Kulicke and Soffa Industries, Inc. (NASDAQ:KLIC) Q1 2017 Earnings Conference Call - Final Transcript
Feb 02, 2017 • 08:00 am ET
serve cost sensitive applications and to ensure we are best positioned to maximize all recurring revenue opportunities.
For the December quarter, wire bonding sales increased by 5% over the September quarter. While December quarters are typically seasonally soft, this performance was largely due to general strength in demand for all our wire bonding equipment including LED, but also our ability to identify the significant memory opportunity and to deliver leading solutions.
The current memory opportunity is due to an aggressively built up capacity to meet growing market requirements for solid state storage across consumer, enterprise, and the mobile applications. In many cases, this wire-based application content is arguably the most complex, high volume, and transistor dense package in production, namely 3D stacked die for vertical NAND.
To be perfectly clear, this is an advanced package that relies heavily on our wire bonding technology. We continue to anticipate NAND memory to be a major demand driver for our leading advanced wire bonding solutions throughout fiscal 2017.
Moving on to our wedge equipment business, the sequential revenue improvement was nearly 36%. Similar to forecasted development of our leading memory wire bonder, we have continued to target high growth applications in general automotive, automotive power storage, and the industrial applications. Geographically, we continue to see strong demand from our China-based customers.
We remain extremely focused in growing our advanced packaging solution by driving features and the functional release into 2017, and anticipate winning share with new hybrid customers, while we anticipate 2018 to be a more meaningful year of adoption for our APAMA solution.
As a reminder, this performance, in addition to ATPremier, covers a breadth of advanced packaging techniques now supported by our core business, including mass reflow SiP, fan-out wafer level packaging, and thermal compression.
When we look out through 2020, we anticipate our served advanced packaging opportunity to grow significantly as we continue to execute against our developmental map.
Lastly, our electronic assembly business continued to perform well with European automotive and the industrial customers.
With a growing need for higher accuracy [precision], we feel there is a sizeable and unmet need in Asia for communication infrastructure applications. Accordingly, we have recently reengaged with a variety of Asia-based customers, and will continue to aggressively drive business development efforts going forward.
I would now like to turn the call over to Jonathan Chou, who will cover this quarter's financial overview in greater detail. Jonathan?
Thank you, Fusen. My remarks today will only refer to GAAP results and will compare the December quarter to the September quarter.
Net revenue for the quarter was $149.6 million. Healthy gross margin of 45.7% generated $68.3 million of gross profit. During the quarter, we generated $17.3 million of operating income, $15.6 million of operating income, and $0.22 of EPS, a very strong performance considering the typical seasonal softness of the December quarter.
As Fusen highlighted, this has been our best per share December quarter performance in eight years, well before the initial copper replacement ramp.