Kulicke and Soffa Industries (KLIC) 8-K Kulicke & Soffa Reports Results for its Fourth Quarter and Fiscal Year 2008

Exhibit 99.1

	Kulicke & Soffa Industries Inc. 1005 Virginia Drive Fort Washington, PA 19034 USA
	215-784-6000 phone 215-659-7588 fax www.kns.com

Kulicke & Soffa Reports Results for its Fourth Quarter and Fiscal Year 2008

Fort Washington, PA – November 13, 2008 – Kulicke & Soffa Industries, Inc. (NASDAQ: KLIC) (“K&S”) today announced results for the quarter and fiscal year ended September 27, 2008. The company reported net revenues from continuing operations of $61.2 million and a net loss of $11.0 million, or $0.21 per share. This press release contains both GAAP and non-GAAP information.

During the fourth quarter, the Company announced the divestiture of its wire business, and accordingly, all operating results associated with this business are reported as discontinued operations. On a non-GAAP basis (excluding equity-based compensation, amortization of intangibles and related tax effects), the Company reported fourth quarter net revenue from continuing operations of $61.2 million, and a net loss of $10.3 million or $0.19 per share.

Quarterly GAAP Results
From Continuing Operations	Q4 2008	Change vs. Q4 2007	vs. Q3 2008
Net Revenue	$61.2 million	-60%	-16%
Gross Profit	$24.9 million	-59%	-16%
Gross Margin	40.6%	+34 basis points	-35 basis points
Net Income (Loss)	($11.0 million)	-143%	-51%
Net Margin	-18.0%	-3,472 basis points	-790 basis points
EPS – Diluted	$(0.21)	-153%	-50%

Quarterly Non-GAAP Measures
From Continuing Operations	Q4 2008	Vs. Q4 2007	vs. Q3 2008
Net Revenue	$61.2 million	-60%	-16%
Gross Profit	$24.9 million	-59%	-16%
Gross Margin	40.7%	+41 basis points	-33 basis points
Net Income (Loss)	($10.3 million)	-143%	-68%
Net Margin	-16.8%	-3,256 basis points	-835 basis points
EPS – Diluted	$(0.19)	-151%	-68%
Non-GAAP measures exclude: equity-based compensation from expenses; amortization of intangibles; and related tax effects (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, “Global economic conditions deteriorated rapidly toward the end of the September quarter, creating a very difficult business environment. Customers responded quickly to the weakening economic conditions, slowing bookings toward the end of that quarter and into the current quarter. We expect demand to remain weak and visibility to be poor through at least the first half of our fiscal 2009. For that reason, we expect net revenue of approximately $40 million during the first fiscal quarter of 2009.”

“To cope with this difficult environment, we are taking appropriate steps to manage costs. These measures include a headcount reduction of 240 positions and a cancellation of annual salary increases scheduled for January. We expect theses measures to cost approximately $3 million, and to result in approximately $12 million in annualized savings.”

Mr. Kulicke concluded, “Although we are heading into a difficult period, we believe we are well positioned to weather the turmoil. We started fiscal 2009 with $186 million in cash, and added about $70 million more after the sale of the wire business and the acquisition of Orthodyne. This balance sheet strength, combined with the strong market position of our core products, makes us confident in our ability to extend our position as a leading supplier of semiconductor assembly solutions.”

Financial Details

• Total cash and cash investments at fiscal year end were $186 million, up $3.3 million.

• Subsequent to year end, we closed the divestiture of the wire business and the Orthodyne acquisition, and on a combined basis added approximately $70 million to our cash balance.

Key Product Trends

• Transition to IConn^PSand ConnX^PSball bonders, which replace the Maxum Ultra and Maxum Elite, respectively, is proceeding as planned. Qualifications for both products have been completed with the bulk of our customers, and the products met or exceeded performance expectations. IConn^PSand ConnX^PSreinforce our technology leadership in ball bonding and will provide customers with significant cost of ownership savings.

• Completed alpha testing for the Discovery die bonder, and the product remains on track for launch in winter of 2009.

• Launched Uniplus^TM—a new series of hub dicing blades that provide improved cut quality, longer blade life and increased productivity for a variety of chip scale package (CSP) applications.

Outlook for First Fiscal Quarter 2009

• Net revenue is expected to be approximately $40 million, including Orthodyne.

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Fiscal Year 2008 Results

For the fiscal year 2008, K&S net revenue from continuing operations was $328.1 million, and we incurred a net loss of $19.6 million or $0.37 per share. On a non-GAAP basis, the Company reported fiscal 2008 net revenue of $328.1 million and a net loss of $8.4 million or $0.16 per share.

Annual GAAP Results
From Continuing Operations	FY 2008	FY 2007	Change
Net Revenue	$328.1 million	$370.5 million	-11.0%
Gross Profit Gross Margin	$133.8 million 40.8%	$155.4 million 42.0%	-14.0% -117 basis points
Net Income (Loss) Net Margin	($19.6 million) (6.1%)	$18.9 million 5.1%	-204% -1,107 basis points
EPS – Diluted	($0.37)	$0.29	-228%

Annual Non-GAAP Measures
From Continuing Operations	FY 2008	FY 2007	Change
Net Revenue	$328.1 million	$370.5 million	-11.0%
Gross Profit Gross Margin	$134.0 million 40.9%	$155.7 million 42.0%	-14.0% -115 basis points
Net Income (Loss) Net Margin	($8.4 million) (2.5%)	$17.1 million 4.6%	-149% -716 basis points
EPS – Diluted	($0.16)	$0.27	-158%
Non-GAAP measures exclude: equity-based compensation from expenses; amortization of intangibles; U.S. pension plan termination charge; debt extinguishment; and related tax effects (see reconciliations of GAAP results to Non-GAAP measures in the following financial schedules).

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 13, 2008 beginning at 9:00 AM EDT. Interested participants may call 877-407-8037 for the teleconference or log on tohttp://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 302063 (replay ID number). A replay will also be available on the K&S web site athttp://www.kns.com/investors/events. The replay will be available via phone and web site for a limited period.

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.

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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. In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 123R,Share Based Payments, 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; and

• Amortization of intangibles.

–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 by the GAAP net 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 expenses, amortization of intangibles, U.S pension plan termination charge, gains on debt extinguishment, and related tax effects.

–Net Margin. Non-GAAP net margin reflects the Company’s net margin excluding equity-based compensation, amortization of intangibles, U.S pension plan termination charge, gains on debt extinguishment, and related tax effects.

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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 wire 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 global economic conditions, future demand for our products, visibility regarding future demand for our products, future costs and savings associated with headcount and other reductions, our future revenue, sales, profitability, financial results, strength of our balance sheet, 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: the risk of failure to successfully manage our operations; the risk of failure to successfully integrate Orthodyne; 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; instability in capital and credit markets; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2007 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.

Contacts:

Geoff Grande, CFA

FD

P: (617) 747-1721

F: (617) 747-1711

geoff.grande@fd.com

Tom Johnson

Director – Investor Relations & Corporate Communications

Kulicke & Soffa

P: (215) 784-6411

F: (215) 784-6167

tjohnson@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						Fiscal year ended
	September 29, 2007			September 27, 2008			September 29, 2007			September 27, 2008
Net revenue	$	151,600		$	61,230		$	370,526		$	328,050
Cost of sales		90,543			36,364			215,090			194,257
Gross profit		61,057			24,866			155,436			133,793
Selling, general and administrative		22,568			22,304			88,839			89,356
Research and development		13,016			14,683			49,085			59,917
U.S. pension plan termination		—			—			—			9,152
Total operating expenses		35,584			36,987			137,924			158,425
Income (loss) from operations		25,473			(12,121	)		17,512			(24,632	)
Interest income		2,073			1,004			6,866			4,732
Interest expense		(924	)		(892	)		(2,876	)		(3,499	)
Gain on extinguishment of debt		2,802			—			2,802			170
Income (loss) from continuing operations before income taxes		29,424			(12,009	)		24,304			(23,229	)
Provision (benefit) for income taxes		4,064			(992	)		5,448			(3,610	)
Income (loss) from continuing operations		25,360			(11,017	)		18,856			(19,619	)
Income from discontinued operations, net of tax		4,891			6,408			18,874			23,441
Net income (loss)	$	30,251		$	(4,609	)	$	37,730		$	3,822
Income (loss) per share from continuing operations:
Basic	$	0.47		$	(0.21	)	$	0.34		$	(0.37	)
Diluted	$	0.40		$	(0.21	)	$	0.29		$	(0.37	)
Income from share of discontinued operations:
Basic	$	0.09		$	0.12		$	0.33		$	0.44
Diluted	$	0.07		$	0.12		$	0.28		$	0.44
Net income (loss) per share:
Basic	$	0.56		$	(0.09	)	$	0.67		$	0.07
Diluted	$	0.47		$	(0.09	)	$	0.57		$	0.07
Weighted average shares outstanding:
Basic		53,546			53,621			56,221			53,449
Diluted		64,702			53,621			68,274			53,449
Stock-based compensation expense included in continuing operations:
Cost of sales	$	45		$	65		$	236		$	252
Selling, general and administrative		722			513			4,038			3,711
Research and development		330			192			1,576			1,442
Total	$	1,097		$	770		$	5,850		$	5,405
	Three months ended						Fiscal year ended
	September 29, 2007			September 27, 2008			September 29, 2007			September 27, 2008
Additional financial data:
Depreciation and amortization
Continuing operations	$	2,941		$	2,336		$	9,559		$	9,080
Discontinued operations	$	530		$	241		$	1,352		$	968
Capital expenditures
Continuing operations	$	1,994		$	1,544		$	5,575		$	7,850
Discontinued operations	$	32		$	32		$	188		$	151
							September 29, 2007			September 27, 2008
Backlog of orders
Continuing operations							$	86,000		$	50,000
Discontinued operations							$	19,000		$	22,000
Number of employees
Continuing operations								2,649			2,496
Discontinued operations								254			293

Note – Statements of operations and additional financial data reflect accounting for the sale of the company's Wire business as a discontinued operation in accordance with the requirements of FAS 144.

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	September 29, 2007			(Unaudited) September 27, 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	150,571		$	144,932
Restricted cash		—			35,000
Short-term investments		19,339			4,148
Accounts and notes receivable, net of allowance for doubtful accounts of $1,586 and $1,376, respectively		116,693			56,643
Inventories, net		37,838			27,236
Prepaid expenses and other current assets		12,023			18,729
Deferred income taxes		3,540			2,118
Current assets of discontinued operations		94,205			127,958
TOTAL CURRENT ASSETS		434,209			416,764
Property, plant and equipment, net		34,108			36,900
Intangible assets		500			386
Goodwill		3,528			2,709
Investments available for sale		—			2,001
Other assets		6,573			5,468
Non-current assets of discontinued operations		33,682			32,909
TOTAL ASSETS	$	512,600		$	497,137
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long term debt	$	—		$	72,412
Accounts payable		62,870			25,028
Accrued expenses		34,714			27,255
Income taxes payable		22,665			569
Current liabilities of discontinued operations		22,201			34,411
TOTAL CURRENT LIABILITIES		142,450			159,675
Long term debt		251,412			175,000
Other liabilities		12,149			37,780
Deferred income taxes		22,525			21,591
Other liabilities of discontinued operations		809			624
TOTAL LIABILITIES		429,345			394,670
SHAREHOLDERS’ EQUITY
Common stock, no par value		288,714			295,841
Treasury stock, at cost		(46,118	)		(46,118	)
Accumulated deficit		(154,094	)		(149,465	)
Accumulated other comprehensive income (loss)		(5,247	)		2,209
TOTAL SHAREHOLDERS’ EQUITY		83,255			102,467
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	512,600		$	497,137

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three months ended						Fiscal year ended
	September 29, 2007			September 27, 2008			September 29, 2007			September 27, 2008
Net cash provided by (used in) continuing operations	$	18,936		$	1,999		$	(2,017	)	$	26,936
Net cash provided by discontinued operations		9,232			3,020			33,780			1,126
Net cash provided by operating activities	$	28,168		$	5,019		$	31,763		$	28,062
Net cash provided by (used in) investing activities		2,972			(24,155	)		(29,762	)		(29,599	)
Net cash used in investing activities, discontinued operations		(32	)		(37	)		(190	)		(193	)
Net cash provided by (used in) investing activities	$	2,940		$	(24,192	)	$	(29,952	)	$	(29,792	)
Net cash provided by (used in) financing activities		(56,138	)		5			14,385			(3,282	)
Effect of exchange rate changes on cash and cash equivalents		253			(96	)		408			(627	)
Changes in cash and cash equivalents	$	(24,777	)	$	(19,264	)	$	16,604		$	(5,639	)
Cash and cash equivalents, beginning of period		175,348			164,196			133,967			150,571
Cash and cash equivalents, end of period	$	150,571		$	144,932		$	150,571		$	144,932
Short-term and long-term investments		19,339			6,149			19,339			6,149
Restricted cash		—			35,000			—			35,000
Total Cash, cash equivalents, restricted cash and short-term investments	$	169,910		$	186,081		$	169,910		$	186,081

KULICKE & SOFFA INDUSTRIES, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

(In thousands)

(Unaudited)

Fiscal 2008:
	Equipment Segment			Packaging Materials Segment		Consolidated
Three months ended September 27, 2008:
Net revenue	$	46,958		$	14,272	$	61,230
Cost of sales		28,949			7,415		36,364
Gross profit		18,009			6,857		24,866
Operating expenses		31,234			5,753		36,987
Income (loss) from continuing operations	$	(13,225	)	$	1,104	$	(12,121	)
Fiscal year ended September 27, 2008:
Net revenue	$	271,019		$	57,031	$	328,050
Cost of sales		165,499			28,758		194,257
Gross profit		105,520			28,273		133,793
Operating expenses		122,302			26,971		149,273
U.S. pension plan termination		9,152			—		9,152
Income (loss) from continuing operations	$	(25,934	)	$	1,302	$	(24,632	)
Fiscal 2007:
	Equipment Segment			Packaging Materials Segment		Consolidated
Three months ended September 29, 2007:
Net revenue	$	136,645		$	14,955	$	151,600
Cost of sales		82,825			7,718		90,543
Gross profit		53,820			7,237		61,057
Operating expenses		29,521			6,063		35,584
Income from continuing operations	$	24,299		$	1,174	$	25,473
Fiscal year ended September 29, 2007:
Net revenue	$	316,718		$	53,808	$	370,526
Cost of sales		188,055			27,035		215,090
Gross profit		128,663			26,773		155,436
Operating expenses		113,444			24,480		137,924
Income from continuing operations	$	15,219		$	2,293	$	17,512

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS—SUMMARY

COMPARISON OF GAAP RESULTS TO NON-GAAP MEASURES

(In thousands, except share amounts)

(Unaudited)

	Three months ended September 29, 2007		Three months ended September 27, 2008			Fiscal year ended September 29, 2007		Fiscal year ended September 27, 2008
	(GAAP results)
Net revenue	$	151,600	$	61,230		$	370,526	$	328,050
Gross profit		61,057		24,866			155,436		133,793
Income (loss) from operations		25,473		(12,121	)		17,512		(24,632	)
Net income (loss) from continuing operations		25,360		(11,017	)		18,856		(19,619	)
Weighted average shares outstanding, continuing operations
Basic		53,546		53,621			56,221		53,449
Diluted		64,702		53,621			68,274		53,449
Net income (loss) per share from continuing operations
Basic	$	0.47	$	(0.21	)		0.34		(0.37	)
Diluted	$	0.40	$	(0.21	)		0.29		(0.37	)
	(Non-GAAP measures)
Net revenue	$	151,600	$	61,230		$	370,526	$	328,050
Gross profit		61,102		24,931			155,672		134,045
Income (loss) from operations		26,614		(11,310	)		23,522		(9,889	)
Net income (loss) from continuing operations		23,928		(10,273	)		17,092		(8,354	)
Weighted average shares outstanding, continuing operations
Basic		53,546		53,621			56,221		53,449
Diluted		64,702		53,621			68,274		53,449
Net income (loss) per share from continuing operations
Basic	$	0.45	$	(0.19	)		0.30	$	(0.16	)
Diluted	$	0.37	$	(0.19	)		0.27	$	(0.16	)

KULICKE & SOFFA INDUSTRIES, INC.

OPERATING RESULTS BY BUSINESS SEGMENT—SUMMARY

COMPARISON OF GAAP RESULTS TO NON-GAAP MEASURES

(In thousands)

(Unaudited)

	Equipment Segment			Packaging Materials Segment		Consolidated
Fiscal 2008:
Three months ended September 27, 2008:
	(GAAP results)
Net revenue	$	46,958		$	14,272	$	61,230
Gross profit		18,009			6,857		24,866
Income (loss) from operations		(13,225	)		1,104		(12,121	)
	(Non-GAAP measures)
Net revenue	$	46,958		$	14,272	$	61,230
Gross profit		18,043			6,888		24,931
Income (loss) from operations		(12,631	)		1,321		(11,310	)
Fiscal year ended September 27, 2008:
	(GAAP results)
Net revenue	$	271,019		$	57,031	$	328,050
Gross profit		105,520			28,273		133,793
Income (loss) from operations		(25,934	)		1,302		(24,632	)
	(Non-GAAP measures)
Net revenue	$	271,019		$	57,031	$	328,050
Gross profit		105,657			28,388		134,045
Income (loss) from operations		(12,474	)		2,585		(9,889	)
Fiscal 2007:
Three months ended September 29, 2007:
	(GAAP results)
Net revenue	$	136,645		$	14,955	$	151,600
Gross profit		53,820			7,237		61,057
Income from operations		24,299			1,174		25,473
	(Non-GAAP measures)
Net revenue	$	136,645		$	14,955	$	151,600
Gross profit		53,849			7,253		61,102
Income from operations		25,260			1,354		26,614
Fiscal year ended September 29, 2007:
	(GAAP results)
Net revenue	$	316,718		$	53,808	$	370,526
Gross profit		128,663			26,773		155,436
Income from operations		15,219			2,293		17,512
	(Non-GAAP measures)
Net revenue	$	316,718		$	53,808	$	370,526
Gross profit		128,780			26,892		155,672
Income from operations		19,877			3,645		23,522

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

RECONCILIATION OF GAAP RESULTS TO NON-GAAP MEASURES

(In thousands, except share amounts)

(Unaudited)

	Three months ended September 29, 2007			% of Revenue		Three months ended September 27, 2008			% of Revenue		Fiscal year ended September 29, 2007			% of Revenue		Fiscal year ended September 27, 2008			% of Revenue
Net revenue (GAAP results)	$	151,600				$	61,230				$	370,526				$	328,050
Net revenue (Non-GAAP measures)		151,600					61,230					370,526					328,050
Gross profit (GAAP results)		61,057		40.3	%		24,866		40.6	%		155,436		42.0	%		133,793		40.8	%
—Equity-based compensation expense		45					65					236					252
Gross profit (Non-GAAP measures)		61,102		40.3	%		24,931		40.7	%		155,672		42.0	%		134,045		40.9	%
Income (loss) from operations (GAAP results)		25,473		16.8	%		(12,121	)	-19.8	%		17,512		4.7	%		(24,632	)	-7.5	%
—Equity-based compensation expense		1,097					770					5,850					5,405
—U.S. pension plan termination		—					—					—					9,152
—Amortization of intangibles		44					41					160					186
Income (loss) from operations (Non-GAAP measures)		26,614		17.6	%		(11,310	)	-18.5	%		23,522		6.3	%		(9,889	)	-3.0	%
Net income (loss) (GAAP results)		25,360		16.7	%		(11,017	)	-18.0	%		18,856		5.1	%		(19,619	)	-6.0	%
—Equity-based compensation expense		1,097					770					5,850					5,405
—U.S. pension plan termination		—					—					—					9,152
—Amortization of intangibles		44					41					160					186
—Gain on extinguishment of debt		(2,802	)				—					(2,802	)				(170	)
—Tax effect of non-GAAP adjustments		229					(67	)				(4,972	)				(3,308	)
Net income (loss) (Non-GAAP measures)		23,928		15.8	%		(10,273	)	-16.8	%		17,092		4.6	%		(8,354	)	-2.5	%
Weighted average shares outstanding, continuing operations (GAAP & Non-GAAP)
Basic		53,546					53,621					56,221					53,449
Diluted		64,702					53,621					68,274					53,449
Net income (loss) per share from continuing operations (GAAP results)
Basic	$	0.47				$	(0.21	)			$	0.34				$	(0.37	)
Diluted	$	0.40				$	(0.21	)			$	0.29				$	(0.37	)
Adjustments to net income per share
Basic	$	(0.02	)			$	0.02				$	(0.04	)			$	0.21
Diluted	$	(0.03	)			$	0.02				$	(0.02	)			$	0.21
Net income (loss) per share from continuing operations (Non-GAAP measures)
Basic	$	0.45				$	(0.19	)			$	0.30				$	(0.16	)
Diluted	$	0.37				$	(0.19	)			$	0.27				$	(0.16	)

KULICKE & SOFFA INDUSTRIES, INC.

OPERATING RESULTS BY BUSINESS SEGMENT

RECONCILIATION OF GAAP RESULTS TO NON-GAAP MEASURES

(In thousands)

(Unaudited)

	Equipment Segment		% of Revenue		Packaging Materials Segment	% of Revenue		Consolidated
Fiscal 2008:
Three months ended September 27, 2008:
Net revenue (GAAP results)	46,958				14,272			61,230
Net revenue (Non-GAAP measures)	46,958				14,272			61,230
Gross profit (GAAP results)	18,009		38.4	%	6,857	48.0	%	24,866
—Equity-based compensation expense	34				31			65
Gross profit (Non-GAAP measures)	18,043		38.4	%	6,888	48.3	%	24,931
Income (loss) from operations (GAAP results)	(13,225	)	-28.2	%	1,104	7.7	%	(12,121	)
—Equity-based compensation expense	553				217			770
—Amortization of intangibles	41				—			41
Income (loss) from operations (Non-GAAP measures)	(12,631	)	-26.9	%	1,321	9.3	%	(11,310	)
Fiscal 2007:
Three months ended September 29, 2007:
Net revenue (GAAP results)	136,645				14,955			151,600
Net revenue (Non-GAAP measures)	136,645				14,955			151,600
Gross profit (GAAP results)	53,820		39.4	%	7,237	48.4	%	61,057
—Equity-based compensation expense	29				16			45
Gross profit (Non-GAAP measures)	53,849		39.4	%	7,253	48.5	%	61,102
Income from operations (GAAP results)	24,299		17.8	%	1,174	7.9	%	25,473
—Equity-based compensation expense	917				180			1,097
—Amortization of intangibles	44				—			44
Income from operations (Non-GAAP measures)	25,260		18.5	%	1,354	9.1	%	26,614
Fiscal 2008:
Fiscal year ended September 27, 2008:
Net revenue (GAAP results)	271,019				57,031			328,050
Net revenue (Non-GAAP measures)	271,019				57,031			328,050
Gross profit (GAAP results)	105,520		38.9	%	28,273	49.6	%	133,793
—Equity-based compensation expense	137				115			252
Gross profit (Non-GAAP measures)	105,657		39.0	%	28,388	49.8	%	134,045
Income (loss) from operations (GAAP results)	(25,934	)	-9.6	%	1,302	2.3	%	(24,632	)
—Equity-based compensation expense	4,122				1,283			5,405
—U.S. pension plan termination	9,152				—			9,152
—Amortization of intangibles	186				—			186
Income (loss) from operations (Non-GAAP measures)	(12,474	)	-4.6	%	2,585	4.5	%	(9,889	)
Fiscal 2007:
Fiscal year ended September 29, 2007:
Net revenue (GAAP results)	316,718				53,808			370,526
Net revenue (Non-GAAP measures)	316,718				53,808			370,526
Gross profit (GAAP results)	128,663		40.6	%	26,773	49.8	%	155,436
—Equity-based compensation expense	117				119			236
Gross profit (Non-GAAP measures)	128,780		40.7	%	26,892	50.0	%	155,672
Income from operations (GAAP results)	15,219		4.8	%	2,293	4.3	%	17,512
—Equity-based compensation expense	4,499				1,351			5,850
—Amortization of intangibles	160				—			160
Income from operations (Non-GAAP measures)	19,877		6.3	%	3,645	6.8	%	23,522