Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke
& Soffa”, “K&S” or the “Company”), today announced
financial results of its fourth fiscal quarter ended September 28,
2019. The Company reported fourth quarter net revenue of $139.8
million, net income of $6.4 million and non-GAAP net income of $9.3
million.
During its fourth fiscal quarter, K&S repurchased $15.0
million of common stock in open market transactions at an average
price of $22.37 per share. The Company also recorded a quarterly
dividend equivalent to $0.12 per share during its fourth fiscal
quarter.
Quarterly Results - U.S.
GAAP
Fiscal Q4 2019
Change vs.
Fiscal Q4 2018
Change vs.
Fiscal Q3 2019
Net Revenue
$139.8 million
down 24.3%
up 10%
Gross Profit
$65.4 million
down 23.8%
up 11.2%
Gross Margin
46.8%
up 40 bps
up 60 bps
Income from Operations
$7.7 million
down 68.7%
up 327.8%
Operating Margin
5.5%
down 780 bps
up 410 bps
Net Income
$6.4 million
down 78.4%
up 392.3%
Net Margin
4.6%
down 1140 bps
up 360 bps
EPS – Diluted
$0.10
down 76.7%
up 400%
Quarterly Results -
Non-GAAP
Fiscal Q4 2019
Change vs.
Fiscal Q4 2018
Change vs.
Fiscal Q3 2019
Income from Operations
$11.2 million
down 59%
up 160.5%
Operating Margin
8.0%
down 670 bps
up 470 bps
Net Income
$9.3 million
down 70.1%
up 158.3%
Net Margin
6.7%
down 1020 bps
up 390 bps
EPS - Diluted
$0.14
down 68.9%
up 133.3%
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.
Despite broader macro and industry headwinds through fiscal
2019, the Company maintained an aggressive pace of R&D
investment, increased the competitiveness of current and new
offerings and generated free cash flow of $54.2 million.
Dr. Fusen Chen, Kulicke & Soffa's President and Chief
Executive Officer, stated, “Nearly all of our businesses
experienced demand improvements sequentially through the September
quarter, and have improved materially since the March quarter. In
parallel, we have also made meaningful progress in expanding our
served markets through customer acceptance and ongoing traction of
our multiple advanced packaging offerings, including PIXALUXTM, our
mini and microLED solution.”
Fiscal Year 2019 Financial
Highlights
- Net revenue of $540.1 million.
- Gross margin of 47.1%.
- Net income of $11.7 million or 0.18 per share; non-GAAP net
income of $30.1 million or $0.46 per share.
- The Company repurchased a total of 4.7 million shares of common
stock at a cost of $100.5 million.
Fourth Quarter Fiscal 2019 Financial
Highlights
- Net revenue of $139.8 million.
- Gross margin of 46.8%.
- Net income of $6.4 million or 0.10 per share; non-GAAP net
income of $9.3 million or $0.14 per share.
- Cash, cash equivalents, and short-term investments, net of bank
overdraft were $532.3 million as of September 28, 2019.
First Quarter Fiscal 2020
Outlook
The Company currently expects net revenue in the first fiscal
quarter of 2020 ending December 28, 2019 to be approximately $130
million to $150 million. Over the past 5 years, December quarter
sales have averaged a 14% sequential revenue decline over the
September quarter.
Looking forward, Dr. Fusen Chen commented, "Considering demand
improvements within our core business, market traction within our
newly developed products, and ongoing customer engagement within
our growing base of Advanced Packaging solutions, we are
increasingly optimistic as we look ahead into fiscal year
2020.”
Earnings Conference Call
Details
A conference call to discuss these results will be held today,
November 14, 2019, beginning at 6:00pm 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 21st 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.
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 (www.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, and include, but are not limited to, statements that relate
to our future expected dividend payouts and growth opportunities.
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
risk that the Company fails to meet its operational and financial
targets in order to adhere to its dividend policy; the risk that
customer orders already received may be postponed or canceled,
generally without charges; the risk that anticipated customer
orders may not materialize; the risk that our suppliers may not be
able to meet our demands on a timely basis; the volatility in the
demand for semiconductors and our products and services; the risk
that identified market opportunities may not grow or developed as
we anticipated; volatile global economic conditions, which could
result in, among other things, sharply lower demand for products
containing semiconductors and for the Company’s products, and
disruption of capital and credit markets; the risk of failure to
successfully manage our operations; the possibility that we may
need to impair the carrying value of goodwill and/or intangibles
established in connection with one or more of our prior
acquisitions; acts of terrorism and violence; risks, such as
changes in trade regulations, currency fluctuations, political
instability and war, which may be associated with a substantial
non-U.S. customer and supplier base and substantial non-U.S.
manufacturing operations; the impact of changes in tax law; the
risk that the Company will not identify suitable acquisition
opportunities or that any acquisitions will not be successful; the
risk that the Company fails to timely remediate the material
weaknesses identified in the Company’s internal controls over
financial reporting or that new material weaknesses or significant
deficiencies emerge; and the factors listed or discussed in Kulicke
and Soffa Industries, Inc. 2018 Annual Report on Form 10-K 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.
KULICKE & SOFFA
INDUSTRIES, INC.
CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS
(In thousands, except per
share and employee data)
(Unaudited)
Three months ended
Twelve months ended
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
Net revenue
$
139,827
$
184,824
$
540,052
$
889,121
Cost of sales
74,389
99,001
285,462
479,680
Gross profit
65,438
85,823
254,590
409,441
Operating expenses:
Selling, general and administrative
25,723
27,854
107,785
113,338
Research and development
28,560
30,740
116,169
119,621
Amortization of intangible assets
1,823
1,899
7,412
7,826
Restructuring
1,639
756
1,614
2,024
Total operating expenses
57,745
61,249
232,980
242,809
Income from operations
7,693
24,574
21,610
166,632
Other income / (expense):
Interest income
3,485
3,551
15,132
11,971
Interest expense
(918
)
(255
)
(2,055
)
(1,054
)
Income before income taxes
10,260
27,870
34,687
177,549
Income tax expense / (benefit)
3,804
(1,750
)
22,910
120,744
Share of results of equity-method
investee, net of tax
52
(15
)
124
129
Net income
$
6,404
$
29,635
$
11,653
$
56,676
Net income per share:
Basic
$
0.10
$
0.44
$
0.18
$
0.82
Diluted
$
0.10
$
0.43
$
0.18
$
0.80
Cash dividends declared per share
$
0.12
$
0.12
$
0.48
$
0.24
Weighted average shares outstanding:
Basic
63,401
67,462
65,286
69,380
Diluted
64,251
68,675
65,948
70,419
Three months ended
Twelve months ended
Supplemental financial data:
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
Depreciation and amortization
$
5,303
$
4,852
$
20,304
$
19,015
Capital expenditures
2,517
3,960
11,829
20,441
Equity-based compensation expense:
Cost of sales
161
131
632
515
Selling, general and administrative
2,632
2,671
10,503
8,548
Research and development
767
659
3,197
2,622
Total equity-based compensation
expense
$
3,560
$
3,461
$
14,332
$
11,685
As of
September 28,
2019
September 29,
2018
Backlog of orders 1
$
104,711
$
141,665
Number of employees
2,614
2,912
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
September 28,
2019
September 29,
2018
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$
364,184
$
320,630
Restricted cash
—
518
Short-term investments
229,000
293,000
Accounts and notes receivable, net of
allowance for doubtful accounts of $597 and $385 respectively
195,830
243,373
Inventories, net
89,308
115,191
Prepaid expenses and other current
assets
15,429
14,561
TOTAL CURRENT ASSETS
893,751
987,273
Property, plant and equipment, net
72,370
76,067
Goodwill
55,691
56,550
Intangible assets, net
42,651
52,871
Deferred income taxes
6,409
9,017
Equity investments
6,250
1,373
Other assets
2,494
2,589
TOTAL ASSETS
$
1,079,616
$
1,185,740
LIABILITIES AND SHAREHOLDERS'
EQUITY
CURRENT LIABILITIES
Short term debt
$
60,904
$
—
Accounts payable
36,711
48,527
Accrued expenses and other current
liabilities
64,533
105,978
Income taxes payable
12,494
19,571
TOTAL CURRENT LIABILITIES
174,642
174,076
Financing obligation
14,207
15,187
Deferred income taxes
32,054
25,591
Income taxes payable
80,290
81,491
Other liabilities
9,360
9,188
TOTAL LIABILITIES
310,553
305,533
SHAREHOLDERS' EQUITY
Common stock, no par value
533,590
519,244
Treasury stock, at cost
(349,212
)
(248,664
)
Retained earnings
594,625
613,529
Accumulated other comprehensive loss
(9,940
)
(3,902
)
TOTAL SHAREHOLDERS' EQUITY
$
769,063
$
880,207
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
1,079,616
$
1,185,740
KULICKE & SOFFA
INDUSTRIES, INC.
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended
Twelve months ended
September 28,
2019
September 29,
2018
September 28,
2019
September 29,
2018
Net cash (used in)/provided by operating
activities
$
(17,214
)
$
29,656
$
65,967
$
123,499
Net cash provided /(used in) by investing
activities, continuing operations
17,094
(39,344
)
47,468
(96,871
)
Net cash (used in) /provided by financing
activities, continuing operations
(32,567
)
(33,330
)
(71,318
)
(99,135
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
859
966
919
715
Changes in cash, cash equivalents and
restricted cash
(31,828
)
(42,052
)
43,036
(71,792
)
Cash, cash equivalents and restricted
cash, beginning of period
396,012
363,200
321,148
392,940
Cash, cash equivalents and restricted
cash, end of period
$
364,184
$
321,148
$
364,184
$
321,148
Short-term investments
229,000
293,000
229,000
293,000
Total cash, cash equivalents, restricted
cash and short-term investments
$
593,184
$
614,148
$
593,184
$
614,148
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
September 28,
2019
September 29,
2018
June 29,
2019
Net revenue
$
139,827
$
184,824
$
127,109
U.S. GAAP income from operations
7,693
24,574
1,827
U.S. GAAP operating margin
5.5
%
13.3
%
1.4
%
Pre-tax non-GAAP items:
Amortization related to intangible assets
acquired through business combination- selling, general and
administrative
$
1,823
$
1,899
$
1,843
Restructuring
1,639
756
587
Non-GAAP income from operations
$
11,155
$
27,229
$
4,257
Non-GAAP operating margin
8.0
%
14.7
%
3.3
%
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
September 28,
2019
September 28,
2019
September 29,
2018
June 29,
2019
Net revenue
$
540,052
$
139,827
$
184,824
$
127,109
U.S. GAAP net income
11,653
6,404
29,635
1,287
U.S. GAAP net margin
2.2
%
4.6
%
16.0
%
1.0
%
Non-GAAP adjustments:
Amortization related to intangible assets
acquired through business combination- selling, general and
administrative
$
7,412
$
1,823
$
1,899
1,843
Restructuring
1,614
1,639
756
587
Income tax expense- Tax Reform
9,911
(300
)
(1,137
)
—
Net income tax (benefit)/expense on
non-GAAP items
(465
)
(250
)
44
(102
)
Total non-GAAP adjustments
18,472
2,912
1,562
2,328
Non-GAAP net income
30,125
9,316
31,197
3,615
Non-GAAP net margin
5.6
%
6.7
%
16.9
%
2.8
%
U.S. GAAP net income per share:
Basic
0.18
0.10
0.44
0.02
Diluted(a)
0.18
0.10
0.43
0.02
Non-GAAP adjustments per share:(b)
Basic
0.28
0.05
0.02
0.04
Diluted
0.28
0.04
0.02
0.04
Non-GAAP net income per share:
Basic
$
0.46
$
0.15
$
0.46
$
0.06
Diluted(c)
$
0.46
$
0.14
$
0.45
$
0.06
Weighted average shares outstanding:
Basic
65,286
63,401
67,462
64,683
Diluted(b)
65,948
64,251
68,675
65,431
(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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191114005743/en/
Kulicke & Soffa Industries, Inc. Joseph Elgindy
Investor Relations & Strategic Initiatives P: +1-215-784-7518
F: +1-215-784-6180
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