Kulicke & Soffa Reports First Quarter 2021 Results

SINGAPORE, Feb. 3, 2021 /PRNewswire/ — Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) («Kulicke & Soffa,» «K&S» or the «Company»), today…

SINGAPORE, Feb. 3, 2021 /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 2, 2021. The Company reported first quarter net revenue of $267.9 million, net income of $48.4 million, representing EPS of $0.77 per fully diluted share, and non-GAAP net income of $53.7 million, representing non-GAAP EPS of $0.86 per fully diluted share.

Quarterly Results – U.S. GAAP


Fiscal Q1 2021

Change vs.

Fiscal Q1 2020

Change vs.

Fiscal Q4 2020

Net Revenue

$267.9 million

up 85.6%

up 50.8%

Gross Profit

$121.5 million

up 72.6%

up 36.7%

Gross Margin

45.4%

down 340 bps

down 460 bps

Income from Operations

$54.0 million

up 303%

up 134.8%

Operating Margin

20.2%

up 1090 bps

up 730 bps

Net Income

$48.4 million

up 258.5%

up 206.3%

Net Margin

18.1%

up 870 bps

up 920 bps

EPS – Diluted(a)

$0.77

up 266.7%

up 208%



(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.















Quarterly Results – Non-GAAP


Fiscal Q1 2021

Change vs.

Fiscal Q1 2020

Change vs.

Fiscal Q4 2020

Income from Operations

$59.8 million

up 209.8%

up 104.8%

Operating Margin

22.3%

up 900 bps

up 590 bps

Net Income

$53.7 million

up 187.2%

up 148.6%

Net Margin

20.0%

up 700 bps

up 790 bps

EPS – Diluted

$0.86

up 196.6%

up 145.7%


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, «Demand has increased significantly in the December quarter driven by strength in the general semiconductor, LED and automotive markets. Additionally, we have supported more complex, high-volume semiconductor assembly, which is increasing the capital intensity and longer-term opportunities within our served markets.»

Throughout the first fiscal quarter, K&S continued to support ongoing demand for its initial advanced display system, PixaluxTM. Today, the Company announced it has acquired Uniqarta, Inc, accelerating development of its high-accuracy, next-generation display solutions.

First Quarter Fiscal 2021 Financial Highlights

  • Net revenue of $267.9 million.
  • Gross margin of 45.4%.
  • Net income of $48.4 million or $0.77 per share; non-GAAP net income of $53.7 million or $0.86 per share.
  • Cash, cash equivalents, and short-term investments were $576.7 million as of January 2, 2021.

Second Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the second fiscal quarter of 2021 ending April 3, 2021 to be approximately $300 million +/- $20 million, and expects non-GAAP EPS to be approximately $0.88 +/- 10%.

Looking forward, Fusen Chen commented, «We continue to expand our served markets by supporting fundamental technology transitions occurring in both the display and automotive markets. In parallel, the increasing complexity of both high-volume and leading-edge semiconductor assembly is further supporting our outlook. We expect trends demanding assembly complexity will increase and further enhance the capital intensity of our broad served markets over the long-term.»

Earnings Conference Call Details

A conference call to discuss these results will be held on February 4, 2021, 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 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 11th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13714784. 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 of intangibles, 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 law, gain/loss on disposals of businesses, as well as tax benefits or expense 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.

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, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended October 3, 2020, filed on November 20, 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


Joseph Elgindy


Investor Relations


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


January 2, 2021


December 28, 2019

Net revenue

$

267,857



$

144,297


Cost of sales

146,371



73,933


Gross profit

121,486



70,364






Operating expenses:




Selling, general and administrative

33,500



26,424


Research and development

31,544



28,292


Amortization of intangible assets

1,958



1,817


Acquisition related cost

351




Restructuring

91



417


Total operating expenses

67,444



56,950


Income from operations

54,042



13,414


Other income (expense):




Interest income

651



2,839


Interest expense

(32)



(583)


Income before income taxes

54,661



15,670


Income tax expense

6,298



2,133


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



60


Net income

$

48,363



$

13,477






Net income per share:




Basic

$

0.78



$

0.21


Diluted

$

0.77



$

0.21






Cash dividends declared per share

$

0.14



$

0.12






Weighted average shares outstanding:




Basic

61,965



63,557


Diluted

62,740



64,139





Three months ended

Supplemental financial data:

January 2, 2021


December 28, 2019

Depreciation and amortization

$

5,147



$

4,759


Capital expenditures

3,687



2,325


Equity-based compensation expense:




Cost of sales

205



232


Selling, general and administrative

2,279



2,735


Research and development

917



642


Total equity-based compensation expense

$

3,401



$

3,609





As of


January 2, 2021


December 28, 2019

Backlog of orders 1

$

271,615



$

115,205


Number of employees

3,080



2,758




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


January 2, 2021


October 3, 2020

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$

239,670



$

188,127


Short-term investments

337,000



342,000


Accounts and other receivable, net of allowance for doubtful accounts of $1,001 and $968, respectively

226,665



198,640


Inventories, net

125,082



111,809


Prepaid expenses and other current assets

21,194



19,620


TOTAL CURRENT ASSETS

949,611



860,196






Property, plant and equipment, net

60,935



59,147


Operating right-of-use assets

22,703



22,688


Goodwill

57,339



56,695


Intangible assets, net

37,577



37,972


Deferred tax assets

8,725



8,147


Equity investments

7,593



7,535


Other assets

2,287



2,186


TOTAL ASSETS

$

1,146,770



$

1,054,566






LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES




Accounts payable

89,362



57,688


Operating lease liabilities

6,379



5,903


Accrued expenses and other current liabilities

83,477



76,762


Income taxes payable

21,472



17,540


TOTAL CURRENT LIABILITIES

200,690



157,893






Deferred income taxes

33,015



33,005


Income taxes payable

73,805



74,957


Operating lease liabilities

18,228



18,325


Other liabilities

13,416



12,392


TOTAL LIABILITIES

339,154



296,572






SHAREHOLDERS’ EQUITY




Common stock, no par value

538,449



539,213


Treasury stock, at cost

(391,870)



(394,817)


Retained earnings

655,795



616,119


Accumulated other comprehensive loss

5,242



(2,521)


TOTAL SHAREHOLDERS’ EQUITY

$

807,616



$

757,994






TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

1,146,770



$

1,054,566


 

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)




Three months ended


January 2, 2021


December 28, 2019

Net cash provided by operating activities

$

58,635



$

25,028


Net cash provided by investing activities

224



106,487


Net cash (used in)/provided by financing activities

(9,207)



2,152


Effect of exchange rate changes on cash and cash equivalents

1,891



(477)


Changes in cash and cash equivalents

51,543



133,190


Cash and cash equivalents, beginning of period

188,127



364,184


Cash and cash equivalents, end of period

$

239,670



$

497,374






Short-term investments

337,000



119,000


Total cash, cash equivalents and short-term investments

$

576,670



$

616,374


 

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



January 2, 2021


December 28, 2019


October 3, 2020

Net revenue


$

267,857



$

144,297



$

177,688


U.S. GAAP income from operations


54,042



13,414



23,048


U.S. GAAP operating margin


20.2

%


9.3

%


13.0

%








Pre-tax non-GAAP items:







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


1,958



1,817



1,920


Restructuring


91



417



263


Equity-based compensation (a)


3,401



3,609



3,963


Acquisition-related costs  


351






Non-GAAP income from operations


$

59,843



$

19,257



$

29,194


Non-GAAP operating margin


22.3

%


13.3

%


16.4

%



(a) 

This non-GAAP measure is newly included for the three months ended January 2, 2021. Comparatives have been included.

 

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 2, 2021


December 28, 2019


October 3, 2020

Net revenue


$

267,857



$

144,297



$

177,688


U.S. GAAP net income


48,363



13,477



15,784


U.S. GAAP net margin


18.1

%


9.3

%


8.9

%








Non-GAAP adjustments:







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


1,958



1,817



1,920


Restructuring


91



417



263


Equity-based compensation


3,401



3,609



3,963


Acquisition-related cost


351






Net income tax benefit on non-GAAP items


(474)



(595)



(358)


Total non-GAAP adjustments


$

5,327



$

5,248



$

5,788


Non-GAAP net income


$

53,690



$

18,725



$

21,572


Non-GAAP net margin


20.0

%


13.0

%


12.1

%








U.S. GAAP net income per share:







Basic


0.78



0.21



0.26


Diluted(a)


0.77



0.21



0.25









Non-GAAP adjustments per share:(b)







Basic


0.09



0.08



0.09


Diluted


0.09



0.08



0.09









Non-GAAP net income per share:







Basic


$

0.87



$

0.29



$

0.35


Diluted(c)


$

0.86



$

0.29



$

0.34




(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, equity-based compensation expenses and acquisition-related costs 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.

 

 

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SOURCE Kulicke & Soffa Industries, Inc.