Kulicke and Soffa Industries (KLIC) 8-K First Quarter Financial Results

Exhibit 99.1

Kulicke & Soffa Corrects

First Quarter Financial Results

Fort Washington, PA – February 2, 2007 – Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) today announced corrections to the financial results for its quarter ended December 30, 2006 (“first quarter”) presented in its earnings press release and conference call on January 25, 2007. The Company made an error in calculating stock-based compensation expense included in continuing operations for the Company’s first quarter. The Company failed to immediately expense all stock options granted in the first quarter to retirement eligible employees. The correction increases this non-cash compensation expense in the first quarter and decreases the expense amount over subsequent quarters.

The following table summarizes the changes to the first quarter amounts presented in the January 25, 2007 press release:

	Previously Presented		Corrected
Stock-based compensation expense included in continuing operations	$	1,179	$	2,066
Net Income	$	4,926	$	4,173
Net Income per share:
Basic	$	0.09	$	0.07
Diluted	$	0.08	$	0.06

On January 25, 2007, the Company held its regularly scheduled conference call to discuss the financial results for the first quarter. On that call, management stated that return on invested capital (“ROIC”) for the first fiscal quarter was 11.6%. As a result of the corrected data discussed above, ROIC was 10.3% for the first quarter.

The corrected financial tables for the first quarter, the definition of ROIC used by the Company, and the reconciliation of ROIC to the most comparable GAAP number are attached.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is the world’s leading supplier of semiconductor assembly equipment, materials, and technology. K&S provides wire bonders, capillaries, wire, die bonders, and die collets for all types of semiconductor packages using wire as the internal electrical interconnections. 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 and process technology that enable our customers to achieve the highest possible yields and throughput. 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 ishttp://www.kns.com.

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

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KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENT OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

	Three months ended
	December 31, 2005			December 30, 2006
Net revenue	$	204,632		$	152,308
Cost of sales		139,169			113,589
Gross profit		65,463			38,719
Selling, general and administrative		20,582			22,655
Research and development, net		8,668			11,825
Operating expense		29,250			34,480
Income from operations		36,213			4,239
Interest income		712			1,457
Interest expense		(958	)		(636	)
Income from continuing operations before income taxes		35,967			5,060
Provision for income taxes		5,349			887
Income from continuing operations		30,618			4,173
Loss from discontinued operations		(5,317	)		—
Net income	$	25,301		$	4,173
Income per share from continuing operations:
Basic	$	0.59		$	0.07
Diluted	$	0.45		$	0.06
Loss per share from discontinued operations:
Basic	$	(0.10	)	$	—
Diluted	$	(0.07	)	$	—
Net income per share:
Basic	$	0.49		$	0.07
Diluted	$	0.38		$	0.06
Weighted average shares outstanding:
Basic		52,044			57,301
Diluted		68,239			69,456
Stock-based compensation expense included in continuing operations:
Cost of sales	$	98		$	67
Selling, general and administrative		815			1,451
Research and development, net		240			548
Total continuing operations	$	1,153		$	2,066
Discontinued operations	$	347		$	—
	Three months ended
	December 31, 2005			December 30, 2006
Additional financial data:
Depreciation and amortization
Continuing operations	$	2,809		$	2,305
Discontinued operations	$	1,364		$	—
Capital expenditures
Continuing operations	$	2,360		$	1,100
Discontinued operations	$	605		$	—
Backlog of orders
Continuing operations	$	66,000		$	56,000
Discontinued operations	$	7,000		$	—
Number of employees
Continuing operations		2,580			2,700
Discontinued operations		932			—

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEET

(In thousands)

	September 30, 2006			(Unaudited) December 30, 2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	133,967		$	127,898
Restricted cash		1,973			—
Short-term investments		21,343			11,560
Accounts and notes receivable (less allowance for doubtful accounts: 9/30/06 - $3,068; 12/30/06 - $3,579)		120,651			123,118
Inventories, net		47,866			58,282
Current assets of discontinued operations		3,832			—
Prepaid expenses and other current assets		10,446			10,996
Deferred income taxes		3,990			3,992
TOTAL CURRENT ASSETS		344,068			335,846
Property, plant and equipment, net		28,487			39,271
Intangible assets, (net of accumulated amortization: 9/30/06 - $0; 12/30/06 - $0)		—			626
Goodwill		29,684			29,684
Other assets		3,262			4,657
TOTAL ASSETS	$	405,501		$	410,084
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	42,881		$	37,484
Accrued expenses		32,970			32,374
Income taxes payable		19,239			20,453
TOTAL CURRENT LIABILITIES		95,090			90,311
Long term debt		195,000			195,000
Other liabilities		10,640			10,331
Deferred taxes		25,465			26,455
TOTAL LIABILITIES		326,195			322,097
Commitments and contingencies		—			—
SHAREHOLDERS’ EQUITY
Common stock, without par value		277,194			280,518
Accumulated deficit		(191,824	)		(187,651	)
Accumulated other comprehensive loss		(6,064	)		(4,880	)
TOTAL SHAREHOLDERS’ EQUITY		79,306			87,987
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	405,501		$	410,084

KULICKE & SOFFA INDUSTRIES, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

(In thousands)

(Unaudited)

Fiscal 2007:
Three months ended December 30, 2006:	Equipment Segment			Packaging Materials Segment		Consolidated
Net revenue	$	58,166		$	94,142	$	152,308
Cost of sales		33,176			80,413		113,589
Gross profit		24,990			13,729		38,719
Operating costs		25,194			9,286		34,480
Income from operations	$	(204	)	$	4,443	$	4,239
Fiscal 2006:
Three months ended December 31, 2005:	Equipment Segment			Packaging Materials Segment		Consolidated
Net revenue	$	120,672		$	83,960	$	204,632
Cost of sales		68,695			70,474		139,169
Gross profit		51,977			13,486		65,463
Operating costs		21,943			7,307		29,250
Income from operations	$	30,034		$	6,179	$	36,213

Company’s Return on Invested Capital Calculation

(For the Three Months ending December 30, 2006)

We define Return On Invested Capital (ROIC) as Operating Income divided by adjusted net Invested Capital. Total Assets are adjusted for discontinued operations’ assets held for sale. Net Invested Capital is defined as Total Assets less Current Liabilities. We believe ROIC is a useful measure in providing investors with information regarding our performance. ROIC is a widely accepted measure of earnings efficiency in relation to capital employed. We believe that increasing the return on capital employed, as measured by ROIC, is an effective method to sustain and increase shareholder value. Reconciliation to the most comparable U.S. GAAP measurements are shown below.

			Adjustments
($ 000)	As Reported		Depreciation/ Amortization			Company's ROIC
Operating Income from Continued Operations	$	4,239	$	2,305		$	6,544		Adjusted Net Operating Income
						$	26,176	(a)	Annualized
			Company Cash Limit (1)
Cash & Cash Equivalents	$	139,458	$	(64,458	)	$	75,000
Non-Cash Assets		270,626					270,626
Total Assets		410,084					345,626
Total Current Liabilities		90,311					90,311
Net Invested Capital	$	319,773				$	255,315	(b)	Adjusted Net Invested Capital
							10.3	%(a)/(b)	ROIC

(1) Only the first $75 million of cash is used for the ROIC calculation