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KULICKE & SOFFA REPORTS FOURTH QUARTER & FISCAL YEAR 2017 RESULTS

Kulicke & Soffa Reports Fourth Quarter & Fiscal Year 2017 Results

November 14, 2017 at 6:55 AM EST

 

  • Reports $215.9 million of September quarters sales up 48% over the same period last year
  • Delivers $0.51 of September quarter EPS and $1.55 for the year
  • Guides December quarter revenue up 27% over the same period last year

SINGAPORE--(BUSINESS WIRE)-- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) ("Kulicke & Soffa", "K&S" or the "Company") today announced results for its fourth quarter and fiscal year ended September 30, 2017.

Quarterly Results      
     
Fiscal Q4 2017
     

Change vs.
Fiscal Q4 2016

      Change vs.
Fiscal Q3 2017
     
Net Revenue     $215.9 million       up 48.1%       down 11.5%      
Gross Profit     $104.7 million       up 57.2%       down 6.3%      
Gross Margin     48.5%       up 280 bps       up 270 bps      
Income from Operations     $36.9 million       up 846.2%       up 220.9%      
Operating Margin     17.1%       up 1440 bps       up 1240 bps      
Net Income     $36.6 million       up 255.3%       up 18.8%      
Net Margin     17.0%       up 990 bps       up 440 bps      
EPS - Diluted     $0.51       up 240.0%       up 18.6%      
                             

Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "We have made many tactical and organizational improvements throughout fiscal year 2017 that enhance our collective ability to deliver long-term shareholder value. Broad industry expansion combined with our strong market positions and sizable new opportunities resulted in a dramatic demand increase over the same period in the prior year."

During the September quarter the Company introduced newly defined "Capital Equipment" and "Aftermarket Products and Services" segments and refined its global R&D organization to enhance business unit accountability and market responsiveness. The Company did not incur any restructuring related charges due to these changes.

Fiscal Year 2017 Financial Highlights

  • Net revenue of $809.0 million.
  • Gross margin of 46.4%.
  • Net income was $112.0 million or $1.55 per diluted share.
  • Cash, cash equivalents, restricted cash and short-term investments were $608.9 million as at September 30, 2017.
  • The Company repurchased a total of 0.9 million shares of common stock at a cost of $18.2 million.

First Quarter Fiscal 2018 Outlook

The Company currently expects net revenue in the first fiscal quarter of 2018 ending December 30, 2017 to be approximately $185 million to $195 million, an increase of 27% over the same period in the prior year.

Looking forward, Dr. Fusen Chen commented, "We continue to seek out meaningful new growth opportunities while extending existing market positions. Our ability to deliver value is further enhanced by our expanding portfolio, meaningful partnerships, and refinements to our sales and R&D organizations."

Semiconductor unit production, a proxy for equipment demand, is expected to grow at 11.8% sequentially in calendar year 2017. The Company anticipates that in the longer-term, semiconductor unit production will grow at an 8.9% CAGR through calendar 2021, materially higher than the previously completed four-year period CAGR of 3.4%. Looking ahead, the Company's products continue to be aligned with several of the fastest growing end-applications, including sensors, LED and NAND flash memory.

Earnings Conference Call Details

A conference call to discuss these results will be held today, November 14, 2017, beginning at 8:00am (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 November 21, 2017 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13672443. 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, future growth opportunities, 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; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2016 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 STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

           
      Three months ended   Twelve months ended
     

September 30,
2017

 

October 1,
2016

 

September 30,
2017

 

October 1,
2016

Net revenue     215,892     145,844     809,041     627,192  
Cost of sales     111,153     79,223     433,995     340,463  
Gross profit     104,739     66,621     375,046     286,729  
Operating expenses:                  
Selling, general and administrative     36,617     29,778     131,015     124,706  
Research and development     27,698     22,781     100,203     92,374  
Impairment charges             35,207      
Amortization of intangible assets     1,989     1,665     6,554     6,661  
Restructuring     1,531     8,484     3,813     10,449  
Total operating expenses     67,835     62,708     276,792     234,190  
Income from operations     36,904    

3,913

    98,254     52,539  
Other income (expense):                  
Interest income     1,989     1,023     6,491     3,318  
Interest expense     (272 )   (268 )   (1,059 )   (1,107 )
Income from operations before income taxes     38,621     4,668     103,686     54,750  
Share of results of equity-method investee, net of tax     (197 )       (190 )    
Income taxes expense / (benefit)     2,242     (5,661 )   (8,135 )   7,638  
Net income     $ 36,576     $ 10,329     $ 112,011     $ 47,112  
                   
Net income per share:                  
Basic     $ 0.52     $ 0.15     $ 1.58     $ 0.67  
Diluted     $ 0.51     $ 0.15     $ 1.55     $ 0.67  
                   
Weighted average shares outstanding:                  
Basic     70,742     70,404     70,906     70,477  
Diluted     72,071     71,017     72,063     70,841  
                           
                           
                  Three months ended   Twelve months ended
Supplemental financial data:                

September 30,
2017

 

October 1,
2016

 

September 30,
2017

 

October 1,
2016

Depreciation and amortization                 $ 4,518     $ 4,009     $ 16,257     $ 16,230
Capital expenditures                 3,779     1,905     25,688     6,301
Equity-based compensation expense:                              
Cost of sales                 119     98     463     421
Selling, general and administrative                 1,652     1,223     9,015     3,244
Research and development                 481     473     2,244     2,065
Total equity-based compensation expense                 $ 2,252     $ 1,794     $ 11,722     $ 5,730
                                             
                                             
                            As of
                           

September 30,
2017

 

October 1,
2016

Backlog of orders1                           190,702     87,200
Number of employees                           3,055     2,389

1. Represents customer purchase commitments. While the Company believes these orders will proceed, they are generally cancellable by customers without penalty.
 

 

     

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

     
    As of
    September 30, 2017   October 1, 2016
ASSETS
CURRENT ASSETS        
Cash and cash equivalents   $ 392,410     $ 423,907  
Restricted cash   530      
Short-term investments   216,000     124,000  

Accounts and notes receivable, net of allowance for doubtful accounts of $79 and
$506 respectively

  198,480     130,455  
Inventories, net   122,023     87,295  
Prepaid expenses and other current assets   23,939     15,285  
TOTAL CURRENT ASSETS   953,382     780,942  
         
Property, plant and equipment, net   67,762     50,342  
Goodwill   56,318     81,272  
Intangible assets   62,316     50,810  
Deferred income taxes   27,771     16,822  
Equity investments   1,502      
Other assets   2,056     2,256  
TOTAL ASSETS   $ 1,171,107     $ 982,444  
         
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES        
Accounts payable   $ 51,354     $ 41,813  
Accrued expenses and other current liabilities   132,314     63,954  
Income taxes payable   16,780     12,830  
TOTAL CURRENT LIABILITIES   200,448     118,597  
         
Financing obligation   16,074     16,701  
Deferred income taxes   26,779     27,697  
Other liabilities   14,870     12,931  
TOTAL LIABILITIES   258,171     175,926  
         
SHAREHOLDERS' EQUITY        
Common stock, no par value   506,515     498,676  
Treasury stock, at cost   (157,604 )   (139,407 )
Retained earnings   561,986     449,975  
Accumulated other comprehensive gain/ (loss)   2,039     (2,726 )
TOTAL SHAREHOLDERS' EQUITY   $ 912,936     $ 806,518  
         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,171,107     $ 982,444  
                 
                 
             

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

             
        Three months ended   Twelve months ended
       

September 30,
2017

 

October 1,
2016

 

September 30,
2017

 

October 1,
2016

Net cash provided by operating activities       68,144     33,949     136,310     68,407  

Net cash used in investing activities, continuing
operations

      (108,615 )   (125,526 )   (145,199 )   (129,165 )

Net cash used in financing activities, continuing
operations

      (21,879 )   (291 )   (22,684 )   (14,486 )

Effect of exchange rate changes on cash and cash
equivalents

      (597 )   (353 )   76     537  
Changes in cash and cash equivalents       (62,947 )   (92,221 )   (31,497 )   (74,707 )
Cash and cash equivalents, beginning of period       455,357     516,128     423,907     498,614  
Cash and cash equivalents, end of period       $ 392,410     $ 423,907     $ 392,410     $ 423,907  
                     
Restricted cash       530         530      
Short-term investments       216,000     124,000     216,000     124,000  

Total cash, cash equivalents, restricted cash and
short-term investments

      $ 608,940     $ 547,907     $ 608,940     $ 547,907  

 

Kulicke & Soffa Industries, Inc.
Joseph Elgindy, +1-215-784-7518
Investor Relations & Strategic Initiatives
F: +1-215-784-6180

 

Source: Kulicke & Soffa Industries, Inc.

 

 

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