Kulicke & Soffa(US:KLIC)2025-05-07 12:56Revenue and Financial Performance - For the three months ended March 29, 2025, approximately 86.3% of net revenue was from shipments to customer locations outside of the U.S., primarily in the Asia/Pacific region [150]. - Approximately 45.8% of net revenue for the three months ended March 29, 2025, was from customers headquartered in China [150]. - Net revenue for the three months ended March 29, 2025, decreased by $10,088 thousand (5.9%) to $161,986 thousand compared to $172,074 thousand for the same period in 2024 [167]. - For the six months ended March 29, 2025, net revenue decreased by $15,153 thousand (4.4%) to $328,110 thousand compared to $343,263 thousand for the same period in 2024 [170]. - Gross profit for the three months ended March 29, 2025, increased by $23,913 thousand (145.2%) to $40,384 thousand compared to $16,471 thousand for the same period in 2024 [167]. - The gross profit margin for the three months ended March 29, 2025, improved to 24.9%, up from 9.6% in the same period in 2024, representing a 1,530 basis point increase [176]. - Ball Bonding Equipment net revenue decreased by $15,627 thousand (19.1%) for the three months ended March 29, 2025, while Wedge Bonding Equipment increased by $13,436 thousand (59.0%) during the same period [169]. - The company reported a loss from operations of $84,667 thousand for the three months ended March 29, 2025, which is an improvement of $20,488 thousand (19.5%) compared to a loss of $105,155 thousand for the same period in 2024 [167]. - For the three months ended March 29, 2025, total loss from operations was $84,667,000, a decrease of 19.5% compared to the loss of $105,155,000 for the same period in 2024 [192]. - Advanced Solutions segment reported a significant improvement with a loss of $6,129,000 for the three months ended March 29, 2025, compared to a loss of $116,981,000 in the same period last year, reflecting a 94.8% change [192]. Expenses and Charges - Selling, general and administrative expenses for the three months ended March 29, 2025, increased by $8,564 thousand (21.7%) to $48,014 thousand compared to $39,450 thousand for the same period in 2024 [183]. - Research and development expenses for the three months ended March 29, 2025, decreased by $484 thousand (1.3%) to $37,220 thousand compared to $37,704 thousand for the same period in 2024 [183]. - Impairment charges for the three months ended March 29, 2025, were $39,817 thousand, a decrease of $4,655 thousand (10.5%) compared to $44,472 thousand for the same period in 2024 [183]. Cash and Investments - The total cash, cash equivalents, and short-term investments as of March 29, 2025, were $581.5 million, reflecting a $4.4 million increase from the prior fiscal year end [157]. - As of March 29, 2025, total cash, cash equivalents, and short-term investments amounted to $581,519,000, a slight increase of 0.8% from $577,147,000 as of September 28, 2024 [200]. - Net cash provided by operating activities for the six months ended March 29, 2025, was $98,779,000, a significant increase from a cash used of $27,479,000 in the same period last year [200]. - The company expects fiscal 2025 capital expenditures to be between $12,000,000 and $16,000,000, with approximately $4,800,000 incurred through the second quarter [207]. Shareholder Actions - The Company declared a quarterly dividend of $0.205 per share, totaling $11.0 million for the three months and $21.8 million for the six months ended March 29, 2025 [218]. - The Company authorized a new share repurchase program to buy back up to $300 million of its common stock, with approximately $272.1 million remaining under this authorization as of March 29, 2025 [214][217]. - During the three months ended March 29, 2025, the Company repurchased approximately 518.0 thousand shares at a cost of $21.3 million, and for the six months, it repurchased 654.0 thousand shares at a cost of $27.9 million [215]. - The company repurchased approximately 657,000 shares of common stock at a cost of $30,300,000 during the three months ended December 28, 2024 [213]. Business Operations and Strategy - The intended cessation of the Electronics Assembly equipment business is expected to be substantially completed by the first half of fiscal 2026 [158]. - The Company received $86.2 million from a customer as reimbursement for costs related to a canceled project, with $15.1 million recognized in net revenue and $71.1 million in gain relating to cessation of business [160]. - The Company is focused on operational excellence and expanding product offerings through continuous research and development or acquisitions [156]. - The semiconductor industry is experiencing volatility and disruption due to inflationary pressures, existing and future tariffs, and declining consumer sentiment [165]. - The Company anticipates that the semiconductor industry's growth projections will normalize despite current macroeconomic conditions [165]. - The APS reportable segment has historically been less volatile and is more directly tied to semiconductor unit consumption rather than capacity requirements [155]. - The ongoing geopolitical tensions and macroeconomic factors have not materially impacted the Company's financial condition and operating results in fiscal 2025 to date [162]. Tax and Liabilities - The effective tax rate for the six months ended March 29, 2025, was 120.7%, compared to 10.2% for the same period in 2024, primarily due to discrete items related to business cessation and project cancellations [197]. - As of March 29, 2025, the Company had deferred tax liabilities of $35.2 million and unrecognized tax benefits of $20.2 million related to uncertain tax positions [220]. Inventory and Obligations - The Company has inventory purchase obligations totaling $102.5 million, with $60.7 million due within one year [222]. - The Company entered into an overdraft facility of up to $150.0 million for general corporate purposes, with no outstanding amounts as of March 29, 2025 [224]. Foreign Exchange and Interest Rate Exposure - The Company has foreign exchange forward contracts with a notional amount of $47.3 million outstanding as of March 29, 2025, to hedge against foreign currency risks [229]. - A 10.0% fluctuation in foreign currency exchange rates could impact the Company's financial position by $4.0 million to $5.0 million [228]. - The Company monitors its exposure to interest rate changes and targets an average life to maturity of less than 18 months for its available-for-sale securities [226]. - The Company’s stock repurchases are recorded as treasury stock using the FIFO method, with any excess amounts upon re-issuance credited to additional paid-in capital [216].