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KULICKE & SOFFA INDUSTRIES INC0000056978falseSingapore00000569782022-11-162022-11-160000056978dei:OtherAddressMember2022-11-162022-11-16

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): November 16, 2022  
____________________________________________________
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, Singapore 554369
1005 Virginia Dr., Fort Washington, PA 19034
(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))

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

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 November 16, 2022, Kulicke and Soffa Industries, Inc. (the “Company”) issued a press release with respect to its financial results for its fourth fiscal quarter ended October 1, 2022. 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
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: November 16, 2022 By: /s/ LESTER WONG  
  Name: Lester Wong  
  Title: Executive Vice President and Chief Financial Officer
(principal financial officer and principal accounting
officer)
     


EX-99.1 2 ex991q42022.htm EX-99.1 Document

Exhibit 99.1
logoa02a01a01a40a.jpg
Kulicke & Soffa Pte. Ltd.
23A Serangoon North Ave 5
Singapore 554369
+65 6880-9600 main
Co. Regn. No. 199902120H
Kulicke and Soffa Industries, Inc.
1005 Virginia Drive
Fort Washington, PA 19034 USA
+1-215-784-6000 main
www.kns.com
 
Kulicke & Soffa Reports Fourth Quarter 2022 Results
Singapore – November 16, 2022 – Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”), today announced financial results of its fourth fiscal quarter ended October 1, 2022. The Company reported fourth quarter net revenue of $286.3 million, net income of $64.9 million and non-GAAP net income of $70.2 million.

Quarterly Results - U.S. GAAP
 
Fiscal Q4 2022
 
Change vs.
Fiscal Q4 2021
Change vs.
Fiscal Q3 2022
Net Revenue $286.3 million down 41% down 23.1%
Gross Profit $132.7 million down 42.6% down 30.4%
Gross Margin 46.3% down 140 bps down 490 bps
Income from Operations $67.5 million down 56.4% down 44.7%
Operating Margin 23.6% down 830 bps down 920 bps
Net Income $64.9 million down 51.5% down 45.5%
Net Margin 22.7% down 490 bps down 930 bps
EPS – Diluted $1.10 down 47.6% down 44.7%
Quarterly Results - Non-GAAP
Fiscal Q4 2022 Change vs.
Fiscal Q4 2021
Change vs.
Fiscal Q3 2022
Income from Operations $73.6 million down 54.1% down 42.9%
Operating Margin 25.7% down 730 bps down 900 bps
Net Income $70.2 million down 49.2% down 43.9%
Net Margin 24.5% down 400 bps down 910 bps
EPS - Diluted $1.19 down 45.2% down 43.1%
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.

Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, "Although the near-term environment is dynamic, past efforts to enhance our culture, optimize our market-leading businesses, and drive innovations across several emerging technology transitions, provide additional paths for sustainable, long-term growth. Our growing portfolio of competitive, market-ready solutions and financial performance stand as testaments to this progress."

Through organic development, prudent acquisitions and close industry partnerships, Kulicke & Soffa's served available market has grown to approximately $4.7 billion in fiscal 2022, up 51 percent from fiscal 2018.

1


Fiscal Year 2022 Financial Highlights
•Net revenue of $1,503.6 million.    
•Gross margin of 49.8%.
•Net income of $433.5 million or $7.09 per share; non-GAAP net income of $455.6 million or $7.45 per share.
•Adjusted free cash flow of $367.4 million.
•Repurchased approximately 5.6 million shares of common stock through open market and accelerated programs at a cost of $282.8 million.

Fourth Quarter Fiscal 2022 Financial Highlights 
•Net revenue of $286.3 million.    
•Gross margin of 46.3%.
•Net income of $64.9 million or $1.10 per share; non-GAAP net income of $70.2 million or $1.19 per share.
•Cash, cash equivalents, and short-term investments were $775.5 million as of October 1, 2022.

First Quarter Fiscal 2023 Outlook
Due to a combination of macro and industry related factors, K&S continues to anticipate a period of capacity digestion for its high-volume assembly solutions over the coming quarters. The Company currently expects net revenue in the first fiscal quarter of 2023, ending December 31, 2022, to be approximately $175.0 million, +/- $20 million, and expects non-GAAP EPS to be approximately $0.20, +/- 10%.

Looking forward, Fusen Chen commented, "Our access to new markets and optimization efforts have enhanced our through-cycle performance and we remain focused on executing strategically near-term. Fiscal 2023 is a critical adoption year for our growing portfolio of Advanced Packaging, Automotive and Advanced Display solutions which are increasingly aligned with long-term, fundamental technology transitions which are well underway."

Earnings Conference Call Details
A conference call to discuss these results will be held tomorrow, November 17, 2022, beginning at 8:00am EST. 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 December 1, 2022 by calling toll-free +1-877-660-6853 or internationally +1-201-612-7415 and using the replay ID number of 13734020. 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, net income per diluted share and adjusted free cash flow. The Company's non-GAAP results exclude amortization related to intangible assets acquired through business combinations, costs associated with restructuring and severance, equity-based compensation, acquisition and integration cost, impairment relating to assets acquired through business combinations, impairment relating to equity investments, income tax expense arising from discrete tax items triggered by acquisition, restructuring and significant changes in tax laws, gain/loss on disposal of business, as well as tax benefits or expense associated with the foregoing non-GAAP items. The non-GAAP adjustments may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. 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.

2


Management uses both U.S. GAAP metrics as well as 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.

Management has not reconciled its outlook for non-GAAP Diluted EPS to Diluted EPS for Q1F23 as it does not provide guidance on the reconciling items between Diluted EPS and non-GAAP Diluted EPS, as a result of the uncertainty regarding, and the potential variability of, these items. The actual amount of such reconciling items could have a significant impact on our non-GAAP Diluted EPS and, accordingly, a reconciliation of Diluted EPS to non-GAAP Diluted EPS for Q1F23 is not available without unreasonable effort.

About Kulicke & Soffa
 
Kulicke & Soffa (NASDAQ: KLIC) is a leading provider of semiconductor, LED 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.
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, mini and micro LED transfer 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.
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, including the importance and competitiveness of our advanced display products and other emerging technology transitions, 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 and macroeconomic headwinds on our business, our ability to develop, manufacture and gain market acceptance of new products, and the other factors listed or discussed in our Annual Report on Form 10-K for the fiscal year ended October 2, 2021, filed on November 18, 2021, 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 and Soffa Industries, Inc.
Joseph Elgindy
Finance
P: +1-215-784-7518
F: +1-215-784-6180
3


KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In thousands, except per share and employee data)
(Unaudited)
  Three months ended Twelve months ended
October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
Net revenue $ 286,313  $ 485,326  $ 1,503,620  $ 1,517,664 
Cost of sales 153,626  254,011  755,300  820,678 
Gross profit 132,687  231,315  748,320  696,986 
Operating expenses:
Selling, general and administrative 31,275  40,186  136,215  139,224 
Research and development 32,356  34,929  136,852  137,478 
Acquisition-related cost 118  —  118  1,730 
Amortization of intangible assets 1,374  1,322  4,917  5,974 
Restructuring 20  42  146  133 
Total operating expenses 65,143  76,479  278,248  284,539 
Income from operations 67,544  154,836  470,072  412,447 
Other income / (expense):
Interest income 4,025  520  7,124  2,321 
Interest expense (35) (72) (208) (218)
Income before income taxes 71,534  155,284  476,988  414,550 
Income tax expense 6,630  21,573  43,443  47,295 
Share of results of equity-method investee, net of tax —  —  —  94 
Net income $ 64,904  $ 133,711  $ 433,545  $ 367,161 
Net income per share:
Basic $ 1.12  $ 2.16  $ 7.21  $ 5.92 
Diluted $ 1.10  $ 2.10  $ 7.09  $ 5.78 
Cash dividends declared per share $ 0.17  $ 0.14  $ 0.68  $ 0.56 
Weighted average shares outstanding:
Basic 57,804  61,966  60,164  62,009 
Diluted 58,816  63,611  61,182  63,515 

  Three months ended Twelve months ended
Supplemental financial data: October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
Depreciation and amortization $ 5,520  $ 5,258  $ 21,293  $ 19,810 
Capital expenditures 21,020  5,792  32,233  22,555 
Equity-based compensation expense:
Cost of sales 233  202  960  828 
Selling, general and administrative 3,426  2,887  13,911  10,998 
Research and development 854  909  4,115  3,676 
Total equity-based compensation expense $ 4,513  $ 3,998  $ 18,986  $ 15,502 

  As of
October 1, 2022 October 2, 2021
Number of employees 3,167  3,586 

4


KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
As of
October 1, 2022 October 2, 2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 555,537  $ 362,788 
Short-term investments 220,000  377,000 
Accounts and notes receivable, net of allowance for doubtful accounts of $0 and $687 respectively 309,323  421,193 
Inventories, net 184,986  167,323 
Prepaid expenses and other current assets 62,200  23,586 
TOTAL CURRENT ASSETS 1,332,046  1,351,890 
Property, plant and equipment, net 80,908  67,982 
Operating right-of-use assets 41,767  41,592 
Goodwill 68,096  72,949 
Intangible assets, net 31,939  42,752 
Deferred tax assets 25,572  15,715 
Equity investments 5,397  6,388 
Other assets 2,874  2,363 
TOTAL ASSETS $ 1,588,599  $ 1,601,631 
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES    
Accounts payable 67,311  154,636 
Operating lease liabilities 6,766  4,903 
Accrued expenses and other current liabilities 134,541  161,570 
Income taxes payable 40,063  30,766 
TOTAL CURRENT LIABILITIES 248,681  351,875 
Deferred tax liabilities 34,037  32,828 
Income taxes payable 64,634  69,422 
Operating lease liabilities 34,927  38,084 
Other liabilities 11,670  14,185 
TOTAL LIABILITIES $ 393,949  $ 506,394 
SHAREHOLDERS' EQUITY    
Common stock, no par value 561,684  550,117 
Treasury stock, at cost (675,800) (400,412)
Retained earnings 1,341,666  948,554 
Accumulated other comprehensive loss (32,900) (3,022)
TOTAL SHAREHOLDERS' EQUITY $ 1,194,650  $ 1,095,237 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,588,599  $ 1,601,631 
 
5



KULICKE AND SOFFA INDUSTRIES, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
  Three months ended Twelve months ended
  October 1, 2022 October 2, 2021 October 1, 2022 October 2, 2021
Net cash provided by operating activities $ 116,563  $ 123,376  $ 390,188  $ 300,032 
Net cash provided by / (used in) investing activities, continuing operations 67,457  (135,928) 133,799  (81,707)
Net cash used in financing activities, continuing operations (70,286) (12,276) (321,191) (44,258)
Effect of exchange rate changes on cash and cash equivalents (3,978) (383) (10,047) 594 
Changes in cash and cash equivalents 109,756  (25,211) 192,749  174,661 
Cash and cash equivalents, beginning of period 445,781  387,999  362,788  188,127 
Cash and cash equivalents, end of period $ 555,537  $ 362,788  $ 555,537  $ 362,788 
Short-term investments 220,000  377,000  220,000  377,000 
Total cash, cash equivalents, and short-term investments $ 775,537  $ 739,788  $ 775,537  $ 739,788 

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
October 1, 2022 October 2, 2021 July 2, 2022
Net revenue $ 286,313  $ 485,326  $ 372,137 
U.S. GAAP income from operations 67,544  154,836  122,077 
U.S. GAAP operating margin 23.6  % 31.9  % 32.8  %
Pre-tax non-GAAP items:
Amortization related to intangible assets acquired through business combination- selling, general and administrative $ 1,374  $ 1,322  1,109 
Acquisition-related costs 118  —  — 
Equity-based compensation 4,513  3,998  4,465 
Restructuring 20  42  — 
Impairment charges —  —  1,346 
Non-GAAP income from operations $ 73,569  $ 160,198  $ 128,997 
Non-GAAP operating margin 25.7  % 33.0  % 34.7  %

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 months ended Three months ended
October 1, 2022 October 1, 2022 October 2, 2021 July 2,
2022
Net revenue $ 1,503,620  $ 286,313  $ 485,326  $ 372,137 
U.S. GAAP net income 433,545  64,904  133,711  119,034 
U.S. GAAP net margin 28.8  % 22.7  % 27.6  % 32.0  %
Non-GAAP adjustments:
Amortization related to intangible assets acquired through business combination- selling, general and administrative $ 4,917  $ 1,374  $ 1,322  1,109 
Restructuring 146  20  42  — 
Acquisition-related costs 118  118  —  — 
Equity-based compensation 18,986  4,513  3,998  4,465 
Impairment charges 1,346  —  —  1,346 
Net income tax benefit on non-GAAP items (3,447) (689) (807) (865)
Total non-GAAP adjustments 22,066  5,336  4,555  6,055 
Non-GAAP net income 455,611  70,240  138,266  125,089 
Non-GAAP net margin 30.3  % 24.5  % 28.5  % 33.6  %
U.S. GAAP net income per share:
Basic 7.21  1.12  2.16  2.02 
Diluted(a)
7.09  1.10  2.10  1.99 
Non-GAAP adjustments per share:(b)
Basic 0.36  0.10  0.07  0.10 
Diluted 0.36  0.09  0.07  0.10 
Non-GAAP net income per share:
Basic $ 7.57  $ 1.22  $ 2.23  $ 2.12 
Diluted(c)
$ 7.45  $ 1.19  $ 2.17  $ 2.09 
Weighted average shares outstanding:
Basic 60,164  57,804  61,966  58,985 
Diluted 61,182  58,816  63,611  59,955 
(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, acquisition and integration cost, equity-based compensation expenses, impairment relating to equity investments and income tax effects 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





Reconciliation of U.S. GAAP Cash provided by Operating Activities
to Non-GAAP Adjusted Free Cash Flow
(In thousands, except percentages)
(unaudited)



  Twelve months ended Three months ended
October 1, 2022 October 1, 2022 October 2, 2021 July 2,
2022
U.S. GAAP net cash provided by operating activities $ 390,188  $ 116,563  $ 123,376  $ 104,616 
Expenditures for property, plant and equipment (22,985) (12,605) (6,028) (4,722)
Proceeds from sales of property, plant and equipment 181  62  100  — 
Non-GAAP adjusted free cash flow 367,384  104,020  117,448  99,894 
9