SINGAPORE, Aug. 4, 2021 /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 3, 2021. The Company reported third quarter net revenue of $424.3 million, net income of $113.8 million, representing EPS of $1.79 per fully diluted share, and non-GAAP net income of $118.8 million, representing non-GAAP EPS of $1.87 per fully diluted share.

Increased packaging complexity of high-volume general semiconductors is rapidly increasing demand for Kulicke & Soffa's leading semiconductor assembly equipment (PRNewsfoto/Kulicke & Soffa Industries, Inc.)

Quarterly Results - U.S. GAAP


Fiscal Q3 2021

Change vs.

Fiscal Q3 2020

Change vs.

Fiscal Q2 2021

Net Revenue

$424.3 million

up 182%

up 24.7%

Gross Profit

$195.7 million

up 182%

up 31.8%

Gross Margin

46.1%

up 0 bps

up 240 bps

Income from Operations

$120.5 million

up 995.5%

up 45%

Operating Margin

28.4%

up 2110 bps

up 400 bps

Net Income

$113.8 million

up 916.1%

up 59.6%

Net Margin

26.8%

up 1940 bps

up 580 bps

EPS – Diluted

$1.79

up 894.4%

up 58.4%



Quarterly Results - Non-GAAP


Fiscal Q3 2021

Change vs.

Fiscal Q3 2020

Change vs.

Fiscal Q2 2021

Income from Operations

$125.9 million

up 663%

up 40.2%

Operating Margin

29.7%

up 1870 bps

up 330 bps

Net Income

$118.8 million

up 628.8%

up 49.6%

Net Margin

28.0%

up 1720 bps

up 460 bps

EPS – Diluted

$1.87

up 619.2%

up 48.4%


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, "Fast-growing end-applications such as 5G, artificial intelligence and connected devices, combined with a technology-driven increase of capital intensity across our served markets, have enabled a new, higher level of profitability."

Third Quarter Fiscal 2021 Financial Highlights

  • Net revenue of $424.3 million.
  • Gross margin of 46.1%.
  • Net income of $113.8 million or $1.79 per share; non-GAAP net income of $118.8 million or $1.87 per share.
  • Cash, cash equivalents, and short-term investments were $635.0 million as of July 3, 2021.

Fourth Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the fourth fiscal quarter of 2021 ending October 2, 2021 to be approximately $465 million +/- $20 million, and expects non-GAAP EPS to be approximately $2.00 +/- 10%.

Fusen Chen commented, "Over the coming quarters, we expect capacity needs across our broad customer base to continue expanding aggressively. Additionally, recent adoption of our new systems are directly supporting several long-term and distinct technology transitions within the semiconductor, automotive, and advanced display markets further enhancing our long-term growth prospects."

Earnings Conference Call Details

A conference call to discuss these results will be held on August 5, 2021, 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 12th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13721220. 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 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 3, 2021


June 27, 2020


July 3, 2021


June 27, 2020

Net revenue

$

424,318



$

150,450



$

1,032,338



$

445,488


Cost of sales

228,623



81,027



566,667



236,398


Gross profit

195,695



69,423



465,671



209,090










Operating expenses:








Selling, general and administrative

37,763



26,091



99,038



79,846


Research and development

36,137



30,547



102,549



87,906


Amortization of intangible assets

1,340



1,814



4,652



5,451


Acquisition-related costs





1,730




Restructuring





91



426


Total operating expenses

75,240



58,452



208,060



173,629


Income from operations

120,455



10,971



257,611



35,461


Other income (expense):








Interest income

564



1,374



1,801



6,888


Interest expense

(41)



(446)



(146)



(1,690)


Income before income taxes

120,978



11,899



259,266



40,659


Income tax expense

7,212



690



25,722



3,985


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



58



94



158


Net income

$

113,766



$

11,151



$

233,450



$

36,516










Net income per share:








Basic

$

1.83



$

0.18



$

3.76



$

0.58


Diluted

$

1.79



$

0.18



$

3.68



$

0.57










Cash dividends declared per share

$

0.14



$

0.12



$

0.42



$

0.36










Weighted average shares outstanding:








Basic

62,023



62,313



62,023



63,200


Diluted

63,485



62,833



63,364



63,755




Three months ended


Nine months ended

Supplemental financial data:

July 3, 2021


June 27, 2020


July 3, 2021


June 27, 2020

Depreciation and amortization

$

4,805



$

5,069



$

14,552



$

14,597


Capital expenditures

7,956



3,451



16,763



8,550


Equity-based compensation expense:








Cost of sales

211



182



626



597


Selling, general and administrative

3,008



2,676



8,111



8,106


Research and development

921



867



2,767



2,353


Total equity-based compensation expense

$

4,140



$

3,725



$

11,504



$

11,056












As of










July 3, 2021


June 27, 2020

Backlog of orders 1









$

852,705



$

128,882


Number of employees









3,583



2,756




1.

Represents customer purchase commitments. While the Company believes these orders are firm, they are generally cancellable by customers without penalty.

 

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)



As of


July 3, 2021


October 3, 2020

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$

387,999



$

188,127


Short-term investments

247,000



342,000


Accounts and other receivable, net of allowance for doubtful accounts of $865
and $968, respectively

369,346



198,640


Inventories, net

153,325



111,809


Prepaid expenses and other current assets

21,923



19,620


TOTAL CURRENT ASSETS

1,179,593



860,196






Property, plant and equipment, net

66,232



59,147


Operating right-of-use assets

19,940



22,688


Goodwill

73,683



56,695


Intangible assets, net

45,031



37,972


Deferred tax assets

16,640



8,147


Equity investments

6,391



7,535


Other assets

2,351



2,186


TOTAL ASSETS

$

1,409,861



$

1,054,566






LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES




Accounts payable

144,269



57,688


Operating lease liabilities

6,231



5,903


Accrued expenses and other current liabilities

134,789



76,762


Income taxes payable

22,971



17,540


TOTAL CURRENT LIABILITIES

308,260



157,893






Deferred income taxes

32,949



33,005


Income taxes payable

66,859



74,957


Operating lease liabilities

15,227



18,325


Other liabilities

13,224



12,392


TOTAL LIABILITIES

436,519



296,572






SHAREHOLDERS' EQUITY




Common stock, no par value

546,175



539,213


Treasury stock, at cost

(396,688)



(394,817)


Retained earnings

823,515



616,119


Accumulated other comprehensive income/ (loss)

340



(2,521)


TOTAL SHAREHOLDERS' EQUITY

$

973,342



$

757,994






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

1,409,861



$

1,054,566


 

 

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended


Nine months ended


July 3, 2021


June 27, 2020


July 3, 2021


June 27, 2020

Net cash provided by operating activities

$

90,936



$

23,598



$

176,656



$

62,681


Net cash provided by investing activities

52,222



50,842



54,221



25,863


Net cash used in financing activities

(12,865)



(144,876)



(31,982)



(130,618)


Effect of exchange rate changes on cash and cash
equivalents

373



(96)



977



(335)


Changes in cash and cash equivalents

130,666



(70,532)



199,872



(42,409)


Cash and cash equivalents, beginning of period

257,333



392,307



188,127



364,184


Cash and cash equivalents, end of period

$

387,999



$

321,775



$

387,999



$

321,775










Short-term investments

247,000



194,000



247,000



194,000


Total cash, cash equivalents and short-term
investments

$

634,999



$

515,775



$

634,999



$

515,775


 

 

Reconciliation of U.S. GAAP

to Non-GAAP Income from Operations and Operating Margin

(In thousands, except percentages)

(Unaudited)




Three months ended



July 3, 2021


June 27, 2020


April 3, 2021

Net revenue


$

424,318



$

150,450



$

340,163


U.S. GAAP income from operations


120,455



10,971



83,114


U.S. GAAP operating margin


28.4

%


7.3

%


24.4

%








Pre-tax non-GAAP items:







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


1,340



1,814



1,355


Equity-based compensation (a)


4,140



3,725



3,963


Acquisition-related costs  






1,379


Non-GAAP income from operations


$

125,935



$

16,510



$

89,811


Non-GAAP operating margin


29.7

%


11.0

%


26.4

%



(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



July 3, 2021


June 27, 2020


April 3, 2021

Net revenue


$

424,318



$

150,450



$

340,163


U.S. GAAP net income


113,766



11,151



71,320


U.S. GAAP net margin


26.8

%


7.4

%


21.0

%








Non-GAAP adjustments:







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


1,340



1,814



1,355


Equity-based compensation


4,140



3,725



3,963


Acquisition-related costs






1,379


Income tax effects on non-GAAP items


(460)



(415)



1,429


Total non-GAAP adjustments


$

5,020



$

5,124



$

8,126


Non-GAAP net income


$

118,786



$

16,275



$

79,446


Non-GAAP net margin


28.0

%


10.8

%


23.4

%








U.S. GAAP net income per share:







Basic


1.83



0.18



1.15


Diluted(a)


1.79



0.18



1.13









Non-GAAP adjustments per share:(b)







Basic


0.08



0.08



0.13


Diluted


0.08



0.08



0.13









Non-GAAP net income per share:







Basic


$

1.91



$

0.26



$

1.28


Diluted(c)


$

1.87



$

0.26



$

1.26




(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 and acquisition-related costs as well as 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.

 

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