May 10, 2018 • 06:00 pm ET



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Greetings, and welcome to the Kulicke & Soffa 2018 Preliminary Second Fiscal Quarter Results Call. All participants will continue to be in listen-only mode and there will be -- there will not be a question-and-answer session during this earnings call. (Operator Instructions).

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joseph Elgindy, Director of Investor Relations and Strategic Initiatives for Kulicke & Soffa. Joseph, you may begin.

Joseph Elgindy

Thank you, Hector. Welcome, everyone, to Kulicke & Soffa's second quarter 2018 conference call. Joining us on the call today are, Fusen Chen, President and Chief Executive Officer; and Lester Wong, General Counsel and Interim Chief Financial Officer.

In addition to historical statements, today's remarks will contain 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.

Our actual results and financial condition may differ materially from what is indicated in those forward-looking statements. For a complete discussion of the risks associated with Kulicke & Soffa that could affect our future results and financial condition, please refer to our recent SEC filings including the risk factors in the 10-K for the year ended September 30, 2017. As well as the disclaimers to our forward-looking statements contained in our preliminary earnings release.

We want to remind investors that comments during today's discussion represent preliminary financial information, which may be subject to change. I would now like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen.

Fusen Chen

Thanks, Joe. Before discussing this quarter's business overview, I wanted to share some specifics regarding our delayed filing. Following the end of the fiscal quarter, we lend off certain upholster rate transactions by a senior finance employee. We immediately initiated investigation of this transaction with assistance of outside advisors. In the course of this investigation, this was discovered that certain warranty accrual in prior periods had been accounted for incorrectly and therefore misstated.

Although this investigation is ongoing, at the present time, we believe certain amount that should be -- should have been included in our results for future warranty expenses plus instead not reserved but expenses as incurred. We currently believe that this error was not intentional. However, considering the timing and scope of this review, more companies are required to back our current understanding.

At this time, we anticipate that we will need to restate fiscal year 2017 into inconsistency, impacting our warranty accrual, affecting both cost of goods sold and selling, general and other miscellaneous expenses. We do not currently anticipate the specific and identified adjustments could be materially to the company.

While this is an extremely critical issue, we are working closely with our external advisors and internal team, more aggressively remediate and file as soon as possible. The Company is committed to addressing the issue identified and are establishing company financial reporting as soon as possible.

While the information I have just provided