Singapore – May 4, 2022 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa,” “K&S” or the “Company”), today announced financial results of its second fiscal quarter ended April 2, 2022. The Company reported second quarter net revenue of $384.3 million, net income of $116.0 million, representing EPS of $1.86 per fully diluted share, and non-GAAP net income of $121.5 million, representing non-GAAP EPS of $1.95 per fully diluted share.
Quarterly Results - U.S. GAAP
Fiscal Q2 2022
Change vs. Fiscal Q2 2021
Change vs. Fiscal Q1 2022
Net Revenue
$384.3 million
up 13%
down 16.6%
Gross Profit
$201.7 million
up 35.8%
down 9.6%
Gross Margin
52.5%
up 880 bps
up 410 bps
Income from Operations
$129.3 million
up 55.6%
down 14.4%
Operating Margin
33.7%
up 930 bps
up 90 bps
Net Income
$116.0 million
up 62.7%
down 13.2%
Net Margin
30.2%
up 920 bps
up 120 bps
EPS – Diluted
$1.86
up 64.6%
down 12%
Quarterly Results - Non-GAAP
Fiscal Q2 2022
Change vs. Fiscal Q2 2021
Change vs. Fiscal Q1 2022
Income from Operations
$135.2 million
up 50.6%
down 14.3%
Operating Margin
35.2%
up 880 bps
up 100 bps
Net Income
$121.5 million
up 53%
down 12.5%
Net Margin
31.6%
up 820 bps
up 150 bps
EPS – Diluted
$1.95
up 54.8%
down 11%
A reconciliation between the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also the “Use of non-GAAP Financial Results” section.
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Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "We continue to participate in several meaningful and fundamental transitions which are positively enhancing our near and long-term semiconductor, automotive and advanced display growth prospects. In addition, we continue to execute our strategic plan through ongoing development, additional customer engagements and new system orders."
Second Quarter Fiscal 2022 Financial Highlights
•Net revenue of $384.3 million.
•Gross margin of 52.5%.
•Net income of $116.0 million or $1.86 per share; non-GAAP net income of $121.5 million or $1.95 per share.
•Cash, cash equivalents, and short-term investments were $690.5 million as of April 2, 2022.
•The Company repurchased a total of 2.94 million shares of common stock through its open market and accelerated repurchase programs at a cost of $146.2 million.
Third Quarter Fiscal 2022 Outlook
The Company currently expects net revenue in the third fiscal quarter of 2022 ending July 2, 2022 to be approximately $365 million +/- $20 million, and expects non-GAAP EPS to be approximately $1.53 +/- 10%.
Kulicke & Soffa recently announced multiple purchase orders for its latest advanced display system - LUMINEXTM - which is well positioned to accelerate the global adoption of mini and micro LED displays. K&S also received a new purchase order for its latest fluxless APAMA thermocompression system, which provides a proven and cost-effective assembly solution supporting the growth in chiplets and heterogeneous integration.
Fusen Chen commented, "We continue executing our strategy outlined during our September investor day. Our ability to continue driving near-term customer adoption of our new offerings can provide significant upside to our long-term financial targets. We look forward to demonstrating this progress over the coming quarters."
Earnings Conference Call Details
A conference call to discuss these results will be held on May 5, 2022, beginning at 8:00am EDT. To access the conference call, interested parties may call +1-877-407-8037 or internationally +1-201-689-8037. A live webcast link and supplemental earnings presentation will also be available at investor.kns.com.
A replay will be available from approximately one hour after the completion of the call through May 12, 2022 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13727849. A webcast replay will also be available at investor.kns.com.
Use of Non-GAAP Financial Results
In addition to U.S. GAAP results, this press release also contains the following non-GAAP financial results: income from operations, operating margin, net income, net margin and net income per diluted share. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, equity-based compensation, acquisition and integration costs, impairment relating to assets acquired through business combinations, income tax expense arising from discrete tax items triggered by significant changes in tax laws, gain/loss on disposal of business, as well as tax benefits or expenses associated with the foregoing non-GAAP items. The non-GAAP adjustments may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. These non-GAAP measures are consistent with the way management analyzes and assesses the Company’s operating results. The Company believes these non-GAAP measures enhance investors’ understanding of the Company’s underlying operational performance, as well as their ability to compare the Company’s period-to-period financial results and the Company’s overall performance to that of its competitors.
Management uses both U.S. GAAP metrics as well as these non-GAAP metrics to evaluate the Company's operating and financial results. Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results
2
differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on the Company’s reported financial results. The presentation of non-GAAP items is meant to supplement, but not substitute for, GAAP financial measures or information. The Company believes the presentation of non-GAAP results in combination with GAAP results provides better transparency to the investment community when analyzing business trends, providing meaningful comparisons with prior period performance and enhancing investors' ability to view the Company's results from management's perspective. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the financial tables at the end of this press release.
Management has not reconciled its outlook for non-GAAP Diluted EPS to Diluted EPS for Q3F22 as it does not provide guidance on the reconciling items between Diluted EPS and non-GAAP Diluted EPS, as a result of the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items could have a significant impact on our non-GAAP Diluted EPS and, accordingly, a reconciliation of Diluted EPS to non-GAAP Diluted EPS for Q3F22 is not available without unreasonable effort.
About Kulicke & Soffa
Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor, LED and electronic assembly solutions serving the global automotive, consumer, communications, computing and industrial markets. Founded in 1951, K&S prides itself on establishing foundations for technological advancement - creating pioneering interconnect solutions that enable performance improvements, power efficiency, form-factor reductions and assembly excellence of current and next-generation semiconductor devices.
Leveraging decades of development proficiency and extensive process technology expertise, Kulicke & Soffa’s expanding portfolio provides equipment solutions, aftermarket products and services supporting a comprehensive set of interconnect technologies including wire bonding, advanced packaging, lithography, and electronics assembly. Dedicated to empowering technological discovery, always, K&S collaborates with customers and technology partners to push the boundaries of possibility, enabling a smarter future.
Caution Concerning Results and Forward-Looking Statements
In addition to historical statements, this press release contains 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. While these forward-looking statements represent our judgments and future expectations concerning our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, the effects of the COVID-19 pandemic on our business, the effects of supply chain constraints on our business, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021, filed on November 18, 2021, and our other filings with the Securities and Exchange Commission. Kulicke and Soffa Industries, Inc. is under no obligation to (and expressly disclaims any obligation to) update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
Contacts:
Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations
P: +1-215-784-7518
F: +1-215-784-6180
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KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
Three months ended
Six months ended
April 2, 2022
April 3, 2021
April 2, 2022
April 3, 2021
Net revenue
$
384,282
$
340,163
$
845,170
$
608,020
Cost of sales
182,572
191,673
420,222
338,044
Gross profit
201,710
148,490
424,948
269,976
Operating expenses:
Selling, general and administrative
33,937
27,774
71,487
61,274
Research and development
37,281
34,868
70,450
66,412
Amortization of intangible assets
1,151
1,355
2,434
3,313
Acquisition-related costs
—
1,379
—
1,730
Restructuring
—
—
126
91
Total operating expenses
72,369
65,376
144,497
132,820
Income from operations
129,341
83,114
280,451
137,156
Other income (expense):
Interest income
470
586
941
1,237
Interest expense
(97)
(74)
(137)
(106)
Income before income taxes
129,714
83,626
281,255
138,287
Income tax expense
13,713
12,212
31,648
18,510
Share of results of equity-method investee, net of tax
—
94
—
94
Net income
$
116,001
$
71,320
$
249,607
$
119,683
Net income per share:
Basic
$
1.89
$
1.15
$
4.03
$
1.93
Diluted
$
1.86
$
1.13
$
3.97
$
1.90
Cash dividends declared per share
$
0.17
$
0.14
$
0.31
$
0.28
Weighted average shares outstanding:
Basic
61,482
62,068
61,934
62,023
Diluted
62,435
63,237
62,907
63,118
Three months ended
Six months ended
Supplemental financial data:
April 2, 2022
April 3, 2021
April 2, 2022
April 3, 2021
Depreciation and amortization
$
5,224
$
4,600
$
10,563
$
9,747
Capital expenditures
3,384
5,121
6,260
8,808
Equity-based compensation expense:
Cost of sales
308
210
534
415
Selling, general and administrative
3,296
2,824
7,252
5,103
Research and development
1,092
929
2,222
1,846
Total equity-based compensation expense
$
4,696
$
3,963
$
10,008
$
7,364
As of
April 2, 2022
April 3, 2021
Backlog of orders 1
$
631,300
$
664,831
Number of employees
3,445
3,434
1.Represents customer purchase commitments. While the Company believes these orders are firm, they are generally cancellable by customers without penalty.
4
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
As of
April 2, 2022
October 2, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
460,453
$
362,788
Short-term investments
230,000
377,000
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $687, respectively
368,101
421,193
Inventories, net
211,877
167,323
Prepaid expenses and other current assets
51,431
23,586
TOTAL CURRENT ASSETS
1,321,862
1,351,890
Property, plant and equipment, net
67,044
67,982
Operating right-of-use assets
38,029
41,592
Goodwill
71,468
72,949
Intangible assets, net
38,440
42,752
Deferred tax assets
13,319
15,715
Equity investments
6,417
6,388
Other assets
2,428
2,363
TOTAL ASSETS
$
1,559,007
$
1,601,631
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
100,213
154,636
Operating lease liabilities
4,932
4,903
Accrued expenses and other current liabilities
136,643
161,570
Income taxes payable
33,101
30,766
TOTAL CURRENT LIABILITIES
274,889
351,875
Deferred income taxes
34,016
32,828
Income taxes payable
63,050
69,422
Operating lease liabilities
34,688
38,084
Other liabilities
15,112
14,185
TOTAL LIABILITIES
421,755
506,394
SHAREHOLDERS' EQUITY
Common stock, no par value
522,864
550,117
Treasury stock, at cost
(554,684)
(400,412)
Retained earnings
1,177,441
948,554
Accumulated other comprehensive loss
(8,369)
(3,022)
TOTAL SHAREHOLDERS' EQUITY
$
1,137,252
$
1,095,237
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,559,007
$
1,601,631
5
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended
Six months ended
April 2, 2022
April 3, 2021
April 2, 2022
April 3, 2021
Net cash provided by operating activities
$
73,135
$
27,085
$
169,009
$
85,720
Net cash provided by investing activities
134,172
1,775
141,461
1,999
Net cash used in financing activities
(186,987)
(9,910)
(211,064)
(19,117)
Effect of exchange rate changes on cash and cash equivalents
(1,357)
(1,287)
(1,741)
604
Changes in cash and cash equivalents
18,963
17,663
97,665
69,206
Cash and cash equivalents, beginning of period
441,490
239,670
362,788
188,127
Cash and cash equivalents, end of period
$
460,453
$
257,333
$
460,453
$
257,333
Short-term investments
230,000
307,000
230,000
307,000
Total cash, cash equivalents and short-term investments
$
690,453
$
564,333
$
690,453
$
564,333
6
Reconciliation of U.S. GAAP
to Non-GAAP Income from Operations and Operating Margin
(In thousands, except percentages)
(Unaudited)
Three months ended
April 2, 2022
April 3, 2021
January 1, 2022
Net revenue
$
384,282
$
340,163
$
460,888
U.S. GAAP income from operations
129,341
83,114
151,110
U.S. GAAP operating margin
33.7
%
24.4
%
32.8
%
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through business combination- selling, general and administrative
1,151
1,355
1,283
Restructuring
—
—
126
Equity-based compensation
4,696
3,963
5,312
Acquisition-related costs
—
1,379
—
Non-GAAP income from operations
$
135,188
$
89,811
$
157,831
Non-GAAP operating margin
35.2
%
26.4
%
34.2
%
7
Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and
U.S. GAAP net income per share to Non-GAAP net income per share
(In thousands, except percentages and per share data)
(Unaudited)
Three months ended
April 2, 2022
April 3, 2021
January 1, 2022
Net revenue
$
384,282
$
340,163
$
460,888
U.S. GAAP net income
116,001
71,320
133,606
U.S. GAAP net margin
30.2
%
21.0
%
29.0
%
Non-GAAP adjustments:
Amortization related to intangible assets acquired through business combination- selling, general and administrative
1,151
1,355
1,283
Restructuring
—
—
126
Equity-based compensation
4,696
3,963
5,312
Acquisition-related costs
—
1,379
—
Net income tax (benefit)/expense on non-GAAP items
(385)
1,429
(1,508)
Total non-GAAP adjustments
$
5,462
$
8,126
$
5,213
Non-GAAP net income
$
121,463
$
79,446
$
138,819
Non-GAAP net margin
31.6
%
23.4
%
30.1
%
U.S. GAAP net income per share:
Basic
1.89
1.15
2.14
Diluted(a)
1.86
1.13
2.11
Non-GAAP adjustments per share:(b)
Basic
0.09
0.13
0.08
Diluted
0.09
0.13
0.08
Non-GAAP net income per share:
Basic
$
1.98
$
1.28
$
2.22
Diluted(c)
$
1.95
$
1.26
$
2.19
Weighted average shares outstanding:
Basic
61,482
62,068
62,385
Diluted
62,435
63,237
63,316
(a)GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock units and stock options, but that effect is excluded when calculating GAAP diluted net loss per share because it would be anti-dilutive.
(b)Non-GAAP adjustments per share include amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, equity-based compensation expenses and acquisition-related costs as well as income tax effects associated with the foregoing non-GAAP items.
(c)Non-GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock units and stock options.
