Kulicke & Soffa Reports Second Quarter 2017 Results

SINGAPORE--()--Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”) today announced results for its second fiscal quarter ended April 1, 2017.

 
Quarterly Results
     

Fiscal Q2 2017

   

Change vs.
Fiscal Q2 2016

   

Change vs.
Fiscal Q1 2017

Net Revenue     $199.6 million     up 27.6%     up 33.4%
Gross Profit     $90.3 million     up 29.6%     up 32.2%
Gross Margin     45.2%     up 70 bps     down 50 bps
Income from Operations $32.6 million up 178.5% up 88.7%
Operating Margin     16.3%     up 880 bps     up 480 bps
Net Income $29.0 million up 470.7% up 86.4%
Net Margin     14.5%     up 1120 bps     up 410 bps
EPS – Diluted     $0.40     up 471.4%     up 81.8%
 

Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, “Automotive, industrial, mobile, LED, and IOT related wireless-connectivity applications are all driving the strong level of current demand in our business. The higher level of wire bonding, wedge bonding and expendable tools demand highlights the pervasive nature of our core business during the current period of industry capacity expansion."

Second Quarter Fiscal 2017 Key Product Trends

  • Ball bonder equipment net revenue increased by 46.1% over the December quarter.
  • Wedge bonder equipment net revenue increased by 5.5% over the December quarter.

Second Quarter Fiscal 2017 Financial Highlights

  • Net revenue of $199.6 million.
  • Gross margin of 45.2%.
  • Net income of $29.0 million or $0.40 per share.
  • Cash, cash equivalents and short-term investments were $574.2 million as of April 1, 2017.

Third Quarter Fiscal 2017 Outlook

The Company currently expects net revenue in the third fiscal quarter of 2017 ending July 1, 2017 to be approximately $235 million to $245 million.

Looking forward, Dr. Fusen Chen commented, "Our highly-targeted market strategy has improved our competitiveness, diversification and financial performance. Our execution on feature development supports this focused strategy and is anticipated to continue driving long-term value creation."

Earnings Conference Call Details

A conference call to discuss these results will be held today, May 3, 2017, beginning at 8:00 am (EDT). 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 February 9, 2017 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13659373. 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, 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 CONDENSED STATEMENTS OF OPERATIONS

(In thousands, except per share and employee data)

(Unaudited)

 
  Three months ended   Six months ended
April 1, 2017   April 2, 2016 April 1, 2017   April 2, 2016
Net revenue $ 199,613 $ 156,400 $ 349,252 $ 264,934
Cost of sales   109,322     86,753     190,643     144,866  
Gross profit   90,291     69,647     158,609     120,068  
 
Operating expenses:
Selling, general and administrative 31,033 33,788 59,042 58,152
Research and development 25,020 22,439 46,525 46,633
Amortization of intangible assets 1,521 1,665 3,044 3,331
Restructuring   112     46     112     1,948  
Total operating expenses   57,686     57,938     108,723     110,064  
Income from operations 32,605 11,709 49,886 10,004
Other income (expense):
Interest income 1,579 701 2,751 1,323
Interest expense   (261 )   (276 )   (523 )   (549 )
Income before income taxes 33,923 12,134 52,114 10,778
Income tax expense   4,882     7,045     7,490     5,780  
Net income $ 29,041   $ 5,089   $ 44,624   $ 4,998  
 
Net income per share:
Basic $ 0.41   $ 0.07   $ 0.63   $ 0.07  
Diluted $ 0.40   $ 0.07   $ 0.62   $ 0.07  
 
Weighted average shares outstanding:
Basic 70,964 70,389 70,909 70,563
Diluted 72,270 70,634 72,039 70,801
 
Three months ended

Six months ended

Supplemental financial data: April 1, 2017 April 2, 2016 April 1, 2017 April 2, 2016
Depreciation and amortization $ 3,831 $ 4,151 $ 7,775 $ 8,202
Capital expenditures 15,877 1,522 18,106 2,916
Equity-based compensation expense:
Cost of sales 106 97 247 225
Selling, general and administrative 2,450 1,460 5,184 690
Research and development   522     416     1,249     1,120  
Total equity-based compensation expense $ 3,078   $ 1,973   $ 6,680   $ 2,035  
 
As of
April 1, 2017 April 2, 2016
Backlog of orders 1 $ 181,201 $ 130,549
Number of employees 3,340 2,639
 
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
April 1, 2017   October 1, 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 435,203 $ 423,907
Short-term investments 139,000 124,000
Accounts and other receivable, net of allowance for doubtful accounts of $25 and $506 respectively 169,748 130,455
Inventories, net 98,685 87,295
Prepaid expenses and other current assets   16,672     15,285  
TOTAL CURRENT ASSETS 859,308 780,942
 
Property, plant and equipment, net 65,725 50,342
Goodwill 81,272 81,272
Intangible assets 47,766 50,810
Deferred income taxes 16,681 16,822
Equity investments 1,312
Other assets   2,010     2,256  
TOTAL ASSETS $ 1,074,074   $ 982,444  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 80,570 $ 41,813
Accrued expenses and other current liabilities 66,850 63,954
Income taxes payable   9,006     12,830  
TOTAL CURRENT LIABILITIES 156,426 118,597
 
Financing obligation 15,965 16,701
Deferred income taxes 32,936 27,697
Other liabilities   14,102     12,931  
TOTAL LIABILITIES   219,429     175,926  
 
SHAREHOLDERS' EQUITY
Common stock, no par value 505,003 498,676
Treasury stock, at cost (139,407 ) (139,407 )
Retained earnings 494,599 449,975
Accumulated other comprehensive loss   (5,550 )   (2,726 )
TOTAL SHAREHOLDERS' EQUITY   854,645     806,518  
   
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,074,074   $ 982,444  
 
 

KULICKE & SOFFA INDUSTRIES, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
  Three months ended   Six months ended
April 1, 2017   April 2, 2016 April 1, 2017   April 2, 2016
Net cash provided by / (used in) operating activities $ 12,929 $ (8,673 ) $ 42,978 $ (979 )
Net cash used in investing activities, continuing operations (153,740 ) (180 ) (32,399 ) (1,792 )
Net cash provided used in financing activities, continuing operations (785 ) (1,668 ) (643 ) (14,093 )
Effect of exchange rate changes on cash and cash equivalents   (627 )   (421 )   1,360     243  
Changes in cash and cash equivalents (142,223 ) (10,942 ) 11,296 (16,621 )
Cash and cash equivalents, beginning of period   577,426     492,935     423,907     498,614  
Cash and cash equivalents, end of period $ 435,203   $ 481,993   $ 435,203   $ 481,993  
 
Short-term investments   139,000         139,000      
Total cash, cash equivalents and short-term investments   574,203     481,993     574,203     481,993  
 

Contacts

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7500
F: +1-215-784-6180

Contacts

Kulicke & Soffa Industries, Inc.
Joseph Elgindy
Investor Relations & Strategic Initiatives
P: +1-215-784-7500
F: +1-215-784-6180