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Improved Fiscal Second Half Demand Anticipated
SINGAPORE, May 3, 2023 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S" or the "Company"), today announced financial results of its second fiscal quarter ended April 1, 2023. The Company reported second quarter net revenue of $173.0 million, net income of $15.0 million, representing EPS of $0.26 per fully diluted share, and non-GAAP net income of $21.9 million, representing non-GAAP EPS of $0.38 per fully diluted share.
Quarterly Results - U.S. GAAP | |||
Fiscal Q2 2023 | Change vs. Fiscal Q2 2022 | Change vs. Fiscal Q1 2023 | |
Net Revenue | $173.0 million | down 55% | down 1.8% |
Gross Profit | $84.1 million | down 58.3% | down 5.2% |
Gross Margin | 48.6 % | down 390 bps | down 170 bps |
Income from Operations | $12.6 million | down 90.3% | up 6.8% |
Operating Margin | 7.3 % | down 2640 bps | up 60 bps |
Net Income | $15.0 million | down 87.1% | up 2.7% |
Net Margin | 8.7 % | down 2150 bps | up 40 bps |
EPS – Diluted | $0.26 | down 86% | up 4% |
Quarterly Results - Non-GAAP | |||
Fiscal Q2 2023 | Change vs. Fiscal Q2 2022 | Change vs. Fiscal Q1 2023 | |
Income from Operations | $20.4 million | down 84.9% | up 1% |
Operating Margin | 11.8 % | down 2340 bps | up 30 bps |
Net Income | $21.9 million | down 82% | up 0.5% |
Net Margin | 12.7 % | down 1890 bps | up 30 bps |
EPS – Diluted | $0.38 | down 80.5% | up 2.7% |
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, "We remain very focused on supporting technology transitions within the advanced display, advanced packaging and automotive markets through several high-profile customer engagements and broadening adoption of our emerging solutions. Additionally, we have experienced an uptick in customer interest and quote activity related to our high-volume markets."
Second Quarter Fiscal 2023 Financial Highlights
Third Quarter Fiscal 2023 Outlook
The Company currently expects net revenue in the third fiscal quarter of 2023 ending July 1, 2023 to be approximately $190 +/- $20 million, GAAP EPS to be approximately $0.23 +/- 10%, and non-GAAP EPS to be approximately $0.32 +/- 10%.
Fusen Chen commented, "We continue to expand market access and align on new, high-growth opportunities, while diversifying our end-market exposure. Past market expansion efforts have improved our trough-level performance and have better enhanced our long-term ability to create and deliver value to shareholders. While the rate of near-term growth will be governed by industry inventory levels and macro dynamics, we continue to anticipate gradual demand improvement across our portfolio over the coming quarters."
During its second fiscal quarter the Company completed its acquisition of Advanced Jet Automation Co., Ltd., including the material business and assets formerly owned by its affiliate, Samurai Spirit Inc., a leading developer and manufacturer of high-precision micro-dispensing equipment and solutions in Taiwan.
Earnings Conference Call Details
A conference call to discuss these results will be held on May 4, 2023, 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 May 11, 2023 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13734621. 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, net income per diluted share and adjusted free cash flow. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, equity-based compensation, acquisition and integration costs, impairment relating to assets acquired through business combinations, impairment relating to equity investments, income tax expense arising from discrete tax items triggered by acquisition, restructuring and significant changes in tax laws, gain/loss on disposal of business, as well as tax benefits or expenses 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.
Management has not reconciled its outlook for non-GAAP Diluted EPS to Diluted EPS for Q3F23 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 Q3F23 is not available without unreasonable effort.
About Kulicke & Soffa
Founded in 1951, Kulicke & Soffa specializes in developing cutting-edge semiconductor and electronics assembly solutions enabling a smart and more sustainable future. Our ever-growing range of products and services supports growth and facilitates technology transitions across large-scale markets, such as advanced display, automotive, communications, compute, consumer, data storage, energy storage and industrial.
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, including the importance and competitiveness of our advanced display products and other emerging technology transitions, 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 and macroeconomic headwinds on our business, our ability to develop, manufacture and gain market acceptance of new products, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, filed on November 17, 2022, 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 and Soffa Industries, Inc.
Joseph Elgindy
Finance
P: +1-215-784-7518
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share and employee data) (Unaudited) | |||||||
Three months ended | Six months ended | ||||||
April 1, 2023 | April 2, 2022 | April 1, 2023 | April 2, 2022 | ||||
Net revenue | $ 173,021 | $ 384,282 | $ 349,254 | $ 845,170 | |||
Cost of sales | 88,929 | 182,572 | 176,456 | 420,222 | |||
Gross profit | 84,092 | 201,710 | 172,798 | 424,948 | |||
Operating expenses: | |||||||
Selling, general and administrative | 33,063 | 33,937 | 73,563 | 71,487 | |||
Research and development | 35,999 | 37,281 | 70,507 | 70,450 | |||
Amortization of intangible assets | 1,563 | 1,151 | 2,957 | 2,434 | |||
Acquisition-related costs | 334 | — | 441 | — | |||
Restructuring | 504 | — | 879 | 126 | |||
Total operating expenses | 71,463 | 72,369 | 148,347 | 144,497 | |||
Income from operations | 12,629 | 129,341 | 24,451 | 280,451 | |||
Other income (expense): | |||||||
Interest income | 8,000 | 470 | 14,559 | 941 | |||
Interest expense | (32) | (97) | (66) | (137) | |||
Income before income taxes | 20,597 | 129,714 | 38,944 | 281,255 | |||
Income tax expense | 5,556 | 13,713 | 9,314 | 31,648 | |||
Net income | $ 15,041 | $ 116,001 | $ 29,630 | $ 249,607 | |||
Net income per share: | |||||||
Basic | $ 0.27 | $ 1.89 | $ 0.52 | $ 4.03 | |||
Diluted | $ 0.26 | $ 1.86 | $ 0.51 | $ 3.97 | |||
Cash dividends declared per share | $ 0.19 | $ 0.17 | $ 0.38 | $ 0.34 | |||
Weighted average shares outstanding: | |||||||
Basic | 56,684 | 61,482 | 56,868 | 61,934 | |||
Diluted | 57,577 | 62,435 | 57,739 | 62,907 | |||
Three months ended | Six months ended | ||||||
Supplemental financial data: | April 1, 2023 | April 2, 2022 | April 1, 2023 | April 2, 2022 | |||
Depreciation and amortization | $ 6,542 | $ 5,224 | $ 12,155 | $ 10,563 | |||
Capital expenditures | 17,383 | 3,384 | 33,034 | 6,260 | |||
Equity-based compensation expense: | |||||||
Cost of sales | 323 | 308 | 631 | 534 | |||
Selling, general and administrative | 3,731 | 3,296 | 8,598 | 7,252 | |||
Research and development | 1,325 | 1,092 | 2,671 | 2,222 | |||
Total equity-based compensation expense | $ 5,379 | $ 4,696 | $ 11,900 | $ 10,008 |
As of | |||
April 1, 2023 | April 2, 2022 | ||
Number of employees | 3,089 | 3,445 |
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited) | |||
As of | |||
April 1, 2023 | October 1, 2022 | ||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $ 389,102 | $ 555,537 | |
Short-term investments | 345,000 | 220,000 | |
Accounts and other receivable, net of allowance for doubtful accounts of $0 and | 169,140 | 309,323 | |
Inventories, net | 224,159 | 184,986 | |
Prepaid expenses and other current assets | 61,472 | 62,200 | |
TOTAL CURRENT ASSETS | 1,188,873 | 1,332,046 | |
Property, plant and equipment, net | 110,680 | 80,908 | |
Operating right-of-use assets | 44,908 | 41,767 | |
Goodwill | 98,893 | 68,096 | |
Intangible assets, net | 39,892 | 31,939 | |
Deferred tax assets | 32,157 | 25,572 | |
Equity investments | 5,433 | 5,397 | |
Other assets | 3,206 | 2,874 | |
TOTAL ASSETS | $ 1,524,042 | $ 1,588,599 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES | |||
Accounts payable | 54,851 | 67,311 | |
Operating lease liabilities | 7,271 | 6,766 | |
Accrued expenses and other current liabilities | 112,301 | 134,541 | |
Income taxes payable | 21,328 | 40,063 | |
TOTAL CURRENT LIABILITIES | 195,751 | 248,681 | |
Deferred tax liabilities | 36,180 | 34,037 | |
Income taxes payable | 52,537 | 64,634 | |
Operating lease liabilities | 39,557 | 34,927 | |
Other liabilities | 16,320 | 11,670 | |
TOTAL LIABILITIES | 340,345 | 393,949 | |
SHAREHOLDERS' EQUITY | |||
Common stock, no par value | 567,031 | 561,684 | |
Treasury stock, at cost | (719,619) | (675,800) | |
Retained earnings | 1,349,736 | 1,341,666 | |
Accumulated other comprehensive loss | (13,451) | (32,900) | |
TOTAL SHAREHOLDERS' EQUITY | $ 1,183,697 | $ 1,194,650 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,524,042 | $ 1,588,599 |
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
Three months ended | Six months ended | ||||||
April 1, 2023 | April 2, 2022 | April 1, 2023 | April 2, 2022 | ||||
Net cash provided by operating activities | $ 1,820 | $ 73,135 | $ 86,936 | $ 169,009 | |||
Net cash (used in) / provided by investing activities | (147,283) | 134,172 | (186,197) | 141,461 | |||
Net cash used in financing activities | (16,681) | (186,987) | (72,911) | (211,064) | |||
Effect of exchange rate changes on cash and cash equivalents | 633 | (1,357) | 5,737 | (1,741) | |||
Changes in cash and cash equivalents | (161,511) | 18,963 | (166,435) | 97,665 | |||
Cash and cash equivalents, beginning of period | 550,613 | 441,490 | 555,537 | 362,788 | |||
Cash and cash equivalents, end of period | $ 389,102 | $ 460,453 | $ 389,102 | $ 460,453 | |||
Short-term investments | 345,000 | 230,000 | 345,000 | 230,000 | |||
Total cash, cash equivalents and short-term investments | $ 734,102 | $ 690,453 | $ 734,102 | $ 690,453 |
Reconciliation of U.S. GAAP to Non-GAAP Income from Operations and Operating Margin (In thousands, except percentages) (Unaudited) | ||||||
Three months ended | ||||||
April 1, 2023 | April 2, 2022 | December 31, 2022 | ||||
Net revenue | $ 173,021 | $ 384,282 | $ 176,233 | |||
U.S. GAAP income from operations | 12,629 | 129,341 | 11,822 | |||
U.S. GAAP operating margin | 7.3 % | 33.7 % | 6.7 % | |||
Pre-tax non-GAAP items: | ||||||
Amortization related to intangible assets acquired through | 1,563 | 1,151 | 1,394 | |||
Restructuring | 504 | — | 375 | |||
Equity-based compensation | 5,379 | 4,696 | 6,521 | |||
Acquisition-related costs | 334 | — | 107 | |||
Non-GAAP income from operations | $ 20,409 | $ 135,188 | $ 20,219 | |||
Non-GAAP operating margin | 11.8 % | 35.2 % | 11.5 % |
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 percentages and per share data) (Unaudited) | ||||||
Three months ended | ||||||
April 1, 2023 | April 2, 2022 | December 31, 2022 | ||||
Net revenue | $ 173,021 | $ 384,282 | $ 176,233 | |||
U.S. GAAP net income | 15,041 | 116,001 | 14,589 | |||
U.S. GAAP net margin | 8.7 % | 30.2 % | 8.3 % | |||
Non-GAAP adjustments: | ||||||
Amortization related to intangible assets acquired through | 1,563 | 1,151 | 1,394 | |||
Restructuring | 504 | — | 375 | |||
Equity-based compensation | 5,379 | 4,696 | 6,521 | |||
Acquisition-related costs | 334 | — | 107 | |||
Net income tax benefit on non-GAAP items | (892) | (385) | (1,218) | |||
Total non-GAAP adjustments | $ 6,888 | $ 5,462 | $ 7,179 | |||
Non-GAAP net income | $ 21,929 | $ 121,463 | $ 21,768 | |||
Non-GAAP net margin | 12.7 % | 31.6 % | 12.4 % | |||
U.S. GAAP net income per share: | ||||||
Basic | 0.27 | 1.89 | 0.26 | |||
Diluted(a) | 0.26 | 1.86 | 0.25 | |||
Non-GAAP adjustments per share:(b) | ||||||
Basic | 0.12 | 0.09 | 0.13 | |||
Diluted | 0.12 | 0.09 | 0.12 | |||
Non-GAAP net income per share: | ||||||
Basic | $ 0.39 | $ 1.98 | $ 0.39 | |||
Diluted(c) | $ 0.38 | $ 1.95 | $ 0.37 | |||
Weighted average shares outstanding: | ||||||
Basic | 56,684 | 61,482 | 57,051 | |||
Diluted | 57,577 | 62,435 | 57,729 |
(a) | GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock, 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, costs associated with restructuring and severance, acquisition and integration costs, equity-based compensation expenses, and 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. |
Reconciliation of U.S. GAAP Cash provided by Operating Activities to Non-GAAP Adjusted Free Cash Flow (In thousands, except percentages) (unaudited) | ||||||
Three months ended | ||||||
April 1, | April 2, | December 31, | ||||
U.S. GAAP net cash provided by operating activities | $ 86,936 | $ 73,135 | $ 85,116 | |||
Expenditures for property, plant and equipment | (24,515) | (5,658) | (13,878) | |||
Proceeds from sales of property, plant and equipment | 235 | 119 | — | |||
Non-GAAP adjusted free cash flow | 62,656 | 67,596 | 71,238 |
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SOURCE Kulicke & Soffa Industries, Inc.