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Kulicke & Soffa Reports First Quarter 2022 Results

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Delivers Strong Financial Performance; Accelerates Share Repurchase Activity; Provides Revenue Outlook for Fiscal 2022

SINGAPORE, Feb. 2, 2022 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S" or the "Company"), today announced financial results of its first fiscal quarter ended January 1, 2022. The Company reported first quarter net revenue of $460.9 million, net income of $133.6 million, representing EPS of $2.11 per fully diluted share, and non-GAAP net income of $138.8 million, representing non-GAAP EPS of $2.19 per fully diluted share.

(PRNewsfoto/Kulicke & Soffa Industries, Inc.)
(PRNewsfoto/Kulicke & Soffa Industries, Inc.)

Quarterly Results - U.S. GAAP


Fiscal Q1 2022

Change vs.

Fiscal Q1 2021

Change vs.

Fiscal Q4 2021

Net Revenue

$460.9 million

up 72.1%

down 5%

Gross Profit

$223.2 million

up 83.7%

down 3.5%

Gross Margin

48.4%

up 300 bps

up 70 bps

Income from Operations

$151.1 million

up 179.8%

down 2.4%

Operating Margin

32.8%

up 1260 bps

up 90 bps

Net Income

$133.6 million

up 176%

down 0.1%

Net Margin

29.0%

up 1090 bps

up 140 bps

EPS – Diluted

$2.11

up 174%

up 0.5%

Quarterly Results - Non-GAAP


Fiscal Q1 2022

Change vs.

Fiscal Q1 2021

Change vs.

Fiscal Q4 2021

Income from Operations

$157.8 million

up 163.9%

down 1.5%

Operating Margin

34.2%

up 1190 bps

up 120 bps

Net Income

$138.8 million

up 158.5%

up 0.4%

Net Margin

30.1%

up 1010 bps

up 160 bps

EPS – Diluted

$2.19

up 154.7%

up 0.9%

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.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "During the December Quarter, we received acceptance and recognized revenue for an emerging silicon photonics application. This represents a recent example of our progress to expand served markets through long-term development, ongoing customer engagements and new system acceptance. Over the coming quarters, we expect to continue driving momentum across several other key growth areas."

First Quarter Fiscal 2022 Financial Highlights

  • Net revenue of $460.9 million.

  • Gross margin of 48.4%.

  • Net income of $133.6 million or $2.11 per share; non-GAAP net income of $138.8 million or $2.19 per share.

  • Cash, cash equivalents, and short-term investments were $808.5 million as of January 1, 2022.

  • The Company repurchased a total of 276.0 thousand shares of common stock at a cost of $15.4 million.

Second Quarter and Full Fiscal Year 2022 Outlook

The Company currently expects net revenue in the second fiscal quarter of 2022 ending April 2, 2022 to be approximately $380 million +/- $20 million, and expects non-GAAP EPS to be approximately $1.45 +/- 10%.

Fusen Chen commented, "Our served markets continue to expand as we drive interest and demand for our broadening advanced packaging, automotive and advanced display solutions. In addition to the growing industry requirements for more complex semiconductor assembly equipment, we are also well positioned to deliver enabling innovations supporting electric vehicles and emerging mini and micro LED displays."

Kulicke & Soffa currently anticipates revenue for its full fiscal year 2022 to increase sequentially to approximately $1.58 billion.

Earnings Conference Call Details

A conference call to discuss these results will be held on February 3, 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 February 10, 2022 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13725826. 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 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 Q2F22 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 Q2F22 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





KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)



Three months ended


January 1, 2022


January 2, 2021

Net revenue

$ 460,888


$ 267,857

Cost of sales

237,650


146,371

Gross profit

223,238


121,486





Operating expenses:




Selling, general and administrative

37,550


33,500

Research and development

33,169


31,544

Amortization of intangible assets

1,283


1,958

Acquisition-related costs


351

Restructuring

126


91

Total operating expenses

72,128


67,444

Income from operations

151,110


54,042

Other income (expense):




Interest income

471


651

Interest expense

(40)


(32)

Income before income taxes

151,541


54,661

Income tax expense

17,935


6,298

Net income

$ 133,606


$ 48,363





Net income per share:




Basic

$ 2.14


$ 0.78

Diluted

$ 2.11


$ 0.77





Cash dividends declared per share

$ 0.14


$ 0.12





Weighted average shares outstanding:




Basic

62,385


61,965

Diluted

63,316


62,740



Three months ended

Supplemental financial data:

January 1, 2022


January 2, 2021

Depreciation and amortization

$ 5,339


$ 5,147

Capital expenditures

2,876


3,687

Equity-based compensation expense:




Cost of sales

226


205

Selling, general and administrative

3,956


2,279

Research and development

1,130


917

Total equity-based compensation expense

$ 5,312


$ 3,401



As of


January 1, 2022


January 2, 2021

Backlog of orders 1

$ 688,303


$ 271,615

Number of employees

3,602


3,080



1.

Represents customer purchase commitments. While the Company believes these orders are firm, they are generally cancellable by customers without penalty.


KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)



As of


January 1, 2022


October 2, 2021

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$ 441,490


$ 362,788

Short-term investments

367,000


377,000

Accounts and other receivable, net of allowance for doubtful accounts of $687 and $687, respectively

431,574


421,193

Inventories, net

197,234


167,323

Prepaid expenses and other current assets

25,765


23,586

TOTAL CURRENT ASSETS

1,463,063


1,351,890





Property, plant and equipment, net

67,109


67,982

Operating right-of-use assets

39,124


41,592

Goodwill

72,353


72,949

Intangible assets, net

40,702


42,752

Deferred tax assets

13,332


15,715

Equity investments

6,412


6,388

Other assets

2,436


2,363

TOTAL ASSETS

$ 1,704,531


$ 1,601,631





LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES




Accounts payable

148,769


154,636

Operating lease liabilities

5,056


4,903

Accrued expenses and other current liabilities

146,152


161,570

Income taxes payable

43,828


30,766

TOTAL CURRENT LIABILITIES

343,805


351,875





Deferred income taxes

33,371


32,828

Income taxes payable

69,618


69,422

Operating lease liabilities

35,961


38,084

Other liabilities

14,600


14,185

TOTAL LIABILITIES

497,355


506,394





SHAREHOLDERS' EQUITY




Common stock, no par value

548,425


550,117

Treasury stock, at cost

(408,788)


(400,412)

Retained earnings

1,071,550


948,554

Accumulated other comprehensive income/ (loss)

(4,011)


(3,022)

TOTAL SHAREHOLDERS' EQUITY

$ 1,207,176


$ 1,095,237





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$ 1,704,531


$ 1,601,631

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended


January 1, 2022


January 2, 2021

Net cash provided by operating activities

$ 95,874


$ 58,635

Net cash provided by investing activities

7,289


224

Net cash used in financing activities

(24,077)


(9,207)

Effect of exchange rate changes on cash and cash equivalents

(384)


1,891

Changes in cash and cash equivalents

78,702


51,543

Cash and cash equivalents, beginning of period

362,788


188,127

Cash and cash equivalents, end of period

$ 441,490


$ 239,670





Short-term investments

367,000


337,000

Total cash, cash equivalents and short-term investments

$ 808,490


$ 576,670

Reconciliation of U.S. GAAP

to Non-GAAP Income from Operations and Operating Margin

(In thousands, except percentages)

(Unaudited)




Three months ended



January 1, 2022


January 2, 2021


October 2, 2021

Net revenue


$ 460,888


$ 267,857


$ 485,326

U.S. GAAP income from operations


151,110


54,042


154,836

U.S. GAAP operating margin


32.8%


20.2%


31.9%








Pre-tax non-GAAP items:







Amortization related to intangible assets acquired through business combination- selling, general and administrative


1,283


1,958


1,322

Restructuring


126


91


42

Equity-based compensation


5,312


3,401


3,998

Acquisition-related costs



351


Non-GAAP income from operations


$ 157,831


$ 59,843


$ 160,198

Non-GAAP operating margin


34.2%


22.3%


33.0%

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



January 1, 2022


January 2, 2021


October 2, 2021

Net revenue


$ 460,888


$ 267,857


$ 485,326

U.S. GAAP net income


133,606


48,363


133,711

U.S. GAAP net margin


29.0%


18.1%


27.6%








Non-GAAP adjustments:







Amortization related to intangible assets acquired through business combination- selling, general and administrative


1,283


1,958


1,322

Restructuring


126


91


42

Equity-based compensation


5,312


3,401


3,998

Acquisition-related costs



351


Net income tax expense/(benefit) on non-GAAP items


(1,508)


(474)


(807)

Total non-GAAP adjustments


$ 5,213


$ 5,327


$ 4,555

Non-GAAP net income


$ 138,819


$ 53,690


$ 138,266

Non-GAAP net margin


30.1 %


20.0%


28.5%








U.S. GAAP net income per share:







Basic


2.14


0.78


2.16

Diluted(a)


2.11


0.77


2.10








Non-GAAP adjustments per share:(b)







Basic


0.08


0.09


0.07

Diluted


0.08


0.09


0.07








Non-GAAP net income per share:







Basic


$ 2.22


$ 0.87


$ 2.23

Diluted(c)


$ 2.19


$ 0.86


$ 2.17








Weighted average shares outstanding:







Basic


62,385


61,965


61,966

Diluted


63,316


62,740


63,611



(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.

Cision
Cision

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SOURCE Kulicke & Soffa Industries, Inc.