PR Newswire | Nov 17, 2021 08:30PM EST

11/17 19:30 CST

Kulicke & Soffa Reports Fourth Quarter 2021 Results SINGAPORE, Nov. 17, 2021

SINGAPORE, Nov. 17, 2021 /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company"), today announced financial results of its fourth fiscal quarter ended October 2, 2021. The Company reported fourth quarter net revenue of $485.3 million, net income of $133.7 million and non-GAAP net income of $138.3 million.

Quarterly Results - U.S. GAAP

Change vs. Change vs. Fiscal Q4 2021 Fiscal Q4 2020 Fiscal Q3 2021

Net Revenue $485.3 million up 173.1% up 14.4%

Gross Profit $231.3 million up 160.2% up 18.2%

Gross Margin 47.7% down 230 bps up 160 bps

Income from Operations $154.8 million up 573% up 28.5%

Operating Margin 31.9% up 1900 bps up 350 bps

Net Income $133.7 million up 746.2% up 17.5%

Net Margin 27.6% up 1870 bps up 80 bps

EPS - Diluted $2.10 up 740% up 17.3%

Quarterly Results - Non-GAAP

Change vs. Change vs. Fiscal Q4 2021 Fiscal Q4 2020 Fiscal Q3 2021

Income from Operations $160.2 million up 448.7% up 27.2%

Operating Margin 33.0% up 1660 bps up 330 bps

Net Income $138.3 million up 535.7% up 16.4%

Net Margin 28.5% up 1630 bps up 50 bps

EPS - Diluted $2.17 up 520% up 16%

A reconciliation of the GAAP and non-GAAP adjusted results is provided in thefinancial tables included in this release. See also "Use of non-GAAP FinancialResults" section.

During the fiscal fourth quarter the Company was able to exceed revenue expectations by temporarily extending production capacity and also by delivering additional advanced display systems and services.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "Throughout fiscal 2021 we continued to support an ongoing period of industry expansion, while carefully navigating global supply-chain challenges. Additionally, we continued our aggressive development efforts, released several new market-ready solutions and also received customer acceptance with several others. These efforts expand our access to favorable long-term trends within the automotive, electronics assembly and advanced display end-markets."

Fiscal Year 2021 Financial Highlights

* Net revenue of $1,517.7 million. * Gross margin of 45.9%. * Net income of $367.2 million or $5.78 per share; non-GAAP net income of $390.2 million or $6.14 per share. * The Company repurchased a total of approximately 215.0 thousand shares of common stock at a cost of approximately $10.2 million.

Fourth Quarter Fiscal 2021 Financial Highlights

* Net revenue of $485.3 million. * Gross margin of 47.7%. * Net income of $133.7 million or $2.10 per share; non-GAAP net income of $138.3 million or $2.17 per share. * Cash, cash equivalents, and short-term investments were $739.8 million as of October 2, 2021.

First Quarter Fiscal 2022 OutlookThe Company currently expects net revenue in the first fiscal quarter of 2022, ending January 1, 2022, to be approximately $460 million, +/- $20 million, and expects non-GAAP EPS to be approximately $1.88, +/- 10%.

This revenue outlook is very similar to the fourth fiscal quarter expectations provided on August 4, 2021.

Looking forward, Fusen Chen commented, "We continue to efficiently support strong, ongoing and broad demand across our served end-markets. Throughout fiscal 2022, we anticipate ongoing industry expansion and also rapid growth of our emerging portfolio of solutions which directly addresses semiconductor, electric vehicle, and advanced LED assembly challenges."

Earnings Conference Call DetailsA conference call to discuss these results will be held tomorrow, November 18, 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 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 25th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13723617. A webcast replay will also be available at investor.kns.com.

Use of Non-GAAP Financial ResultsIn addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, costs associated with restructuring, equity-based compensation, acquisition and integration cost, impairment relating to assets acquired through business combinations, income tax expense arising from discrete tax items triggered by significant changes in tax laws, gain/loss on disposal of business, 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 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 Q1F22 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 Q1F22 is not available without unreasonable effort.

About Kulicke & SoffaKulicke & 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 (kns.com).

Caution Concerning Results and Forward Looking StatementsIn 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, the effects of supply chain constraints 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 Industries, Inc.Joseph ElgindyInvestor Relations & Strategic Initiatives 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 Twelve months ended

October 2, 2021October 3, 2020October 2, 2021October 3, 2020

Net revenue $ 485,326 $ 177,688 $ 1,517,664 $ 623,176

Cost of sales 254,011 88,803 820,678 325,201

Gross profit 231,315 88,885 696,986 297,975



Operating expenses:

Selling, general and administrative 40,186 28,101 139,224 107,947

Research and development 34,929 35,553 137,478 123,459

Acquisition-related cost - - 1,730 -

Amortization of intangible assets 1,322 1,920 5,974 7,371

Restructuring 42 263 133 689

Total operating expenses 76,479 65,837 284,539 239,466

Income from operations 154,836 23,048 412,447 58,509

Other income / (expense):

Interest income 520 653 2,321 7,541

Interest expense (72) (26) (218) (1,716)

Income before income taxes 155,284 23,675 414,550 64,334

Income tax expense / (benefit) 21,573 8,013 47,295 11,998

Share of results of equity-method - (122) 94 36 investee, net of tax

Net income $ 133,711 $ 15,784 $ 367,161 $ 52,300



Net income per share:

Basic $ 2.16 $ 0.26 $ 5.92 $ 0.83

Diluted $ 2.10 $ 0.25 $ 5.78 $ 0.83



Cash dividends declared per share $ 0.14 $ 0.12 $ 0.56 $ 0.48



Weighted average shares outstanding:

Basic 61,966 61,791 62,009 62,828

Diluted 63,611 62,411 63,515 63,359

Three months ended Twelve months ended

Supplemental financial data: October 2, 2021October 3, 2020October 2, 2021October 3, 2020

Depreciation and amortization $ 5,258 $ 5,142 $ 19,810 $ 19,739

Capital expenditures 5,792 5,964 22,555 14,514

Equity-based compensation expense:

Cost of sales 202 147 828 744

Selling, general and administrative 2,887 2,965 10,998 11,071

Research and development 909 851 3,676 3,204

Total equity-based compensation expense$ 3,998 $ 3,963 $ 15,502 $ 15,019

As of

October 2, 2021October 3, 2020

Backlog of orders ^1 $ 787,241 $ 127,924

Number of employees 3,586 2,836

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

October 2, 2021October 3, 2020

ASSETS

CURRENT ASSETS

Cash and cash equivalents $362,788 $188,127

Short-term investments 377,000 342,000

Accounts and notes receivable, net of allowance for doubtful accounts of $687 and 421,193 198,640 $968 respectively

Inventories, net 167,323 111,809

Prepaid expenses and other current assets 23,586 19,620

TOTAL CURRENT ASSETS 1,351,890 860,196



Property, plant and equipment, net 67,982 59,147

Operating right-of-use assets 41,592 22,688

Goodwill 72,949 56,695

Intangible assets, net 42,752 37,972

Deferred tax assets 15,715 8,147

Equity investments 6,388 7,535

Other assets 2,363 2,186

TOTAL ASSETS $1,601,631 $1,054,566



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable 154,636 57,688

Operating lease liabilities 4,903 5,903

Accrued expenses and other current liabilities161,570 76,762

Income taxes payable 30,766 17,540

TOTAL CURRENT LIABILITIES 351,875 157,893



Deferred tax liabilities 32,828 33,005

Income taxes payable 69,422 74,957

Operating lease liabilities 38,084 18,325

Other liabilities 14,185 12,392

TOTAL LIABILITIES 506,394 296,572



SHAREHOLDERS' EQUITY

Common stock, no par value 550,117 539,213

Treasury stock, at cost (400,412) (394,817)

Retained earnings 948,554 616,119

Accumulated other comprehensive loss (3,022) (2,521)

TOTAL SHAREHOLDERS' EQUITY $1,095,237 $757,994



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,601,631 $1,054,566

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended Twelve months ended

October 2, 2021October 3, 2020October 2, 2021October 3, 2020

Net cash provided by operating activities $ 123,376 $ 31,731 $ 300,032 $ 94,412

Net cash used in investing activities, (135,928) (151,820) (81,707) (125,957) continuing operations

Net cash used in financing activities, (12,276) (15,191) (44,258) (145,809) continuing operations

Effect of exchange rate changes on cash and (383) 1,632 594 1,297 cash equivalents

Changes in cash and cash equivalents (25,211) (133,648) 174,661 (176,057)

Cash and cash equivalents, beginning of period387,999 321,775 188,127 364,184

Cash and cash equivalents, end of period $ 362,788 $ 188,127 $ 362,788 $ 188,127



Short-term investments 377,000 342,000 377,000 342,000

Total cash, cash equivalents, and short-term $ 739,788 $ 530,127 $ 739,788 $ 530,127 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

October 2, 2021October 3, 2020July 3, 2021

Net revenue $485,326 $177,688 $424,318

U.S. GAAP income from operations154,836 23,048 120,455

U.S. GAAP operating margin 31.9 %13.0 %28.4 %



Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through business combination- $1,322 $1,920 1,340 selling, general and administrative

Equity-based compensation^ (a) 3,998 3,963 4,140

Restructuring 42 263 -

Non-GAAP income from operations $160,198 $29,194 $125,935

Non-GAAP operating margin 33.0 %16.4 %29.7 %

(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 per share data)

(unaudited)



Twelve monthsThree months ended ended

October 2, October 2, October 3, July 3, 2021 2021 2020 2021

Net revenue $1,517,664 $485,326 $177,688 $424,318

U.S. GAAP net income 367,161 133,711 15,784 113,766

U.S. GAAP net margin 24.2 %27.6 %8.9 %26.8 %



Non-GAAP adjustments:

Amortization related to intangible assets acquired through business combination- selling, general and$5,974 $1,322 $1,920 1,340 administrative

Restructuring 133 42 263 -

Acquisition-related costs 1,730 - - -

Equity-based compensation 15,502 3,998 3,963 4,140

Net income tax (benefit)/expense on non-GAAP items(311) (807) (181) (460)

Total non-GAAP adjustments 23,028 4,555 5,965 5,020

Non-GAAP net income 390,189 138,266 21,749 118,786

Non-GAAP net margin 25.7 %28.5 %12.2 %28.0 %



U.S. GAAP net income per share:

Basic 5.92 2.16 0.25 1.83

Diluted^(a) 5.78 2.10 0.25 1.79



Non-GAAP adjustments per share:^(b)

Basic 0.37 0.07 0.10 0.08

Diluted 0.36 0.07 0.10 0.08



Non-GAAP net income per share:

Basic $6.29 $2.23 $0.35 $1.91

Diluted^(c) $6.14 $2.17 $0.35 $1.87



Weighted average shares outstanding:

Basic 62,009 61,966 61,791 62,023

Diluted^(b) 63,515 63,611 62,411 63,485

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 assets acquired through business combinations, costs associated with(b) 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.