PR Newswire | Nov 18, 2020 08:31PM EST

11/18 19:30 CST

Kulicke & Soffa Reports Fourth Quarter 2020 Results SINGAPORE, Nov. 18, 2020

SINGAPORE, Nov. 18, 2020 /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 3, 2020. The Company reported fourth quarter net revenue of $177.7 million, net income of $15.8 million and non-GAAP net income of $18.0 million.

During its fourth fiscal quarter, K&S repurchased $8.8 million of common stock in open market transactions at an average price of $22.68 per share. The Company also recorded a quarterly dividend equivalent of $0.12 per share during its fourth fiscal quarter.

Quarterly Results - U.S. GAAP



Fiscal Q4 2020Change vs. Change vs. Fiscal Q4 2019Fiscal Q3 2020

Net Revenue $177.7 millionup 27.1% up 18.1%

Gross Profit $88.9 million up 35.9% up 28.1%

Gross Margin 50.0% up 320 bps up 390 bps

Income from Operations$23.0 million up 198.7% up 109.1%

Operating Margin 12.9% up 740 bps up 560 bps

Net Income $15.8 million up 146.9% up 41.1%

Net Margin 8.9% up 430 bps up 150 bps

EPS - Diluted $0.25 up 150% up 38.9%

Quarterly Results - Non-GAAP



Fiscal Q4 2020Change vs. Change vs. Fiscal Q4 2019Fiscal Q3 2020

Income from Operations$25.2 million up 126.2% up 96.9%

Operating Margin 14.2% up 620 bps up 570 bps

Net Income $18.0 million up 93% up 39.5%

Net Margin 10.1% up 340 bps up 150 bps

EPS - Diluted $0.29 up 107.1% up 38.1%

* 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.

Fourth fiscal quarter tax expense of $8.0 million was associated with increased profitability and jurisdictional adjustments. The Company continues to target a long-term effective tax rate of 18%.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "During fiscal 2020, we entered into the emerging advanced-LED market, expanded advanced packaging engagements and returned $85 million through the repurchase and dividend programs. Our dedicated global workforce, financial position, and commitment to development have facilitated this progress despite the challenging macro-economic environment through fiscal 2020."

Fiscal Year 2020 Financial Highlights

* Net revenue of $623.2 million. * Gross margin of 47.8%. * Net income of $52.3 million or $0.83 per share; non-GAAP net income of $60.3 million or $0.95 per share. * The Company repurchased a total of approximately 2.5 million shares of common stock at a cost of approximately $55.0 million.

Fourth Quarter Fiscal 2020 Financial Highlights

* Net revenue of $177.7 million. * Gross margin of 50.0%. * Net income of $15.8 million or $0.25 per share; non-GAAP net income of $18.0 million or $0.29 per share. * Cash, cash equivalents, and short-term investments were $530.1 million as of October 3, 2020.

First Quarter Fiscal 2021 Outlook

The Company currently expects net revenue in the first fiscal quarter of 2021, ending January 2, 2021, to be approximately $230 million to $250 million, and expects non-GAAP EPS to be approximately $0.48 to $0.58. This steep sequential demand improvement is driven by strength in the Company's general semiconductor and LED end-markets.

Looking forward, Fusen Chen commented, "Our entry into the advanced display market combined with 5G adoption, smartphone recovery and general semiconductor unit growth improvement are increasing demand for our core products and services. In addition to the positive near-term outlook, we remain strategically focused to support fundamental technology transitions in the advanced packaging, automotive and display markets."

Earnings Conference Call Details

A conference call to discuss these results will be held tomorrow, November 19, 2020, 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 21st by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13694867. 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 non-GAAP financial results. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, goodwill impairment, costs associated with restructuring, income tax expense related to the Tax Cuts and Jobs Act of 2017 as well as tax benefits or expense associated with the foregoing non-GAAP items. 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 operating income, operating margin, net income, net margin and net income per diluted share 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 attached exhibit.

Management has not reconciled its outlook for non-GAAP Diluted EPS to Diluted EPS for Q1F21 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 Q1F21 is not available without unreasonable effort.

About Kulicke & Soffa

Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor 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, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended September 28, 2019, filed on November 15, 2019, our Quarterly Reports on Form 10-Q filed on April 30, 2020, and July 30, 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 3, 2020September 28,October 3, 2020September 28, 2019 2019

Net revenue $177,688 $139,827 $623,176 $ 540,052

Cost of sales 88,803 74,389 325,201 285,462

Gross profit 88,885 65,438 297,975 254,590



Operating expenses:

Selling, general and 28,101 25,723 107,947 107,785 administrative

Research and 35,553 28,560 123,459 116,169 development

Amortization of intangible 1,920 1,823 7,371 7,412 assets

Restructuring 263 1,639 689 1,614

Total operating 65,837 57,745 239,466 232,980 expenses

Income from 23,048 7,693 58,509 21,610 operations

Other income / (expense):

Interest 653 3,485 7,541 15,132 income

Interest (26) (918) (1,716) (2,055) expense

Income before 23,675 10,260 64,334 34,687 income taxes

Income tax expense / 8,013 3,804 11,998 22,910 (benefit)

Share of results of equity-method (122) 52 36 124 investee, net of tax

Net income $15,784 $6,404 $52,300 $ 11,653



Net income per share:

Basic $0.26 $0.10 $0.83 $ 0.18

Diluted $0.25 $0.10 $0.83 $ 0.18



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



Weighted average shares outstanding:

Basic 61,791 63,401 62,828 65,286

Diluted 62,411 64,251 63,359 65,948



Three months ended Twelve months ended

Supplemental September 28, September 28, financial October 3, 20202019 October 3, 20202019 data:

Depreciation and $5,142 $5,303 $19,739 $ 20,304 amortization

Capital 5,964 2,517 14,514 11,829 expenditures

Equity-based compensation expense:

Cost of sales 147 161 744 632

Selling, general and 2,965 2,632 11,071 10,503 administrative

Research and 851 767 3,204 3,197 development

Total equity-based $3,963 $3,560 $15,019 $ 14,332 compensation expense



As of

October 3, 2020September 28, 2019

Backlog of orders ^1 $127,924 $ 104,711

Number of employees 2,836 2,614

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 3, 2020September 28, 2019

ASSETS

CURRENT ASSETS

Cash and cash equivalents $188,127 $364,184

Short-term investments 342,000 229,000

Accounts and notes receivable, net of allowance for doubtful accounts of $968 198,640 195,830 and $597 respectively

Inventories, net 111,809 89,308

Prepaid expenses and other current assets19,620 15,429

TOTAL CURRENT ASSETS 860,196 893,751



Property, plant and equipment, net 59,147 72,370

Operating right-of-use assets 22,688 -

Goodwill 56,695 55,691

Intangible assets, net 37,972 42,651

Deferred tax assets 8,147 6,409

Equity investments 7,535 6,250

Other assets 2,186 2,494

TOTAL ASSETS $1,054,566 $1,079,616



LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Short term debt $- $60,904

Accounts payable 57,688 36,711

Operating lease liabilities 5,903 -

Accrued expenses and other current 76,762 64,533 liabilities

Income taxes payable 17,540 12,494

TOTAL CURRENT LIABILITIES 157,893 174,642



Financing obligation - 14,207

Deferred tax liabilities 33,005 32,054

Income taxes payable 74,957 80,290

Operating lease liabilities 18,325 -

Other liabilities 12,392 9,360

TOTAL LIABILITIES 296,572 310,553



SHAREHOLDERS' EQUITY

Common stock, no par value 539,213 533,590

Treasury stock, at cost (394,817) (349,212)

Retained earnings 616,119 594,625

Accumulated other comprehensive loss (2,521) (9,940)

TOTAL SHAREHOLDERS' EQUITY $757,994 $769,063



TOTAL LIABILITIES AND SHAREHOLDERS' $1,054,566 $1,079,616 EQUITY

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)



Three months ended Twelve months ended

October 3, 2020September 28,October 3, 2020September 28, 2019 2019

Net cash provided by / (used in) $31,731 $(17,214) $94,412 $65,967 operating activities

Net cash (used in) / provided by investing (151,820) 17,094 (125,957) 47,468 activities, continuing operations

Net cash (used in) /provided by financing (15,191) (32,567) (145,809) (71,318) activities, continuing operations

Effect of exchange rate changes on cash, cash 1,632 859 1,297 919 equivalents and restricted cash

Changes in cash, cash equivalents (133,648) (31,828) (176,057) 43,036 and restricted cash

Cash, cash equivalents and restricted321,775 396,012 364,184 321,148 cash, beginning of period

Cash, cash equivalents and restricted$188,127 $364,184 $188,127 $364,184 cash, end of period



Short-term 342,000 229,000 342,000 229,000 investments

Total cash, cash equivalents, restricted $530,127 $593,184 $530,127 $593,184 cash and short-term 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 3, 2020September 28, 2019June 27, 2020

Net revenue $177,688 $139,827 $150,450

U.S. GAAP income from 23,048 7,693 10,971 operations

U.S. GAAP operating 13.0 %5.5 %7.3 %margin



Pre-tax non-GAAP items:

Amortization related to intangible assets acquired through business$1,920 $1,823 $1,814 combination- selling, general and administrative

Restructuring 263 1,639 -

Non-GAAP income from $25,231 $11,155 $12,785 operations

Non-GAAP operating margin14.2 %8.0 %8.5 %

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 3, October 3, September 28,June 27, 2020 2020 2020 2019

Net revenue $623,176 $177,688 $139,827 $150,450

U.S. GAAP net income 52,300 15,784 6,404 11,151

U.S. GAAP net margin 8.4 %8.9 %4.6 %7.4 %



Non-GAAP adjustments:

Amortization related to intangible assets acquired through $7,371 $1,920 $1,823 1,814 business combination- selling, general and administrative

Restructuring 689 263 1,639 -

Income tax expense- - - (300) - Tax Reform

Net income tax (benefit)/expense on (85) 16 (250) (23) non-GAAP items

Total non-GAAP 7,975 2,199 2,912 1,791 adjustments

Non-GAAP net income 60,275 17,983 9,316 12,942

Non-GAAP net margin 9.7 %10.1 %6.7 %8.6 %



U.S. GAAP net income per share:

Basic 0.83 0.26 0.10 0.18

Diluted^(a) 0.83 0.25 0.10 0.18



Non-GAAP adjustments per share:^(b)

Basic 0.13 0.04 0.05 0.03

Diluted 0.12 0.04 0.04 0.03



Non-GAAP net income per share:

Basic $0.96 $0.30 $0.15 $0.21

Diluted^(c) $0.95 $0.29 $0.14 $0.21



Weighted average shares outstanding:

Basic 62,828 61,791 63,401 62,313

Diluted^(b) 63,359 62,411 64,251 62,833

Net revenue

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, income tax expense related to the Tax Cuts and Jobs Act of 2017 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.