PR Newswire | Aug 4, 2021 09:27PM EDT

08/04 20:26 CDT

Kulicke & Soffa Reports Third Quarter 2021 ResultsDelivers GAAP Operating Margin of 28.4% and Updates Outlook SINGAPORE, Aug. 4, 2021

SINGAPORE, Aug. 4, 2021 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S" or the "Company"), today announced financial results of its third fiscal quarter ended July 3, 2021. The Company reported third quarter net revenue of $424.3 million, net income of $113.8 million, representing EPS of $1.79 per fully diluted share, and non-GAAP net income of $118.8 million, representing non-GAAP EPS of $1.87 per fully diluted share.

Quarterly Results - U.S. GAAP

Change vs. Change vs. Fiscal Q3 2021 Fiscal Q3 2020 Fiscal Q2 2021

Net Revenue $424.3 million up 182% up 24.7%

Gross Profit $195.7 million up 182% up 31.8%

Gross Margin 46.1% up 0 bps up 240 bps

Income from Operations $120.5 million up 995.5% up 45%

Operating Margin 28.4% up 2110 bps up 400 bps

Net Income $113.8 million up 916.1% up 59.6%

Net Margin 26.8% up 1940 bps up 580 bps

EPS - Diluted $1.79 up 894.4% up 58.4%





Quarterly Results - Non-GAAP

Change vs. Change vs. Fiscal Q3 2021 Fiscal Q3 2020 Fiscal Q2 2021

Income from Operations $125.9 million up 663% up 40.2%

Operating Margin 29.7% up 1870 bps up 330 bps

Net Income $118.8 million up 628.8% up 49.6%

Net Margin 28.0% up 1720 bps up 460 bps

EPS - Diluted $1.87 up 619.2% up 48.4%



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, "Fast-growing end-applications such as 5G, artificial intelligence and connected devices, combined with a technology-driven increase of capital intensity across our served markets, have enabled a new, higher level of profitability."

Third Quarter Fiscal 2021 Financial Highlights

* Net revenue of $424.3 million. * Gross margin of 46.1%. * Net income of $113.8 million or $1.79 per share; non-GAAP net income of $118.8 million or $1.87 per share. * Cash, cash equivalents, and short-term investments were $635.0 million as of July 3, 2021.

Fourth Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the fourth fiscal quarter of 2021 ending October 2, 2021 to be approximately $465 million +/- $20 million, and expects non-GAAP EPS to be approximately $2.00 +/- 10%.

Fusen Chen commented, "Over the coming quarters, we expect capacity needs across our broad customer base to continue expanding aggressively. Additionally, recent adoption of our new systems are directly supporting several long-term and distinct technology transitions within the semiconductor, automotive, and advanced display markets further enhancing our long-term growth prospects."

Earnings Conference Call Details

A conference call to discuss these results will be held on August 5, 2021, 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 August 12th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13721220. 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 & SoffaJoseph ElgindyInvestor Relations P: +1-215-784-7518 F: +1-215-784-6180

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

July 3, 2021June 27, 2020July 3, 2021June 27, 2020

Net revenue $424,318 $150,450 $1,032,338$445,488

Cost of sales 228,623 81,027 566,667 236,398

Gross profit 195,695 69,423 465,671 209,090



Operating expenses:

Selling, general and administrative 37,763 26,091 99,038 79,846

Research and development 36,137 30,547 102,549 87,906

Amortization of intangible assets 1,340 1,814 4,652 5,451

Acquisition-related costs - - 1,730 -

Restructuring - - 91 426

Total operating expenses 75,240 58,452 208,060 173,629

Income from operations 120,455 10,971 257,611 35,461

Other income (expense):

Interest income 564 1,374 1,801 6,888

Interest expense (41) (446) (146) (1,690)

Income before income taxes 120,978 11,899 259,266 40,659

Income tax expense 7,212 690 25,722 3,985

Share of results of equity-method investee, net of tax- 58 94 158

Net income $113,766 $11,151 $233,450 $36,516



Net income per share:

Basic $1.83 $0.18 $3.76 $0.58

Diluted $1.79 $0.18 $3.68 $0.57



Cash dividends declared per share $0.14 $0.12 $0.42 $0.36



Weighted average shares outstanding:

Basic 62,023 62,313 62,023 63,200

Diluted 63,485 62,833 63,364 63,755



Three months ended Nine months ended

Supplemental financial data: July 3, 2021June 27, 2020July 3, 2021June 27, 2020

Depreciation and amortization $4,805 $5,069 $14,552 $14,597

Capital expenditures 7,956 3,451 16,763 8,550

Equity-based compensation expense:

Cost of sales 211 182 626 597

Selling, general and administrative 3,008 2,676 8,111 8,106

Research and development 921 867 2,767 2,353

Total equity-based compensation expense $4,140 $3,725 $11,504 $11,056



As of

July 3, 2021June 27, 2020

Backlog of orders ^1 $852,705 $128,882

Number of employees 3,583 2,756

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

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)



As of

July 3, 2021October 3, 2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents $387,999 $ 188,127

Short-term investments 247,000 342,000

Accounts and other receivable, net of allowance for doubtful accounts of $865369,346 198,640 and $968, respectively

Inventories, net 153,325 111,809

Prepaid expenses and other current assets 21,923 19,620

TOTAL CURRENT ASSETS 1,179,593 860,196



Property, plant and equipment, net 66,232 59,147

Operating right-of-use assets 19,940 22,688

Goodwill 73,683 56,695

Intangible assets, net 45,031 37,972

Deferred tax assets 16,640 8,147

Equity investments 6,391 7,535

Other assets 2,351 2,186

TOTAL ASSETS $1,409,861$ 1,054,566



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable 144,269 57,688

Operating lease liabilities 6,231 5,903

Accrued expenses and other current liabilities 134,789 76,762

Income taxes payable 22,971 17,540

TOTAL CURRENT LIABILITIES 308,260 157,893



Deferred income taxes 32,949 33,005

Income taxes payable 66,859 74,957

Operating lease liabilities 15,227 18,325

Other liabilities 13,224 12,392

TOTAL LIABILITIES 436,519 296,572



SHAREHOLDERS' EQUITY

Common stock, no par value 546,175 539,213

Treasury stock, at cost (396,688) (394,817)

Retained earnings 823,515 616,119

Accumulated other comprehensive income/ (loss) 340 (2,521)

TOTAL SHAREHOLDERS' EQUITY $973,342 $ 757,994



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,409,861$ 1,054,566

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended Nine months ended

July 3, 2021June 27, 2020July 3, 2021June 27, 2020

Net cash provided by operating activities $ 90,936 $ 23,598 $ 176,656 $ 62,681

Net cash provided by investing activities 52,222 50,842 54,221 25,863

Net cash used in financing activities (12,865) (144,876) (31,982) (130,618)

Effect of exchange rate changes on cash and cash373 (96) 977 (335) equivalents

Changes in cash and cash equivalents 130,666 (70,532) 199,872 (42,409)

Cash and cash equivalents, beginning of period 257,333 392,307 188,127 364,184

Cash and cash equivalents, end of period $ 387,999 $ 321,775 $ 387,999 $ 321,775



Short-term investments 247,000 194,000 247,000 194,000

Total cash, cash equivalents and short-term $ 634,999 $ 515,775 $ 634,999 $ 515,775 investments

Reconciliation of U.S. GAAP

to Non-GAAP Income from Operations and Operating Margin

(In thousands, except percentages)

(Unaudited)



Three months ended

July 3, 2021 June 27, 2020 April 3, 2021

Net revenue $ 424,318 $ 150,450 $340,163

U.S. GAAP income from operations 120,455 10,971 83,114

U.S. GAAP operating margin 28.4 % 7.3 % 24.4 %



Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through1,340 1,814 1,355 business combination- selling, general and administrative

Equity-based compensation^ (a) 4,140 3,725 3,963

Acquisition-related costs ^ - - 1,379

Non-GAAP income from operations $ 125,935 $ 16,510 $89,811

Non-GAAP operating margin 29.7 % 11.0 % 26.4 %

(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

July 3, 2021 June 27, 2020 April 3, 2021

Net revenue $ 424,318 $ 150,450 $340,163

U.S. GAAP net income 113,766 11,151 71,320

U.S. GAAP net margin 26.8 % 7.4 % 21.0 %



Non-GAAP adjustments:

Amortization related to intangible assets acquired through1,340 1,814 1,355 business combination- selling, general and administrative

Equity-based compensation 4,140 3,725 3,963

Acquisition-related costs - - 1,379

Income tax effects on non-GAAP items (460) (415) 1,429

Total non-GAAP adjustments $ 5,020 $ 5,124 $8,126

Non-GAAP net income $ 118,786 $ 16,275 $79,446

Non-GAAP net margin 28.0 % 10.8 % 23.4 %



U.S. GAAP net income per share:

Basic 1.83 0.18 1.15

Diluted^(a) 1.79 0.18 1.13



Non-GAAP adjustments per share:^(b)

Basic 0.08 0.08 0.13

Diluted 0.08 0.08 0.13



Non-GAAP net income per share:

Basic $ 1.91 $ 0.26 $1.28

Diluted^(c) $ 1.87 $ 0.26 $1.26

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 include amortization related to intangible(b) assets acquired through business combinations, equity-based compensation expenses and acquisition-related costs as well as 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 units and stock options.

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SOURCE Kulicke & Soffa Industries, Inc.