Joseph Elgindy - Investor Relations & Strategic Planning Bruno Guilmart – President and CEO Jonathan Chou – SVP and CFO.

Brett Piira – B. Riley & Co. Krish Sankar – Bank of America Merrill Lynch Tom Diffely - D.A. Davidson David Duley – Steelhead Steven Paleo - HSBC Sandy Mehta - Value Investment Principals.

Presentation:.

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Greetings and welcome to the Kulicke & Soffa Third Fiscal Quarter 2014 Results Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Mr.

Joseph Elgindy, Director of Investor Relations and Strategic Planning for Kulicke & Soffa. Thank you sir. You may now begin. .

Thank you, Martha. Welcome everyone to Kulicke & Soffa's fiscal 2014 third quarter conference call. Joining us on the call today are Bruno Guilmart, President and CEO and Jonathan Chou, Senior Vice President and CFO, both are available for Q&A after the prepared comments.

For those of you who have not received a copy of today’s results, the release, as well as our latest investor presentation, are both available in the Investor Relations section of our website at kns.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 Kulicke & Soffa that could affect our future results and financial condition, please refer to our SEC filings, particularly the 10-K for the year ended September 28, 2013 and our other recent SEC filings. I would now like to turn the call over to Mr. Bruno Guilmart. Please go ahead, Bruno. .

Thank you, Joe and thank you all for joining our call today. Revenue in our third quarter of 2014 was just over $180 million, nearly 60% above the March quarter and above our previously reported guidance range. During the June quarter, we generated $85 million of gross profit which put us just over 47% for the company.

The supply strengths was driven primarily by our core wire bonding solutions but it was further supported by sequential quarterly improvements in other equipment businesses, including stud bumping, wedge bonding and also ADU [ph] offering.

We were able to meet this aggressive shift in demand by working closely with our supply chain partners and also increasing our invoice [ph] days by nearly 15% invested in the quarter. This crossed rates to over 300 new headcount from the prior quarter. These headcount additions were – high skills and temporary direct labor employees.

I will provide some additional commentary to each business momentarily although from a high level perspective, normal seasonality of our business generally drives high demand of our products for the second half.

While seasonality actually played a role in June quarter, based on 50 customers on applications, we believe a portion of demand was also driven by growth in utility in basic smartphone and tablet segment. These end devices are largely targeted for emerging markets and are expected to reach very aggressively growth targets over the next few years.

In March 2014, Gartner issued a report showing that the utility and basic smartphone market was already the size of the premium smartphone market and expected to grow at a nearly 16% CAGR during 2013 through 2018.

Similarly utility and basic tablets are already much larger than the premium tablet market and are expected to grow at nearly 19% CAGR during that same time period.

While we participate in all the smartphone and tablet markets, premium utility and basic, we expect the most cost effective markets will have a larger content of wire bonded chips than the premium markets.

The continued resilience in the smartphone and tablet market combined with the recent upbeat expectations real in the PC industry and our growing anticipation of the internet of things helped to instil additional confidence in the broader semiconductor market as we look ahead.

Turning back to our specific equipment analytics [ph] for the June quarter, revenue from wire bonding was over 70% from the prior quarter, with copper capable unit sales representing approximately 69% of wire bonder sales which is in line with our historic copper capable unit sales in fiscal 2010.

While we are fast, the rapid adoption base, we expect the current allocation of copper capable shipments to continue going forward. Our market leadership which has driven the industry trends level of capability in terms of process and application remains a key tailwind in our business.

We continue to serve a very broad market for this core business and have enjoyed some heightened level of sales in China and some renewed support from our key customers. In addition to our normal semiconductor wire bonding business, we have also enjoyed a stronger demand for our LED product offerings in the June quarter.

I will provide some additional insights shortly. Our AT Premier Plus is our latest wafer level stud bumping solution that serves fast growing niche applications and demands [indiscernible] and optical centers.

Since this underlying segment has a slightly higher growth trajectory than the broader end markets, we continue to remain optimistic in the stud bumping business as we look ahead.

Also from an production perspective, this solution has strong commonality and synergies with our higher volume wire bonding business which have enhanced our overall manufacturing efficiency. Moving on to wedge bonding equipment. June quarter revenues were over 80% from the March quarter.

The majority of these sales were driven by continued market strength combined with share gains in the automotive and power module segment. Quarterly performance was further heightened by what seems to be a more widespread recovery in the power semi markets combined with the broader acceptance of our new power season semi products.

We continue to anticipate this higher level of sales will persist through September quarter. LED bonders sold for the June quarter represented over 40% of our ball bonder shipments. Considering our ancillary run rate of just over 6% of LED sales, the additional June quarter volume represented fairly significant increase.

June quarter LED sales were focused towards backlight LED production for developing markets. We continue to look ahead at the LED market very selectively with cautious optimism, anticipate the transition towards general lighting will provide incremental business opportunities.

Overall our market leadership and ability to flex our personal capacity enabled us to drive a mid demand for our broader end solutions. This business level also allowed us to invest heavily in new product development with the ultimate goal of driving long term financial performance. Finally, as an update to our advanced packaging programs.

The development team continues to execute and achieve key milestones beyond expectations. As mentioned last quarter, we recently shipped a high throughput dual head several compression bonders, or chip to substrate to a key development customer and plan to ship out several additional system to new customers in the September quarter.

While we are targeting the September SEMICON Taiwan show as the official product reach, we continue to utilize our portfolio management process which enables us reduction in development time, peculiarity of feature sets and addition product variation.

We are now working aggressively on bringing to market a high performance several compression bonder for our chip to wafer within the next year. We believe this flexible approach is critical in ensuring that our commercialized offering incorporates the right amount of features at the right price points to drive a distinct and future customer demand.

I will now turn the call over to Jonathan Chou for a more detail of the financial review for the June quarter.

Jonathan?.

Thank you, Bruno. My remarks today will only refer to GAAP results and we will compare the June quarter to the March quarter. Net revenue for the quarter was $180.5 million, up $66.3 million and 58.1% from the March quarter. Gross margins came in at 47.2% with $85.2 million of gross profit.

Gross margin was down slightly from the March quarter as expected considering the shift of our products and customer mix in the June quarter, and the exclusion of favourable March quarter costs related provision adjustment of approximately $800,000. We generated $31.6 million of operating income, 26.6 million of net income and $0.34 EPS.

June quarter operating expense closed at $53.6 million, up 6 million from the March quarter. As mentioned on our last call, incremental operating expenses were largely related to advanced packaging related investments, more specifically short term phototyping expense which will continue into the September quarter.

For the June quarter, R&D spending came in at $223.5 million, and we are currently targeting R&D – sorry, 23.5 million – and we are currently targeting R&D spending in the September quarter to come in at an elevated $21.3 million and return to our historical run rate by the December quarter.

We ended the quarter with total cash and investments position of $600.1 million, up $3.8 million from the March quarter. From a diluted shares standpoint, this cash position is equivalent to $7.73 which increases our book value equivalent to $9.79.

As expected, a significant portion of our June quarter operating income has transitioned to short term working capital needs to support current level of operational activity.

Considering this robust and high end level activity the June quarter modest cash will increase actually to our earlier expectation reflecting solid management of working capital usage. Working capital defined as accounts receivable plus inventory less accounts payable increased $39.4 million to $142.1 million.

From a DSO perspective, our days sales outstanding remained unchanged from the prior quarter at 77 days. Our days sales of inventory decreased from 69 days to 51 days and days accounts payable increased 61 days to 63 days. Our effective tax rate for the quarter came in just under 15%.

This sequential increase is largely due to specific discrete items within a specific entity. We are currently targeting a long term effective tax rate of 10%. This concludes the financial review portion of our call. I will now turn the discussion back over to Bruno for the September quarter business outlook. .

Thanks, Jonathan. In terms of our guidance for the September quarter, we expect our business to remain strong with revenue in the $185 million to $195 million revenue range.

While our core business remains quite robust, we remain committed to leverage our strong balance sheet to support long term opportunities in the core markets such as copper, QFN, MEMS but also in the new markets such gartneras advanced packaging.

While excellent M&A has been and continues to be a key focus for additional growth, we continue to periodically review alternative options to leverage the cash benefits to drive returns for our shareholders. This concludes our prepared remarks. Operator, we will now be happy to take any questions. .

Operator:.

(Operator Instructions) Our first question comes from the line of Brett Piira with B. Riley & Co. .

In the LED market, you had some nice growth there. Can you just kind of talk about the broader competition there? I think one of your competitors is more focused on that market.

But just what do you think the growth opportunities there, what you think the advantages are, any targets that you are trying to meet there?.

Okay. So our focus on the R&D market, there is no change. We’ve always been actually very selective in the LED market and we do not want to copy it in the low end of the market.

As it turns out, there is an opportunity that comes up with emerging economies for backlight LEDs and also more LED in the automotive and beginning of a start of, I would say of more demand for home applications. So what we are doing is before if you want, we were, I would say, maybe too selective in looking at the LED applications.

And now we have taken a more aggressive routes. I am not saying that we will take every opportunities that we have. Our bonders are high performing bonders and they must fit the application. That’s why that is taking a much more focus especially in China with specific customers so that we can address in a proper way this growing market. .

And then maybe on the core wire bonder side, there was OSAT company light night kind of talking about the acceleration of advanced packaging down into the mid tier kind of range.

Do you guys think that you still have some of that low end there in the tablet and smartphone? Can you just talk about the progression you are seeing there and what the overall drivers you think are?.

Well, I mean the driver right now are the emerging economies, as we have lot of development. Therefore emerging economies mean more, I would say, less sophisticated smartphone and tablets and more use of wire bond tasks. Just a data point to remember it took 14 years for flip chip to come from the zero to about 14% or 15% market share today.

So while there is no doubt that the high end applications, advanced packaging and actually flip chip if you could put that into advanced packaging, which is not really advanced packaging, is some form of I would say advanced packaging, the ball bonders that not – the advanced packaging we are talking about.

We do believe that actually there is quite a bit of runway for us to get more business.

In addition to that, in terms of seeing very simple devices, wearable watches, wearable bracelets that give you the number of stats for your heart beat or whatever linked to your smartphone do not require very sophisticated, I would say, processors on using advanced packaging technology.

So hence obviously there is no doubt that over the years where we have reached a plateau from a ball bonder perspective, we do believe that especially from a copper perspective, we are on a pathway through the conversion rate and anyway since most of the new products except for very specific applications need copper, we do still have some runway for copper for many years to come.

Nonetheless the growth will be with advanced packaging as you saw it we qualify as advanced packaging which is where we are putting a lot of investment dollars and then bringing new machines as fast as we can to the market. .

Our next question comes from the line of Krish Sankar with Bank of America Merrill Lynch. .

A couple of them.

Bruno, how many customers are you involved with today in advanced packaging and when do you expect you will close the revenue for the product?.

So we don’t disclose the number, that I have mentioned – we had I would say an anchor IDN customer and that we work closely with, if you remember we started with several compression bonder for chip to substrate, that’s the first machine we worked on about a year ago.

That way shipped to an IDN, because it was essential for us to ship it to this type of customer to get as much as we could on the machine and we did ship basically the version that will be essentially commercialized which is the high throughput machine, which is a dual head machine and that has been actually shipped and is actually working as a customer.

For this quarter, we plan to ship several other customers and it is confirmed dual head machines to customers that we have chosen, I would say, primarily next year. Again I can’t disclose the name of the customers, I can’t disclose either also the location, but please do remember that these are no revenue generating machines.

Okay, they are either ration machines, and we do anticipate after the official launch in September we will start to see revenue generating advanced packaging probably in the late part of the first half of FY15 which is for us around the March timeframe but more likely in the second half of FY15 and these revenues will be fairly modest.

We are also working as I mentioned on the new machine this time to address the chip to wafer aspect which is a lot more complex and really FY16 will be, I would say, the benchmark year where we can really see some revenue from both of these products and some others that we have in the pipeline. .

And then two other questions, one is, what do the LED as a percentage of wire bonder sales was that --.

I am sorry, say that again. .

How much of LED as a percentage of wire bonder sales in June?.

16% -- 14%, usually we do 56. So what we did for LED is that I think in the past maybe we were not aggressive enough. Our platform, our strategy for – as far as wire bonding is concerned, is we have a one platform and several derivatives. Okay, we have never focused on developing a specific platform for LED.

Hence the LED – the low end LEDs that will require very cheap wire bonders were never an attraction for us because just the margin we had been totally unattractive.

On the other hand, the backlight LED TVs or LED displays, not omni TVs, the automotive and as well as the general lighting seems to be picking up and we have been taking, I would say, a more aggressive approach with specific large customers in China into the LED space, okay, rather than I would say being maybe too complacent about it.

And hence the importance for us is the overall corporate margin, and by being able to play a little bit depending on the machine, and the pricing to address specific markets because we’ve actually reorganized our wire bonding lines by a market and application as opposed to have just high performance and cost performance, we are able to play a lot more into direct market and direct application and actually the results have been very negligent for us.

.

Final question, I noticed that wedge bonder revenues picked up a quite a bit.

Is there something going on there, or I think it’s just this normal seasonality?.

No, there is something going on. I mean we have been working on that business line for quite some time. We’ve had – last year was a very, very difficult year for wedge bonder.

The previous year I think, they were probably or two years ago, I forgot, there were probably a over-buy in terms of capacity, and so what we did is we really restructured and refocused our wire bonding activities.

The first thing actually that it’s time to pay off and we are getting market share, if you remember, last year we introduced the PowerFusion semi products and that is getting an excellent performance -- excellent acceptance from a performance perspective from customers.

And where we are gaining market share and that addressed mostly the power semi and power semi starting to, I would say, regain some momentum, as well as we are gaining a lot of market share in the automotive segment as well as the module segment, which will have also a new machine coming shortly to address this segment and again try to bring a better solution to customers.

So there has been really two years of hard work, we have a new leader in place, we’re driving the business. So I would say yes, we do have a little bit of tailwinds but it has been a hard work to bring back that business line into where it is today. .

Thank you. Our next question comes from the line of Tom Diffely with D.A. Davidson. .

First question, I guess coming back to your some of the newer – the markets, the LED and wedge.

So the sequential decrease in the gross margin, was that mainly a mix issue with, obviously you’ve come up with very high levels in the March quarter, but the sequential decrease due to the mix or is it volume discounts to certain customers?.

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Well it is, I think it’s a combination of product and customer and I mentioned the provision that was actually, that we had in the March quarter of 800K. So generally when ball bonder volumes pick up the average book gross margin would actually come down again, this is reflective of what we are expecting in terms of the gross margin level. .

Bruno Guilmart:.

Yeah, if you look at historically I mean when volume goes up either the gross margin goes down. That’s pretty normal in our business. .

Yeah, if I can add a little bit more -- in terms of our, compare this to one or two years ago where we do have actually some very large customer buying under volume discount. Our customer base is much more diversity based and that allows us to kind of maintain a higher gross margin over time. .

Okay, that will make sense. And you talked about how the wedge bonded business you see very strong in the quarter and will remain strong.

Do you expect the LED business to remain strong as well on the out-quarter?.

Okay, it is more difficult to predict the LED business because you know as I mentioned in my remarks, well very safety, okay. So you may see in the future, I would say higher fluctuations depending on whether we decide to go for that piece of business or not.

We do expect that there is a potential for opportunity with general lighting, but this is still you know couple of years away because the price points from a customer perspective is still high. So there is definitely opportunity.

But our strategy is basically to leverage out coming platform for both buyers and we are now – we are not going to go and design a specific platform to address any of these. So you will see very likely more fluctuation in that market than for instance the wedge bond recovery or the normal seasonality of our overall business. .

And this year when you look at the, I guess combination of a little bit more diversified wire bonder customer base and a little more diversity in your products, any change to the normal seasonality because of the diversification or most of the customers still act on a very seasonal basis with the fourth quarter, fourth calendar quarter for all of it or part of it?.

Yeah, that has been a conscious effort since you know we have not depended as much at all from the two large customers we had in the past to really reorganize ourselves and re-deploy our resources, our resources and specially reorganize ourselves by applications and by market to try to grab more customers, more applications, and capturing more business at the same time.

China, for instance has been really tough for us this quarter and will be next quarter. So we are making great coverage in this area.

So I think that’s – you know the fact that we are not relying anymore on a couple of large customers but on the other hand multiple customers in multiple markets and applications and also multiple regions has enabled us to be more efficient and get more results and increase our market share while the overall you know should you get generally speaking, the wire bonding markets is not growing as such.

You know it should get again historically, we’ve guided first quarter up versus the third quarter and it’s typically not a normal pattern for China. We usually tend to see a first quarter kind of that reach to down versus the third quarter.

So that again is a demonstration that by diversifying our ways we are able to get I would say somewhat more linearity in the business. But don’t forget that this is a seasonal business. This is you know highly volatile and depending on demand and that’s just the nature of the business, okay. .

Operator :.

Thank you, our next question comes from the line of David Duley with Steelhead. Please proceed with your question. .

David Duley – Steelhead:.

Thank you.

Can you give us an idea of what you think the size of the overall wedge bonder and the LED bonder markets are?.

Bruno Guilmart:.

We don’t disclose these numbers. You can find these, there is plenty of data available from you know various analysts. But we do not disclose, we do not disclose the data. Maybe you can get it easily from Gartner, VLSI, or Yole and they will give you the size. I mean you’ll have the size of the market for all these different devices. .

David Duley – Steelhead:.

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Well I won’t disclose information. So the point is that we’re asking you number one, that part in overall market share for wire bonders, that’s how we disclose it. We are by far dominating the copper space. But we are definitely not dominant player in the LED market. We do – are a dominant player or large player in the wedge bond market. .

Okay, and then – could you talk about over the next year or two what you think that the directory just your copper wire business is going to be?.

Yeah, as I mentioned, I mean the copper transition, that’s probably gone faster than we first anticipated, which had given us three great years of our business and it should get back by the end of this year. If you estimate the overall install base roughly about 130,000 machines also. 50% of these machines will be copper capable.

We’ve always said that we believe that the end number will be somewhere around 70%, 70% maybe 75% because you always have a portion of the wire bonding market that will utilize gold and also silver. So it will not be 100% copper market.

So as you can see there is still some runway ahead of us, just the speed at which the market is going to grow compared to the last three years where we basically overtook the market and grabbed majority of the market share is just going to be difficult. Which is why we diversified in other areas of growth such as I mentioned to you. .

And the quality advanced packaging products go, what applications or end market products do you think are going to be first to truly adopt this chip to substrate or chip to chip thermal compression bonder technology.

You know, is it – obviously it’s going to be mobility, or is it – what type of chip do you think are going to be the first to go in production with this type of technology?.

It is difficult to say what type of chips because there is in advanced packaging there is quite a number of solutions to put chips together, okay.

From 3D packaging with sequel interpolar [ph] and sequence where we have and there is a number of different way of doing it, some companies are already doing it, but as far as the end application is definitely going to be the big driver for that – are going to be mobile device, application processors, potentially DRAM and especially for the high end smart phones and tablets initially.

One the cross-point – once the cross points basically becomes more I would say attractive, that means that the volumes go up. This technology obviously will move towards more I would say cost – more cost performance type application that I just talked about for the emerging economies.

But right now, I mean the main drivers is all this app processors and as I said potentially DRAM for all these mobility devices. .

Okay, final thing for me is, did you have any 10% customers in the quarter?.

No, we don’t. .

Thank you. .

Operator:.

Thank you. Our next question comes from the line Steven Paleo with HSBC. Please proceed with your question. .

Okay, actually to follow-up you quickly on the customer concentration. This diversely means an interest for me and then the last fiscal years, I’m looking at your 10-K’s, you did have a couple of offer there, you had 1% over 10% of revenue, but you didn’t in the quarter.

I’m just curious, is that you think the new trend now or you’re not going to have any 10% of revenue customers?.

Well actually moving forward we do expect one 10% customer, just not this time. But obviously less concentration basically is more diversified within the more maybe perhaps non-usual two suspects that we have in the past, more in tier two. .

Steven Paleo – HSBC:.

Maybe you can quantify this a little bit -- top two, top three, top five customers and what the percent of revenues were.

What has that done the last couple of years and what do you think of it this year?.

I think the concentration is still clearly similar where we do get probably 60% of our ball bond revenue coming from five or six customers. But they’re different – you know different-different customer base compared to a year ago. I’ll just say that each of these customers are at a different point of their conversion kind of point from copper. .

Yeah, they’re a lot more I would say medium sized customers who buy I would say anywhere from 50 to 100 machines which we didn’t have as much in the past.

So when you add up all these customers, add them, okay, so from I would say the situation two years ago, it is totally different than the situation of today where we have a very high multiple of customers and less dependency on the two previous customers we had in the past.

So then that conveys my last question which is, and I guess some of your cycle thoughts, if you are more diversified yet. I guess I can get nervous that the market’s observing almost $100 million in shipments from your guys in a few quarter period.

Any initial thoughts as you go out to the December quarter, in terms of, I don’t know if it’s from the guidance, but just thinking about it maybe on a year on year basis, do you think this diversity allows you to still grow year on year but you don’t need to see a 50% pull back what you saw in last year?.

Again we only guide the current quarter, okay. This is a business. A number of customers – it’s great that it doesn’t improve your visibility, okay. What we’re trying is do is working with upstream customers, but that’s really more so for advanced packaging.

But what we’re trying to do sensing for more bonders to try to have a better base of our business.

But the reality is that there are customers, no matter who they are, want to have their equipment in place by the end of September for the holiday season and we will always have a first quarter fiscal which is a Q4 calendar lower than the last quarter of our fiscal year, no matter how many customers we have and no matter how we are diversified in terms of application.

Remember that overall the wire bonding market is not size growing market anymore. It’s a market that’s going to reach plateau in a few years and become slowly a replacement market. Now devices will be wire bonded for, I don’t know many-many more years to come.

That hence the – I would say the essential push for us to get into packaging because that’s what’s going to take us to the next level in terms of running effective for the years to come. .

Okay, and then one quick clarification. When you look to the quarterly guidance total revenue is up a bit. I think you’re kind of suggesting LED was going to be kind of lumpy. What do you LED business as a percentage of your wire bonders in the September quarter and then I guess does that mean the other one got to kind of grow in line.

I mean help me understand the mix of the third quarter, third calendar quarter –.

Yeah, we do not disclose, we do not disclose the type, I mean I would say this type of application in our guidance. We just disclose the top-line. So as I just said LED is something that we take on a very steady opportunity basis. We’ll see how we handle this quarter.

But basically our estimate at this point in time if there is going to be flattish to probably down versus this quarter. Okay, that’s the best information I can give you. .

Operator :.

Thank you. Our next question comes from the line of David Wu of Indaba Global Research LLC. Please proceed with your question. .

David Wu – Indaba Global Research LLC:.

Thank you, good evening. Joe I’ve got a couple of questions for you. Number one, let me hear you, you finished from guidance or the RD numbers for the first half of fiscal quarter.

What was that?.

Yeah, that’s about $21.5 million. .

21.5, so that’s 2 million in terms of first quarter. .

Yeah, it’s already down from this quarter basically, from the Q3 reported quarter. .

Right. I just – related to the R&D spend in one piece fashion on [indiscernible]. .

Yes it is. It’s actually mostly pro-type material which were expensed in the last quarter as well as this current quarter that we’re anticipating. .

Okay, can you give me an order lag to the cost? How much of loss making are you sustaining and developing your advanced packaging machines. In other words if you look at the R&D line as well as possibly cost line, I don’t since it’s no machine. So I assume that’s all in the R&D line.

So the R&D number in the third quarter, how much of that was due to development expenses for advanced packaging?.

I think if you look at a normal run rate, it’s you know – well we have actually kind of adjusted -- the model is that after Q4, this current quarter we’ll resume to our historical run rate $18.5 million-$19 million level.

So with our advanced packaging, that’s – what’s beyond that is mainly what we’ve been actually investing in terms of material cost. We do actually try to maximize our resources that we have in terms of people within our R&D department. .

I see.

Okay so, assuming a change in the first quarter of fiscal ’15 I should be looking at under 20 million of total R&D spend?.

Yeah, roughly there unless we want to accelerate some other development, for example–we might. Right now we have chip to substrate, we have chip to wafer and it might be in something else. .

(Operator Instructions). Our next question comes from the line of Sandy Mehta with Value Investment Principals. Please proceed with your question. .

Yeah, congratulations on a solid quarter results. You mentioned in your press release about continuing to actively seek supplemental opportunities to further enhance shareholder value. Can you expand a little bit on that? Are you referring to acquisitions or you know where are you in terms of looking at buy-backs or possibly paying a dividend, thanks.

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As we said in our prepared remarks, our first priority to create shareholder value is looking at acquisitions. Not any kind of acquisitions, acquisition in a very specific space which is complementary to, or complementary to offering, especially in the advanced packaging.

Obviously we can’t give you any more detail as far as where we are, or what kind of size and – this is something which is strictly confidential , as well as we have a board meeting in a couple of weeks, we will review other options such as dividends, but as you know for a company our size, dividends if they’re not done on a regular basis do not make a lot of sense.

A one time dividend is also not very meaningful. Remember that a lot of cash is outside of the U.S. Okay, so it would not be a very good return to the shareholder to do this type of I would say action. On the other hand we will again talk and we have some recommendation.

We’ll have a discussion with the board about potential share buyback and this type of activity, okay. So we are looking basically our goal as management is to maximize shareholder value.

Right now we’ve kept this cash because as I said our primary objective is to add to our business because we know that this business is going to reach a plateau and we do not have all the competency inside G&A [ph] to be able to basically address all this new mid end market of advanced packaging which is going to be the only growing market for equipment companies in the next five years.

If you look at in terms of equipment companies, [propane] is going to go down. [Digane] is going to be flat to down and that has already started to go down. So the only strength is advanced packaging. Okay, so that’s the area we’re going to carry and we have some competencies but we don’t have all of them.

And so we believe that if we can lead the company, that basically the highest provision of [indiscernible] from ball bonders to advanced packaging and – as we are today for wire bonding, number one supplier – that will be the best return in terms of investments for our shareholders. .

Sandy Mehta - Value Investment Principals:.

In terms of acquisitions would you look at sort of a narrow or specific product line or would you, would it be more along the line of buying an entire company?.

As I said we have no pre-conceived idea, okay. It could be small technology acquisition to buy some skill sets or some technology we don’t have or it could be buying another company, okay and anything in between. .

Okay, thank you. .

Operator:.

Thank you. Our next question is from the line of Steven Paleo with HSBC. Please proceed with your question. .

Steven Paleo –HSBC:.

Yeah, I just have one more quick financial question. You mentioned about working capital I guess [indiscernible]. You just are back from the September quarter or do you have to wait so kind of December, [indiscernible] working capital.

What do you think your cash balance would be at the end of September or likely at the end of the calendar year?.

Steve, there’s always a lag in terms of the working capital. Once we actually head into – you know once we’re finished Q4, obviously the ramp that we’re currently experiencing, this might come down. So we should be able to collect those DSOs over time. So without guiding on the cash number, though we don’t expect them to accumulate any more. .

Okay, I was just trying to size the magnitude.

Don’t want to quantify it at all?.

Jonathan Chou:.

Yeah, we haven’t really got on the number, the cash number in the past. We kind of give it directionally. So I’ll keep that position. .

All right, thanks a lot. .

Operator :.

Thank you, ladies and gentlemen at this time we’ve come to the end of our question-and-answer session. I’d like to turn the floor back to Joe Elgindy for any closing and final remarks. .

Thanks Martha and thank you all for the time today. Please feel free to follow up after today’s call for any additional questions. Well this concludes our call. Thank you. .

Operator :.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day..