Kulicke & Soffa Reports Fourth Quarter 2023 Results

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Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) announced Q4 2023 financial results, reporting net revenue of $202.3 million, net income of $23.4 million, and EPS of $0.41 per fully diluted share. The company's President and CEO, Fusen Chen, highlighted improvements in the General Semiconductor and LED end markets. Fiscal Year 2023 Financial Highlights include net revenue of $742.5 million, gross margin of 48.3%, and net income of $57.1 million. The first quarter fiscal 2024 outlook expects net revenue of approximately $170.0 million. The company will hold a conference call on November 16, 2023, to discuss the results.

SINGAPORE, Nov. 15, 2023  /PRNewswire/ -- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa," "K&S," "our," or the "Company"), today announced the financial results of its fourth fiscal quarter ended September 30, 2023. The Company reported fourth quarter net revenue of $202.3 million and net income of $23.4 million, representing EPS of $0.41 per fully diluted shares, and non-GAAP net income of $29.4 million, representing non-GAAP EPS of $0.51 per fully diluted share.

Quarterly Results - U.S. GAAP
	Fiscal Q4 2023	Change vs. Fiscal Q4 2022	Change vs. Fiscal Q3 2023
Net Revenue	$202.3 million	down 29.3%	up 6%
Gross Margin	47.4 %	up 110 bps	up 20 bps
Operating Margin	9.6 %	down 1400 bps	up 1200 bps
Net Income	$23.4 million	down 64%	up 461.3%
Net Margin	11.5 %	down 1120 bps	up 930 bps
EPS – Diluted	$0.41	down 62.7%	up 485.7%
Quarterly Results - Non-GAAP
	Fiscal Q4 2023	Change vs. Fiscal Q4 2022	Change vs. Fiscal Q3 2023
Income from Operations	$26.3 million	down 64.3%	up 8.2%
Operating Margin	13.0 %	down 1270 bps	up 30 bps
Net Income	$29.4 million	down 58.1%	down 7.8%
Net Margin	14.5 %	down 1000 bps	down 220 bps
EPS - Diluted	$0.51	down 57.1%	down 7.3%
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.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "The General Semiconductor and LED end markets have shown clear improvements in the September quarter. As we execute on a broad range of technology-driven initiatives throughout 2024, we expect industry conditions, and also unique K&S opportunities, to strengthen."

Kulicke & Soffa's broadening portfolio of solutions are becoming increasingly technology driven due to a growing industry need for more capable semiconductor and display solutions.

Fiscal Year 2023 Financial Highlights

• Net revenue of $742.5 million.
• Gross margin of 48.3%.
• Net income of $57.1 million or $0.99 per fully diluted share; non-GAAP net income of $105.0 million or $1.82 per fully diluted share.
• GAAP cash from operations of $173.4 million; Adjusted free cash flow of $129.6 million.
• The Company repurchased a total of 1.5 million shares of common stock at a cost of $68.1 million.
• Cash, cash equivalents, and short-term investments were $759.4 million as of September 30, 2023.

Fourth Quarter Fiscal 2023 Financial Highlights 

• Net revenue of $202.3 million.
• Gross margin of 47.4%.
• Net income of $23.4 million or $0.41 per fully diluted share; non-GAAP net income of $29.4 million or $0.51 per fully diluted share.
• GAAP cash from operations of $77.5 million; Adjusted free cash flow of $68.5 million.
• The Company repurchased a total of 0.2 million shares of common stock at a cost of $9.2 million.

First Quarter Fiscal 2024 Outlook

While broader cyclical improvements have benefited the utilization rates and demand for Ball Bonding systems, near-term headwinds persist in memory and automotive markets. The Company currently expects net revenue in the first fiscal quarter of 2024, ending December 30, 2023, to be approximately $170.0 million, +/- $10 million, GAAP diluted EPS to be approximately $0.15 +/- 10%, and non-GAAP diluted EPS to be approximately $0.25, +/- 10%.

Management anticipates demand to sequentially improve in the second fiscal quarter 2024 followed by broader demand improvements in the second fiscal half due to both strengthening industry conditions and ongoing execution of several K&S-specific opportunities.

Earnings Conference Call Details

A conference call to discuss these results will be held tomorrow, November 16, 2023, 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 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 November 23, 2023 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13734623. 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, net income per fully diluted share and adjusted free cash flow. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, equity-based compensation, acquisition and integration cost, impairment relating to assets acquired through business combinations, impairment relating to equity investments, income tax expense arising from discrete tax items triggered by acquisition, restructuring and significant changes in tax laws, gain/loss on disposal of business, as well as tax benefits or expenses 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 Q1, FY 2024 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 Q1, FY 2024 is not available without unreasonable effort.

About Kulicke & Soffa

Founded in 1951, Kulicke & Soffa specializes in developing cutting-edge semiconductor and electronics assembly solutions enabling a smart and more sustainable future. Our ever-growing range of products and services supports growth and facilitates technology transitions across large-scale markets, such as advanced display, automotive, communications, compute, consumer, data storage, energy storage and industrial.

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, including the importance and competitiveness of our advanced display products and other emerging technology transitions, 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 persistent macroeconomic headwinds on our business, our ability to develop, manufacture and gain market acceptance of new products, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended October 1, 2022, filed on November 17, 2022, and amended on August 8, 2023, 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 and Soffa Industries, Inc.
Joseph Elgindy
Finance
P: +1-215-784-7518

 

KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (In thousands, except per share and employee data) (Unaudited)
	Three months ended				Twelve months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net revenue	$           202,320		$           286,313		$           742,491		$        1,503,620
Cost of sales	106,481		153,626		383,836		755,300
Gross profit	95,839		132,687		358,655		748,320
Operating expenses:
Selling, general and administrative	37,380		31,275		145,493		134,869
Research and development	37,616		32,356		144,701		136,852
Impairment charges	—		—		21,535		1,346
Acquisition-related cost	13		118		511		118
Amortization of intangible assets	1,356		1,374		6,099		4,917
Restructuring	—		20		879		146
Total operating expenses	76,365		65,143		319,218		278,248
Income from operations	19,474		67,544		39,437		470,072
Other income / (expense):
Interest income	9,500		4,025		32,906		7,124
Interest expense	(26)		(35)		(142)		(208)
Income before income taxes	28,948		71,534		72,201		476,988
Income tax expense	5,591		6,630		15,053		43,443
Net income	$             23,357		$             64,904		$             57,148		$           433,545
Net income per share:
Basic	$                  0.41		$                  1.12		$                  1.01		$                  7.21
Diluted	$                  0.41		$                  1.10		$                  0.99		$                  7.09
Cash dividends declared per share	$                  0.19		$                  0.17		$                  0.76		$                  0.68
Weighted average shares outstanding:
Basic	56,442		57,804		56,682		60,164
Diluted	57,408		58,816		57,548		61,182
	Three months ended				Twelve months ended
Supplemental financial data:	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Depreciation and amortization	$                8,111		$                5,520		$             28,857		$             21,293
Capital expenditures	4,217		21,020		47,702		32,233
Equity-based compensation expense:
Cost of sales	289		233		1,192		960
Selling, general and administrative	3,841		3,426		16,239		13,911
Research and development	1,311		854		5,313		4,115
Total equity-based compensation expense	$                5,441		$                4,513		$             22,744		$             18,986
					As of
					September 30, 2023		October 1, 2022
Number of employees					3,025		3,167

 

KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (In thousands) (Unaudited)
	As of
	September 30, 2023		October 1, 2022
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$                    529,402		$                    555,537
Short-term investments	230,000		220,000
Accounts and notes receivable, net of allowance for doubtful accounts of $49 and $0 respectively	158,601		309,323
Inventories, net	217,304		184,986
Prepaid expenses and other current assets	53,751		62,200
TOTAL CURRENT ASSETS	1,189,058		1,332,046
Property, plant and equipment, net	110,051		80,908
Operating right-of-use assets	47,148		41,767
Goodwill	88,673		68,096
Intangible assets, net	29,357		31,939
Deferred tax assets	31,551		25,572
Equity investments	716		5,397
Other assets	3,223		2,874
TOTAL ASSETS	$                 1,499,777		$                 1,588,599
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	49,302		67,311
Operating lease liabilities	6,574		6,766
Accrued expenses and other current liabilities	103,005		134,541
Income taxes payable	22,670		40,063
TOTAL CURRENT LIABILITIES	181,551		248,681
Deferred tax liabilities	37,264		34,037
Income taxes payable	52,793		64,634
Operating lease liabilities	41,839		34,927
Other liabilities	11,769		11,670
TOTAL LIABILITIES	$                    325,216		$                    393,949
SHAREHOLDERS' EQUITY
Common stock, no par value	577,727		561,684
Treasury stock, at cost	(737,214)		(675,800)
Retained earnings	1,355,810		1,341,666
Accumulated other comprehensive loss	(21,762)		(32,900)
TOTAL SHAREHOLDERS' EQUITY	$                 1,174,561		$                 1,194,650
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$                 1,499,777		$                 1,588,599

 

KULICKE AND SOFFA INDUSTRIES, INC. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Three months ended				Twelve months ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022
Net cash provided by operating activities	$             77,492		$           116,563		$           173,404		$           390,188
Net cash provided by / (used in) investing activities, continuing operations	70,386		67,457		(91,338)		133,799
Net cash used in financing activities, continuing operations	(19,518)		(70,286)		(111,876)		(321,191)
Effect of exchange rate changes on cash and cash equivalents	(764)		(3,978)		3,675		(10,047)
Changes in cash and cash equivalents	127,596		109,756		(26,135)		192,749
Cash and cash equivalents, beginning of period	401,806		445,781		555,537		362,788
Cash and cash equivalents, end of period	$           529,402		$           555,537		$           529,402		$           555,537
Short-term investments	230,000		220,000		230,000		220,000
Total cash, cash equivalents, and short-term investments	$           759,402		$           775,537		$           759,402		$           775,537

 

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
		September 30, 2023		October 1, 2022		July 1, 2023
Net revenue		$              202,320		$               286,313		$                190,917
U.S. GAAP income from operations		19,474		67,544		(4,488)
U.S. GAAP operating margin		9.6 %		23.6 %		(2.4) %
Pre-tax non-GAAP items:
Amortization related to intangible assets		$                   1,356		$                    1,374		1,786
Acquisition-related costs		13		118		57
Equity-based compensation		5,441		4,513		5,403
Restructuring		—		20		—
Impairment charges		—		—		21,535
Non-GAAP income from operations		$                26,284		$                 73,569		$                  24,293
Non-GAAP operating margin		13.0 %		25.7 %		12.7 %

 

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)
	Twelve months ended		Three months ended
	September 30, 2023		September 30, 2023		October 1, 2022		July 1, 2023
Net revenue	$      742,491		$      202,320		$      286,313		$      190,917
U.S. GAAP net income	57,148		23,357		64,904		4,161
U.S. GAAP net margin	7.7 %		11.5 %		22.7 %		2.2 %
Non-GAAP adjustments:
Amortization related to intangible assets	$          6,099		$          1,356		$          1,374		1,786
Restructuring	879		—		20		—
Acquisition-related costs	511		13		118		57
Equity-based compensation	22,744		5,441		4,513		5,403
Impairment charges	21,535		—		—		21,535
Net income tax benefit on non-GAAP items	(3,928)		(758)		(689)		(1,060)
Total non-GAAP adjustments	47,840		6,052		5,336		27,721
Non-GAAP net income	104,988		29,409		70,240		31,882
Non-GAAP net margin	14.1 %		14.5 %		24.5 %		16.7 %
U.S. GAAP net income per share:
Basic	1.01		0.41		1.12		0.07
Diluted(a)	0.99		0.41		1.10		0.07
Non-GAAP adjustments per share:(b)
Basic	0.84		0.11		0.10		0.49
Diluted	0.83		0.10		0.09		0.48
Non-GAAP net income per share:
Basic	$            1.85		$            0.52		$            1.22		$            0.56
Diluted(c)	$            1.82		$            0.51		$            1.19		$            0.55
Weighted average shares outstanding:
Basic	56,682		56,442		57,804		56,553
Diluted	57,548		57,408		58,816		57,519

(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 includes amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, acquisition and integration cost, equity-based compensation expenses, impairment relating to assets acquired through business combinations, impairment relating to equity investments, 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)
	Twelve months ended		Three months ended
	September 30, 2023		September 30, 2023		October 1, 2022		July 1, 2023
U.S. GAAP net cash provided by operating activities	$         173,404		$           77,492		$         116,563		$              8,976
Expenditures for property, plant and equipment	(44,406)		(9,281)		(12,605)		(10,610)
Proceeds from sales of property, plant and equipment	591		273		62		83
Non-GAAP adjusted free cash flow	129,589		68,484		104,020		(1,551)

 

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SOURCE Kulicke & Soffa Industries, Inc.

FAQ

What are Kulicke and Soffa's Q4 2023 financial results?

Kulicke and Soffa reported net revenue of $202.3 million, net income of $23.4 million, and EPS of $0.41 per fully diluted share in Q4 2023.

What are the Fiscal Year 2023 Financial Highlights for Kulicke and Soffa?

In fiscal year 2023, Kulicke and Soffa achieved net revenue of $742.5 million, gross margin of 48.3%, and net income of $57.1 million.

What is Kulicke and Soffa's first quarter fiscal 2024 outlook?

The company expects net revenue of approximately $170.0 million in the first fiscal quarter of 2024, ending December 30, 2023.

When is the conference call to discuss Kulicke and Soffa's results?

The conference call to discuss the results will be held on November 16, 2023, beginning at 8:00am EST.