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Kulicke & Soffa Reports Fourth Quarter 2020 Results

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SINGAPORE, Nov. 18, 2020 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company"), today announced financial results of its fourth fiscal quarter ended October 3, 2020. The Company reported fourth quarter net revenue of $177.7 million, net income of $15.8 million and non-GAAP net income of $18.0 million.

Kulicke & Soffa Logo
Kulicke & Soffa Logo

During its fourth fiscal quarter, K&S repurchased $8.8 million of common stock in open market transactions at an average price of $22.68 per share. The Company also recorded a quarterly dividend equivalent of $0.12 per share during its fourth fiscal quarter.

Quarterly Results - U.S. GAAP



Fiscal Q4 2020

Change vs.
Fiscal Q4 2019

Change vs.
Fiscal Q3 2020

Net Revenue

$177.7 million

up 27.1%

up 18.1%

Gross Profit

$88.9 million

up 35.9%

up 28.1%

Gross Margin

50.0%

up 320 bps

up 390 bps

Income from Operations

$23.0 million

up 198.7%

up 109.1%

Operating Margin

12.9%

up 740 bps

up 560 bps

Net Income

$15.8 million

up 146.9%

up 41.1%

Net Margin

8.9%

up 430 bps

up 150 bps

EPS – Diluted

$0.25

up 150%

up 38.9%

Quarterly Results - Non-GAAP



Fiscal Q4 2020

Change vs.
Fiscal Q4 2019

Change vs.
Fiscal Q3 2020

Income from Operations

$25.2 million

up 126.2%

up 96.9%

Operating Margin

14.2%

up 620 bps

up 570 bps

Net Income

$18.0 million

up 93%

up 39.5%

Net Margin

10.1%

up 340 bps

up 150 bps

EPS - Diluted

$0.29

up 107.1%

up 38.1%

* A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also "Use of non-GAAP Financial Results" section.

Fourth fiscal quarter tax expense of $8.0 million was associated with increased profitability and jurisdictional adjustments. The Company continues to target a long-term effective tax rate of 18%.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "During fiscal 2020, we entered into the emerging advanced-LED market, expanded advanced packaging engagements and returned $85 million through the repurchase and dividend programs. Our dedicated global workforce, financial position, and commitment to development have facilitated this progress despite the challenging macro-economic environment through fiscal 2020."

Fiscal Year 2020 Financial Highlights

  • Net revenue of $623.2 million.

  • Gross margin of 47.8%.

  • Net income of $52.3 million or $0.83 per share; non-GAAP net income of $60.3 million or $0.95 per share.

  • The Company repurchased a total of approximately 2.5 million shares of common stock at a cost of approximately $55.0 million.

Fourth Quarter Fiscal 2020 Financial Highlights

  • Net revenue of $177.7 million.

  • Gross margin of 50.0%.

  • Net income of $15.8 million or $0.25 per share; non-GAAP net income of $18.0 million or $0.29 per share.

  • Cash, cash equivalents, and short-term investments were $530.1 million as of October 3, 2020.

First Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the first fiscal quarter of 2021, ending January 2, 2021, to be approximately $230 million to $250 million, and expects non-GAAP EPS to be approximately $0.48 to $0.58. This steep sequential demand improvement is driven by strength in the Company's general semiconductor and LED end-markets.

Looking forward, Fusen Chen commented, "Our entry into the advanced display market combined with 5G adoption, smartphone recovery and general semiconductor unit growth improvement are increasing demand for our core products and services. In addition to the positive near-term outlook, we remain strategically focused to support fundamental technology transitions in the advanced packaging, automotive and display markets."

Earnings Conference Call Details

A conference call to discuss these results will be held tomorrow, November 19, 2020, beginning at 8:00am EST. To access the conference call, interested parties may call +1-877-407-8037 or internationally +1-201-689-8037. A live webcast will also be available at investor.kns.com.

A replay will be available from approximately one hour after the completion of the call through November 21st by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13694867. 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 non-GAAP financial results. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, goodwill impairment, costs associated with restructuring, income tax expense related to the Tax Cuts and Jobs Act of 2017 as well as tax benefits or expense associated with the foregoing non-GAAP items. 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 non-GAAP operating income, operating margin, net income, net margin and net income per diluted share 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 attached exhibit.

Management has not reconciled its outlook for non-GAAP Diluted EPS to Diluted EPS for Q1F21 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 Q1F21 is not available without unreasonable effort.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor 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 (kns.com).

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, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended September 28, 2019, filed on November 15, 2019, our Quarterly Reports on Form 10-Q filed on April 30, 2020, and July 30, 2020, 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 & Strategic Initiatives
P: +1-215-784-7518
F: +1-215-784-6180

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)



Three months ended


Twelve months ended


October 3, 2020


September 28,
2019


October 3, 2020


September 28,
2019

Net revenue

$

177,688



$

139,827



$

623,176



$

540,052


Cost of sales

88,803



74,389



325,201



285,462


Gross profit

88,885



65,438



297,975



254,590










Operating expenses:








Selling, general and administrative

28,101



25,723



107,947



107,785


Research and development

35,553



28,560



123,459



116,169


Amortization of intangible assets

1,920



1,823



7,371



7,412


Restructuring

263



1,639



689



1,614


Total operating expenses

65,837



57,745



239,466



232,980


Income from operations

23,048



7,693



58,509



21,610


Other income / (expense):








Interest income

653



3,485



7,541



15,132


Interest expense

(26)



(918)



(1,716)



(2,055)


Income before income taxes

23,675



10,260



64,334



34,687


Income tax expense / (benefit)

8,013



3,804



11,998



22,910


Share of results of equity-method investee, net of tax

(122)



52



36



124


Net income

$

15,784



$

6,404



$

52,300



$

11,653










Net income per share:








Basic

$

0.26



$

0.10



$

0.83



$

0.18


Diluted

$

0.25



$

0.10



$

0.83



$

0.18










Cash dividends declared per share

$

0.12



$

0.12



$

0.48



$

0.48










Weighted average shares outstanding:








Basic

61,791



63,401



62,828



65,286


Diluted

62,411



64,251



63,359



65,948







Three months ended


Twelve months ended

Supplemental financial data:

October 3, 2020


September 28,
2019


October 3, 2020


September 28,
2019

Depreciation and amortization

$

5,142



$

5,303



$

19,739



$

20,304


Capital expenditures

5,964



2,517



14,514



11,829


Equity-based compensation expense:








Cost of sales

147



161



744



632


Selling, general and administrative

2,965



2,632



11,071



10,503


Research and development

851



767



3,204



3,197


Total equity-based compensation expense

$

3,963



$

3,560



$

15,019



$

14,332





As of


October 3, 2020


September 28, 2019

Backlog of orders 1

$

127,924



$

104,711


Number of employees

2,836



2,614




1.

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

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)



As of


October 3, 2020


September 28, 2019

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$

188,127



$

364,184


Short-term investments

342,000



229,000


Accounts and notes receivable, net of allowance for doubtful accounts of $968 and $597 respectively

198,640



195,830


Inventories, net

111,809



89,308


Prepaid expenses and other current assets

19,620



15,429


TOTAL CURRENT ASSETS

860,196



893,751






Property, plant and equipment, net

59,147



72,370


Operating right-of-use assets

22,688




Goodwill

56,695



55,691


Intangible assets, net

37,972



42,651


Deferred tax assets

8,147



6,409


Equity investments

7,535



6,250


Other assets

2,186



2,494


TOTAL ASSETS

$

1,054,566



$

1,079,616






LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES




Short term debt

$



$

60,904


Accounts payable

57,688



36,711


Operating lease liabilities

5,903




Accrued expenses and other current liabilities

76,762



64,533


Income taxes payable

17,540



12,494


TOTAL CURRENT LIABILITIES

157,893



174,642






Financing obligation



14,207


Deferred tax liabilities

33,005



32,054


Income taxes payable

74,957



80,290


Operating lease liabilities

18,325




Other liabilities

12,392



9,360


TOTAL LIABILITIES

296,572



310,553






SHAREHOLDERS' EQUITY




Common stock, no par value

539,213



533,590


Treasury stock, at cost

(394,817)



(349,212)


Retained earnings

616,119



594,625


Accumulated other comprehensive loss

(2,521)



(9,940)


TOTAL SHAREHOLDERS' EQUITY

$

757,994



$

769,063






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,054,566



$

1,079,616


KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended


Twelve months ended


October 3, 2020


September 28,
2019


October 3, 2020


September 28,
2019

Net cash provided by / (used in) operating activities

$

31,731



$

(17,214)



$

94,412



$

65,967


Net cash (used in) / provided by investing activities, continuing operations

(151,820)



17,094



(125,957)



47,468


Net cash (used in) /provided by financing activities, continuing operations

(15,191)



(32,567)



(145,809)



(71,318)


Effect of exchange rate changes on cash, cash equivalents and restricted cash

1,632



859



1,297



919


Changes in cash, cash equivalents and restricted cash

(133,648)



(31,828)



(176,057)



43,036


Cash, cash equivalents and restricted cash, beginning of period

321,775



396,012



364,184



321,148


Cash, cash equivalents and restricted cash, end of period

$

188,127



$

364,184



$

188,127



$

364,184










Short-term investments

342,000



229,000



342,000



229,000


Total cash, cash equivalents, restricted cash and short-term investments

$

530,127



$

593,184



$

530,127



$

593,184


Reconciliation of U.S. GAAP Income from Operating

to Non-GAAP Income from Operation and Operating Margin

(In thousands, except percentages)

(unaudited)




Three months ended



October 3, 2020


September 28, 2019


June 27, 2020

Net revenue


$

177,688



$

139,827



$

150,450


U.S. GAAP income from operations


23,048



7,693



10,971


U.S. GAAP operating margin


13.0

%


5.5

%


7.3

%








Pre-tax non-GAAP items:







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


$

1,920



$

1,823



$

1,814


Restructuring


263



1,639




Non-GAAP income from operations


$

25,231



$

11,155



$

12,785


Non-GAAP operating margin


14.2

%


8.0

%


8.5

%

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 per share data)

(unaudited)



Twelve months
ended


Three months ended


October 3,
2020


October 3,
2020


September 28,
2019


June 27, 2020

Net revenue

$

623,176



$

177,688



$

139,827



$

150,450


U.S. GAAP net income

52,300



15,784



6,404



11,151


U.S. GAAP net margin

8.4

%


8.9

%


4.6

%


7.4

%









Non-GAAP adjustments:








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

$

7,371



$

1,920



$

1,823



1,814


Restructuring

689



263



1,639




Income tax expense- Tax Reform





(300)




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

(85)



16



(250)



(23)


Total non-GAAP adjustments

7,975



2,199



2,912



1,791


Non-GAAP net income

60,275



17,983



9,316



12,942


Non-GAAP net margin

9.7

%


10.1

%


6.7

%


8.6

%









U.S. GAAP net income per share:








Basic

0.83



0.26



0.10



0.18


Diluted(a)

0.83



0.25



0.10



0.18










Non-GAAP adjustments per share:(b)








Basic

0.13



0.04



0.05



0.03


Diluted

0.12



0.04



0.04



0.03










Non-GAAP net income per share:








Basic

$

0.96



$

0.30



$

0.15



$

0.21


Diluted(c)

$

0.95



$

0.29



$

0.14



$

0.21










Weighted average shares outstanding:








Basic

62,828



61,791



63,401



62,313


Diluted(b)

63,359



62,411



64,251



62,833


Net revenue










(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 includes amortization related to intangible assets acquired through business combinations, costs associated with restructuring, income tax expense related to the Tax Cuts and Jobs Act of 2017 as well as tax benefits or expense 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.