Kulicke & Soffa Reports Fourth Quarter 2020 Results
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.
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. Change vs.
Fiscal Q4 2019 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. Change vs.
Fiscal Q4 2019 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 21(st) 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, October 3, 2020 September 28,
2019 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, October 3, 2020 September 28,
2019 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, October 3, 2020 September 28,
2019 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
Three months ended
ended
October 3, October 3, September 28, June 27, 2020
2020 2020 2019
---
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.
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SOURCE Kulicke & Soffa Industries, Inc.
