Boring Portfolio

Boring Portfolio Report
Tuesday, January 30, 1996

Kulicke & Soffa just reported their 1Q:96 earnings a few minutes ago, and they look just fine. KLIC clicked off fully-diluted earnings per share of $.82--easily beating the Street's consensus estimate of $.75 and hitting the high end of the range of $.70 to $.82 provided by six analysts (source: First Call).

That $.82 represents a stunning 290% increase over the $.21 EPS reported in the year-ago quarter. Sales for Q1 of FY96 were $127,189,000, up 147% compared to $51,459,000 in the same period last year. Net income was $16,337,000, up 339% from the $3,724,000 reported in Q1 of FY95.

Highlights from the press release (available on AOL through "Company Research"):

"In addition to the $17,000,000 of sales from American Fine Wire, which we acquired in early October, our equipment revenues grew by 118% year-over-year," said C. Scott Kulicke, chairman and chief executive officer.

"The company booked $138,000,000 in the first quarter, and ended the quarter with a backlog of $96,000,000, both new records. Nevertheless, a few of our customers pushed out deliveries of machines previously scheduled for shipment in the second quarter. While these push-outs may impact our second quarter results, we view them as timing issues within the fiscal year, and remain optimistic about the year as a whole."

There is a post-earnings conference call scheduled for 10 AM (EST) tomorrow, in which I plan to participate. I expect that these "timing issues," as well as other themes will be hashed out thoroughly then. So if you're one who cares about such things (and that's entirely a matter of taste), the analysts' divinations based on the conference may begin to show up in KLIC's share price by late morning.

I'll post my quick take on the event ASAP in the KLIC folder during the day and will elaborate here tomorrow night.

Oh yes: KLIC closed up 5/8 today, at 24 1/4, with 1.44 million shares "changing hands," as they say.

K&S may have stolen the spotlight this evening with their earnings release, but Texas Industries certainly merits a word or two, as well. All that TXI did today was climb another point and a half to set a record high of 56 5/8. Thanks, podnah!

I don't know if this unusual spurt in TXI's price the past two days demonstrates the, uh, "Power of Boredom," a post-Superbowl celebration down in Big-D, or what. It certainly is a nice way to get this portfolio going, whatever the reason.

I also happened to get a very nice phone call from TXI's treasurer, Kenneth Allen, this afternoon. A little while back when I was researching the company, I had faxed him my draft review for comment. Today, he offered some comments, corrections, and updated info (all good stuff), which I'll incorporate into my original review, probably over the week-end. He also extended an invitation to me to participate in TXI's conference call after earnings are reported in mid-March. So we'll have that news for you hot off the keyboard when it happens.

By the way, the latest numbers from First Call indicate that one of the analysts following TXI raised his earnings estimates for the current FY (ands in May) and the next. This FY's mean estimate is now $6.35, formerly $6.26.

--Greg Markus (MF Boring)