During its fourth fiscal quarter, K&S repurchased
| Quarterly Results - U.S. GAAP | |||||||||
|
Fiscal Q4 2018 |
Change vs. |
Change vs. Fiscal Q3 2018 |
|||||||
| Net Revenue | $184.8 million | down 14.4% | down 31.3% | ||||||
| Gross Profit | $85.8 million | down 20.1% | down 32.4% | ||||||
| Gross Margin | 46.4% | down 330 bps | down 80 bps | ||||||
| Income from Operations | $24.6 million | down 41.1% | down 61.9% | ||||||
| Operating Margin | 13.3% | down 610 bps | down 1070 bps | ||||||
| Net Income | $29.6 million | down 28.2% | down 50.9% | ||||||
| Net Margin | 16.0% | down 310 bps | down 640 bps | ||||||
| EPS – Diluted | $0.43 | down 24.6% | down 50.0% | ||||||
| Quarterly Results - Non-GAAP | |||||||||
|
Fiscal Q4 2018 |
Change vs. Fiscal Q4 2017 |
Change vs. Fiscal Q3 2018 |
|||||||
| Income from Operations | $27.2 million | down 40.0% | down 59.0% | ||||||
| Operating Margin | 14.7% | down 630 bps | down 1000 bps | ||||||
| Net Income | $31.2 million | down 30.2% | down 49.9% | ||||||
| Net Margin | 16.9% | down 380 bps | down 630 bps | ||||||
| EPS - Diluted | $0.45 | down 27.4% | down 49.4% | ||||||
* 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.
Dr.
Fiscal Year 2018 Financial Highlights
- Net revenue of
$889.1 million . - Gross margin of 46.1%.
- Net income of
$56.7 million or$0.80 per share; Non-GAAP net income of$171.1 million or$2.43 per share. - The Company repurchased a total of 3.8 million shares of common stock at a cost of
$91.1 million .
Fourth Quarter Fiscal 2018 Financial Highlights
- Net revenue of
$184.8 million . - Gross margin of 46.4%.
- Net income of
$29.6 million or$0.43 per share; Non-GAAP net income of$31.2 million or$0.45 per share. - Cash, cash equivalents, and short-term investments were
$613.6 million as ofSeptember 29, 2018 .
First Quarter Fiscal 2019 Outlook
The Company currently expects net revenue in the first fiscal quarter of 2019 ending
Looking forward, Dr.
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
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 expected dividend payouts and growth opportunities. 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 the Company fails to meet its operational and financial targets in order to adhere to its dividend policy; 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; the risk that the Company will not identify suitable acquisition opportunities or that any acquisitions will not be successful; the risk that the Company fails to timely remediate the material weaknesses identified in the Company’s internal controls over financial reporting or that new material weaknesses or significant deficiencies emerge; and the factors listed or discussed in
| KULICKE & SOFFA INDUSTRIES, INC. | ||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | ||||||||||||||||
|
(In thousands, except per share and employee data) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| September 29, | September 30, | September 29, | September 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net revenue | $ | 184,824 | $ | 215,892 | $ | 889,121 | $ | 809,041 | ||||||||
| Cost of sales | 99,001 | 108,491 | 479,680 | 426,947 | ||||||||||||
| Gross profit | 85,823 | 107,401 | 409,441 | 382,094 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 27,854 | 34,334 | 113,338 | 123,234 | ||||||||||||
| Research and development | 30,740 | 27,698 | 119,621 | 100,203 | ||||||||||||
| Impairment charges | — | — | — | 35,207 | ||||||||||||
| Amortization of intangible assets | 1,899 | 1,989 | 7,826 | 6,554 | ||||||||||||
| Restructuring | 756 | 1,531 | 2,024 | 3,813 | ||||||||||||
| Total operating expenses | 61,249 | 65,552 | 242,809 | 269,011 | ||||||||||||
| Income from operations | 24,574 | 41,849 | 166,632 | 113,083 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 3,551 | 1,989 | 11,971 | 6,491 | ||||||||||||
| Interest expense | (255 | ) | (272 | ) | (1,054 | ) | (1,059 | ) | ||||||||
| Income before income taxes | 27,870 | 43,566 | 177,549 | 118,515 | ||||||||||||
| Income tax (benefit)/expense | (1,750 | ) | 2,539 | 120,744 | (7,394 | ) | ||||||||||
| Share of results of equity-method investee, net of tax | (15 | ) | (197 | ) | 129 | (190 | ) | |||||||||
| Net income | $ | 29,635 | $ | 41,224 | $ | 56,676 | $ | 126,099 | ||||||||
| Net income per share: | ||||||||||||||||
| Basic | $ | 0.44 | $ | 0.58 | $ | 0.82 | $ | 1.78 | ||||||||
| Diluted | $ | 0.43 | $ | 0.57 | $ | 0.80 | $ | 1.75 | ||||||||
| Cash dividends declared per share | $ | 0.12 | $ | — | $ | 0.24 | $ | — | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 67,462 | 70,742 | 69,380 | 70,906 | ||||||||||||
| Diluted | 68,675 | 72,071 | 70,419 | 72,063 | ||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||
| September 29, | September 30, | September 29, | September 30, | |||||||||||||||
|
Supplemental financial data: |
2018 | 2017 | 2018 | 2017 | ||||||||||||||
| Depreciation and amortization | $ | 4,852 | $ | 4,518 | $ | 19,015 | $ | 16,257 | ||||||||||
| Capital expenditures | 3,960 | 3,779 | 20,441 | 25,688 | ||||||||||||||
| Equity-based compensation expense: | ||||||||||||||||||
| Cost of sales | 131 | 119 | 515 | 463 | ||||||||||||||
| Selling, general and administrative | 2,671 | 1,652 | 8,548 | 9,015 | ||||||||||||||
| Research and development | 659 | 481 | 2,622 | 2,244 | ||||||||||||||
| Total equity-based compensation expense | $ | 3,461 | $ | 2,252 | $ | 11,685 | $ | 11,722 | ||||||||||
| As of | ||||||||||||||||||
| September 29, 2018 | September 30, 2017 | |||||||||||||||||
| Backlog of orders 1 | $ | 141,665 | $ | 190,702 | ||||||||||||||
| Number of employees | 2,912 | 3,055 | ||||||||||||||||
| 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 | ||||||||
| September 29, 2018 | September 30, 2017 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 320,630 | $ | 392,410 | ||||
| Restricted cash | 518 | 530 | ||||||
| Short-term investments | 293,000 | 216,000 | ||||||
| Accounts and notes receivable, net of allowance for doubtful accounts of $385 and $79, respectively | 243,373 | 198,480 | ||||||
| Inventories, net | 115,191 | 122,023 | ||||||
| Prepaid expenses and other current assets | 14,561 | 23,939 | ||||||
| TOTAL CURRENT ASSETS | 987,273 | 953,382 | ||||||
| Property, plant and equipment, net | 76,067 | 67,762 | ||||||
| Goodwill | 56,550 | 56,318 | ||||||
| Intangible assets, net | 52,871 | 62,316 | ||||||
| Deferred income taxes | 9,017 | 27,771 | ||||||
| Equity investments | 1,373 | 1,502 | ||||||
| Other assets | 2,589 | 2,056 | ||||||
| TOTAL ASSETS | $ | 1,185,740 | $ | 1,171,107 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 48,527 | $ | 51,354 | ||||
| Accrued expenses and other current liabilities | 105,978 | 124,847 | ||||||
| Income taxes payable | 19,571 | 16,780 | ||||||
| TOTAL CURRENT LIABILITIES | 174,076 | 192,981 | ||||||
| Financing obligation | 15,187 | 16,074 | ||||||
| Deferred income taxes | 25,591 | 27,152 | ||||||
| Income taxes payable | 81,491 | 6,438 | ||||||
| Other liabilities | 9,188 | 8,432 | ||||||
| TOTAL LIABILITIES | 305,533 | 251,077 | ||||||
| SHAREHOLDERS' EQUITY | ||||||||
| Common stock, no par value | 519,244 | 506,515 | ||||||
| Treasury stock, at cost | (248,664 | ) | (157,604 | ) | ||||
| Retained earnings | 613,529 | 569,080 | ||||||
| Accumulated other comprehensive (loss) / income | (3,902 | ) | 2,039 | |||||
| TOTAL SHAREHOLDERS' EQUITY | $ | 880,207 | $ | 920,030 | ||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,185,740 | $ | 1,171,107 | ||||
| KULICKE & SOFFA INDUSTRIES, INC. | ||||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS | ||||||||||||||||
|
(In thousands) |
||||||||||||||||
|
(Unaudited) |
||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| September 29, | September 30, | September 29, | September 30, | |||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| Net cash provided by operating activities | $ | 29,656 | $ | 68,144 | $ | 123,499 | $ | 136,310 | ||||||||
| Net cash provided used in investing activities, continuing operations | (39,344 | ) | (136,657 | ) | (96,871 | ) | (144,669 | ) | ||||||||
| Net cash used in financing activities, continuing operations | (33,330 | ) | (21,879 | ) | (99,135 | ) | (22,684 | ) | ||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 966 | (597 | ) | 715 | 76 | |||||||||||
| Changes in cash, cash equivalents and restricted cash | (42,052 | ) | (90,989 | ) | (71,792 | ) | (30,967 | ) | ||||||||
| Cash, cash equivalents and restricted cash, beginning of period* | 363,200 | 483,929 | 392,940 | 423,907 | ||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 321,148 | $ | 392,940 | $ | 321,148 | $ | 392,940 | ||||||||
| Short-term investments | 293,000 | 216,000 | 293,000 | 216,000 | ||||||||||||
| Total cash, cash equivalents, restricted cash and short-term investments | $ | 614,148 | $ | 608,940 | $ | 614,148 | $ | 608,940 | ||||||||
| *Certain time deposits as at October 1, 2016 have been corrected from cash equivalents to short-term investments for comparative purposes. | ||||||||||||||||
| 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 29, 2018 | September 30, 2017 | June 30, 2018 | ||||||||||
| Net revenue | $ | 184,824 | $ | 215,892 | $ | 268,834 | ||||||
| U.S. GAAP Income from operations | 24,574 | 41,849 | 64,463 | |||||||||
| U.S. GAAP operating margin | 13.3 | % | 19.4 | % | 24.0 | % | ||||||
| Pre-tax non-GAAP items: | ||||||||||||
| Amortization related to intangible assets acquired through business combination- selling, general and administrative | 1,899 | 1,989 | 1,962 | |||||||||
| Restructuring | 756 | 1,531 | (39 | ) | ||||||||
| Impairment charges | — | — | — | |||||||||
| Non-GAAP Income from operations | $ | 27,229 | $ | 45,369 | $ | 66,386 | ||||||
| Non-GAAP operating margin | 14.7 | % | 21.0 | % | 24.7 | % | ||||||
| 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 |
Three months ended | |||||||||||||||
|
September 29, |
September 29, |
September 30, |
June 30, 2018 | |||||||||||||
| Net revenue | $ | 889,121 | $ | 184,824 | $ | 215,892 | $ | 268,834 | ||||||||
| U.S. GAAP net income |
|
56,676 | 29,635 | 41,224 | 60,256 | |||||||||||
| U.S. GAAP net margin | 6.4 | % | 16.0 | % | 19.1 | % | 22.4 | % | ||||||||
| Pre-tax non-GAAP adjustments: | ||||||||||||||||
| Amortization related to intangible assets acquired through business combination- selling, general and administrative | 7,826 | 1,899 | 1,989 | 1,962 | ||||||||||||
| Restructuring | 2,024 | 756 | 1,531 | (39 | ) | |||||||||||
| Income tax expense- Tax Reform | 104,550 | (1,137 | ) | — | — | |||||||||||
| Net income tax (benefit)/expense on non-GAAP items | (25 | ) | 44 | (44 | ) | 78 | ||||||||||
| Total non-GAAP adjustments | 114,375 | 1,562 | 3,476 | 2,001 | ||||||||||||
| Non-GAAP net income | 171,051 | 31,197 | 44,700 | 62,257 | ||||||||||||
| Non-GAAP net margin | 19.2 | % | 16.9 | % | 20.7 | % | 23.2 | % | ||||||||
| U.S. GAAP net income per share: | ||||||||||||||||
| Basic | 0.82 | 0.44 | 0.58 | 0.87 | ||||||||||||
| Diluted | 0.80 | 0.43 | 0.57 | 0.86 | ||||||||||||
| Non-GAAP adjustments per share: | ||||||||||||||||
| Basic | 1.65 | 0.02 | 0.05 | 0.03 | ||||||||||||
| Diluted | 1.62 | 0.02 | 0.05 | 0.03 | ||||||||||||
| Non-GAAP net income per share: | ||||||||||||||||
| Basic | $ | 2.47 | $ | 0.46 | $ | 0.63 | $ | 0.90 | ||||||||
| Diluted | $ | 2.43 | $ | 0.45 | $ | 0.62 | $ | 0.89 | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Basic | 69,380 | 67,462 | 70,742 | 69,125 | ||||||||||||
| Diluted | 70,419 | 68,675 | 72,071 | 70,302 | ||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20181119005601/en/
Source:
Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7518
F: +1-215-784-6180
