Industry Adoption of Advanced Solutions Expands

SINGAPORE, Aug. 7, 2024  /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S," "our," or the "Company"), today announced financial results of its third fiscal quarter ended June 29, 2024. The Company reported third quarter net revenue of $181.7 million, net income of $12.3 million, representing EPS of $0.22 per fully diluted share, and non-GAAP net income of $19.3 million, representing non-GAAP EPS of $0.35 per fully diluted share.

Quarterly Results - U.S. GAAP


 

Fiscal Q3 2024

 

Change vs.

Fiscal Q3 2023

Change vs.

Fiscal Q2 2024

Net Revenue

$181.7 million

down 4.9%

up 5.6%

Gross Margin

46.6 %

down 60 bps

up 3700 bps

Income from Operations

$8.3 million

up 284.4%

up 107.9%

Operating Margin

4.6 %

up 700 bps

up 6570 bps

Net Income

$12.3 million

up 194.7%

up 111.9%

Net Margin

6.8 %

up 460 bps

up 6650 bps

EPS – Diluted

$0.22

up 214.3%

up 112%

 

Quarterly Results - Non-GAAP


 

Fiscal Q3 2024

 

Change vs.

Fiscal Q3 2023

Change vs.

Fiscal Q2 2024

Income from Operations

$15.9 million

down 34.6%

up 131.7%

Operating Margin

8.7 %

down 400 bps

up 3790 bps

Net Income

$19.3 million

down 39.4%

down 136.3%

Net Margin

10.6 %

down 610 bps

up 4150 bps

EPS – Diluted

$0.35

down 36.4%

down 136.8%


A reconciliation between the GAAP and non-GAAP adjusted results is provided in the financial tables included at the end of this press release. See also the "Use of non-GAAP Financial Results" section of this press release.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "While the recovery remains gradual, improving utilization rates combined with continued near-term industry growth provide optimism for coordinated capacity and technology expansion across multiple end-markets. Additionally, we continue to drive industry adoption of our leading Fluxless Thermo-Compression (FTC), Vertical-Fan-Out (VFO), and High-Power-Interconnect (HPI) solutions through industry collaborations, customer development programs and recent market wins."

K&S recently announced several milestones, which highlighted growing industry momentum for its Thermo-Compression (TCB) program, including multiple new commercial business wins, a path to TCB-enabled hybrid-bonding as well as membership in a US-based semiconductor consortium which includes access to the consortium's Union City, CA based R&D center.

Third Quarter Fiscal 2024 Financial Highlights

  • Net revenue of $181.7 million.
  • Gross margin of 46.6%.
  • Net income of $12.3 million or $0.22 per share; non-GAAP net income of $19.3 million or $0.35 per fully diluted share.
  • GAAP cash flow from operations of $26.9 million; Adjusted free cash flow of $24.2 million.
  • Cash, cash equivalents, and short-term investments were $601.9 million as of June 29, 2024.
  • The Company repurchased a total of 0.9 million shares of common stock at a cost of $44.0 million.

Fourth Quarter Fiscal 2024 Outlook

K&S currently expects net revenue in the fourth quarter of fiscal 2024 ending September 28, 2024 to be approximately $180 million +/- $10 million, GAAP diluted EPS to be approximately $0.22 +/- 10%, and non-GAAP diluted EPS to be approximately $0.35 +/- 10%.

A reconciliation between the GAAP and non-GAAP financial outlook is provided in the financial tables included at the end of this press release.

Earnings Conference Webcast

A webcast to discuss these results will be held on August 7, 2024, beginning at 4:30 pm EDT. The live webcast link, supplemental earnings presentation, and archived webcast will be available at investor.kns.com. To access the audio-only portion of the live webcast, parties may call +1-877-407-8037, or internationally, +1-201-689-8037.

An audio-only replay of the webcast will also be available approximately one hour after the completion of the live call by calling +1-877-660-6853, or internationally, +1-201-612-7415 and referencing access code 13743543.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP ("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 fully 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, long-lived asset impairment relating to business cessation or disposal, impairment relating to equity investments, income tax expense/benefit arising from discrete tax items triggered by acquisition, disposal of business (both via a sale or an abandonment), 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 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 non-GAAP financial measure to the most directly comparable GAAP measure discussed in this press release is contained in the financial tables at the end of this press release.

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, Forward-Looking Statements and Certain Risks Related to our Business

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 continued review of the impact of the cancellation of Project W (the "Project") on our business, our ability to repurpose assets deployed or developed for the Project to other parts of our business, our ability to seek potential recourse, claims and remedies arising from the cancellation of the Project, disruptions, breaches or failures in our information technology systems and network infrastructures, the persistent macroeconomic headwinds on our business, actual or potential inflationary pressures, interest rate and risk premium adjustments, falling customer sentiment, or economic recession caused directly or indirectly by geopolitical tensions, our ability to develop, manufacture and gain market acceptance of new products, our ability to operate our business in accordance with our business plan and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed on November 16, 2023, 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.

Contact:

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


Nine months ended


June 29, 2024


July 1, 2023


June 29, 2024


July 1, 2023

Net revenue

$          181,650


$           190,917


$           524,913


$       540,171

Cost of sales

96,920


100,899


343,816


277,355

Gross profit

84,730


90,018


181,097


262,816









Operating expenses:








Selling, general and administrative

37,266


34,550


112,497


108,113

Research and development

37,937


36,578


112,451


107,085

Impairment charges


21,535


44,472


21,535

Amortization of intangible assets

1,250


1,786


3,922


4,743

Acquisition-related costs


57



498

Restructuring



2,940


879

Total operating expenses

76,453


94,506


276,282


242,853

Income / (loss) from operations

8,277


(4,488)


(95,185)


19,963

Other income (expense):








Interest income

8,060


8,847


26,807


23,406

Interest expense

(20)


(50)


(60)


(116)

Income / (loss) before income taxes

16,317


4,309


(68,438)


43,253

Income tax expense

4,053


148


12,685


9,462

Net income / (loss)

$            12,264


$               4,161


$           (81,123)


$         33,791









Net income / (loss) per share:








Basic

$                0.22


$                0.07


$               (1.45)


$             0.60

Diluted

$                0.22


$                0.07


$               (1.45)


$             0.59









Cash dividends declared per share

$                0.20


$                0.19


$                0.60


$             0.57









Weighted average shares outstanding:








Basic

55,280


56,553


56,028


56,763

Diluted

55,724


57,519


56,028


57,684

 


Three months ended


Nine months ended

Supplemental financial data:

June 29, 2024


July 1, 2023


June 29, 2024


July 1, 2023

Depreciation and amortization

$              4,944


$              8,591


$            19,896


$         20,746

Capital expenditures

3,266


10,451


10,645


43,485

Equity-based compensation expense:








Cost of sales

315


272


1,037


903

Selling, general and administrative

4,300


3,800


14,083


12,398

Research and development

1,748


1,331


5,332


4,002

Total equity-based compensation expense

$              6,363


$              5,403


$            20,452


$         17,303

 


As of


June 29, 2024


July 1, 2023

Number of employees

2,790


3,045

 

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)



As of


June 29, 2024


September 30, 2023

ASSETS

CURRENT ASSETS




Cash and cash equivalents

$             366,917


$                 529,402

Short-term investments

235,000


230,000

Accounts and other receivable, net of allowance for doubtful accounts of $49 and $49, respectively

200,320


158,601

Inventories, net

175,551


217,304

Prepaid expenses and other current assets

35,300


53,751

TOTAL CURRENT ASSETS

1,013,088


1,189,058





Property, plant and equipment, net

64,536


110,051

Operating right-of-use assets

35,875


47,148

Goodwill

88,933


88,673

Intangible assets, net

25,744


29,357

Deferred tax assets

16,983


31,551

Equity investments

2,900


716

Other assets

9,156


3,223

TOTAL ASSETS

$          1,257,215


$              1,499,777





LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES




Accounts payable

52,145


49,302

Operating lease liabilities

7,128


6,574

Accrued expenses and other current liabilities

89,979


103,005

Income taxes payable

16,725


22,670

TOTAL CURRENT LIABILITIES

165,977


181,551





Deferred tax liabilities

35,705


37,264

Income taxes payable

35,639


52,793

Operating lease liabilities

32,524


41,839

Other liabilities

13,832


11,769

TOTAL LIABILITIES

283,677


325,216





SHAREHOLDERS' EQUITY




Common stock, no par value

590,915


577,727

Treasury stock, at cost

(838,803)


(737,214)

Retained earnings

1,241,235


1,355,810

Accumulated other comprehensive loss

(19,809)


(21,762)

TOTAL SHAREHOLDERS' EQUITY

$             973,538


$              1,174,561





TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$          1,257,215


$              1,499,777

 

KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)



Three months ended


Nine months ended


June 29, 2024


July 1, 2023


June 29, 2024


July 1, 2023

Net cash provided by / (used in) operating activities

$              26,897


$                8,976


$                 (582)


$              95,912

Net cash provided by / (used in) investing activities

36,594


24,473


(20,518)


(161,724)

Net cash used in financing activities

(55,933)


(19,447)


(141,729)


(92,358)

Effect of exchange rate changes on cash and cash equivalents

(389)


(1,298)


344


4,439

Changes in cash and cash equivalents

7,169


12,704


(162,485)


(153,731)

Cash and cash equivalents, beginning of period

359,748


389,102


529,402


555,537

Cash and cash equivalents, end of period

$            366,917


$            401,806


$            366,917


$            401,806









Short-term investments

235,000


310,000


235,000


310,000

Total cash, cash equivalents and short-term investments

$            601,917


$            711,806


$            601,917


$            711,806

 

Reconciliation of U.S. GAAP
to Non-GAAP Income from Operations and Operating Margin
(In thousands, except percentages)
(Unaudited)




Three months ended



June 29, 2024


July 1, 2023


March 30, 2024

Net revenue


$         181,650


$          190,917


$          172,074

U.S. GAAP income from operations


8,277


(4,488)


(105,155)

U.S. GAAP operating margin


4.6 %


(2.4) %


(61.1) %








Pre-tax non-GAAP items:







Amortization related to intangible assets


1,250


1,786


1,325

Restructuring and severance




2,940

Equity-based compensation


6,363


5,403


6,232

Impairment charges



21,535


44,472

Acquisition-related costs  



57


Non-GAAP income from operations


$           15,890


$            24,293


$           (50,186)

Non-GAAP operating margin


8.7 %


12.7 %


(29.2) %

 

Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and Non-GAAP Net Margin 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



June 29, 2024


July 1, 2023


March 30, 2024

Net revenue


$         181,650


$         190,917


$             172,074

U.S. GAAP net income / (loss)


12,264


4,161


(102,680)

U.S. GAAP net margin


6.8 %


2.2 %


(59.7) %








Non-GAAP adjustments:







Amortization related to intangible assets


1,250


1,786


1,325

Restructuring and severance




2,940

Equity-based compensation


6,363


5,403


6,232

Impairment charges



21,535


44,472

Acquisition-related costs



57


Net income tax benefit on non-GAAP items


(568)


(1,060)


(5,534)

Total non-GAAP adjustments


$             7,045


$           27,721


$               49,435

Non-GAAP net income / (loss)


$           19,309


$           31,882


$             (53,245)

Non-GAAP net margin


10.6 %


16.7 %


(30.9) %








U.S. GAAP net income / (loss) per share:







Basic


0.22


0.07


(1.83)

Diluted(a)


0.22


0.07


(1.83)








Non-GAAP adjustments per share:(b)







Basic


0.13


0.49


0.88

Diluted


0.13


0.48


0.88








Non-GAAP net income / (loss) per share:







Basic


$               0.35


$               0.56


$                 (0.95)

Diluted(c)


$               0.35


$               0.55


$                 (0.95)








Weighted average shares outstanding:







Basic


55,280


56,553


56,154

Diluted


55,724


57,519


56,154

(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, long-lived asset impairment relating to business cessation or disposal, 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



June 29, 2024


July 1, 2023


March 30, 2024

U.S. GAAP net cash provided by / (used in) by operating activities


$              26,897


$                8,976


$           (20,148)

Expenditures for property, plant and equipment


(2,683)


(10,610)


(6,571)

Proceeds from sales of property, plant and equipment



83









Non-GAAP adjusted free cash flow


24,214


(1,551)


(26,719)

 

Reconciliation of U.S. GAAP to Non-GAAP Outlook
(In millions, except per share data)
(Unaudited)




Fourth quarter of fiscal 2024 ending September 28, 2024



GAAP Outlook


Adjustments


Non-GAAP Outlook

Net revenue


$180 million

+/- $10 million



$180 million

+/- $10 million

Operating expenses


$76.5 million

+/- 2%


$7.5 million B,C


$69.0 million

+/- 2%

Diluted EPS(1)


$0.22

+/- 10%


$0.13 A, B, C,D


$0.35

+/- 10%








Non-GAAP Adjustments







A. Equity-based compensation - Cost of sales




0.3

B. Equity-based compensation - Selling, general and administrative and Research and development




6.3

C. Amortization related to intangible assets




1.2

D. Net income tax effect of the above items




(0.6)



(1)

GAAP and non-GAAP diluted EPS based on approximately 54.9 million diluted weighted average shares outstanding.




The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, restructuring activities, strategic investments and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control.

 

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SOURCE Kulicke & Soffa Industries, Inc.