Kulicke and Soffa Industries, Inc.

Greetings and welcome to the Kulik and Soffa's second quarter fiscal 2020 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joe Elgindy. Please go ahead, Joe.

Thank you. Welcome everyone to Kewlick and Soffa's second quarter fiscal 2020 conference call. Joining us on the call today are Fusen Chen, President and Chief Executive Officer, and Lester Wong, Chief Financial Officer. For those of you who have not received a copy of today's results, the release as well as the latest investor presentation are both available in the investor relations section of our website at investor.canis.com. 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 Chula and Soffa that could affect our future results and financial condition, please refer to our recent SEC filings, specifically the 10-K for the year ended September 28, 2019, and the 8K filed yesterday. Before moving on to our prepared comments, I'd like to make an additional announcement. Beginning on today's call, we will provide additional details and updates to our end market categorization. These end market categories will now refer only to our capital equipment segment and will isolate the general and advanced LED market from the general semiconductor end markets and advanced packaging IC markets. Additional information regarding these end market categories are available within the latest investor presentation and will be reported in the management discussion and analysis section of our quarterly and year-end SEC filings. With that said, I would like to turn the call over to Fusen Chen for the business overview. Please go ahead, Fusen.

Thank you, Joe. This is clearly an unprecedented period for our industry and the world. First, I hope your family, friends, and colleagues remain safe and healthy through this unique period. Before reviewing our quarterly business update, I would like to briefly discuss our response and status relating to the global COVID-19 situation. Over the past six years, our global development and manufacturing side have designed and carried out detailed business continuity planning and testing exercises. These efforts have streamlined and prioritized critical communication flow and allow our individual site management team in effective areas to operate sites in the best interest of employees, customers, and business partners while allowing decisive response to local and regional guidelines and orders. More recently, over the past few months, We have also taken many precautionary steps, including significant travel reductions, increased site cleaning, rigorous social distancing practices, visitor limitations, and an increased use of virtual collaboration tools and software. Where it is in the best interest to employees and the local community where we operate? We have also reduced our physical presence in the office and facilities to provide a safe working environment for essential staff. Our IT infrastructure has provided adequate bandwidth to support the need of this temporary remote working environment. Despite this working-from-home transition, we continue to make progress on our development initiative and do not anticipate significant disruption to critical customer commitments. From a manufacturing standpoint, our operational side in Singapore, Europe and China remain fully operational. Our operation in China return to 100% capacity within the March quarter. Regarding supply chain, there continue to be disruption in many part of the world. Although we believe the situation remains manageable, we experience temporary disruption of supply within China, although production gradually recovers in March. Several US and European vendors are running at reduced capacity. Currently, the situation in Malaysia may create additional disruption in the June quarter. Again, we believe this current situation is manageable. and we are mitigating this identified supply chain risk through close partnership with customers and also with new and existing suppliers. Overall, I'm very proud of our organization's resilience, dedication and effort in navigating this unique situation. Turning to the business dynamic, Demand challenge and uncertainty were triggered by mandate customers shut down early in the quarter. Demand has recovered rapidly in certain areas like China and has softened in other regions currently implementing social distancing practice, such as Europe, Southeast Asia, and the US. Even in March quarter, revenue came in at $150.7 million A sequential increase from the December quarters, we generate $11.9 million of net income and an earning per share of $0.19. From the December quarter, the capital equipment segment revenue increased by 11%, with stronger demand for our high volume board and wage bond system. The APS segment decreased by roughly 11% sequentially, This change was largely due to the low customer utilization rate in the week following Chinese New Year. Considering a higher portion of capital equipment sales, gross margin of 46% came in better than expected, generating $69 million of gross profit. Within capital equipment, general semiconductor increased the most dramatically by nearly $17 million. over 33% from the December quarters. Automotive and industrial also improved, while LED advanced packaging and memory declined sequentially. During the June quarter, we continue to anticipate demand improvement to stem primarily from general semiconductor, and the LED market allow anticipate ongoing shutter in place order to create regional demand disruptions. I would now like to turn the call over to Lester Wong, who will cover this quarter's financial overview in greater detail. Lester? Thank you, Fusen.