Document
falseSingapore0000056978KULICKE & SOFFA INDUSTRIES INC 0000056978 2020-07-29 2020-07-29


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): July 29, 2020 
____________________________________________________
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 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 July 29, 2020, Kulicke and Soffa Industries, Inc. (the “Company”) issued a press release with respect to its financial results for its third fiscal quarter ended June 27, 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 July 29, 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: July 30, 2020
By:
/s/ LESTER WONG
 
 
Name:
Lester Wong
 
 
Title:
Senior Vice President and Chief Financial Officer
 
 
 
 
 






EXHIBIT INDEX
 
 
Exhibit No.
Description
 
99.1
 
104
Inline XBRL for the cover page of this Current Report on Form 8‑K.



Exhibit
Exhibit 99.1
https://cdn.kscope.io/2dedf9ee25ee4fd5d29d0cfde8cd30eb-logoa02a01a01a48.jpg
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 Reports Third Quarter 2020 Results
Singapore – July 29, 2020 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa,” “K&S” or the “Company”), today announced financial results of its third fiscal quarter ended June 27, 2020. The Company reported third quarter net revenue of $150.5 million, net income of $11.2 million and non-GAAP net income of $12.9 million.

Quarterly Results - U.S. GAAP
 
 
Fiscal Q3 2020
 
Change vs.
Fiscal Q3 2019
Change vs.
Fiscal Q2 2020
Net Revenue
$150.5 million
up 18.4%
down 0.1%
Gross Profit
$69.4 million
up 18%
up 0.1%
Gross Margin
46.1%
down 10 bps
up 10 bps
Income from Operations
$11.0 million
up 511.1%
down 0.9%
Operating Margin
7.3%
up 590 bps
down 10 bps
Net Income
$11.2 million
up 761.5%
down 5.9%
Net Margin
7.4%
up 640 bps
down 50 bps
EPS – Diluted(a)
$0.18
up 800%
down 5.3%
(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.
Quarterly Results - Non-GAAP
 
 
Fiscal Q3 2020
 
Change vs.
Fiscal Q3 2019
Change vs.
Fiscal Q2 2020
Income from Operations
$12.8 million
up 197.7%
down 0.8%
Operating Margin
8.5%
up 520 bps
down 10 bps
Net Income
$12.9 million
up 258.3%
down 5.8%
Net Margin
8.6%
up 580 bps
down 50 bps
EPS - Diluted
$0.21
up 250%
down 4.5%
A reconciliation between the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also the “Use of non-GAAP Financial Results” section.

Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "During the June quarter we maintained our pace of development, ramped production of Pixalux, increased share repurchase activity and also delivered strong financial performance."
During the June quarter the Company recognized revenue on 25 Pixalux mini and micro LED systems. The Company's global manufacturing facilities are operating at nearly full capacity, and the Company believes prior COVID-19-related supply-chain risks have been reduced significantly from the March quarter.


1



Third Quarter Fiscal 2020 Financial Highlights
 
Net revenue of $150.5 million.    
Gross margin of 46.1%.
Net income of $11.2 million or $0.18 per share; non-GAAP net income of $12.9 million or $0.21 per share.
Cash, cash equivalents, and short-term investments were $515.8 million as of June 27, 2020.


Fourth Quarter Fiscal 2020 Outlook
The Company currently expects net revenue in the fourth fiscal quarter of 2020 ending October 3, 2020 to be approximately $165 million +/- $10 million.
Looking forward, Dr. Fusen Chen commented, "Despite broad industry challenges, we have consistently maintained or increased our business outlook since March 2019 and have also successfully entered the display market, which provides a new set of near and longer-term opportunities. While our industry may continue to face near-term, episodic and unpredictable COVID-19-related headwinds, through calendar year 2021, we anticipate a broader recovery in our core market as semiconductor unit growth returns positive."

Earnings Conference Call Details
A conference call to discuss these results will be held on July 30, 2020, beginning at 8:00am EDT. 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 August 6th by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13705397. 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 the following non-GAAP financial results: income from operations, operating margin, net income, net margin and net income per diluted share. 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 these non-GAAP metrics 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 financial tables at the end of this press release.
 
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.

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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 (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. 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 Report on Form 10-Q filed on April 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
 
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
 
Nine months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
Net revenue
$
150,450

 
$
127,109

 
$
445,488

 
$
400,225

Cost of sales
81,027

 
68,329

 
236,398

 
211,073

Gross profit
69,423

 
58,780

 
209,090

 
189,152

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Selling, general and administrative
26,091

 
26,294

 
79,846

 
82,062

Research and development
30,547

 
28,229

 
87,906

 
87,609

Amortization of intangible assets
1,814

 
1,843

 
5,451

 
5,589

Restructuring

 
587

 
426

 
(25
)
Total operating expenses
58,452

 
56,953

 
173,629

 
175,235

Income from operations
10,971

 
1,827

 
35,461

 
13,917

Other income (expense):
 
 
 
 
 
 
 
Interest income
1,374

 
3,956

 
6,888

 
11,647

Interest expense
(446
)
 
(632
)
 
(1,690
)
 
(1,137
)
Income before income taxes
11,899

 
5,151

 
40,659

 
24,427

Income tax expense
690

 
3,864

 
3,985

 
19,106

Share of results of equity-method investee, net of tax
58

 

 
158

 
72

Net income
$
11,151

 
$
1,287

 
$
36,516

 
$
5,249

 
 
 
 
 
 
 
 
Net income per share:
 
 
 
 
 
 
 
Basic
$
0.18

 
$
0.02

 
$
0.58

 
$
0.08

Diluted
$
0.18

 
$
0.02

 
$
0.57

 
$
0.08

 
 
 
 
 
 
 
 
Cash dividends declared per share
$
0.12

 
$
0.12

 
$
0.36

 
$
0.36

 
 
 
 
 
 
 
 
Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
62,313

 
64,683

 
63,200

 
65,914

Diluted
62,833

 
65,431

 
63,755

 
66,597

 
Three months ended
 
Nine months ended
Supplemental financial data:
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
Depreciation and amortization
$
5,069

 
$
4,995

 
$
14,597

 
$
15,001

Capital expenditures
3,451

 
2,136

 
8,550

 
9,312

Equity-based compensation expense:


 


 


 


Cost of sales
182

 
161

 
597

 
471

Selling, general and administrative
2,676

 
2,616

 
8,106

 
7,871

Research and development
867

 
820

 
2,353

 
2,430

Total equity-based compensation expense
$
3,725

 
$
3,597

 
$
11,056

 
$
10,772

 
As of
 
June 27, 2020
 
June 29, 2019
Backlog of orders 1
$
128,882

 
$
96,690

Number of employees
2,756

 
2,721

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

4



KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
 
As of
 
June 27, 2020
 
September 28, 2019
ASSETS
CURRENT ASSETS
 
 
 
Cash and cash equivalents
$
321,775

 
$
364,184

Short-term investments
194,000

 
229,000

Accounts and other receivable, net of allowance for doubtful accounts of $1,306 and $597, respectively
195,489

 
195,830

Inventories, net
114,194

 
89,308

Prepaid expenses and other current assets
13,735

 
15,429

TOTAL CURRENT ASSETS
839,193

 
893,751

 
 
 
 
Property, plant and equipment, net
55,826

 
72,370

Operating right-of-use assets
22,192

 

Goodwill
56,053

 
55,691

Intangible assets, net
38,207

 
42,651

Deferred tax assets
8,515

 
6,409

Equity investments
7,367

 
6,250

Other assets
2,112

 
2,494

TOTAL ASSETS
$
1,029,465

 
$
1,079,616

 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
 

 
 

Short term debt
$

 
$
60,904

Accounts payable
49,659

 
36,711

Operating lease liabilities
5,471

 

Accrued expenses and other current liabilities
74,624

 
64,533

Income taxes payable
13,050

 
12,494

TOTAL CURRENT LIABILITIES
142,804

 
174,642

 
 
 
 
Financing obligation

 
14,207

Deferred income taxes
34,508

 
32,054

Income taxes payable
74,307

 
80,290

Operating lease liabilities
18,124

 

Other liabilities
10,078

 
9,360

TOTAL LIABILITIES
279,821

 
310,553

 
 
 
 
SHAREHOLDERS' EQUITY
 

 
 

Common stock, no par value
536,487

 
533,590

Treasury stock, at cost
(387,302
)
 
(349,212
)
Retained earnings
607,733

 
594,625

Accumulated other comprehensive loss
(7,274
)
 
(9,940
)
TOTAL SHAREHOLDERS' EQUITY
$
749,644

 
$
769,063

 
 
 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$
1,029,465

 
$
1,079,616


5



KULICKE & SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Three months ended
 
Nine months ended
 
June 27, 2020
 
June 29, 2019
 
June 27, 2020
 
June 29, 2019
Net cash provided by operating activities
$
23,598

 
$
(154
)
 
$
62,681

 
$
83,181

Net cash provided by/(used in) investing activities
50,842

 
(43,315
)
 
25,863

 
30,374

Net cash (used in)/provided by financing activities
(144,876
)
 
20,341

 
(130,618
)
 
(38,751
)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(96
)
 
(197
)
 
(335
)
 
60

Changes in cash, cash equivalents and restricted cash
(70,532
)
 
(23,325
)
 
(42,409
)
 
74,864

Cash, cash equivalents and restricted cash, beginning of period
392,307

 
419,337

 
364,184

 
321,148

Cash, cash equivalents and restricted cash, end of period
$
321,775

 
$
396,012

 
$
321,775

 
$
396,012

 
 
 
 
 
 
 
 
Short-term investments
194,000

 
248,000

 
194,000

 
248,000

Total cash, cash equivalents and short-term investments
$
515,775

 
$
644,012

 
$
515,775

 
$
644,012



6



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
 
 
June 27, 2020
 
June 29, 2019
 
March 28, 2020
Net revenue
 
$
150,450

 
$
127,109

 
$
150,741

U.S. GAAP income from operations
 
10,971

 
1,827

 
11,076

U.S. GAAP operating margin
 
7.3
%
 
1.4
%
 
7.3
%
 
 
 
 
 
 
 
Pre-tax non-GAAP items:
 
 
 
 
 
 
Amortization related to intangible assets acquired through business combination- selling, general and administrative
 
1,814

 
1,843

 
1,820

Restructuring
 

 
587

 
9

Non-GAAP income from operations
 
$
12,785

 
$
4,257

 
$
12,905

Non-GAAP operating margin
 
8.5
%
 
3.3
%
 
8.6
%


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 percentages and per share data)
(Unaudited)
 
 
Three months ended
 
 
June 27, 2020
 
June 29, 2019
 
March 28, 2020
Net revenue
 
$
150,450

 
$
127,109

 
$
150,741

U.S. GAAP net income
 
11,151

 
1,287

 
11,888

U.S. GAAP net margin
 
7.4
%
 
1.0
%
 
7.9
%
 
 
 
 
 
 
 
Non-GAAP adjustments:
 
 
 
 
 
 
Amortization related to intangible assets acquired through business combination- selling, general and administrative
 
1,814

 
1,843

 
1,820

Restructuring
 

 
587

 
9

Net income tax benefit on non-GAAP items
 
(23
)
 
(102
)
 
(27
)
Total non-GAAP adjustments
 
$
1,791

 
$
2,328

 
$
1,802

Non-GAAP net income
 
$
12,942

 
$
3,615

 
$
13,690

Non-GAAP net margin
 
8.6
%

2.8
%

9.1
%
 
 
 
 
 
 
 
U.S. GAAP net income per share:
 
 
 
 
 
 
Basic
 
0.18

 
0.02

 
0.19

Diluted(a)
 
0.18

 
0.02

 
0.19

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

 
0.04

 
0.03

Diluted
 
0.03

 
0.04

 
0.03

 
 
 
 
 
 
 
Non-GAAP net income per share:
 
 
 
 
 
 
Basic
 
$
0.21

 
$
0.06

 
$
0.22

Diluted(c)
 
$
0.21

 
$
0.06

 
$
0.22

(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.


8