8-K
Kulicke & Soffa Industries Inc (KLIC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________
FORM 8-K
____________________________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 18, 2020
____________________________________________________
KULICKE AND SOFFA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
____________________________________________________
| Pennsylvania | 000-00121 | 23-1498399 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (I.R.S. Employer<br>Identification No.) |
23A Serangoon North Avenue 5, #01-01, K&S Corporate Headquarters, Singapore 554369
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: (215) 784-6000
N/A
(Former Name or Former Address, if Changed Since Last Report)
____________________________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, Without Par Value | KLIC | The Nasdaq Global Market |
Item 2.02 Results of Operations and Financial Condition.
On November 18, 2020, Kulicke and Soffa Industries, Inc. (the “Company”) issued a press release with respect to its financial results for its fourth fiscal quarter ended October 3, 2020. A copy of this press release is furnished as Exhibit 99.1 to this report, and is incorporated by reference into this Item 2.02 as if fully set forth herein.
The information in this report, furnished under “Item 2.02 Results of Operations and Financial Condition,” shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| Exhibit No. | Description |
| 99.1 | Press Release dated November 18, 2020 |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8‑K. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KULICKE AND SOFFA INDUSTRIES, INC. | ||
|---|---|---|
| Date: November 19, 2020 | By: | /s/ LESTER WONG |
| Name: | Lester Wong | |
| Title: | Senior Vice President and Chief Financial Officer |
EXHIBIT INDEX
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated November 18, 2020 |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8‑K. |
Document
Exhibit 99.1
| K&S Corporate Headquarters<br><br>Kulicke & Soffa Pte Ltd<br><br>23A Serangoon North Ave 5<br><br>#01-01, Singapore 554369 |
|---|
| +65-6880-9600 main<br><br>+65-6880-9580 fax<br><br>www.kns.com<br><br>Co. Regn. No. 199902120H |
Kulicke & Soffa Reports Fourth Quarter 2020 Results
Singapore – November 18, 2020 – 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 2020 | Change vs.<br>Fiscal Q4 2019 | Change vs.<br>Fiscal Q3 2020 | |
| Net Revenue | $177.7 million | up 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 2020 | Change vs.<br>Fiscal Q4 2019 | Change vs.<br>Fiscal 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 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, 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 Elgindy |
| Investor 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, 2020 | September 28, 2019 | October 3, 2020 | September 28, 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 administrative | 28,101 | 25,723 | 107,947 | 107,785 | ||||
| Research and development | 35,553 | 28,560 | 123,459 | 116,169 | ||||
| Amortization of intangible assets | 1,920 | 1,823 | 7,371 | 7,412 | ||||
| Restructuring | 263 | 1,639 | 689 | 1,614 | ||||
| Total operating expenses | 65,837 | 57,745 | 239,466 | 232,980 | ||||
| Income from operations | 23,048 | 7,693 | 58,509 | 21,610 | ||||
| Other income / (expense): | ||||||||
| Interest income | 653 | 3,485 | 7,541 | 15,132 | ||||
| Interest expense | (26) | (918) | (1,716) | (2,055) | ||||
| Income before income taxes | 23,675 | 10,260 | 64,334 | 34,687 | ||||
| Income tax expense / (benefit) | 8,013 | 3,804 | 11,998 | 22,910 | ||||
| Share of results of equity-method investee, net of tax | (122) | 52 | 36 | 124 | ||||
| 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 share | $ | 0.12 | $ | 0.12 | $ | 0.48 | $ | 0.48 |
| 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 financial data: | October 3, 2020 | September 28, 2019 | October 3, 2020 | September 28, 2019 | ||||
| Depreciation and amortization | $ | 5,142 | $ | 5,303 | $ | 19,739 | $ | 20,304 |
| Capital expenditures | 5,964 | 2,517 | 14,514 | 11,829 | ||||
| Equity-based compensation expense: | ||||||||
| Cost of sales | 147 | 161 | 744 | 632 | ||||
| Selling, general and administrative | 2,965 | 2,632 | 11,071 | 10,503 | ||||
| Research and development | 851 | 767 | 3,204 | 3,197 | ||||
| Total equity-based compensation expense | $ | 3,963 | $ | 3,560 | $ | 15,019 | $ | 14,332 |
| As of | ||||||||
| --- | --- | --- | --- | --- | ||||
| October 3, 2020 | September 28, 2019 | |||||||
| Backlog of orders 1 | $ | 127,924 | $ | 104,711 | ||||
| Number of employees | 2,836 | 2,614 |
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 | ||||
|---|---|---|---|---|
| October 3, 2020 | September 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 and $597 respectively | 198,640 | 195,830 | ||
| Inventories, net | 111,809 | 89,308 | ||
| Prepaid expenses and other current assets | 19,620 | 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 liabilities | 76,762 | 64,533 | ||
| 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' EQUITY | $ | 1,054,566 | $ | 1,079,616 |
KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Three months ended | Twelve months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| October 3, 2020 | September 28, 2019 | October 3, 2020 | September 28, 2019 | |||||
| Net cash provided by / (used in) operating activities | $ | 31,731 | $ | (17,214) | $ | 94,412 | $ | 65,967 |
| Net cash (used in) / provided by investing activities, continuing operations | (151,820) | 17,094 | (125,957) | 47,468 | ||||
| Net cash (used in) /provided by financing activities, continuing operations | (15,191) | (32,567) | (145,809) | (71,318) | ||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1,632 | 859 | 1,297 | 919 | ||||
| Changes in cash, cash equivalents and restricted cash | (133,648) | (31,828) | (176,057) | 43,036 | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 321,775 | 396,012 | 364,184 | 321,148 | ||||
| Cash, cash equivalents and restricted cash, end of period | $ | 188,127 | $ | 364,184 | $ | 188,127 | $ | 364,184 |
| Short-term investments | 342,000 | 229,000 | 342,000 | 229,000 | ||||
| Total cash, cash equivalents, restricted cash and short-term investments | $ | 530,127 | $ | 593,184 | $ | 530,127 | $ | 593,184 |
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, 2020 | September 28, 2019 | June 27, 2020 | |||||||
| Net revenue | $ | 177,688 | $ | 139,827 | $ | 150,450 | |||
| U.S. GAAP income from operations | 23,048 | 7,693 | 10,971 | ||||||
| U.S. GAAP operating margin | 13.0 | % | 5.5 | % | 7.3 | % | |||
| Pre-tax non-GAAP items: | |||||||||
| Amortization related to intangible assets acquired through business combination- selling, general and administrative | $ | 1,920 | $ | 1,823 | $ | 1,814 | |||
| Restructuring | 263 | 1,639 | — | ||||||
| Non-GAAP income from operations | $ | 25,231 | $ | 11,155 | $ | 12,785 | |||
| Non-GAAP operating margin | 14.2 | % | 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 months ended | Three months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| October 3, 2020 | October 3, 2020 | September 28, 2019 | June 27, 2020 | |||||||||
| 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 business combination- selling, general and administrative | $ | 7,371 | $ | 1,920 | $ | 1,823 | 1,814 | |||||
| Restructuring | 689 | 263 | 1,639 | — | ||||||||
| Income tax expense- Tax Reform | — | — | (300) | — | ||||||||
| Net income tax (benefit)/expense on non-GAAP items | (85) | 16 | (250) | (23) | ||||||||
| Total non-GAAP adjustments | 7,975 | 2,199 | 2,912 | 1,791 | ||||||||
| 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 |
(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.
(b)Non-GAAP adjustments per share includes amortization related to intangible assets acquired through business combinations, 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.
(c)Non-GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock units and stock options.
9