Document


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): May 31, 2018
 
____________________________________________________
KULICKE AND SOFFA INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
 
 ____________________________________________________
 
Pennsylvania
 
000-00121
 
23-1498399
(State or Other Jurisdiction
of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer
Identification No.)
 
23A Serangoon North Avenue 5, #01-01 K&S Corporate Headquarters, Singapore
 
554369
(Address of Principal Executive Offices)
 
(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. [ ]





Item 2.02     Results of Operations and Financial Condition.
On May 31, 2018, Kulicke and Soffa Industries, Inc. (the “Company”) issued a press release with respect to its financial results for its second fiscal quarter ended March 31, 2018. 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 May 31, 2018






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: May 31, 2018
By:
/s/ LESTER WONG
 
 
Name:
Lester Wong
 
 
Title:
Senior Vice President, Interim Chief Financial Officer and General Counsel
 
 
 
 
 






EXHIBIT INDEX
 
 
Exhibit No.
Description
99.1



Exhibit
Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12286544&doc=3
K&S Corporate Headquarters
Kulicke & Soffa Pte Ltd
23A Serangoon North Ave 5
#01-01, Singapore 554369
 
+65-6880-9600 main
+65-6880-9580 fax
www.kns.com
Co. Regn. No. 199902120H
 
Kulicke & Soffa Finalizes Second Quarter 2018 Results
Reiterates Strong Outlook

Singapore – May 31, 2018 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”), following the filing of its quarterly report on Form 10Q for the second fiscal quarter, and the amendment of its Form 10Q for the first fiscal quarter and Form 10K for fiscal 2017, today announced final results of its second fiscal quarter ended March 31, 2018. The Company reaffirmed its previously reported second quarter net revenue of $221.8 million, and reported diluted EPS of $0.51 and a non-GAAP diluted EPS of $0.54. The Company also reaffirmed its third quarter revenue guidance of approximately $255 million to $270 million.
During its second fiscal quarter, K&S repurchased $21.5 million of common stock in open market transactions at an average price of $23.90 per share.
Quarterly Results - U.S. GAAP
 
 
Fiscal Q2 2018
 
Change vs.
Fiscal Q2 2017
(As Restated)
Change vs.
Fiscal Q1 2018
(As Restated)
Net Revenue
$221.8 million
up 11.1%
up 3.8%
Gross Profit
$99.4 million
up 7.7%
up 2.3%
Gross Margin
44.8%
down 140 bps
down 70 bps
Income from Operations
$38.4 million
up 5.2%
down 2.0%
Operating Margin
17.3%
down 100 bps
down 100 bps
Net Income
$36.3 million
up 11.0%
up 152.2%
Net Margin
16.4%
-
up 4890 bps
EPS – Diluted(a)
$0.51
up 13.3%
up 151.5%
(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. For the three months ended December 30, 2017, 1.2 million shares of restricted stock units and stock options were excluded due to the Company's net loss.
Quarterly Results - Non-GAAP
 
 
Fiscal Q2 2018
 
Change vs.
Fiscal Q2 2017
(As Restated)
Change vs.
Fiscal Q1 2018
(As Restated)
Income from Operations
$40.5 million
up 6.3%
down 4.5%
Operating Margin
18.2%
down 90 bps
down 160 bps
Net Income
$38.2 million
up 11.4%
down 3.0%
Net Margin
17.2%
-
down 120 bps
EPS - Diluted
$0.54
up 14.9%
down 1.8%
* 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.

1




Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, “Looking ahead, the entire organization continues to be extremely committed to pursuing several near and long-term goals in parallel. Our ongoing progress within LED, memory, recurring revenue and advanced packaging strategies has improved our financial performance and growth prospects."
The Company does not anticipate that the delays associated with filing its second quarter 2018 results have had a material adverse impact on the Company's operations or business prospects.
Second Quarter Fiscal 2018 Financial Highlights
 
Net revenue of $221.8 million.    
Gross margin of 44.8%.
Net income of $36.3 million or $0.51 per share; Non-GAAP net income of $38.2 million or $0.54 per share.
Cash, cash equivalents, and short-term investments were $628.2 million as of March 31, 2018.

Third Quarter Fiscal 2018 Outlook

The Company currently expects net revenue in the third fiscal quarter of 2018 ending June 30, 2018 to be approximately $255 million to $270 million. For the first three quarters of 2018, this guidance represents an increase of 17.6% over the same period in the prior year.

Looking forward, Dr. Fusen Chen commented, "Our core products' alignment with several major industry trends, our share gains within LED and recurring revenue as well as our ongoing development progress to further expand the advanced packaging portfolio provide additional confidence in our ability to generate strong results going forward."

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.
 
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 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).

2


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, increasing, continuing or strengthening demand for our products, replacement demand, 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; the impact of changes in tax law; and the factors listed or discussed in Kulicke and Soffa Industries, Inc. 2017 Annual Report on Form 10-K/A 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
 
 
 

3


KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
 
Three months ended
 
Six months ended
 
March 31, 2018
 
April 1, 2017
As Restated
 
March 31, 2018
 
April 1, 2017
As Restated
Net revenue
$
221,772

 
$
199,613

 
$
435,463

 
$
349,252

Cost of sales
122,325

 
107,350

 
238,814

 
188,562

Gross profit
99,447

 
92,263

 
196,649

 
160,690

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Selling, general and administrative
30,339

 
29,107

 
54,875

 
55,447

Research and development
28,657

 
25,020

 
58,907

 
46,525

Amortization of intangible assets
2,022

 
1,521

 
3,965

 
3,044

Restructuring
(7
)
 
112

 
1,307

 
112

Total operating expenses
61,011

 
55,760

 
119,054

 
105,128

Income from operations
38,436

 
36,503

 
77,595

 
55,562

Other income (expense):
 
 
 
 
 
 
 
Interest income
2,986

 
1,579

 
4,961

 
2,751

Interest expense
(270
)
 
(261
)
 
(536
)
 
(523
)
Income before income taxes
41,152

 
37,821

 
82,020

 
57,790

Income tax expense
4,800

 
5,151

 
115,212

 
7,724

Share of results of equity-method investee, net of tax
39

 

 
23

 

Net income / (loss)
$
36,313

 
$
32,670

 
$
(33,215
)
 
$
50,066

 
 
 
 
 
 
 
 
Net income / (loss) per share:
 
 
 
 
 
 
 
Basic
$
0.52

 
$
0.46

 
$
(0.47
)
 
$
0.71

Diluted
$
0.51

 
$
0.45

 
$
(0.47
)
 
$
0.69

 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
70,361

 
70,964

 
70,467

 
70,909

Diluted
71,425

 
72,270

 
70,467

 
72,039


 
Three months ended
 
Six months ended
Supplemental financial data:
March 31, 2018
 
April 1, 2017
 
March 31, 2018
 
April 1, 2017
Depreciation and amortization
$
4,744

 
$
3,831

 
$
9,212

 
$
7,775

Capital expenditures
6,153

 
15,877

 
12,410

 
18,106

Equity-based compensation expense:


 


 


 


Cost of sales
126

 
106

 
258

 
247

Selling, general and administrative
1,443

 
2,450

 
3,766

 
5,184

Research and development
653

 
522

 
1,307

 
1,249

Total equity-based compensation expense
$
2,222

 
$
3,078

 
$
5,331

 
$
6,680


 
As of
 
March 31, 2018
 
April 1, 2017
Backlog of orders 1
$
177,754

 
$
181,201

Number of employees
3,276

 
3,340

 

4


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

5



KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
 
As of
 
March 31, 2018
 
September 30, 2017
ASSETS
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
340,151

 
$
392,410

Restricted cash
535

 
530

Short-term investments
288,000

 
216,000

Accounts and other receivable, net of allowance for doubtful accounts of $680 and $79 respectively
224,484

 
198,480

Inventories, net
118,831

 
122,023

Prepaid expenses and other current assets
23,754

 
23,939

TOTAL CURRENT ASSETS
995,755

 
953,382

 
 
 
 
Property, plant and equipment, net
75,619

 
67,762

Goodwill
57,478

 
56,318

Intangible assets, net
60,180

 
62,316

Deferred income taxes
10,922

 
27,771

Equity investments
1,479

 
1,502

Other assets
2,577

 
2,056

TOTAL ASSETS
$
1,204,010

 
$
1,171,107

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
 

 
 

Accounts payable
$
82,716

 
$
51,354

Accrued expenses and other current liabilities
85,133

 
124,847

Income taxes payable
19,340

 
16,780

TOTAL CURRENT LIABILITIES
187,189

 
192,981

 
 
 
 
Financing obligation
16,257

 
16,074

Deferred income taxes
27,800

 
27,152

Income taxes payable
83,626

 
6,438

Other liabilities
9,211

 
8,432

TOTAL LIABILITIES
324,083

 
251,077

 
 
 
 
SHAREHOLDERS' EQUITY
 

 
 

Common stock, no par value
513,315

 
506,515

Treasury stock, at cost
(182,354
)
 
(157,604
)
Retained earnings
539,871

 
569,080

Accumulated other comprehensive income
9,095

 
2,039

TOTAL SHAREHOLDERS' EQUITY
879,927

 
920,030

 
 
 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,204,010

 
$
1,171,107

 

6



KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Three months ended
 
Six months ended
 
March 31, 2018
 
April 1, 2017
 
March 31, 2018
 
April 1, 2017
Net cash provided by operating activities
$
6,740

 
$
12,929

 
$
57,073

 
$
42,978

Net cash used in investing activities, continuing operations
(35,273
)
 
(29,740
)
 
(83,456
)
 
(32,399
)
Net cash used in financing activities, continuing operations
(20,850
)
 
(785
)
 
(24,241
)
 
(643
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(1,120
)
 
(627
)
 
(1,630
)
 
1,360

Changes in cash, cash equivalents and restricted cash
(50,503
)
 
(18,223
)
 
(52,254
)
 
11,296

Cash, cash equivalents and restricted cash, beginning of period*
391,189

 
453,426

 
392,940

 
423,907

Cash, cash equivalents and restricted cash, end of period
$
340,686

 
$
435,203

 
$
340,686

 
$
435,203

 
 
 
 
 
 
 
 
Short-term investments
288,000

 
139,000

 
288,000

 
139,000

Total cash, cash equivalents, restricted cash and short-term investments
$
628,686

 
$
574,203

 
$
628,686

 
$
574,203

*Certain time deposits as at October 1, 2016 have been corrected from cash equivalents to short-term investments for comparative purposes.
 
 
 
 
 
 
 


7



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
 
 
March 31, 2018
 
April 1, 2017
As Restated
 
December 30, 2017
As Restated
Net revenue
 
$
221,772

 
$
199,613

 
$
213,691

U.S. GAAP Income from operations
 
38,436

 
36,503

 
39,159

U.S. GAAP operating margin
 
17.3
%
 
18.3
%
 
18.3
%
 
 
 
 
 
 
 
Pre-tax non-GAAP items:
 
 
 
 
 
 
Amortization related to intangible assets acquired through business combination- selling, general and administrative
 
2,022

 
1,521

 
1,943

Restructuring
 
(7
)
 
112

 
1,314

Non-GAAP Income from operations
 
$
40,451

 
$
38,136

 
$
42,416

Non-GAAP operating margin
 
18.2
%
 
19.1
%
 
19.8
%

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)
 
 
Three months ended
 
 
March 31, 2018
 
April 1, 2017
As Restated
 
December 30, 2017
As Restated
Net revenue
 
$
221,772

 
$
199,613

 
$
213,691

U.S. GAAP net income/(loss)
 
36,313

 
32,670

 
(69,528
)
U.S. GAAP net margin
 
16.4
%
 
16.4
%
 
(32.5
)%
 
 
 
 
 
 
 
Pre-tax non-GAAP adjustments:
 
 
 
 
 
 
Amortization related to intangible assets acquired through business combination- selling, general and administrative
 
2,022

 
1,521

 
1,943

Restructuring
 
(7
)
 
112

 
1,314

Income tax expense- Tax Reform
 

 

 
105,688

Net income tax benefit on non-GAAP items
 
(111
)
 
(30
)
 
(36
)
Total non-GAAP adjustments
 
1,904

 
1,603

 
108,909

Non-GAAP net income
 
38,217

 
34,273

 
39,381

Non-GAAP net margin
 
17.2
%

17.2
%

18.4
 %
 
 
 
 
 
 
 
U.S. GAAP net income/(loss) per share:
 
 
 
 
 
 
Basic
 
0.52

 
0.46

 
(0.99
)
Diluted (a)
 
0.51

 
0.45

 
(0.99
)
 
 
 
 
 
 
 
Non-GAAP adjustments per share:
 
 
 
 
 
 
Basic
 
0.03

 
0.02

 
1.54

Diluted
 
0.03

 
0.02

 
1.52

 
 
 
 
 
 
 
Non-GAAP net income per share:
 
 
 
 
 
 
Basic
 
$
0.54

 
$
0.48

 
$
0.56

Diluted (b)
 
$
0.54

 
$
0.47

 
$
0.55

(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. For the three months ended December 30, 2017, 1.2 million shares of restricted stock units and stock options were excluded due to the Company's net loss.
(b)
Non-GAAP diluted net earnings per share reflects any dilutive effect of outstanding restricted stock units and stock options.

8