- Reports $213.7 million of December
quarters sales, up 43% over the same period last year
- Delivers $38.6 million of December
quarter operating profit, up 123% over the same period last
year
- Guides record first fiscal half 2018
revenue between $419 and $429 million
Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke
& Soffa”, “K&S” or the “Company”) today announced results
for its first fiscal quarter ended December 30, 2017. The
Company reported first quarter net revenue of $213.7 million, a
diluted EPS of $(0.98) and a non-GAAP diluted EPS was $0.54.
Quarterly Results - U.S. GAAP
Fiscal Q1 2018
Change vs.
Fiscal Q1 2017
Change vs.
Fiscal Q4 2017
Net Revenue $213.7 million
up 42.8% down 1.0% Gross Profit
$99.0 million up 44.9%
down 5.4% Gross Margin 46.3%
up 60 bps down 220 bps
Income from Operations $38.6 million up 123.1% up 4.6% Operating
Margin 18.1% up 650 bps
up 100 bps Net Loss $(69.3) million down
544.2% down 289.3% Net Margin (32.4)%
down 4280 bps down 4940 bps EPS
– Diluted(a) $(0.98) down
545.5% down 292.2%
(a)
GAAP diluted net earnings per share
reflects any dilutive effect of 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. For the three months ended December 30, 2017, 1.2
million shares of restricted stock units and stock options were
excluded due to the Company's net loss.
Quarterly Results - Non-GAAP
Fiscal Q1 2018
Change vs.
Fiscal Q1 2017
Change vs.
Fiscal Q4 2017
Income from Operations $41.8 million
up 122.3% up 3.5% Operating
Margin 19.6% up 700 bps
up 90 bps Net Income $38.8 million up 126.9%
down 3.2% Net Margin 18.2%
up 680 bps down 40 bps EPS - Diluted
$0.54 up 125.0%
down 3.6%
* 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.
Dr. Fusen Chen, Kulicke & Soffa's President and Chief
Executive Officer, stated, “Strength during the December quarter
was driven by our competitive automotive, LED, memory and image
sensor solutions in addition to the ongoing strong business
environment."
During the December quarter the Company incurred a charge of
$105 million due to the impact of the Tax Cuts and Reform Act of
2017. On a non-GAAP basis, diluted earnings per share increased by
125% over the same period in the prior year.
First Quarter Fiscal 2018 Financial
Highlights
- Net revenue of $213.7 million.
- Gross margin of 46.3%.
- Non-GAAP net income of $38.8 million or
$0.54 per share.
- Cash, cash equivalents, and short-term
investments were $649.7 million as of December 30, 2017.
Second Quarter Fiscal 2018
Outlook
The Company currently expects net revenue in the second fiscal
quarter of 2018 ending March 31, 2018 to be approximately $205
million to $215 million. For the first fiscal half of 2018, this
guidance represents an increase of 21% over the same period in the
prior year.
Looking forward, Dr. Fusen Chen commented, "Our competitive
positions and exposure to higher-growth segments provides
additional upside beyond the already favorable semiconductor unit
growth rate of 8.9%, calendar 2017 through 2021. In addition, we
remain focused to further enhance these long-term growth prospects
through traction with our growing advanced packaging offerings and
share gains within our recurring revenue business."
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.
Earnings Conference Call
Details
A conference call to discuss these results will be held today,
January 31, 2018, beginning at 6:00 pm (EST). To access the
conference call, interested parties may call +1-877-407-8037 or
internationally +1-201-689-8037. The call will also be available by
live webcast at investor.kns.com.
A replay will be available from approximately one hour after the
completion of the call through February 14, 2018 by calling
toll-free +1-877-660-6853 or internationally +1-201-612-7415 and
using the replay ID number of 13675324. A webcast replay will also
be available at investor.kns.com.
About Kulicke &
Soffa
Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of
semiconductor packaging and electronic assembly solutions
supporting the global automotive, consumer, communications,
computing and industrial segments. As a pioneer in the
semiconductor space, K&S has provided customers with market
leading packaging solutions for decades. In recent years,
K&S has expanded its product offerings through strategic
acquisitions and organic development, adding advanced packaging,
electronics assembly, wedge bonding and a broader range of
expendable tools to its core offerings. Combined with its extensive
expertise in process technology and focus on development, K&S
is well positioned to help customers meet the challenges of
packaging and assembling the next-generation of electronic devices
(www.kns.com).
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, and include, but are not limited to, statements that relate
to our future revenue, sustained, increasing, continuing or
strengthening demand for our products, replacement demand, our
research and development efforts, our ability to control costs, and
our ability to identify and realize new growth opportunities within
segments, such as automotive and industrial as well as surrounding
technology adoption such as system in package and advanced
packaging techniques. 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 risk that customer orders already received may
be postponed or canceled, generally without charges; the risk that
anticipated customer orders may not materialize; the risk that our
suppliers may not be able to meet our demands on a timely basis;
the volatility in the demand for semiconductors and our products
and services; the risk that identified market opportunities may not
grow or developed as we anticipated; volatile global economic
conditions, which could result in, among other things, sharply
lower demand for products containing semiconductors and for the
Company’s products, and disruption of capital and credit markets;
the risk of failure to successfully manage our operations; the
possibility that we may need to impair the carrying value of
goodwill and/or intangibles established in connection with one or
more of our prior acquisitions; acts of terrorism and violence;
risks, such as changes in trade regulations, currency fluctuations,
political instability and war, which may be associated with a
substantial non-U.S. customer and supplier base and substantial
non-U.S. manufacturing operations; the impact of changes in tax
law; and the factors listed or discussed in Kulicke and Soffa
Industries, Inc. 2017 Annual Report on Form 10-K 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.
KULICKE & SOFFA INDUSTRIES,
INC.
CONSOLIDATED CONDENSED STATEMENTS OF
OPERATIONS
(In thousands, except per share and
employee data)
(Unaudited)
Three months ended December 30, 2017
December 31, 2016 Net revenue $ 213,691 $ 149,639
Cost of sales 114,652 81,321 Gross
profit 99,039 68,318 Operating
expenses: Selling, general and administrative 26,961 28,009
Research and development 30,250 21,505 Amortization of intangible
assets 1,943 1,523 Restructuring 1,314 —
Total operating expenses 60,468 51,037
Income from operations 38,571 17,281 Other income (expense):
Interest income 1,975 1,172 Interest expense (266 )
(262 ) Income before income taxes 40,280 18,191 Income tax expense
109,633 2,608 Share of results of equity-method investee, net of
tax (16 ) — Net (loss)/income $ (69,337 ) $
15,583 Net (loss)/income per share: Basic $ (0.98 ) $
0.22 Diluted $ (0.98 ) $ 0.22 Weighted average
shares outstanding: Basic 70,577 70,854 Diluted 70,577 71,763
Three months ended Supplemental financial data:
December 30, 2017 December 31, 2016 Depreciation and amortization $
4,468 $ 3,944 Capital expenditures 6,257 2,229 Equity-based
compensation expense: Cost of sales 132 141 Selling, general and
administrative 2,323 2,734 Research and development 654
727 Total equity-based compensation expense $
3,109 $ 3,602 As of December 30, 2017
December 31, 2016 Backlog of orders 1 $ 164,968 $ 86,676 Number of
employees 3,181 2,827 1. Represents customer purchase
commitments. While the Company believes these orders are firm, they
are generally cancellable by customers without penalty.
KULICKE & SOFFA INDUSTRIES,
INC.
CONSOLIDATED CONDENSED BALANCE
SHEETS
(In thousands)
(Unaudited)
As of December 30, 2017
September 30, 2017
ASSETS CURRENT ASSETS Cash and
cash equivalents $ 390,661 $ 392,410 Restricted cash 528 530
Short-term investments 259,000 216,000 Accounts and other
receivable, net of allowance for doubtful accounts of $354 and $79
respectively 173,777 198,480 Inventories, net 106,683 122,023
Prepaid expenses and other current assets 22,686
23,939
TOTAL CURRENT ASSETS 953,335 953,382
Property, plant and equipment, net 71,720 67,762 Goodwill
57,063 56,318 Intangible assets, net 60,586 62,316 Deferred income
taxes 12,276 27,771 Equity investments 1,518 1,502 Other assets
2,088 2,056
TOTAL ASSETS $
1,158,586 $ 1,171,107
LIABILITIES AND
SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts
payable $ 68,370 $ 51,354 Accrued expenses and other current
liabilities 80,147 132,314 Income taxes payable 18,137
16,780
TOTAL CURRENT LIABILITIES
166,654 200,448 Financing obligation 16,130 16,074 Deferred
income taxes 26,940 26,779 Income taxes payable 89,491 6,438 Other
liabilities 9,000 8,432
TOTAL
LIABILITIES 308,215 258,171
SHAREHOLDERS' EQUITY Common stock, no par value 510,736
506,515 Treasury stock, at cost (160,884 ) (157,604 ) Retained
earnings 496,655 561,986 Accumulated other comprehensive income
3,864 2,039
TOTAL SHAREHOLDERS'
EQUITY 850,371 912,936
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 1,158,586 $ 1,171,107
KULICKE & SOFFA INDUSTRIES,
INC.
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS
(In thousands)
(Unaudited)
Three months ended December 30, 2017 December 31,
2016 Net cash provided by operating activities $ 50,333 $ 30,049
Net cash used in investing activities, continuing operations
(48,183 ) (2,659 ) Net cash (used in) / provided by financing
activities, continuing operations (3,391 ) 142 Effect of exchange
rate changes on cash, cash equivalents and restricted cash
(510 ) 1,987 Changes in cash, cash equivalents and
restricted cash (1,751 ) 29,519 Cash, cash equivalents and
restricted cash, beginning of period* 392,940
423,907 Cash, cash equivalents and restricted cash, end of
period $ 391,189 $ 453,426 Short-term
investments 259,000 124,000 Total cash,
cash equivalents, restricted cash and short-term investments $
650,189 $ 577,426 *Certain time deposits as at
October 1, 2016 were previously reclassified from cash equivalents
to short-term investments for comparative purposes.
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 December 30, 2017 December 31,
2016 September 30, 2017 Net revenue 213,691 149,639 215,892 U.S.
GAAP Income from operations 38,571 17,281 36,904 U.S. GAAP
operating margin 18.0 % 11.5 % 17.1 % Pre-tax non-GAAP
items: Amortization related to intangible assets acquired through
business combination- selling, general and administrative 1,943
1,523 1,989 Restructuring 1,314 — 1,531
Non-GAAP Income from operations 41,828 18,804 40,424
Non-GAAP operating margin 19.6 % 12.6 % 18.7 %
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)
Three months ended December 30, 2017 December 31,
2016 September 30, 2017 Net revenue 213,691 149,639 215,892 U.S.
GAAP net (loss)/income (69,337 ) 15,583 36,576 U.S. GAAP net margin
(32.4 )% 10.4 % 16.9 % Pre-tax non-GAAP adjustments:
Amortization related to intangible assets acquired through business
combination- selling, general and administrative 1,943 1,523 1,989
Restructuring 1,314 — 1,531 Income tax expense- Tax Reform 104,955
— — Net income tax benefit on non-GAAP items (36 ) (22 ) (44 )
Total non-GAAP adjustments 108,176 1,501 3,476
Non-GAAP net income 38,839 17,084 40,052
Non-GAAP net margin 18.2 % 11.4 % 18.6 % U.S. GAAP net
(loss)/income per share: Basic (0.98 ) 0.22 0.52 Diluted (a) (0.98
) 0.22 0.51 Non-GAAP adjustments per share: Basic 1.53 0.02
0.05 Diluted 1.51 0.02 0.05 Non-GAAP net income per share:
Basic 0.55 0.24 0.57 Diluted (b) 0.54
0.24 0.56 (a) GAAP diluted net
earnings per share reflects any dilutive effect of 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. For the three months ended December 30,
2017, 1.2 million shares of restricted stock units and stock
options were excluded due to the Company's net loss. (b) Non-GAAP
diluted net earnings per share reflects any dilutive effect of
outstanding restricted stock units and stock options.
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Kulicke & Soffa Industries, Inc.Joseph
ElgindyInvestor Relations & Strategic InitiativesP:
+1-215-784-7518F: +1-215-784-6180
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