Kulicke & Soffa Industries Inc 10-Q for FY2024 Q1

Kulicke & Soffa Industries Inc (KLIC)

10-Q 2024-02-01 For: 2023-12-30

Added on April 09, 2026

About this 10-Q

Kulicke & Soffa Industries Inc filed this 10-Q on February 1, 2024, covering the quarter ended December 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended December 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $171.19M; down 2.9% from $176.23M a year earlier
Net income: $9.29M; down 36.3% from net income of $14.59M a year earlier
Diluted EPS: $0.16; down 36.0% from $0.25 a year earlier

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Pennsylvania			23-1498399
(State or other jurisdiction of incorporation)			(IRS Employer
			Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Without Par Value	KLIC	The Nasdaq Global Market


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐


		Page Number

PART I - FINANCIAL INFORMATION

Item 1.	FINANCIAL STATEMENTS (Unaudited)

	Consolidated Condensed Balance Sheets as of December 30, 2023 and September 30, 2023	1

	Consolidated Condensed Statements of Operations for the three months ended December 30, 2023 and December 31, 2022	2

	Consolidated Condensed Statements of Comprehensive Income for the three months ended December 30, 2023 and December 31, 2022	3

	Consolidated Condensed Statements of Changes in Shareholders’ Equity for the three months ended December 30, 2023 and December 31, 2022	4

	Consolidated Condensed Statements of Cash Flows for the three months ended December 30, 2023 and December 31, 2022	5

	Notes to Consolidated Condensed Financial Statements	6

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36

Item 4.	CONTROLS AND PROCEDURES	37

PART II - OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	38

Item 1A.	RISK FACTORS	38

Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38

Item 3.	DEFAULTS UPON SENIOR SECURITIES	39

Item 4.	MINE SAFETY DISCLOSURES	39

Item 5.	OTHER INFORMATION	39

Item 6.	EXHIBITS	40

	SIGNATURES	41


	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
Income taxes payable	24,716		22,670
Accrued expenses and other current liabilities	91,193		103,005
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

Commitments and contingent liabilities (Note 15)

Shareholders’ equity:
Preferred stock, without par value: Authorized 5,000 shares; issued - none	$	—	$	—
Common stock, without par value: Authorized 200,000 shares; issued 85,364 and 85,364, respectively; outstanding 56,495 and 56,310 shares, respectively	578,479		577,727
Treasury stock, at cost, 28,869 and 29,054 shares, respectively	(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


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	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
Selling, general and administrative	41,393		42,376
Research and development	36,810		34,508

Operating expenses	78,203		76,884
Income from operations	1,693		11,822

Interest income	9,899		6,559
Interest expense	(22)		(34)
Income before income taxes	11,570		18,347
Provision for income taxes	2,277		3,758

Net income	$	9,293	$	14,589

Net income per share:
Basic	$	0.16	$	0.26
Diluted	$	0.16	$	0.25



Weighted average shares outstanding:
Basic	56,650		57,051
Diluted	57,023		57,729


	Common Stock			Treasury Stock		Retained Earnings		Accumulated Other Comprehensive (Loss)/Income		Shareholders' Equity
	Shares	Amount
Balances as of September 30, 2023	56,310	$	577,727	$	(737,214)	$	1,355,810	$	(21,762)	$	1,174,561
Issuance of stock for services rendered	7	253		62		—		—		315
Repurchase of common stock	(556)	—		(26,840)		—		—		(26,840)

Issuance of shares for equity-based compensation	734	(7,043)		7,043		—		—		—
Equity-based compensation	—	7,542		—		—		—		7,542

Cash dividend declared	—	—		—		(11,303)		—		(11,303)
Components of comprehensive income:
Net income	—	—		—		9,293		—		9,293
Other comprehensive income	—	—		—		—		7,683		7,683
Total comprehensive income	—	—		—		9,293		7,683		16,976
Balances as of December 30, 2023	56,495	$	578,479	$	(756,949)	$	1,353,800	$	(14,079)	$	1,161,251


	As of
(in thousands)	December 30, 2023		September 30, 2023

Inventories, net:
Raw materials and supplies	$	119,077	$	114,827
Work in process	85,499		74,555
Finished goods	55,463		49,207
	260,039		238,589
Inventory reserves	(23,481)		(21,285)
	$	236,558	$	217,304
Property, plant and equipment, net:
Land	$	2,182	$	2,182
Buildings and building improvements	23,213		23,105
Leasehold improvements	83,586		82,927
Data processing equipment and software	38,267		37,483
Machinery, equipment, furniture and fixtures	98,773		95,692
Construction in progress	11,345		11,099
	257,366		252,488
Accumulated depreciation	(150,093)		(142,437)
	$	107,273	$	110,051
Accrued expenses and other current liabilities:

Accrued customer obligations (1)	$	36,287	$	35,701
Wages and benefits	23,060		33,096
Dividends payable	11,303		10,710
Commissions and professional fees	4,270		4,091
Accrued leasehold renovations	10,013		11,005

Other	6,260		8,402
	$	91,193	$	103,005


(in thousands)	Wedge Bonding Equipment		APS		All Others	Total
Balance at September 30, 2023(1)	$	18,280	$	26,109	44,284	$	88,673


Other	—		125		718	$	843
Balance at December 30, 2023	$	18,280	$	26,234	45,002	$	89,516


		As of December 30, 2023						As of September 30, 2023
(dollar amounts in thousands)	Average estimated useful lives (in years)	Gross Carrying Amount		Accumulated Amortization		Net Amount		Gross Carrying Amount		Accumulated Amortization		Net Amount

Developed technology	6.0 to 15.0	$	82,874	$	(57,961)	$	24,913	$	80,959	$	(55,877)	$	25,082
Customer relationships	5.0 to 8.0	$	37,439	$	(35,530)	$	1,909	$	36,764	$	(34,789)	$	1,975
Trade and brand name	7.0 to 8.0	$	7,241	$	(7,241)	$	—	$	7,130	$	(7,130)	$	—
Other intangible assets	1.0 to 8.0	$	5,618	$	(3,983)	$	1,635	$	5,617	$	(3,776)	$	1,841
In-process research and development	N.A	$	459	$	—	$	459	$	459	$	—	$	459
		$	133,631	$	(104,715)	$	28,916	$	130,929	$	(101,572)	$	29,357


(in thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses		Estimated Fair Value
Current assets:
Cash	$	39,229	$	—	$	—	$	39,229
Cash equivalents:
Money market funds (1)	225,429		2		—		225,431
Time deposits (2)	160,000		—		—		160,000

Total cash and cash equivalents	$	424,658	$	2	$	—	$	424,660


Short-term investments:
Time deposits (2)	285,000		—		—		285,000

Total short-term investments	$	285,000	$	—	$	—	$	285,000
Total cash, cash equivalents and short-term investments	$	709,658	$	2	$	—	$	709,660


	Three months ended
(shares in thousands)	December 30, 2023	December 31, 2022
Time-based RSUs	499	508
Relative TSR PSUs	231	186
Growth PSUs	49	92
Common stock	7	6
Equity-based compensation in shares	786	792



	Three months ended
(in thousands, except per share data)	December 30, 2023				December 31, 2022
	Basic		Diluted		Basic		Diluted
NUMERATOR:
Net income	$	9,293	$	9,293	$	14,589	$	14,589


DENOMINATOR:
Weighted average shares outstanding - Basic	56,650		56,650		57,051		57,051

Dilutive effect of Equity Plans			373				678


Weighted average shares outstanding - Diluted			57,023				57,729
EPS:
Net income per share - Basic	$	0.16	$	0.16	$	0.26	$	0.26
Effect of dilutive shares			—				(0.01)
Net income per share - Diluted			$	0.16			$	0.25

Anti-dilutive shares(1)			25				1


	Three months ended
	December 30, 2023		December 31, 2022
Net income	$	9,293	$	14,589
Other comprehensive income:

Foreign currency translation adjustment	6,280		14,319
Unrecognized actuarial gain on pension plan, net of tax	(67)		(47)
	6,213		14,272

Derivatives designated as hedging instruments:
Unrealized gain on derivative instruments, net of tax	1,255		3,093
Reclassification adjustment for loss on derivative instruments recognized, net of tax	215		280
Net increase from derivatives designated as hedging instruments, net of tax	1,470		3,373

Total other comprehensive income	7,683		17,645

Comprehensive income	$	16,976	$	32,234


	Three months ended
	December 30, 2023		December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	9,293	$	14,589
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,985		5,613

Equity-based compensation and employee benefits	7,857		6,521


Adjustment for inventory valuation	2,789		809
Deferred taxes	(678)		(2,740)
Loss/(Gain) on disposal of property, plant and equipment	43		(256)
Unrealized fair value changes on equity investment	(211)		—
Unrealized foreign currency translation	2,565		3,588

Changes in operating assets and liabilities, net of assets and liabilities assumed in businesses combinations:
Accounts and other receivable	(25,619)		108,754
Inventories	(22,083)		(27,229)
Prepaid expenses and other current assets	7,547		252
Accounts payable, accrued expenses and other current liabilities	(819)		(32,763)
Income taxes payable	2,396		5,745
Other, net	1,604		2,233
Net cash (used in)/provided by operating activities	(7,331)		85,116

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment	(4,426)		(13,878)

Investment in private equity fund	(1,115)		(36)


Purchase of short-term investments	(215,000)		(85,000)
Maturity of short-term investments	160,000		60,000


Net cash used in investing activities	(60,541)		(38,914)

CASH FLOWS FROM FINANCING ACTIVITIES:


	As of
(in thousands)	December 30, 2023
Remaining fiscal 2024	$	3,916
Fiscal 2025	5,153
Fiscal 2026	5,153
Fiscal 2027	4,878
Fiscal 2028	4,438
Thereafter	5,378
Total amortization expense	$	28,916


	As of
	December 30, 2023				September 30, 2023
(in thousands)	Notional Amount		Fair Value Asset Derivatives(1)			Notional Amount		Fair Value Liability Derivatives(2)
Derivatives designated as hedging instruments:
Foreign exchange forward contracts (3)	$	42,736	$	747		$	54,590	$	(723)
Total derivatives	$	42,736	$	747		$	54,590	$	(723)


			Payments due by fiscal year
(in thousands)	Total		2024		2025		2026		2027		2028		Thereafter
Inventory purchase obligation (1)	$	167,469	$	97,313	$	70,156	$	—	$	—	$	—	$	—



	Three months ended				Basis Point
	December 30, 2023		December 31, 2022		Change
Ball Bonding Equipment	47.2	%	52.4	%	(520)
Wedge Bonding Equipment	50.4	%	48.3	%	210
Advanced Solutions	26.1	%	31.2	%	(510)
APS	55.2	%	55.4	%	(20)
All Others	17.1	%	56.6	%	(3,950)
Total gross profit margin	46.7	%	50.3	%	(360)


			Payments due in
(in thousands)	Total		Less than 1 year		1 - 3 years		3 - 5 years		More than 5 years
Inventory purchase obligations (1)	$	167,469	$	97,313	$	70,156	$	—	$	—

U.S. one-time transition tax payable (2) (reflected on our Consolidated Condensed Balance Sheets)	$	47,686	12,606		35,080		—		—

Total	$	215,155	$	109,919	$	105,236	$	—	$	—


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
October 1, 2023 to October 28, 2023	154	$	45.37	154	$	174.1
October 29, 2023 to December 2, 2023	285	$	48.21	285	$	160.3
December 3, 2023 to December 30, 2023	116	$	52.47	116	$	154.2
For the three months ended December 30, 2023	555			555



Exhibit No.						Description

3.1						The Company's Amended and Restated Articles of Incorporation, dated December 5, 2007, are incorporated herein by reference to Exhibit 3(i) to the Company's Annual Report on Form 10-K for the fiscal year ended September 29, 2007, SEC file number 000-00121.

3.2						The Company's Amended and Restated By-Laws, dated October 12, 2023, are incorporated herein by reference to Exhibit 3(i) to the Company's Current Report on Form 8-K dated October 13, 2023.

31.1						Certification of Fusen Chen, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Lester Wong, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.

32.1*						Certification of Fusen Chen, Chief Executive Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*						Certification of Lester Wong, Chief Financial Officer of Kulicke and Soffa Industries, Inc., pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						Inline XBRL Instance Document.

101.SCH						Inline XBRL Taxonomy Extension Schema Document.

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS).

*						This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act.


	KULICKE AND SOFFA INDUSTRIES, INC.

Date: February 1, 2024	By:	/s/ LESTER WONG
		Lester Wong
		Executive Vice President and Chief Financial Officer (principal financial officer and principal accounting officer)


Date: February 1, 2024	By:	/s/ FUSEN CHEN
		Fusen Chen
		President and Chief Executive Officer