Kulicke & Soffa Reports Fourth Quarter 2023 Results
SINGAPORE, Nov. 15, 2023 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S," "our," or the "Company"), today announced the financial results of its fourth fiscal quarter ended September 30, 2023. The Company reported fourth quarter net revenue of $202.3 million and net income of $23.4 million, representing EPS of $0.41 per fully diluted shares, and non-GAAP net income of $29.4 million, representing non-GAAP EPS of $0.51 per fully diluted share.
Quarterly Results - U.S. GAAP | |||
Fiscal Q4 2023
| Change vs. Fiscal Q4 2022 | Change vs. Fiscal Q3 2023 | |
Net Revenue | $202.3 million | down 29.3% | up 6% |
Gross Margin | 47.4 % | up 110 bps | up 20 bps |
Operating Margin | 9.6 % | down 1400 bps | up 1200 bps |
Net Income | $23.4 million | down 64% | up 461.3% |
Net Margin | 11.5 % | down 1120 bps | up 930 bps |
EPS – Diluted | $0.41 | down 62.7% | up 485.7% |
Quarterly Results - Non-GAAP | |||
Fiscal Q4 2023 | Change vs. Fiscal Q4 2022 | Change vs. Fiscal Q3 2023 | |
Income from Operations | $26.3 million | down 64.3% | up 8.2% |
Operating Margin | 13.0 % | down 1270 bps | up 30 bps |
Net Income | $29.4 million | down 58.1% | down 7.8% |
Net Margin | 14.5 % | down 1000 bps | down 220 bps |
EPS - Diluted | $0.51 | down 57.1% | down 7.3% |
A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See | |||
Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "The General Semiconductor and LED end markets have shown clear improvements in the September quarter. As we execute on a broad range of technology-driven initiatives throughout 2024, we expect industry conditions, and also unique K&S opportunities, to strengthen."
Kulicke & Soffa's broadening portfolio of solutions are becoming increasingly technology driven due to a growing industry need for more capable semiconductor and display solutions.
Fiscal Year 2023 Financial Highlights
- Net revenue of $742.5 million.
- Gross margin of 48.3%.
- Net income of $57.1 million or $0.99 per fully diluted share; non-GAAP net income of $105.0 million or $1.82 per fully diluted share.
- GAAP cash from operations of $173.4 million; Adjusted free cash flow of $129.6 million.
- The Company repurchased a total of 1.5 million shares of common stock at a cost of $68.1 million.
- Cash, cash equivalents, and short-term investments were $759.4 million as of September 30, 2023.
Fourth Quarter Fiscal 2023 Financial Highlights
- Net revenue of $202.3 million.
- Gross margin of 47.4%.
- Net income of $23.4 million or $0.41 per fully diluted share; non-GAAP net income of $29.4 million or $0.51 per fully diluted share.
- GAAP cash from operations of $77.5 million; Adjusted free cash flow of $68.5 million.
- The Company repurchased a total of 0.2 million shares of common stock at a cost of $9.2 million.
First Quarter Fiscal 2024 Outlook
While broader cyclical improvements have benefited the utilization rates and demand for Ball Bonding systems, near-term headwinds persist in memory and automotive markets. The Company currently expects net revenue in the first fiscal quarter of 2024, ending December 30, 2023, to be approximately $170.0 million, +/- $10 million, GAAP diluted EPS to be approximately $0.15 +/- 10%, and non-GAAP diluted EPS to be approximately $0.25, +/- 10%.
Management anticipates demand to sequentially improve in the second fiscal quarter 2024 followed by broader demand improvements in the second fiscal half due to both strengthening industry conditions and ongoing execution of several K&S-specific opportunities.
Earnings Conference Call Details
A conference call to discuss these results will be held tomorrow, November 16, 2023, 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 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 November 23, 2023 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13734623. 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 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 cost, 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 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 Q1, FY 2024 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 Q1, FY 2024 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 persistent 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 amended on August 8, 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.
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 | Twelve months ended | ||||||||||
September 30, | October 1, | September 30, | October 1, | ||||||||
Net revenue | $ 202,320 | $ 286,313 | $ 742,491 | $ 1,503,620 | |||||||
Cost of sales | 106,481 | 153,626 | 383,836 | 755,300 | |||||||
Gross profit | 95,839 | 132,687 | 358,655 | 748,320 | |||||||
Operating expenses: | |||||||||||
Selling, general and administrative | 37,380 | 31,275 | 145,493 | 134,869 | |||||||
Research and development | 37,616 | 32,356 | 144,701 | 136,852 | |||||||
Impairment charges | — | — | 21,535 | 1,346 | |||||||
Acquisition-related cost | 13 | 118 | 511 | 118 | |||||||
Amortization of intangible assets | 1,356 | 1,374 | 6,099 | 4,917 | |||||||
Restructuring | — | 20 | 879 | 146 | |||||||
Total operating expenses | 76,365 | 65,143 | 319,218 | 278,248 | |||||||
Income from operations | 19,474 | 67,544 | 39,437 | 470,072 | |||||||
Other income / (expense): | |||||||||||
Interest income | 9,500 | 4,025 | 32,906 | 7,124 | |||||||
Interest expense | (26) | (35) | (142) | (208) | |||||||
Income before income taxes | 28,948 | 71,534 | 72,201 | 476,988 | |||||||
Income tax expense | 5,591 | 6,630 | 15,053 | 43,443 | |||||||
Net income | $ 23,357 | $ 64,904 | $ 57,148 | $ 433,545 | |||||||
Net income per share: | |||||||||||
Basic | $ 0.41 | $ 1.12 | $ 1.01 | $ 7.21 | |||||||
Diluted | $ 0.41 | $ 1.10 | $ 0.99 | $ 7.09 | |||||||
Cash dividends declared per share | $ 0.19 | $ 0.17 | $ 0.76 | $ 0.68 | |||||||
Weighted average shares outstanding: | |||||||||||
Basic | 56,442 | 57,804 | 56,682 | 60,164 | |||||||
Diluted | 57,408 | 58,816 | 57,548 | 61,182 | |||||||
Three months ended | Twelve months ended | ||||||||||
Supplemental financial data: | September 30, | October 1, | September 30, | October 1, | |||||||
Depreciation and amortization | $ 8,111 | $ 5,520 | $ 28,857 | $ 21,293 | |||||||
Capital expenditures | 4,217 | 21,020 | 47,702 | 32,233 | |||||||
Equity-based compensation expense: | |||||||||||
Cost of sales | 289 | 233 | 1,192 | 960 | |||||||
Selling, general and administrative | 3,841 | 3,426 | 16,239 | 13,911 | |||||||
Research and development | 1,311 | 854 | 5,313 | 4,115 | |||||||
Total equity-based compensation expense | $ 5,441 | $ 4,513 | $ 22,744 | $ 18,986 | |||||||
As of | |||||||||||
September 30, 2023 | October 1, 2022 | ||||||||||
Number of employees | 3,025 | 3,167 | |||||||||
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited) | |||
As of | |||
September 30, 2023 | October 1, 2022 | ||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $ 529,402 | $ 555,537 | |
Short-term investments | 230,000 | 220,000 | |
Accounts and notes receivable, net of allowance for doubtful accounts of $49 | 158,601 | 309,323 | |
Inventories, net | 217,304 | 184,986 | |
Prepaid expenses and other current assets | 53,751 | 62,200 | |
TOTAL CURRENT ASSETS | 1,189,058 | 1,332,046 | |
Property, plant and equipment, net | 110,051 | 80,908 | |
Operating right-of-use assets | 47,148 | 41,767 | |
Goodwill | 88,673 | 68,096 | |
Intangible assets, net | 29,357 | 31,939 | |
Deferred tax assets | 31,551 | 25,572 | |
Equity investments | 716 | 5,397 | |
Other assets | 3,223 | 2,874 | |
TOTAL ASSETS | $ 1,499,777 | $ 1,588,599 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES | |||
Accounts payable | 49,302 | 67,311 | |
Operating lease liabilities | 6,574 | 6,766 | |
Accrued expenses and other current liabilities | 103,005 | 134,541 | |
Income taxes payable | 22,670 | 40,063 | |
TOTAL CURRENT LIABILITIES | 181,551 | 248,681 | |
Deferred tax liabilities | 37,264 | 34,037 | |
Income taxes payable | 52,793 | 64,634 | |
Operating lease liabilities | 41,839 | 34,927 | |
Other liabilities | 11,769 | 11,670 | |
TOTAL LIABILITIES | $ 325,216 | $ 393,949 | |
SHAREHOLDERS' EQUITY | |||
Common stock, no par value | 577,727 | 561,684 | |
Treasury stock, at cost | (737,214) | (675,800) | |
Retained earnings | 1,355,810 | 1,341,666 | |
Accumulated other comprehensive loss | (21,762) | (32,900) | |
TOTAL SHAREHOLDERS' EQUITY | $ 1,174,561 | $ 1,194,650 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,499,777 | $ 1,588,599 | |
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
Three months ended | Twelve months ended | ||||||
September 30, | October 1, | September 30, | October 1, | ||||
Net cash provided by operating activities | $ 77,492 | $ 116,563 | $ 173,404 | $ 390,188 | |||
Net cash provided by / (used in) investing activities, | 70,386 | 67,457 | (91,338) | 133,799 | |||
Net cash used in financing activities, continuing | (19,518) | (70,286) | (111,876) | (321,191) | |||
Effect of exchange rate changes on cash and cash | (764) | (3,978) | 3,675 | (10,047) | |||
Changes in cash and cash equivalents | 127,596 | 109,756 | (26,135) | 192,749 | |||
Cash and cash equivalents, beginning of period | 401,806 | 445,781 | 555,537 | 362,788 | |||
Cash and cash equivalents, end of period | $ 529,402 | $ 555,537 | $ 529,402 | $ 555,537 | |||
Short-term investments | 230,000 | 220,000 | 230,000 | 220,000 | |||
Total cash, cash equivalents, and short-term | $ 759,402 | $ 775,537 | $ 759,402 | $ 775,537 | |||
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 30, | October 1, | July 1, | ||||
Net revenue | $ 202,320 | $ 286,313 | $ 190,917 | |||
U.S. GAAP income from operations | 19,474 | 67,544 | (4,488) | |||
U.S. GAAP operating margin | 9.6 % | 23.6 % | (2.4) % | |||
Pre-tax non-GAAP items: | ||||||
Amortization related to intangible assets | $ 1,356 | $ 1,374 | 1,786 | |||
Acquisition-related costs | 13 | 118 | 57 | |||
Equity-based compensation | 5,441 | 4,513 | 5,403 | |||
Restructuring | — | 20 | — | |||
Impairment charges | — | — | 21,535 | |||
Non-GAAP income from operations | $ 26,284 | $ 73,569 | $ 24,293 | |||
Non-GAAP operating margin | 13.0 % | 25.7 % | 12.7 % | |||
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 | Three months ended | ||||||
September 30, | September 30, | October 1, | July 1, | ||||
Net revenue | $ 742,491 | $ 202,320 | $ 286,313 | $ 190,917 | |||
U.S. GAAP net income | 57,148 | 23,357 | 64,904 | 4,161 | |||
U.S. GAAP net margin | 7.7 % | 11.5 % | 22.7 % | 2.2 % | |||
Non-GAAP adjustments: | |||||||
Amortization related to intangible assets | $ 6,099 | $ 1,356 | $ 1,374 | 1,786 | |||
Restructuring | 879 | — | 20 | — | |||
Acquisition-related costs | 511 | 13 | 118 | 57 | |||
Equity-based compensation | 22,744 | 5,441 | 4,513 | 5,403 | |||
Impairment charges | 21,535 | — | — | 21,535 | |||
Net income tax benefit on non-GAAP items | (3,928) | (758) | (689) | (1,060) | |||
Total non-GAAP adjustments | 47,840 | 6,052 | 5,336 | 27,721 | |||
Non-GAAP net income | 104,988 | 29,409 | 70,240 | 31,882 | |||
Non-GAAP net margin | 14.1 % | 14.5 % | 24.5 % | 16.7 % | |||
U.S. GAAP net income per share: | |||||||
Basic | 1.01 | 0.41 | 1.12 | 0.07 | |||
Diluted(a) | 0.99 | 0.41 | 1.10 | 0.07 | |||
Non-GAAP adjustments per share:(b) | |||||||
Basic | 0.84 | 0.11 | 0.10 | 0.49 | |||
Diluted | 0.83 | 0.10 | 0.09 | 0.48 | |||
Non-GAAP net income per share: | |||||||
Basic | $ 1.85 | $ 0.52 | $ 1.22 | $ 0.56 | |||
Diluted(c) | $ 1.82 | $ 0.51 | $ 1.19 | $ 0.55 | |||
Weighted average shares outstanding: | |||||||
Basic | 56,682 | 56,442 | 57,804 | 56,553 | |||
Diluted | 57,548 | 57,408 | 58,816 | 57,519 | |||
(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 includes amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, acquisition and integration cost, equity-based compensation expenses, impairment relating to assets acquired through business combinations, impairment relating to equity investments, 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) | |||||||
Twelve | Three months ended | ||||||
September 30, | September 30, | October 1, | July 1, | ||||
U.S. GAAP net cash provided by operating activities | $ 173,404 | $ 77,492 | $ 116,563 | $ 8,976 | |||
Expenditures for property, plant and equipment | (44,406) | (9,281) | (12,605) | (10,610) | |||
Proceeds from sales of property, plant and equipment | 591 | 273 | 62 | 83 | |||
Non-GAAP adjusted free cash flow | 129,589 | 68,484 | 104,020 | (1,551) | |||
SOURCE Kulicke & Soffa Industries, Inc.
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