Singapore – August 3, 2022 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa,” “K&S” or the “Company”), today announced financial results of its third fiscal quarter ended July 2, 2022. The Company reported third quarter net revenue of $372.1 million, net income of $119.0 million, representing EPS of $1.99 per fully diluted share, and non-GAAP net income of $125.1 million, representing non-GAAP EPS of $2.09 per fully diluted share.
Quarterly Results - U.S. GAAP
Fiscal Q3 2022
Change vs. Fiscal Q3 2021
Change vs. Fiscal Q2 2022
Net Revenue
$372.1 million
down 12.3%
down 3.2%
Gross Profit
$190.7 million
down 2.6%
down 5.5%
Gross Margin
51.2%
up 510 bps
down 130 bps
Income from Operations
$122.1 million
up 1.3%
down 5.6%
Operating Margin
32.8%
up 440 bps
down 90 bps
Net Income
$119.0 million
up 4.6%
up 2.6%
Net Margin
32.0%
up 520 bps
up 180 bps
EPS – Diluted
$1.99
up 11.2%
up 7%
Quarterly Results - Non-GAAP
Fiscal Q3 2022
Change vs. Fiscal Q3 2021
Change vs. Fiscal Q2 2022
Income from Operations
$129.0 million
up 2.5%
down 4.6%
Operating Margin
34.7%
up 500 bps
down 50 bps
Net Income
$125.1 million
up 5.3%
up 3%
Net Margin
33.6%
up 560 bps
up 200 bps
EPS – Diluted
$2.09
up 11.8%
up 7.2%
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.
1
Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "Throughout the June quarter, we have continued to execute several new product development initiatives while generating strong earnings and aggressively returning capital to shareholders."
Over the prior four quarters, K&S has generated $380 million in free-cash-flow and returned $263 million through its repurchase and dividend programs.
Third Quarter Fiscal 2022 Financial Highlights
•Net revenue of $372.1 million.
•Gross margin of 51.2%.
•Net income of $119.0 million or $1.99 per share; non-GAAP net income of $125.1 million or $2.09 per share.
•Cash, cash equivalents, and short-term investments were $745.8 million as of July 2, 2022.
•The Company repurchased a total of 1.0 million shares of common stock through its open market and accelerated repurchase programs at a cost of $61.1 million.
Fourth Quarter Fiscal 2022 Outlook
The Company currently expects net revenue in the fourth fiscal quarter of 2022 ending October 1, 2022 to be approximately $280 million +/- $20 million, and expects non-GAAP EPS to be approximately $0.93 +/- 10%.
Fusen Chen commented, "While the near-term macro environment remains dynamic, over the past several years we have broadened our market access, expanded customer engagements and are now intimately supporting several long-term technology transitions. We expect these efforts have materially increased our long-term growth potential while sustainably enhancing our through-cycle earnings potential."
Earnings Conference Call Details
A conference call to discuss these results will be held on August 4, 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 August 11, 2022 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13730497. 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, impairment relating to equity investments, income tax expense arising from discrete tax items triggered by acquisition, restructuring and 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.
2
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 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 Q4F22 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 Q4F22 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, mini and micro LED transfer 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, supply chain constraints and macroeconomic conditions 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
3
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
Three months ended
Nine months ended
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Net revenue
$
372,137
$
424,318
$
1,217,307
$
1,032,338
Cost of sales
181,452
228,623
601,674
566,667
Gross profit
190,685
195,695
615,633
465,671
Operating expenses:
Selling, general and administrative
33,453
37,763
104,940
99,038
Research and development
34,046
36,137
104,496
102,549
Amortization of intangible assets
1,109
1,340
3,543
4,652
Acquisition-related costs
—
—
—
1,730
Restructuring
—
—
126
91
Total operating expenses
68,608
75,240
213,105
208,060
Income from operations
122,077
120,455
402,528
257,611
Other income (expense):
Interest income
2,158
564
3,099
1,801
Interest expense
(36)
(41)
(173)
(146)
Income before income taxes
124,199
120,978
405,454
259,266
Income tax expense
5,165
7,212
36,813
25,722
Share of results of equity-method investee, net of tax
—
—
—
94
Net income
$
119,034
$
113,766
$
368,641
$
233,450
Net income per share:
Basic
$
2.02
$
1.83
$
6.05
$
3.76
Diluted
$
1.99
$
1.79
$
5.95
$
3.68
Cash dividends declared per share
$
0.17
$
0.14
$
0.51
$
0.42
Weighted average shares outstanding:
Basic
58,985
62,023
60,951
62,023
Diluted
59,955
63,485
61,940
63,364
Three months ended
Nine months ended
Supplemental financial data:
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Depreciation and amortization
$
5,210
$
4,805
$
15,773
$
14,552
Capital expenditures
4,953
7,956
11,213
16,763
Equity-based compensation expense:
Cost of sales
193
211
727
626
Selling, general and administrative
3,233
3,008
10,485
8,111
Research and development
1,039
921
3,261
2,767
Total equity-based compensation expense
$
4,465
$
4,140
$
14,473
$
11,504
As of
July 2, 2022
July 3, 2021
Number of employees
3,405
3,583
4
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
As of
July 2, 2022
October 2, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
445,781
$
362,788
Short-term investments
300,000
377,000
Accounts and other receivable, net of allowance for doubtful accounts of $0 and $687, respectively
350,045
421,193
Inventories, net
215,281
167,323
Prepaid expenses and other current assets
75,011
23,586
TOTAL CURRENT ASSETS
1,386,118
1,351,890
Property, plant and equipment, net
66,510
67,982
Operating right-of-use assets
41,160
41,592
Goodwill
69,787
72,949
Intangible assets, net
35,291
42,752
Deferred tax assets
21,103
15,715
Equity investments
5,397
6,388
Other assets
2,911
2,363
TOTAL ASSETS
$
1,628,277
$
1,601,631
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable
98,572
154,636
Operating lease liabilities
5,973
4,903
Accrued expenses and other current liabilities
138,434
161,570
Income taxes payable
31,060
30,766
TOTAL CURRENT LIABILITIES
274,039
351,875
Deferred income taxes
34,541
32,828
Income taxes payable
62,468
69,422
Operating lease liabilities
35,836
38,084
Other liabilities
14,660
14,185
TOTAL LIABILITIES
421,544
506,394
SHAREHOLDERS' EQUITY
Common stock, no par value
557,236
550,117
Treasury stock, at cost
(615,689)
(400,412)
Retained earnings
1,286,505
948,554
Accumulated other comprehensive loss
(21,319)
(3,022)
TOTAL SHAREHOLDERS' EQUITY
$
1,206,733
$
1,095,237
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,628,277
$
1,601,631
5
KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended
Nine months ended
July 2, 2022
July 3, 2021
July 2, 2022
July 3, 2021
Net cash provided by operating activities
$
104,616
$
90,936
$
273,625
$
176,656
Net cash (used in) / provided by investing activities
(75,119)
52,222
66,342
54,221
Net cash used in financing activities
(39,841)
(12,865)
(250,905)
(31,982)
Effect of exchange rate changes on cash and cash equivalents
(4,328)
373
(6,069)
977
Changes in cash and cash equivalents
(14,672)
130,666
82,993
199,872
Cash and cash equivalents, beginning of period
460,453
257,333
362,788
188,127
Cash and cash equivalents, end of period
$
445,781
$
387,999
$
445,781
$
387,999
Short-term investments
300,000
247,000
300,000
247,000
Total cash, cash equivalents and short-term investments
$
745,781
$
634,999
$
745,781
$
634,999
6
Reconciliation of U.S. GAAP
to Non-GAAP Income from Operations and Operating Margin
(In thousands, except percentages)
(Unaudited)
Three months ended
July 2, 2022
July 3, 2021
April 2, 2022
Net revenue
$
372,137
$
424,318
$
384,282
U.S. GAAP income from operations
122,077
120,455
129,341
U.S. GAAP operating margin
32.8
%
28.4
%
33.7
%
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through business combination- selling, general and administrative
1,109
1,340
1,151
Equity-based compensation
4,465
4,140
4,696
Impairment charges
1,346
—
—
Non-GAAP income from operations
$
128,997
$
125,935
$
135,188
Non-GAAP operating margin
34.7
%
29.7
%
35.2
%
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
July 2, 2022
July 3, 2021
April 2, 2022
Net revenue
$
372,137
$
424,318
$
384,282
U.S. GAAP net income
119,034
113,766
116,001
U.S. GAAP net margin
32.0
%
26.8
%
30.2
%
Non-GAAP adjustments:
Amortization related to intangible assets acquired through business combination- selling, general and administrative
1,109
1,340
1,151
Equity-based compensation
4,465
4,140
4,696
Impairment charges
1,346
—
—
Net income tax (benefit)/expense on non-GAAP items
(865)
(460)
(385)
Total non-GAAP adjustments
$
6,055
$
5,020
$
5,462
Non-GAAP net income
$
125,089
$
118,786
$
121,463
Non-GAAP net margin
33.6
%
28.0
%
31.6
%
U.S. GAAP net income per share:
Basic
2.02
1.83
1.89
Diluted(a)
1.99
1.79
1.86
Non-GAAP adjustments per share:(b)
Basic
0.10
0.08
0.09
Diluted
0.10
0.08
0.09
Non-GAAP net income per share:
Basic
$
2.12
$
1.91
$
1.98
Diluted(c)
$
2.09
$
1.87
$
1.95
Weighted average shares outstanding:
Basic
58,985
62,023
61,482
Diluted
59,955
63,485
62,435
(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, equity-based compensation expenses, impairment relating to equity investments, and 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.
