Kulicke & Soffa Reports Fourth Quarter 2021 Results

SINGAPORE, Nov. 17, 2021 /PRNewswire/ — Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) («Kulicke & Soffa», «K&S» or the «Company»),…

SINGAPORE, Nov. 17, 2021 /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 2, 2021. The Company reported fourth quarter net revenue of $485.3 million, net income of $133.7 million and non-GAAP net income of $138.3 million.

Quarterly Results – U.S. GAAP



Fiscal Q4 2021

Change vs.

Fiscal Q4 2020

Change vs.

Fiscal Q3 2021

Net Revenue

$485.3 million

up 173.1%

up 14.4%

Gross Profit

$231.3 million

up 160.2%

up 18.2%

Gross Margin

47.7%

down 230 bps

up 160 bps

Income from Operations

$154.8 million

up 573%

up 28.5%

Operating Margin

31.9%

up 1900 bps

up 350 bps

Net Income

$133.7 million

up 746.2%

up 17.5%

Net Margin

27.6%

up 1870 bps

up 80 bps

EPS – Diluted

$2.10

up 740%

up 17.3%


Quarterly Results – Non-GAAP



Fiscal Q4 2021

Change vs.

Fiscal Q4 2020

Change vs.

Fiscal Q3 2021

Income from Operations

$160.2 million

up 448.7%

up 27.2%

Operating Margin

33.0%

up 1660 bps

up 330 bps

Net Income

$138.3 million

up 535.7%

up 16.4%

Net Margin

28.5%

up 1630 bps

up 50 bps

EPS – Diluted

$2.17

up 520%

up 16%

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.

During the fiscal fourth quarter the Company was able to exceed revenue expectations by temporarily extending production capacity and also by delivering additional advanced display systems and services.

Fusen Chen, Kulicke & Soffa’s President and Chief Executive Officer, stated, «Throughout fiscal 2021 we continued to support an ongoing period of industry expansion, while carefully navigating global supply-chain challenges. Additionally, we continued our aggressive development efforts, released several new market-ready solutions and also received customer acceptance with several others. These efforts expand our access to favorable long-term trends within the automotive, electronics assembly and advanced display end-markets.»

Fiscal Year 2021 Financial Highlights

  • Net revenue of $1,517.7 million.
  • Gross margin of 45.9%.
  • Net income of $367.2 million or $5.78 per share; non-GAAP net income of $390.2 million or $6.14 per share.
  • The Company repurchased a total of approximately 215.0 thousand shares of common stock at a cost of approximately $10.2 million.

Fourth Quarter Fiscal 2021 Financial Highlights 

  • Net revenue of $485.3 million.
  • Gross margin of 47.7%.
  • Net income of $133.7 million or $2.10 per share; non-GAAP net income of $138.3 million or $2.17 per share.
  • Cash, cash equivalents, and short-term investments were $739.8 million as of October 2, 2021.

First Quarter Fiscal 2022 Outlook

The Company currently expects net revenue in the first fiscal quarter of 2022, ending January 1, 2022, to be approximately $460 million, +/- $20 million, and expects non-GAAP EPS to be approximately $1.88, +/- 10%.

This revenue outlook is very similar to the fourth fiscal quarter expectations provided on August 4, 2021.

Looking forward, Fusen Chen commented, «We continue to efficiently support strong, ongoing and broad demand across our served end-markets. Throughout fiscal 2022, we anticipate ongoing industry expansion and also rapid growth of our emerging portfolio of solutions which directly addresses semiconductor, electric vehicle, and advanced LED assembly challenges.»

Earnings Conference Call Details

A conference call to discuss these results will be held tomorrow, November 18, 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 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 25th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13723617. 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, costs associated with restructuring, equity-based compensation, acquisition and integration cost, 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 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 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 Q1F22 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 Q1F22 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 (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, 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 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 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 2, 2021


October 3, 2020


October 2, 2021


October 3, 2020

Net revenue

$

485,326



$

177,688



$

1,517,664



$

623,176


Cost of sales

254,011



88,803



820,678



325,201


Gross profit

231,315



88,885



696,986



297,975










Operating expenses:








Selling, general and administrative

40,186



28,101



139,224



107,947


Research and development

34,929



35,553



137,478



123,459


Acquisition-related cost





1,730




Amortization of intangible assets

1,322



1,920



5,974



7,371


Restructuring

42



263



133



689


   Total operating expenses

76,479



65,837



284,539



239,466


Income from operations

154,836



23,048



412,447



58,509


Other income / (expense):








Interest income

520



653



2,321



7,541


Interest expense

(72)



(26)



(218)



(1,716)


Income before income taxes

155,284



23,675



414,550



64,334


Income tax expense / (benefit)

21,573



8,013



47,295



11,998


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



(122)



94



36


Net income

$

133,711



$

15,784



$

367,161



$

52,300










Net income per share:








Basic

$

2.16



$

0.26



$

5.92



$

0.83


Diluted

$

2.10



$

0.25



$

5.78



$

0.83










Cash dividends declared per share

$

0.14



$

0.12



$

0.56



$

0.48










Weighted average shares outstanding:








Basic

61,966



61,791



62,009



62,828


Diluted

63,611



62,411



63,515



63,359



Three months ended


Twelve months ended

Supplemental financial data:

October 2, 2021


October 3, 2020


October 2, 2021


October 3, 2020

Depreciation and amortization

$

5,258



$

5,142



$

19,810



$

19,739


Capital expenditures

5,792



5,964



22,555



14,514


Equity-based compensation expense:








Cost of sales

202



147



828



744


Selling, general and administrative

2,887



2,965



10,998



11,071


Research and development

909



851



3,676



3,204


Total equity-based compensation expense

$

3,998



$

3,963



$

15,502



$

15,019











As of










October 2, 2021


October 3, 2020

Backlog of orders 1









$

787,241



$

127,924


Number of employees









3,586



2,836


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 2, 2021


October 3, 2020

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$

362,788



$

188,127


Short-term investments

377,000



342,000


Accounts and notes receivable, net of allowance for doubtful accounts of $687 and $968 respectively

421,193



198,640


Inventories, net

167,323



111,809


Prepaid expenses and other current assets

23,586



19,620


TOTAL CURRENT ASSETS

1,351,890



860,196






Property, plant and equipment, net

67,982



59,147


Operating right-of-use assets

41,592



22,688


Goodwill

72,949



56,695


Intangible assets, net

42,752



37,972


Deferred tax assets

15,715



8,147


Equity investments

6,388



7,535


Other assets

2,363



2,186


TOTAL ASSETS

$

1,601,631



$

1,054,566






LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES




Accounts payable

154,636



57,688


Operating lease liabilities

4,903



5,903


Accrued expenses and other current liabilities

161,570



76,762


Income taxes payable

30,766



17,540


TOTAL CURRENT LIABILITIES

351,875



157,893






Deferred tax liabilities

32,828



33,005


Income taxes payable

69,422



74,957


Operating lease liabilities

38,084



18,325


Other liabilities

14,185



12,392


TOTAL LIABILITIES

506,394



296,572






SHAREHOLDERS’ EQUITY




Common stock, no par value

550,117



539,213


Treasury stock, at cost

(400,412)



(394,817)


Retained earnings

948,554



616,119


Accumulated other comprehensive loss

(3,022)



(2,521)


TOTAL SHAREHOLDERS’ EQUITY

$

1,095,237



$

757,994






TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

1,601,631



$

1,054,566


 

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended


Twelve months ended


October 2, 2021


October 3, 2020


October 2, 2021


October 3, 2020

Net cash provided by operating activities

$

123,376



$

31,731



$

300,032



$

94,412


Net cash used in investing activities, continuing operations

(135,928)



(151,820)



(81,707)



(125,957)


Net cash used in financing activities, continuing operations

(12,276)



(15,191)



(44,258)



(145,809)


Effect of exchange rate changes on cash and cash equivalents

(383)



1,632



594



1,297


Changes in cash and cash equivalents

(25,211)



(133,648)



174,661



(176,057)


Cash and cash equivalents, beginning of period

387,999



321,775



188,127



364,184


Cash and cash equivalents, end of period

$

362,788



$

188,127



$

362,788



$

188,127










Short-term investments

377,000



342,000



377,000



342,000


Total cash, cash equivalents, and short-term investments

$

739,788



$

530,127



$

739,788



$

530,127


 

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 2, 2021


October 3, 2020


July 3, 2021

Net revenue


$

485,326



$

177,688



$

424,318


U.S. GAAP income from operations


154,836



23,048



120,455


U.S. GAAP operating margin


31.9

%


13.0

%


28.4

%








Pre-tax non-GAAP items:







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


$

1,322



$

1,920



1,340


Equity-based compensation (a)


3,998



3,963



4,140


Restructuring


42



263




Non-GAAP income from operations


$

160,198



$

29,194



$

125,935


Non-GAAP operating margin


33.0

%


16.4

%


29.7

%

(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 per share data)

(unaudited)



Twelve months

ended


Three months

ended


October 2,

2021


October 2,

2021


October 3,

2020


July 3,

2021

Net revenue

$

1,517,664



$

485,326



$

177,688



$

424,318


U.S. GAAP net income

367,161



133,711



15,784



113,766


U.S. GAAP net margin

24.2

%


27.6

%


8.9

%


26.8

%









Non-GAAP adjustments:








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

$

5,974



$

1,322



$

1,920



1,340


Restructuring

133



42



263




Acquisition-related costs

1,730








Equity-based compensation

15,502



3,998



3,963



4,140


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

(311)



(807)



(181)



(460)


Total non-GAAP adjustments

23,028



4,555



5,965



5,020


Non-GAAP net income

390,189



138,266



21,749



118,786


Non-GAAP net margin

25.7

%


28.5

%


12.2

%


28.0

%









U.S. GAAP net income per share:








Basic

5.92



2.16



0.25



1.83


Diluted(a)

5.78



2.10



0.25



1.79










Non-GAAP adjustments per share:(b)








Basic

0.37



0.07



0.10



0.08


Diluted

0.36



0.07



0.10



0.08










Non-GAAP net income per share:








Basic

$

6.29



$

2.23



$

0.35



$

1.91


Diluted(c)

$

6.14



$

2.17



$

0.35



$

1.87










Weighted average shares outstanding:








Basic

62,009



61,966



61,791



62,023


Diluted(b)

63,515



63,611



62,411



63,485


(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.