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Classified in: Science and technology, Business, Covid-19 virus
Subjects: ERN, ERP

Kulicke & Soffa Reports Third Quarter 2022 Results


Delivers Strong Financial Performance; Strategic Execution Continues

SINGAPORE, Aug. 3, 2022 /PRNewswire/ -- 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.

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

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.

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

 

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

 

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

 

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

 

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 %

 

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.

 

 

SOURCE Kulicke & Soffa Industries, Inc.


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