Kulicke & Soffa Reports First Quarter 2024 Results

Quarterly Results - U.S. GAAP

Fiscal Q1 2024

Change vs.

Fiscal Q1 2023

Change vs.

Fiscal Q4 2023

Net Revenue

$171.2 million

down 2.9%

down 15.4%

Gross Margin

46.7 %

down 360 bps

Income from Operations

$1.7 million

down 85.7%

down 91.3%

Operating Margin

1.0 %

down 570 bps

down 860 bps

Net Income

$9.3 million

down 36.3%

down 60.2%

Net Margin

5.4 %

down 290 bps

down 610 bps

EPS – Diluted

$0.16

down 36%

down 61%

Quarterly Results - Non-GAAP

Fiscal Q1 2024

Change vs.

Fiscal Q1 2023

Change vs.

Fiscal Q4 2023

Income from Operations

$10.9 million

down 46.1%

down 58.5%

Operating Margin

6.4 %

down 510 bps

down 660 bps

Net Income

$17.0 million

down 22%

down 42.3%

Net Margin

9.9 %

down 250 bps

down 460 bps

EPS – Diluted

$0.30

down 18.9%

down 41.2%

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

Three months ended

December 30, 2023

December 31, 2022

Net revenue

$                 171,189

$                 176,233

Cost of sales

91,293

87,527

Gross profit

79,896

88,706

Operating expenses:

Selling, general and administrative

40,046

40,500

Research and development

36,810

34,508

Amortization of intangible assets

1,347

1,394

Acquisition-related costs

—

107

Restructuring

—

375

Total operating expenses

78,203

76,884

Income from operations

1,693

11,822

Other income (expense):

Interest income

9,899

6,559

Interest expense

(22)

(34)

Income before income taxes

11,570

18,347

Income tax expense

2,277

3,758

Net income

$                     9,293

$                   14,589

Net income per share:

Basic

$                      0.16

$                      0.26

Diluted

$                      0.16

$                      0.25

Cash dividends declared per share

$                      0.20

$                      0.19

Weighted average shares outstanding:

Basic

56,650

57,051

Diluted

57,023

57,729

Three months ended

Supplemental financial data:

December 30, 2023

December 31, 2022

Depreciation and amortization

$                     7,985

$                     5,613

Capital expenditures

3,533

15,651

Equity-based compensation expense:

Cost of sales

359

308

Selling, general and administrative

5,680

4,867

Research and development

1,818

1,346

Total equity-based compensation expense

$                     7,857

$                     6,521

As of

December 30, 2023

December 31, 2022

Number of employees

2,981

3,176

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands)

(Unaudited)

As of

December 30,
2023

September 30,
2023

ASSETS

CURRENT ASSETS

Cash and cash equivalents

$              424,660

$              529,402

Short-term investments

285,000

230,000

Accounts and other receivable, net of allowance for doubtful accounts of $49 and $49, respectively

184,400

158,601

Inventories, net

236,558

217,304

Prepaid expenses and other current assets

47,035

53,751

TOTAL CURRENT ASSETS

1,177,653

1,189,058

Property, plant and equipment, net

107,273

110,051

Operating right-of-use assets

45,797

47,148

Goodwill

89,516

88,673

Intangible assets, net

28,916

29,357

Deferred tax assets

32,139

31,551

Equity investments

2,042

716

Other assets

3,390

3,223

TOTAL ASSETS

$           1,486,726

$           1,499,777

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

58,682

49,302

Operating lease liabilities

6,697

6,574

Accrued expenses and other current liabilities

91,193

103,005

Income taxes payable

24,716

22,670

TOTAL CURRENT LIABILITIES

181,288

181,551

Deferred tax liabilities

37,174

37,264

Income taxes payable

53,145

52,793

Operating lease liabilities

41,720

41,839

Other liabilities

12,148

11,769

TOTAL LIABILITIES

325,475

325,216

SHAREHOLDERS' EQUITY

Common stock, no par value

578,479

577,727

Treasury stock, at cost

(756,949)

(737,214)

Retained earnings

1,353,800

1,355,810

Accumulated other comprehensive loss

(14,079)

(21,762)

TOTAL SHAREHOLDERS' EQUITY

$           1,161,251

$           1,174,561

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$           1,486,726

$           1,499,777

KULICKE AND SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Three months ended

December 30, 2023

December 31, 2022

Net cash (used in)/provided by operating activities

$                   (7,331)

$                   85,116

Net cash used in investing activities

(60,541)

(38,914)

Net cash used in financing activities

(38,124)

(56,230)

Effect of exchange rate changes on cash and cash equivalents

1,254

5,104

Changes in cash and cash equivalents

(104,742)

(4,924)

Cash and cash equivalents, beginning of period

529,402

555,537

Cash and cash equivalents, end of period

$                 424,660

$                 550,613

Short-term investments

285,000

245,000

Total cash, cash equivalents and short-term investments

$                 709,660

$                 795,613

Reconciliation of U.S. GAAP 

to Non-GAAP Income from Operations and Operating Margin

(In thousands, except percentages)

(Unaudited)

Three months ended

December 30,
2023

December 31,
2022

September 30,
2023

Net revenue

$         171,189

$          176,233

$          202,320

U.S. GAAP income from operations

1,693

11,822

19,474

U.S. GAAP operating margin

1.0 %

6.7 %

9.6 %

Pre-tax non-GAAP items:

Amortization related to intangible assets

1,347

1,394

1,356

Restructuring

—

375

—

Equity-based compensation

7,857

6,521

5,441

Acquisition-related costs  

—

107

13

Non-GAAP income from operations

$           10,897

$            20,219

$            26,284

Non-GAAP operating margin

6.4 %

11.5 %

13.0 %

Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and Non-GAAP Net Margin 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

December 30,
2023

December 31,
2022

September 30,
2023

Net revenue

$         171,189

$         176,233

$          202,320

U.S. GAAP net income

9,293

14,589

23,357

U.S. GAAP net margin

5.4 %

8.3 %

11.5 %

Non-GAAP adjustments:

Amortization related to intangible assets

1,347

1,394

1,356

Restructuring

—

375

—

Equity-based compensation

7,857

6,521

5,441

Acquisition-related costs

—

107

13

Net income tax benefit on non-GAAP items

(1,516)

(1,218)

(758)

Total non-GAAP adjustments

$             7,688

$             7,179

$              6,052

Non-GAAP net income

$           16,981

$           21,768

$            29,409

Non-GAAP net margin

9.9 %

12.4 %

14.5 %

U.S. GAAP net income per share:

Basic

0.16

0.26

0.41

Diluted^(a)

0.16

0.25

0.41

Non-GAAP adjustments per share:^(b)

Basic

0.14

0.13

0.11

Diluted

0.14

0.12

0.10

Non-GAAP net income per share:

Basic

$               0.30

$               0.39

$                0.52

Diluted^(c)

$               0.30

$               0.37

$                0.51

Weighted average shares outstanding:

Basic

56,650

57,051

56,442

Diluted

57,023

57,729

57,408

(a)

GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock, but that effect is excluded when calculating GAAP diluted net loss per share because it would be anti-dilutive.

(b)

Non-GAAP adjustments per share include amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, acquisition and integration costs, equity-based compensation expenses, and 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.

Reconciliation of U.S. GAAP Cash provided by Operating Activities

to Non-GAAP Adjusted Free Cash Flow

(In thousands, except percentages)

(unaudited)

Three months ended

December 30,
2023

December 31,
2022

September 30,
2023

U.S. GAAP net cash (used in)/provided by operating activities

$               (7,331)

$              85,116

$            77,492

Expenditures for property, plant and equipment

(4,426)

(13,878)

(9,281)

Proceeds from sales of property, plant and equipment

—

—

273

Non-GAAP adjusted free cash flow

(11,757)

71,238

68,484

Reconciliation of U.S. GAAP to Non-GAAP Outlook

(In millions, except per share data)

(Unaudited)

Second quarter of fiscal 2024 ending March 30, 2024

GAAP Outlook

Adjustments

Non-GAAP Outlook

Net revenue

$170 million

+/- $10 million

—

$170 million

+/- $10 million

Operating expenses

$79.3 million

+/- 2%

$6.8 million ^B,C

$72.5 million

+/- 2%

Diluted EPS⁽¹⁾

$0.13

+/- 10%

$0.12 ^{A, B, C,D}

$0.25

+/- 10%

Non-GAAP Adjustments

A. Equity-based compensation - Cost of sales

0.4

B. Equity-based compensation - Selling, general and administrative and Research and development

5.4

C. Amortization related to intangible assets

1.4

D. Net income tax effect of the above items

(0.5)

(1) GAAP and non-GAAP diluted EPS based on approximately 56.9 million diluted weighted average shares outstanding.