Kulicke & Soffa Reports Fourth Quarter 2024 Results
SINGAPORE, Nov. 13, 2024 /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 28, 2024. The Company reported fourth quarter net revenue of $181.3 million, net income of $12.1 million, representing EPS of $0.22 per fully diluted shares, and non-GAAP net income of $18.5 million, representing non-GAAP EPS of $0.34 per fully diluted share.
Quarterly Results - U.S. GAAP | |||
|
Fiscal Q4 2024 | Change vs. Fiscal Q4 2023 | Change vs. Fiscal Q3 2024 | |
Net Revenue | $181.3 million | down 10.4% | down 0.2% |
Gross Margin | 48.3 % | up 90 bps | up 170 bps |
Income from Operations | $2.7 million | down 86.2% | down 67.5% |
Operating Margin | 1.5 % | down 810 bps | down 310 bps |
Net Income | $12.1 million | down 48.1% | down 1.2% |
Net Margin | 6.7 % | down 480 bps | down 10 bps |
EPS – Diluted | $0.22 | down 46.3% | up 0% |
Quarterly Results - Non-GAAP | |||
|
Fiscal Q4 2024 | Change vs. Fiscal Q4 2023 | Change vs. Fiscal Q3 2024 | |
Income from Operations | $12.7 million | down 51.7% | down 20.2% |
Operating Margin | 7.0 % | down 600 bps | down 170 bps |
Net Income | $18.5 million | down 37% | down 4.1% |
Net Margin | 10.2 % | down 430 bps | down 40 bps |
EPS - Diluted | $0.34 | down 33.3% | down 2.9% |
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. |
Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "We continue to drive market adoption of our advanced packaging and assembly solutions including vertical wire, high-power interconnect (HPI), advanced dispense and fluxless thermo-compression (FTC). Demand for these solutions is anticipated to accelerate along with coordinated General Semiconductor and Automotive market recovery through fiscal year 2025."
The transition to emerging chiplet and heterogeneous applications — which are enabling new levels of performance and transistor density — position Kulicke & Soffa for additional share gains within leading-edge logic. Beyond this emerging FTC solution which is supporting leading-edge assembly transitions; high-volume memory, automotive and LED applications are also requiring new assembly solutions which can deliver package-level transistor density improvements. These growing market needs are being directly supported through Kulicke & Soffa's portfolio of vertical wire, advanced dispense and advanced display solutions.
Fiscal Year 2024 Financial Highlights
- Net revenue of $706.2 million.
- Gross margin of 38.1%.
- Net loss of $69.0 million or $(1.24) per fully diluted share; non-GAAP net income of $1.6 million or $0.03 per fully diluted share.
- GAAP cash from operations of $31.0 million; Adjusted free cash flow of $14.9 million.
- The Company repurchased a total of 3.2 million shares of common stock at a cost of $151.0 million.
- Cash, cash equivalents, and short-term investments were $577.1 million as of September 28, 2024.
Fourth Quarter Fiscal 2024 Financial Highlights
- Net revenue of $181.3 million.
- Gross margin of 48.3%.
- Net income of $12.1 million or $0.22 per fully diluted share; non-GAAP net income of $18.5 million or $0.34 per fully diluted share.
- GAAP cash from operations of $31.6 million; Adjusted free cash flow of $29.2 million.
- The Company repurchased a total of 1.0 million shares of common stock at a cost of $42.7 million.
First Quarter Fiscal 2025 Outlook
The Company currently expects net revenue in the first fiscal quarter of 2025, ending December 28, 2024, to be approximately $165.0 million, +/- $10 million, GAAP diluted EPS to be approximately $1.45 +/- 10%, and non-GAAP diluted EPS to be approximately $0.28, +/- 10%. This outlook includes favorable claim/proceeds relating to cessation of business due to the cancellation of Project W - which was disclosed on March 11, 2024.
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 tomorrow, November 14, 2024, beginning at 8:00am EST. 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.
A replay will be available from approximately one hour after the completion of the call by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13743544.
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, long-lived asset impairment relating to business cessation or disposal, impairment relating to equity investments, income tax expense 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 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 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 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 thermo-compression 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, actual or potential inflationary pressures, disruptions, breaches or failures in our information technology systems and network infrastructures, 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.
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 | September | September | September | ||||
Net revenue | $ 181,319 | $ 202,320 | $ 706,232 | $ 742,491 | |||
Cost of sales | 93,662 | 106,481 | 437,478 | 383,836 | |||
Gross profit | 87,657 | 95,839 | 268,754 | 358,655 | |||
Operating expenses: | |||||||
Selling, general and administrative | 42,645 | 37,380 | 155,142 | 145,493 | |||
Research and development | 38,763 | 37,616 | 151,214 | 144,701 | |||
Impairment charges | — | — | 44,472 | 21,535 | |||
Acquisition-related cost | — | 13 | — | 511 | |||
Amortization of intangible assets | 1,266 | 1,356 | 5,188 | 6,099 | |||
Restructuring | 2,294 | — | 5,234 | 879 | |||
Total operating expenses | 84,968 | 76,365 | 361,250 | 319,218 | |||
Income/(loss) from operations | 2,689 | 19,474 | (92,496) | 39,437 | |||
Other income / (expense): | |||||||
Interest income | 7,423 | 9,500 | 34,230 | 32,906 | |||
Interest expense | (29) | (26) | (89) | (142) | |||
Income/(loss) before income taxes | 10,083 | 28,948 | (58,355) | 72,201 | |||
Income tax (benefit) / expense | (2,034) | 5,591 | 10,651 | 15,053 | |||
Net income / (loss) | $ 12,117 | $ 23,357 | $ (69,006) | $ 57,148 | |||
Net income / (loss) per share: | |||||||
Basic | $ 0.22 | $ 0.41 | $ (1.24) | $ 1.01 | |||
Diluted | $ 0.22 | $ 0.41 | $ (1.24) | $ 0.99 | |||
Cash dividends declared per share | $ 0.20 | $ 0.19 | $ 0.80 | $ 0.76 | |||
Weighted average shares outstanding: | |||||||
Basic | 54,368 | 56,442 | 55,613 | 56,682 | |||
Diluted | 54,871 | 57,408 | 55,613 | 57,548 | |||
Three months ended | Twelve months ended | ||||||
Supplemental financial data: | September | September | September | September | |||
Depreciation and amortization | $ 4,839 | $ 8,111 | $ 24,735 | $ 28,857 | |||
Capital expenditures | 3,091 | 4,217 | 13,736 | 47,702 | |||
Equity-based compensation expense: | |||||||
Cost of sales | 240 | 289 | 1,277 | 1,192 | |||
Selling, general and administrative | 4,441 | 3,841 | 18,524 | 16,239 | |||
Research and development | 1,758 | 1,311 | 7,090 | 5,313 | |||
Total equity-based compensation expense | $ 6,439 | $ 5,441 | $ 26,891 | $ 22,744 | |||
As of | |||||||
September 28, | September 30, | ||||||
Number of employees | 2,746 | 3,025 | |||||
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited) | |||
As of | |||
September 28, | September 30, | ||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $ 227,147 | $ 529,402 | |
Short-term investments | 350,000 | 230,000 | |
Accounts and notes receivable, net of allowance for doubtful accounts of $49 and $49 respectively | 193,909 | 158,601 | |
Inventories, net | 177,736 | 217,304 | |
Prepaid expenses and other current assets | 46,161 | 53,751 | |
TOTAL CURRENT ASSETS | 994,953 | 1,189,058 | |
Property, plant and equipment, net | 64,823 | 110,051 | |
Operating right-of-use assets | 35,923 | 47,148 | |
Goodwill | 89,748 | 88,673 | |
Intangible assets, net | 25,239 | 29,357 | |
Deferred tax assets | 17,900 | 31,551 | |
Equity investments | 3,143 | 716 | |
Other assets | 8,433 | 3,223 | |
TOTAL ASSETS | $ 1,240,162 | $ 1,499,777 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
CURRENT LIABILITIES | |||
Accounts payable | 58,847 | 49,302 | |
Operating lease liabilities | 7,718 | 6,574 | |
Accrued expenses and other current liabilities | 90,802 | 103,005 | |
Income taxes payable | 26,427 | 22,670 | |
TOTAL CURRENT LIABILITIES | 183,794 | 181,551 | |
Deferred tax liabilities | 34,594 | 37,264 | |
Income taxes payable | 31,352 | 52,793 | |
Operating lease liabilities | 33,245 | 41,839 | |
Other liabilities | 13,168 | 11,769 | |
TOTAL LIABILITIES | $ 296,153 | $ 325,216 | |
SHAREHOLDERS' EQUITY | |||
Common stock, no par value | 596,703 | 577,727 | |
Treasury stock, at cost | (881,830) | (737,214) | |
Retained earnings | 1,242,558 | 1,355,810 | |
Accumulated other comprehensive loss | (13,422) | (21,762) | |
TOTAL SHAREHOLDERS' EQUITY | $ 944,009 | $ 1,174,561 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,240,162 | $ 1,499,777 | |
KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
Three months ended | Twelve months ended | ||||||
September | September | September | September | ||||
Net cash provided by operating activities | $ 31,619 | $ 77,492 | $ 31,037 | $ 173,404 | |||
Net cash (used in) / provided by investing activities, continuing operations | (117,983) | 70,386 | (138,501) | (91,338) | |||
Net cash used in financing activities, continuing operations | (54,371) | (19,518) | (196,100) | (111,876) | |||
Effect of exchange rate changes on cash and cash equivalents | 965 | (764) | 1,309 | 3,675 | |||
Changes in cash and cash equivalents | (139,770) | 127,596 | (302,255) | (26,135) | |||
Cash and cash equivalents, beginning of period | 366,917 | 401,806 | 529,402 | 555,537 | |||
Cash and cash equivalents, end of period | $ 227,147 | $ 529,402 | $ 227,147 | $ 529,402 | |||
Short-term investments | 350,000 | 230,000 | 350,000 | 230,000 | |||
Total cash, cash equivalents, and short-term investments | $ 577,147 | $ 759,402 | $ 577,147 | $ 759,402 | |||
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, | September 30, | June 29, | ||||
Net revenue | $ 181,319 | $ 202,320 | $ 181,650 | |||
U.S. GAAP income from operations | 2,689 | 19,474 | 8,277 | |||
U.S. GAAP operating margin | 1.5 % | 9.6 % | 4.6 % | |||
Pre-tax non-GAAP items: | ||||||
Amortization related to intangible assets | $ 1,266 | $ 1,356 | 1,250 | |||
Acquisition-related costs | — | 13 | — | |||
Equity-based compensation | 6,439 | 5,441 | 6,363 | |||
Restructuring | 2,294 | — | — | |||
Non-GAAP income from operations | $ 12,688 | $ 26,284 | $ 15,890 | |||
Non-GAAP operating margin | 7.0 % | 13.0 % | 8.7 % | |||
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 months ended | Three months ended | ||||||
September 28, | September 28, | September 30, | June 29, | ||||
Net revenue | $ 706,232 | $ 181,319 | $ 202,320 | $ 181,650 | |||
U.S. GAAP net income | (69,006) | 12,117 | 23,357 | 12,264 | |||
U.S. GAAP net margin | (9.8) % | 6.7 % | 11.5 % | 6.8 % | |||
Non-GAAP adjustments: | |||||||
Amortization related to intangible assets | $ 5,188 | $ 1,266 | $ 1,356 | 1,250 | |||
Restructuring | 5,234 | 2,294 | — | — | |||
Acquisition-related costs | — | — | 13 | — | |||
Equity-based compensation | 26,891 | 6,439 | 5,441 | 6,363 | |||
Impairment charges | 44,472 | — | — | — | |||
Income tax benefit - US one-time transition tax | (6,461) | (6,461) | — | — | |||
Net income tax (benefit)/expense on non-GAAP items | (4,752) | 2,866 | (758) | (568) | |||
Total non-GAAP adjustments | 70,572 | 6,404 | 6,052 | 7,045 | |||
Non-GAAP net income | 1,566 | 18,521 | 29,409 | 19,309 | |||
Non-GAAP net margin | 0.2 % | 10.2 % | 14.5 % | 10.6 % | |||
U.S. GAAP net income per share: | |||||||
Basic | (1.24) | 0.22 | 0.41 | 0.22 | |||
Diluted(a) | (1.24) | 0.22 | 0.41 | 0.22 | |||
Non-GAAP adjustments per share:(b) | |||||||
Basic | 1.27 | 0.12 | 0.11 | 0.13 | |||
Diluted | 1.27 | 0.12 | 0.10 | 0.13 | |||
Non-GAAP net income per share: | |||||||
Basic | $ 0.03 | $ 0.34 | $ 0.52 | $ 0.35 | |||
Diluted(c) | $ 0.03 | $ 0.34 | $ 0.51 | $ 0.35 | |||
Weighted average shares outstanding: | |||||||
Basic | 55,613 | 54,368 | 56,442 | 55,280 | |||
Diluted | 55,613 | 54,871 | 57,408 | 55,724 | |||
(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 business cessation or disposal, income tax benefit from the U.S. Tax Court opinion in Varian Medical Systems, Inc. v. Commissioner related to the U.S. one-time transition tax 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 28, | September | September | June 29, | ||||
U.S. GAAP net cash provided by operating activities | $ 31,037 | $ 31,619 | $ 77,492 | $ 26,897 | |||
Expenditures for property, plant and equipment | (16,148) | (2,468) | (9,281) | (2,683) | |||
Proceeds from sales of property, plant and equipment | 27 | 27 | 273 | — | |||
Non-GAAP adjusted free cash flow | 14,916 | 29,178 | 68,484 | 24,214 | |||
Reconciliation of U.S. GAAP to Non-GAAP Outlook (In millions, except per share data) (Unaudited) | ||||||
First quarter of fiscal 2025 ending December 28, 2024 | ||||||
GAAP Outlook | Adjustments | Non-GAAP Outlook | ||||
Net revenue | $165 million +/- $10 million | — | $165 million +/- $10 million | |||
Operating expenses | $4.0 million +/- 2% | $(66.5) million B,C,D,E | $70.5 million +/- 2% | |||
Diluted EPS(1) | $1.45 +/- 10% | $(1.17) A,B,C,D,E,F | $0.28 +/- 10% | |||
Non-GAAP Adjustments | ||||||
A. Equity-based compensation - Cost of sales | 0.5 | |||||
B. Equity-based compensation - Selling, general and | 6.3 | |||||
C. Amortization related to intangible assets | 1.4 | |||||
D. Restructuring expenses | 0.8 | |||||
E. Claim/proceeds relating to cessation of business | (75.0) | |||||
F. Net income tax effect of the above items | 2.4 | |||||
(1) | GAAP and non-GAAP diluted EPS based on approximately 54.2 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. |
SOURCE Kulicke & Soffa Industries, Inc.
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