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Category: Stock Market and Kulicke & Soffa
Date: 15 November 2019 Stock Price: $25.17 We take a look at the 4th quarter earnings report of their 2019 fiscal year of Kulicke & Soffa a provider of semiconductor packaging and electronic assembly solutions.
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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.
Semiconductor
Overview of Kulicke & Soffa's 4th quarter 2019 earnings report
- Revenues: $139.827 million (down from $184.824 million for the same quarter of the previous year
- Revenue decreased by -24.3% over the last 12 months
- Cost of sales: $74.389 million (down from $99 million for the same quarter of the previous year)
- Cost of sales decreased by -24.9% over the last 12 months
- Net income: $6.404 million (up from $29.623 million for the same quarter of the previous year)
- Diluted earnings per share: $0.10 (up from $0.43 for the same quarter of the previous year)
- Diluted weighted-average shares outstanding: 64.251 million (down from 68.675 million for the same quarter of the previous year)
- Cash and cash equivalents: $364.184 million
- Cash and cash equivalents per share: $5.67
- Cash and cash equivalents makes up 22.5% of Kulicke & Soffa's market capital
- Cash and cash equivalents makes up 33.7% of Kulicke & Soffa's total assets
- Accounts receivable: $195.830 million
- Accounts receivable makes up 18.1% of Kulicke & Soffa's total assets
- Stockholders equity of Kulicke & Soffa : $769.063 million
- Stockholders equity per share: $11.96
- Kulicke & Soffa is trading at 2.1 times its stockholders equity per share which is within the expected range of between 2 and 4 that most firms tend to trade at
- Cash generated from operations (for full fiscal 2019): $65.967 million
- Cash generated from operations per share (for full fiscal 2019): $1.02
Kulicke & Soffa's management commentary on their 4th quarter 2019 earnings report
SINGAPORE--(BUSINESS WIRE)--Nov. 14, 2019-- Kulicke and Soffa Industries, Inc. (NASDAQ: KLIC) (“Kulicke & Soffa”, “K&S” or the “Company”), today announced financial results of its fourth fiscal quarter ended September 28, 2019. The Company reported fourth quarter net revenue of $139.8 million, net income of $6.4 million and non-GAAP net income of $9.3 million.
During its fourth fiscal quarter, K&S repurchased $15.0 million of common stock in open market transactions at an average price of $22.37 per share. The Company also recorded a quarterly dividend equivalent to $0.12 per share during its fourth fiscal quarter.
Despite broader macro and industry headwinds through fiscal 2019, the Company maintained an aggressive pace of R&D investment, increased the competitiveness of current and new offerings and generated free cash flow of $54.2 million.
Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, “Nearly all of our businesses experienced demand improvements sequentially through the September quarter, and have improved materially since the March quarter. In parallel, we have also made meaningful progress in expanding our served markets through customer acceptance and ongoing traction of our multiple advanced packaging offerings, including PIXALUXTM, our mini and microLED solution.”
During its fourth fiscal quarter, K&S repurchased $15.0 million of common stock in open market transactions at an average price of $22.37 per share. The Company also recorded a quarterly dividend equivalent to $0.12 per share during its fourth fiscal quarter.
Despite broader macro and industry headwinds through fiscal 2019, the Company maintained an aggressive pace of R&D investment, increased the competitiveness of current and new offerings and generated free cash flow of $54.2 million.
Dr. Fusen Chen, Kulicke & Soffa's President and Chief Executive Officer, stated, “Nearly all of our businesses experienced demand improvements sequentially through the September quarter, and have improved materially since the March quarter. In parallel, we have also made meaningful progress in expanding our served markets through customer acceptance and ongoing traction of our multiple advanced packaging offerings, including PIXALUXTM, our mini and microLED solution.”
Fourth Quarter Fiscal 2019 Financial Highlights
First Quarter Fiscal 2020 Outlook
The Company currently expects net revenue in the first fiscal quarter of 2020 ending December 28, 2019 to be approximately $130 million to $150 million. Over the past 5 years, December quarter sales have averaged a 14% sequential revenue decline over the September quarter. Looking forward, Dr. Fusen Chen commented, "Considering demand improvements within our core business, market traction within our newly developed products, and ongoing customer engagement within our growing base of Advanced Packaging solutions, we are increasingly optimistic as we look ahead into fiscal year 2020.”
- Net revenue of $139.8 million.
- Gross margin of 46.8%.
- Net income of $6.4 million or 0.10 per share; non-GAAP net income of $9.3 million or $0.14 per share.
- Cash, cash equivalents, and short-term investments, net of bank overdraft were $532.3 million as of September 28, 2019.
First Quarter Fiscal 2020 Outlook
The Company currently expects net revenue in the first fiscal quarter of 2020 ending December 28, 2019 to be approximately $130 million to $150 million. Over the past 5 years, December quarter sales have averaged a 14% sequential revenue decline over the September quarter. Looking forward, Dr. Fusen Chen commented, "Considering demand improvements within our core business, market traction within our newly developed products, and ongoing customer engagement within our growing base of Advanced Packaging solutions, we are increasingly optimistic as we look ahead into fiscal year 2020.”
Kulicke & Soffa (NASDAQ: KLIC) stock price history
The image below shows the stock price history of Kulicke & Soffa (NASDAQ: KLIC) over the last 5 years. And it's been a very good time for Kulicke & Soffa stockholders. 5 years ago the stock was trading at around $14 and it is currently trading at $25.17 a stock. That is strong return of 79.8% provided to Kulicke & Soffa stockholders over the last 5 years.
The stock of Kulicke & Soffa is trading at very close to its 52 week high of $25.85 and far away from its 52 week low of $17.40 which to us is a clear indication that the short term sentiment and momentum of Kulicke & Soffa's stock is very positive
The stock of Kulicke & Soffa is trading at very close to its 52 week high of $25.85 and far away from its 52 week low of $17.40 which to us is a clear indication that the short term sentiment and momentum of Kulicke & Soffa's stock is very positive
Kulicke & Soffa (NASDAQ: KLIC) stock price history over the last 5 years
Recent coverage of Kulicke & Soffa
The extract below discusses the latest regarding Kulicke & Soffa as obtained from TheStreet.com
Kulicke & Soffa Industries, Inc. (NASDAQ:KLIC) ("Kulicke & Soffa", "K&S" or "Company") announced today that it will be participating at the Productronica 2019 trade show in Germany from November 12 through November 15, 2019. Kulicke & Soffa will demonstrate the technological advancements of several new solutions designed to provide a new level of efficiency, quality and cost of ownership. - The latest flexible Electronic Assembly machine provides high-accuracy placement, maximum versatility, as well as improved design and increased feeder capacity. - The Asterion™ Ultrasonic Welder (UW) offers an expanded welding area with new robust pattern recognition capabilities and extremely tight process controls delivering heightened productivity, weld quality and reliability. - Advanced process features such as real-time monitoring and diagnostics capabilities of the RAPID™ Pro, Gen-S Series of automatic wire bonder, will be demonstrated. Engineered for copper wire applications, this market-leading system ensures the best quality and efficiency. - A 3D model demonstration of the LITEQ 500 lithography solution highlights how this dedicated step and repeat system delivers a new level of cost-of-ownership with increased flexibility and throughput
Kulicke & Soffa Industries, Inc. (NASDAQ:KLIC) ("Kulicke & Soffa", "K&S" or "Company") announced today that it will be participating at the Productronica 2019 trade show in Germany from November 12 through November 15, 2019. Kulicke & Soffa will demonstrate the technological advancements of several new solutions designed to provide a new level of efficiency, quality and cost of ownership. - The latest flexible Electronic Assembly machine provides high-accuracy placement, maximum versatility, as well as improved design and increased feeder capacity. - The Asterion™ Ultrasonic Welder (UW) offers an expanded welding area with new robust pattern recognition capabilities and extremely tight process controls delivering heightened productivity, weld quality and reliability. - Advanced process features such as real-time monitoring and diagnostics capabilities of the RAPID™ Pro, Gen-S Series of automatic wire bonder, will be demonstrated. Engineered for copper wire applications, this market-leading system ensures the best quality and efficiency. - A 3D model demonstration of the LITEQ 500 lithography solution highlights how this dedicated step and repeat system delivers a new level of cost-of-ownership with increased flexibility and throughput
Semiconductor
Kulicke & Soffa (NASDAQ: KLIC) latest stock valuation
So what is Kulicke & Soffa (NASDAQ: KLIC) stock worth based on the release of their latest earnings report and the fiscal guidance provided for their 2020 fiscal year? Based on the earnings reported and the guidance provided our valuation model provides a target (full value) price for Kulicke & Soffa at $16.70 a stock. We therefore believe that the stock is overvalued.
We usually suggest long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $16.70 A good entry point into Kulicke & Soffa would therefore be at $15 or below. Since the stock of Kulicke & Soffa is trading at well above our suggested entry point we rate the stock of Kulicke & Soffa as a sell
We usually suggest long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $16.70 A good entry point into Kulicke & Soffa would therefore be at $15 or below. Since the stock of Kulicke & Soffa is trading at well above our suggested entry point we rate the stock of Kulicke & Soffa as a sell
Next earnings release of Kulicke & Soffa
It is expected that Kulicke & Soffa will release their 1st quarter 2020 earnings report in mid February 2020