Commitments and contingencies		—			—
SHAREHOLDERS’ EQUITY (DEFICIT)
Common stock, without par value		218,426			271,400
Accumulated deficit		(243,994	)		(219,416	)
Accumulated other comprehensive loss		(6,180	)		(5,784	)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)		(31,748	)		46,200
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)	$	386,496		$	399,489

Note (1)– Amounts have been adjusted to reflect accounting for the sale of the company’s Test business as a discontinued operation in accordance with the requirements of FAS 144.

KULICKE & SOFFA INDUSTRIES, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

(In thousands)

(Unaudited)

Fiscal 2006:

	Equipment Segment			Packaging Materials Segment		Consolidated
Three months ended April 1, 2006: (1)
Net revenue	$	73,162		$	87,167	$	160,329
Cost of sales		41,807			73,582		115,389
Gross profit		31,355			13,585		44,940
Operating costs		21,680			8,472		30,152
Income from operations	$	9,675		$	5,113	$	14,788
Six months ended April 1, 2006: (1)
Net revenue	$	193,834		$	171,127	$	364,961
Cost of sales		110,502			144,056		254,558
Gross profit		83,332			27,071		110,403
Operating costs		43,617			15,779		59,396
Income from operations	$	39,715		$	11,292	$	51,007
Fiscal 2005:
	Equipment Segment			Packaging Materials Segment		Consolidated
Three months ended March 31, 2005: (1)
Net revenue	$	38,985		$	63,616	$	102,601
Cost of sales		22,603			52,059		74,662
Gross profit		16,382			11,557		27,939
Operating costs		16,493			7,370		23,863
Income (loss) from operations	$	(111	)	$	4,187	$	4,076
Six months ended March 31, 2005: (1)
Net revenue	$	68,334		$	127,634	$	195,968
Cost of sales		39,884			103,279		143,163
Gross profit		28,450			24,355		52,805
Operating costs		30,974			15,610		46,584
Income (loss) from operations	$	(2,524	)	$	8,745	$	6,221

Note (1): During the three months ended April 1, 2006, the Company sold its Test business. General corporate expenses previously allocated to this segment have been allocated to the Company’s remaining two segments for all periods presented above.