PR Newswire | Feb 3, 2021 08:31PM EST

02/03 19:30 CST

Kulicke & Soffa Reports First Quarter 2021 Results SINGAPORE, Feb. 3, 2021

SINGAPORE, Feb. 3, 2021 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S" or the "Company"), today announced financial results of its first fiscal quarter ended January 2, 2021. The Company reported first quarter net revenue of $267.9 million, net income of $48.4 million, representing EPS of $0.77 per fully diluted share, and non-GAAP net income of $53.7 million, representing non-GAAP EPS of $0.86 per fully diluted share.

Quarterly Results - U.S. GAAP

Fiscal Q1 2021Change vs. Change vs. Fiscal Q1 2020Fiscal Q4 2020

Net Revenue $267.9 millionup 85.6% up 50.8%

Gross Profit $121.5 millionup 72.6% up 36.7%

Gross Margin 45.4% down 340 bps down 460 bps

Income from Operations$54.0 million up 303% up 134.8%

Operating Margin 20.2% up 1090 bps up 730 bps

Net Income $48.4 million up 258.5% up 206.3%

Net Margin 18.1% up 870 bps up 920 bps

EPS - Diluted^(a) $0.77 up 266.7% up 208%

GAAP diluted net earnings per share reflects any dilutive effect of(a) 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.

Quarterly Results - Non-GAAP

Fiscal Q1 2021Change vs. Change vs. Fiscal Q1 2020Fiscal Q4 2020

Income from Operations$59.8 million up 209.8% up 104.8%

Operating Margin 22.3% up 900 bps up 590 bps

Net Income $53.7 million up 187.2% up 148.6%

Net Margin 20.0% up 700 bps up 790 bps

EPS - Diluted $0.86 up 196.6% up 145.7%

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, "Demand has increased significantly in the December quarter driven by strength in the general semiconductor, LED and automotive markets. Additionally, we have supported more complex, high-volume semiconductor assembly, which is increasing the capital intensity and longer-term opportunities within our served markets."

Throughout the first fiscal quarter, K&S continued to support ongoing demand for its initial advanced display system, PixaluxTM. Today, the Company announced it has acquired Uniqarta, Inc, accelerating development of its high-accuracy, next-generation display solutions.

First Quarter Fiscal 2021 Financial Highlights

* Net revenue of $267.9 million. * Gross margin of 45.4%. * Net income of $48.4 million or $0.77 per share; non-GAAP net income of $53.7 million or $0.86 per share. * Cash, cash equivalents, and short-term investments were $576.7 million as of January 2, 2021.

Second Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the second fiscal quarter of 2021 ending April 3, 2021 to be approximately $300 million +/- $20 million, and expects non-GAAP EPS to be approximately $0.88 +/- 10%.

Looking forward, Fusen Chen commented, "We continue to expand our served markets by supporting fundamental technology transitions occurring in both the display and automotive markets. In parallel, the increasing complexity of both high-volume and leading-edge semiconductor assembly is further supporting our outlook. We expect trends demanding assembly complexity will increase and further enhance the capital intensity of our broad served markets over the long-term."

Earnings Conference Call Details

A conference call to discuss these results will be held on February 4, 2021, 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 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 February 11th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13714784. 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 & SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share and employee data) (Unaudited)



Three months ended

January 2, December 28, 2021 2019

Net revenue $267,857 $144,297

Cost of sales 146,371 73,933

Gross profit 121,486 70,364



Operating expenses:

Selling, general and administrative 33,500 26,424

Research and development 31,544 28,292

Amortization of intangible assets 1,958 1,817

Acquisition related cost 351 -

Restructuring 91 417

Total operating expenses 67,444 56,950

Income from operations 54,042 13,414

Other income (expense):

Interest income 651 2,839

Interest expense (32) (583)

Income before income taxes 54,661 15,670

Income tax expense 6,298 2,133

Share of results of equity-method investee, - 60 net of tax

Net income $48,363 $13,477



Net income per share:

Basic $0.78 $0.21

Diluted $0.77 $0.21



Cash dividends declared per share $0.14 $0.12



Weighted average shares outstanding:

Basic 61,965 63,557

Diluted 62,740 64,139



Three months ended

Supplemental financial data: January 2, December 28, 2021 2019

Depreciation and amortization $5,147 $4,759

Capital expenditures 3,687 2,325

Equity-based compensation expense:

Cost of sales 205 232

Selling, general and administrative 2,279 2,735

Research and development 917 642

Total equity-based compensation expense $3,401 $3,609



As of

January 2, December 28, 2021 2019

Backlog of orders ^1 $271,615 $115,205

Number of employees 3,080 2,758

Represents customer purchase commitments. While the Company believes these1. orders are firm, they are generally cancellable by customers without penalty.

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



As of

January 2, October 3, 2021 2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents $239,670 $188,127

Short-term investments 337,000 342,000

Accounts and other receivable, net of allowance for doubtful accounts of $1,001 and $968, 226,665 198,640 respectively

Inventories, net 125,082 111,809

Prepaid expenses and other current assets 21,194 19,620

TOTAL CURRENT ASSETS 949,611 860,196



Property, plant and equipment, net 60,935 59,147

Operating right-of-use assets 22,703 22,688

Goodwill 57,339 56,695

Intangible assets, net 37,577 37,972

Deferred tax assets 8,725 8,147

Equity investments 7,593 7,535

Other assets 2,287 2,186

TOTAL ASSETS $1,146,770$1,054,566



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable 89,362 57,688

Operating lease liabilities 6,379 5,903

Accrued expenses and other current liabilities 83,477 76,762

Income taxes payable 21,472 17,540

TOTAL CURRENT LIABILITIES 200,690 157,893



Deferred income taxes 33,015 33,005

Income taxes payable 73,805 74,957

Operating lease liabilities 18,228 18,325

Other liabilities 13,416 12,392

TOTAL LIABILITIES 339,154 296,572



SHAREHOLDERS' EQUITY

Common stock, no par value 538,449 539,213

Treasury stock, at cost (391,870) (394,817)

Retained earnings 655,795 616,119

Accumulated other comprehensive loss 5,242 (2,521)

TOTAL SHAREHOLDERS' EQUITY $807,616 $757,994



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,146,770$1,054,566

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



Three months ended

January 2, December 28, 2021 2019

Net cash provided by operating activities $58,635 $25,028

Net cash provided by investing activities 224 106,487

Net cash (used in)/provided by financing (9,207) 2,152 activities

Effect of exchange rate changes on cash and cash1,891 (477) equivalents

Changes in cash and cash equivalents 51,543 133,190

Cash and cash equivalents, beginning of period 188,127 364,184

Cash and cash equivalents, end of period $239,670 $497,374



Short-term investments 337,000 119,000

Total cash, cash equivalents and short-term $576,670 $616,374 investments

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

January 2, December October 3, 2021 28, 2019 2020

Net revenue $267,857 $144,297 $177,688

U.S. GAAP income from operations 54,042 13,414 23,048

U.S. GAAP operating margin 20.2 %9.3 %13.0 %



Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through business 1,958 1,817 1,920 combination- selling, general and administrative

Restructuring 91 417 263

Equity-based compensation^ (a) 3,401 3,609 3,963

Acquisition-related costs ^ 351 - -

Non-GAAP income from operations $59,843 $19,257 $29,194

Non-GAAP operating margin 22.3 %13.3 %16.4 %

(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

January 2, December October 3, 2021 28, 2019 2020

Net revenue $267,857 $144,297 $177,688

U.S. GAAP net income 48,363 13,477 15,784

U.S. GAAP net margin 18.1 %9.3 %8.9 %



Non-GAAP adjustments:

Amortization related to intangible assets acquired through business 1,958 1,817 1,920 combination- selling, general and administrative

Restructuring 91 417 263

Equity-based compensation 3,401 3,609 3,963

Acquisition-related cost 351 - -

Net income tax benefit on non-GAAP (474) (595) (358) items

Total non-GAAP adjustments $5,327 $5,248 $5,788

Non-GAAP net income $53,690 $18,725 $21,572

Non-GAAP net margin 20.0 %13.0 %12.1 %



U.S. GAAP net income per share:

Basic 0.78 0.21 0.26

Diluted^(a) 0.77 0.21 0.25



Non-GAAP adjustments per share:^(b)

Basic 0.09 0.08 0.09

Diluted 0.09 0.08 0.09



Non-GAAP net income per share:

Basic $0.87 $0.29 $0.35

Diluted^(c) $0.86 $0.29 $0.34

GAAP diluted net earnings per share reflects any dilutive effect of(a) 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.

Non-GAAP adjustments per share includes amortization related to intangible(b) assets acquired through business combinations, costs associated with restructuring, equity-based compensation expenses and acquisition-related costs as well as tax benefits or expense 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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SOURCE Kulicke & Soffa Industries, Inc.