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Kulicke & Soffa Reports Second Quarter 2022 Results

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Delivers Strong Financial Performance; Executes Toward Strategic Targets

SINGAPORE, May 4, 2022 /PRNewswire/ -- 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.

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

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.

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 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

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.

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

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

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 %

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.

Cision
Cision

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SOURCE Kulicke & Soffa Industries, Inc.