Moody's raises Kulicke and Soffa outlook

Moody's Investors Service changed the rating outlook for Kulicke and Soffa Industries Inc. to positive from stable following a comprehensive review of the company's improved operating performance, right-sized footprint and advantageously refinanced debt profile, while at the same time weighing increased concerns surrounding expected softening semiconductor demand for the latter half of 2004 and early 2005.

Moody's also affirmed Kulicke and Soffa's B3 senior implied and senior unsecured issuer and Caa2 convertible subordinated notes ratings, reflecting ongoing confidence in the company's ability to internally fund operations as well as support modest capital spend plans during the next twelve months. The following ratings were affirmed:

Over the next few quarters, Moody's said the company's ability to generate sufficient gross margin levels and efficiently manage working capital, resulting in break-even to modest profitability and free cash flow generation, will prove instrumental to allaying liquidity concerns and barriers to a rating upgrade.

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